“Environmental Stewardship” is pivotal to planet sustainability. Focus must dramatically shift to absolute reductions in quick time.
The latest European Green Deal “Fit for 55” is set to influence a wide range of policies aligning them to cut EU’s emissions by 55% by 2030. The US federal administration qualifies its announcement to cut 50 – 52% of carbon emission by 2030, as pushing progress, creating jobs and achieving justice.
While India has not yet declared a net-zero commitment date, its Nationally Determined Contribution (NDC) is already aligned to the 2 degrees target of the Paris Agreement and is set to exceed the agreement with commitments such as 450 GW of green energy by 2030. Posting the lowest per capita emission among G20 countries, India has rightfully urged others to reduce.
Urgently, scientists need to project scenarios based on Environmental, Social and Governance (ESG) measures of China, Russia, Brazil and Australia. G20 as a pack have the out-and-out power to save or fail the planet. That makes COP 26 the most significant global event which must unfalteringly initiate the journey of action led by collaboration, accountability, attitude and urgency.
Let us see how ESG is influencing corporate and ecosystem practices.
Sustainable Investments: As per the latest report from Global Sustainable Investment Alliance, the global sustainable investment reached USD 35 trillion, a 15% increase in the past two years (2018-2020). The most common sustainable investment strategy is found to be ESG integration, followed by negative screening and corporate engagement & shareholder action.
Regulators and Reporting: A vast majority of the leading market and financial regulators across the globe have kept stakeholders on their toes through actions such as the establishment of the Sustainability Standards Board, uniform reporting policies, and expansion of mandatory disclosures.
Assurance: An ESG assurer will need to certify an organization’s stakeholder engagement, materiality, reporting frameworks, globally acceptable measures and their relevance, impact and claims of outcomes across financial and non-financial parameters.
Over 10,000 companies across the globe adopt CDP (formerly known as Carbon Disclosure Project) standards. 67 of India’s top 200 companies have disclosed their emissions through CDP in 2020. The Science Based Target Initiative (SBTi) has just announced its strategy to reset corporate targets to ‘1.5°C’ instead of ‘well below 2°C’. All companies and financial institutions that submit targets from 15 July 2022 will need to align to the new criteria.
Business Integration and linked outcomes:
Reimagining the business through the lens of sustainability is leading to sustainability strategies that have potential to be a competitive advantage. Leaders and early starters are conveying that sustainability is an obligation only until the right solutions are figured out. They are demonstrating that sustainable solutions can deliver long term value, stakeholder intimacy, increased financial performance and brand image.
Focus by Board of Directors:
Leaders are setting the tone at the top, ensuring ESG integration with core business and overseeing strategy linkage to outcomes and communication. These aspects are typically found to be included in the charter of ESG Committees. Upskilling of the board and enriching board composition with ESG expertise are getting traction and are positively expected to deliver outcomes in the medium to long term.
Digital Technology: Sustainability Transformation has kicked off the exhilarating journey of digital transformation. We need an insightful supply of digital capabilities that would enable end to end sustainability
We postulate that most digital technologies such as Blockchain, Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), Augmented and Virtual Reality (AR/VR) will find their use cases deployed in sustainability sooner than later.
Net Zero Commitments: While just 100 companies are responsible for 71% of the total global GHG, having a net-zero commitment from over 1500 companies may look a lot for the cause. However, the devil is in the details!
All net-zero promises are to be read along with:
‒ The efficacy and reliability of the solutions that are mapped out.
‒ The vicinity of timelines.
‒ Clarity and reliability of underlying plans.
‒ The overall intent and action the organizations demonstrate consistently across all of its current touchpoints.
The time to act is NOW. Be aggressive, be persuasive, be collaborative, be anxious for outcomes to deliver reductions, be faithful to commitments and above all LOVE YOUR PLANET. Communities, Governments, regulators and individuals will all have to come together to save our only home: Planet Earth. There is no Plan B.
The blog has been contributed by Mr Shailesh Haribhakti, Chairman, Shailesh Haribhakti & Associates and Ms Thara TK, Co-Founder & CEO, ESG Minds.
Disclaimer- The opinions expressed in this reflect the authors’ personal views and may not represent the views of CII.