By Ira Srivastava
1. CDP disclosures to align with European Sustainability Reporting Standards. One of the key aspects of standard setting and reporting framework development is integration to avoid overlapping reporting standards. To avoid this issue, the CDP and European Financial Reporting Advisory Group (EFRAG) will collaborate to make sure that CDP disclosures are in line with the new European Sustainability Reporting Standards (ESRS). The CDP is already a well-known and widely used reporting platform, and the European Union hopes that by partnering with them it will boost adoption of the ESRS. The CDP has also shared that it plans to work with the IFRS Foundation to better align with the International Sustainability Standards Board’s newly published disclosure frameworks.
2. Historic summer for labour action comes to a close. Labour stoppages are becoming more and more frequent across industries, and companies should pay attention. Last week, the SAG-AFTRA union agreed to a new contract with Hollywood studios ending the longest strike in Hollywood history at 118 days. AI was one of the primary concerns of union members, as one of their key demands was to block studios from using AI generated likenesses of them without appropriate payment. The Writers Guild of America also went on a 148 day strike this year which ended in September. At the end of October, the United Auto Workers union agreed to a four year contract with General Motors to end a 45 day strike that had significant impacts on the American automobile industry. 2023 was a historic year for strike action, showing that companies must engage with their employees and their demands to avoid future labour stoppages.
3. Business for Nature publishes Nature Strategy Handbook for businesses. A lack of information is often cited by businesses as a reason why nature action is lagging. Business for Nature has stepped in to fill these gaps by publishing a Nature Strategy Handbook that outlines a four step plan for companies: Assess, commit, transform, and disclose.
- Assess: Companies can conduct materiality and risk assessments, measure their nature impacts and dependencies, and explore business opportunities
- Commit: Set concrete goals and create KPIs and targets to help achieve those goals
- Transform: Reducing negative nature impacts, investing in ecosystem restoration, exploring new business models, collaborating with industry peers, and loudly advocating for nature protections
- Disclose: Have reports externally audited for accuracy and report using one of several major reporting frameworks
The handbook also includes guiding questions and recommendations for businesses on developing robust nature and biodiversity strategies.
4. Environmental justice bolsters the ESG movement. While the environmental aspect of ESG has become top of mind for business leaders around the world, the complex relationship between environmental and social factors can be overlooked. One example of this is environmental justice. The U.S. Environmental Protection Agency defines environmental justice as “the fair treatment and meaningful involvement of all people regardless of race, colour, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies”. Companies must make environmental justice a core component of their ESG strategy, as their operations can disproportionately impact minority communities such as oil and gas refineries in the United States. It is well documented that the climate crisis disproportionately impacts people of colour and lower socioeconomic status, and companies must take active steps to address this issue.
5. United Nations Environment Programme releases 2023 Production Gap Report. The Production Gap Report focuses on how different countries’ fossil fuel production aligns with the 2015 Paris Agreement target of limiting warming to 1.5-2 degrees Celsius. Here are the key findings from the fourth annual report:
- Currently, governments around the world are planning on extracting more than twice as much fossil fuels by the end of the decade than the amount that would limit warming to 1.5 degrees Celsius
- Coal production is projected to increase until 2030, while oil and gas will increase until 2050 in a time when significant immediate reductions are needed
- Many countries have committed to net-zero emissions but not to specifically reducing fossil fuel production to limit warming to 1.5 degrees Celsius
- Governments must develop short and long term fossil fuel extraction targets
- Carbon capture and storage is still a very new and relatively untested technology so governments should not rely on these alone
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Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.