There is no shortage of information around environmental, social and governance (ESG) risk and opportunities. In fact, part of the current problem is there is almost too much, with much of it varying in quality and accuracy. So how best do you acquire quality, usable information to create maximum value for your company?
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1. Mind the credibility gaps. The latest report from Net Zero Tracker paints a bleak picture of the climate plans and pledges of publicly traded companies on the Forbes Global 2,000 List. Approximately half have yet to announce any formal plans for reaching net zero, and of the 702 companies that have, only one-third have formulated any clear targets. “We see a lot of issues with credibility, and the quality and robustness of these targets,” noted report co-author Frederic Hans — a climate policy analyst at NewClimate Institute — in a press release. Net Zero Tracker is a partnership project between the British-based Energy and Climate Intelligence Unit (ECIU) and the University of Oxford that gauges publicly available data from 200 countries as well as large publicly traded companies.
2. Fa fa fa fa fashion. The Apparel Impact Institute (Aii) has launched a new US$ 250 million Fashion Climate Fund. It is designed to promote decarbonization solutions across the industry and modernize fashion supply chains, which are notorious laggards. The fund has some big names on board already: Lululemon, H&M Group, H&M Foundation and The Schmidt Family Foundation. The fashion industry aims to halve its carbon emissions by 2030. There is much work to be done: a recent report by Aii and the World Resources Institute found that 96% of the fashion industry’s emissions come from third-party farms and factories that are shared across the industry.
3. Measuring boardroom pressure. Technology, cybersecurity and ESG top the priority list for senior leaders around the world, according to a new survey by Mazars. The C-suite Barometer found that ESG and sustainability are increasingly central to companies’ strategic planning. Three out of four executives (75%) plan to invest more in sustainability initiatives in the coming year. To address the twin challenge of technological transformation and cybersecurity, 82% of executives polled plan to double down on maintaining and evolving their IT systems. In terms of sustainability priorities, reducing waste (62%), cutting pollution (50%) and human rights (58%) were the top three. Perhaps surprisingly, achieving net zero came bottom of the list. The survey heard from more than 1,000 executives in 39 countries
4. Allez les Bleus! The French stock-market regulator has renewed its call for a bigger crackdown across Europe on agencies that provide ESG ratings. The AMF has seen that these agencies have spread far and wide, as well as becoming an increasing go-to source for investors and companies. Therefore, AMF wants regulations with real teeth that should “cover the entire range of ESG data, ratings, and services and not be limited to ESG ratings”. The AMF’s clarion call follows recent disclosure proposals by the SEC in the US and other regulatory bodies.
5. Grade C for Carbon. The launch of the first federal carbon offset market in Canada last week was mired in controversy. Environmental groups are worried that major companies will avoid their responsibilities to reduce emissions by flooding the market with cheap offsets instead. Carbon offset markets let companies, governments and other greenhouse-gas-emitting organizations pay for those emissions by buying credits created when emissions are cut elsewhere. In Canada, companies can only use these offsets for 75% of their total emissions.
Mathew Loup is Competent Boards’ Director, Marketing & Communications. Connect with him on LinkedIn.Back To News & Views