As the candidates jostled for position this week in the race to be the next leader of the Conservative Party in the UK (and de facto Prime Minister of a G7 economy), their silence on climate change was astonishing.
This despite wildfires raging across the UK this week as 360-year high temperature records were smashed. Airport runways melted, rail lines buckled and power grids surged, yet according to the latest opinion poll, the climate crisis is at the bottom of the list of their priorities for the Conservative Party membership.
Luckily, that is not the case for most forward-thinking companies around the world. They know that environmental, social and governance (ESG) risks and opportunities need to be at the top of their agendas. And climate change is a big part of that. Board directors and business leaders are getting educated — fast.
Why not join them? Our Designation and Certificate programs will help you have the knowledge and tools to make better informed decisions.
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1. Sustainability strategies. The recently released Mazars C-Suite Barometer 2021 has some encouraging findings around ESG as a strategic priority. Three-quarters (75%) of the executives polled plan to increase investment on sustainability initiatives in the coming year, a 27-point increase. While 62% have a sustainability strategy overhaul firmly in their sights over the next three to five years. Reducing waste, reducing pollution and human rights are three areas where most companies have made public commitments. The report surveyed more than 1,000 executives in 39 countries.
2. Climate change targets. The High Court in the UK has ordered the government to provide clear details on how the UK plans to actually meet its net zero targets. Friends of the Earth, ClientEarth and the Good Law Project had brought legal action against the government’s high-profile climate change strategy, arguing it failed to provide any concrete policies for implementation. Environmental campaigners have called the ruling “a breakthrough moment”. The net zero strategy, which was unveiled last October, had goals such as ending the sales of new fossil fuel cars by 2030 and gas boilers by 2035.
3. Trusting in trust. Under scrutiny as never before from all sides of the political spectrum, ESG is at a pivotal moment. A new report from EY, The Emerging Sustainability Information Ecosystem, examines the key priorities for rebuilding and reaffirming trust in ESG:
- Globally consistent reporting standards, not just by country
- Understanding the different uses of assessing sustainability information (financial risk or social impact)
- Enable robust, independent assurance
- Develop comparable and interoperable taxonomies
- Address barriers for emerging countries
4. Fossil fuel finances. COP26 closed out last year with 34 countries and five public finance institutions making a public commitment to ending finance for fossil fuels. Instead, that money was to be used on public money for geothermal, hydro, solar, tidal and wind power. However, according to a report by Oil Change International, the International Institute for Sustainable Development (IISD) and Tearfund, only six of the signatories have made good on their promise. Unfortunately, the three biggest polluters in Asia, China, India and Japan, did not even sign the initial treaty. There is a huge opportunity for real change: between 2018 to 2020 the top 18 countries spent an average annual US$46 million on fossil fuels.
5. ESG in the boardrooms. More boards are making positive steps towards incorporating ESG into their company planning and actions, says a new report by Diligent Institute and Spencer Stuart. Sustainability in the Spotlight: Board ESG Oversight and Strategy found that 71% of boards now incorporate ESG goals and metrics into their main strategy. Just over a third (34%) discuss ESG at every board meeting, compared with just 15% two years ago. However, only 38% are engaging in director training and education to increase their competency and fluency around ESG. The report surveyed just under 600 corporate directors.
Mathew Loup is Competent Boards’ Director, Marketing & Communications. Follow Competent Boards on LinkedIn.Back To News & Views