Behind the ESG headlines - July 29, 2022

By mathew-loup

Energy security is increasingly top of mind for many people around the world. According to Google, there have been more than one billion searches for that phrase.

Western Europe is reaching back to coal while the Russian gas taps remain set to the off switch. This is a boon for many emerging economies in Asia, that are some of the world’s largest coal exporters and consumers. 

However, this renewed appetite for black gold means that — again — the climate crisis takes a back seat, which is not good news for anyone. Those environmental changes are real and not going away. 

Board directors and senior business leaders can still redress this balance by keeping environmental, social and governance (ESG) risks and opportunities as high priority items. At the same time, there is a huge need for companies and their leadership to quickly become better informed. 

Help is at hand. Our Designation and Certificate programs are the perfect place to master the skills and integrated mindset to lead businesses, communities and the world into a more balanced, sustainable future.

As always, please keep your comments and news items flowing to mathew.loup@competentboards.com or join the conversation on LinkedIn when we post this weekly digest. 

1. Food security challenges. Climate change is having a devastating and dangerous impact on the food ecosystem in Latin America. The latest report from the World Meteorological Organization (WMO), State of the Climate in Latin America and the Caribbean 2021, highlights how mega-droughts, floods, searing heatwaves and melting glaciers are affecting crops and water supplies across the continent. That comes alongside the ongoing human-caused degradation and reduction of the Amazon rainforest. For example, Chile is enduring its longest drought in more than 1,000 years. Soybean and corn crops in Brazil, Paraguay and Argentina are falling short. The WMO say food insecurity in Latin America is now affecting millions of people,m and rapidly becoming worse.

2. Meeting ESG goals. The new Global Corporate Sustainability Survey 2022 has highlighted some of the key challenges and opportunities for companies with strategic ESG ambitions. Although 71% of companies are taking a proactive approach to sustainability, less than half (45%) have a board and executive team aligned on ESG priorities. The vast majority (87%) are feeling the weight of stakeholder pressure for better ESG reporting, but less than a third (27%) have actual ESG KPIs in place to report on. More than half (58%) say their leadership team disagree on how to balance short-term needs with long-term ESG goals. L.E.K. Consulting and Longitude surveyed more than 400 C-Suite executives in Europe, Asia and North America.

3. Overheating assets. A new study has revealed that a startling 70% on average of the world’s largest funds are currently on track to exceed the 2050 target of a 1.5C temperature rise, unless there are radical cuts in emissions. ESG Book, a sustainability data and technology firm, analyzed more than 35,000 funds around the world. Their analysis also showed that 20% of funds do not disclose their emissions at all. Of the standard stock market indices analyzed by ESG Book, the ASX 200 (Australia) has the highest emissions intensity and the Dow Jones Industrial Average (US) has comfortably the lowest emissions intensity.

4. Seeing the big picture. The University of Oxford and the UK’s Financial Conduct Authority (FCA) have teamed up to launch a new centre of excellence for financial research. The Oxford Sustainable Finance Lab will open its doors officially later this fall. The lab will gather Oxford researchers along with leading professionals from central banks, civil society organizations, financial institutions, government departments and supervisory authorities. “Without urgent action from across the financial system, we will not be able to achieve net zero, reduce our climate fragility, or rehabilitate the natural world,” said Dr Ben Caldecott, Director of the Oxford Sustainable Finance Group and founder of the Lab, in a media release.

5. Who’s ready for ESG? A new survey of senior executives by Deloitte revealed that many top companies are behind in their ESG planning. The survey showed that only one in five (21%) had an ESG council or working group set up to deal with the increased focus on ESG matters from stakeholders. Most of the senior senior executives (83%) believe that their companies need to allocate extra resources to generate the new ESG disclosures that are being mandated in different regions. To do that, companies will need to invest more in technology to get consistent and accurate data. Deloitte surveyed more than 300 finance, accounting, sustainability, and legal executives. 

Mathew Loup is Competent Boards’ Director, Marketing & Communications. Follow Competent Boards on LinkedIn.

Behind the ESG headlines
BACK TO NEWS & VIEWS