As the world transitions away from fossil fuels, demand for the metals and minerals needed for renewable energy technology grows. However, the costs of extraction of these resources must not outweigh the benefits. Deep sea mining has been proposed as a potential solution, as the ocean floor is a rich source of copper, nickel, aluminium, lithium, cobalt, and more. However, a report by Planet Tracker that analysed the costs of deep sea mining found that it could do unprecedented damage to marine ecosystems. It would be nearly impossible to restore the biodiversity loss that mining activities would cause in delicate and little-understood deep sea ecosystems. The price tag for ecosystem restoration would also vastly outweigh the projected profits of such a project.
New developments are announced every day in the world of clean energy and decarbonisation. Business leaders must be able to stay on top of this flood of information in order to lead their companies successfully. Our world-class Global Competent Boards ESG and Climate & Biodiversity programs for boards and business leaders are an excellent way to do that.
1. UK introduces ESG rating code of conduct. The world of ESG ratings can often be convoluted and confusing for organisations to keep up with. To address this, the United Kingdom’s Financial Conduct Authority created a working group to develop a voluntary code of conduct. One of the topics covered by the code is data integrity to ensure that ratings organisations are collecting, storing, and reporting their data accurately and responsibly. The code of conduct also covers transparency, as the methodologies of ratings agencies are typically hidden from the public. While the code of conduct is voluntary, companies who abide by it will gain more credibility as organisations and investors can be reassured by the accuracy of the ratings.
2. Effective C-suite succession planning. Executive succession is an integral part of board functions around the world, and having a clear and well-thought out plan will streamline the process. Board members will need to ensure that new executives joining the C-suite have both the soft and hard skills necessary to help the company achieve its goals. Internal candidates should be taken into consideration as they will have a stronger understanding of the company’s operations alongside strong external candidates. Diversity and inclusion are also top of mind, so board members must work to ensure the selection process is equitable and fair to all candidates. Finally, clear communication and consistent updates of existing succession plans are key to keep up in an ever-changing business landscape.
3. US $4 trillion price tag to decarbonise supply chains. Research by McKinsey has found that global supply chains will require an investment of $4 trillion by 2030 in order to combat material shortages. The metals and minerals required to develop renewable energy technologies such as solar panels and wind turbines are in low supply, with demand skyrocketing in the coming decade. The report suggests that the money should be funnelled towards the development of a circular economy, research into more efficient usage of materials, and strengthening international cooperation to boost resiliency. Read the full report here.
4. AI: Helpful or harmful in the fight against climate change? Artificial intelligence (AI) breakthroughs are happening at lightning speed. Organisations around the world already use AI throughout their operations, but according to Corporate Knights, it is also a promising tool in mitigating climate change. AI’s ability to read and analyse huge amounts of data means that it will help make climate modelling and predictions more accurate, which benefits both climate researchers and lawmakers. It can analyse energy usage and find ways to increase energy efficiency, as well as ways to make renewable energies more efficient, reducing the need for fossil fuels. While there are risks of increased energy consumption and the need for strong AI governance to avoid bias and ensure ethical usage, AI can be a powerful tool.
5. Shipping industry aims to reach net zero by 2050. The International Maritime Organization, a branch of the United Nations, has announced the adoption of a strategy to achieve net zero emissions by 2050. Commercial shipping is a significant source of greenhouse gas emissions, responsible for about 3% of global annual emissions. It will not be an easy transition, but there are a number of ways for the industry to meet this goal. Increased fuel and energy efficiency, new fuel sources, and technological breakthroughs will all be crucial to ensure that this industry can decarbonise. While specific targets have not been set, the intention and objective are an excellent place to start.
Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.Back To News & Views