Environment - Setting the scene
Environment — Care for The Environment to make the world better for us and future generations. The fight for carbon mitigation is now a global priority. Regulations and Fines are increasing. No longer can this be ignored.
Environment - Setting the scene
Environment — Care for The Environment to make the world better for us and future generations. The fight for carbon mitigation is now a global priority. Regulations and Fines are increasing. No longer can this be ignored. Adopting ESG – Environment, Social and Governance principles by businesses is all the rage. Every listed Company is obligated to comply, and you have a new category of the person employed in organised called Head of ESG. However, the evolution of ESG today, which is based on the UN SDG principles is like the wild west. Even the debate around Climate Change and the road to lower emissions to 1.5c is pathed with potholes.
Every public company today has a sustainability report, and this is a key feature of the Financial Report. ESG principles, legislation is being brought in to stop greenwashing and increase accountability.
In this Blog, I will set out some key issues and practical steps through my initiative upgrading ESG, providing ESG Innovation, providers and resources.
When I talk about ESG with people from the Business world, and even in successful Real Estate groups, either they are not into and do not see it relevant or have not fully embraced it. Just take this example, I happened to have a chat with the general counsel for a quite large Real Estate player with strip malls across America. I asked him whether they do ESG in the organisation – while not quite sure what ESG is, I then used the word sustainability and then replied – Oh you mean Green Build and added not really. So, at this stage of the ESG Journey, you have Companies that have either embraced the ESG story or at least the Environment part of it or Companies that do see it relevant yet or at all. After all, profit is still the benchmark.
The questions to ask - Why is ESG an important need to fight Global warming?
Why are the social and governance angles not more important? Is ESG a risk or opportunity? Is it a cost or can it lead to more profit?
E- Environment — Care for The Environment to make the world a better place for us and future generations. The fight for carbon mitigation is now a global priority.
Regulations and Fines are increasing,
Israel — Green building standard became compulsory
in March 2022 UK — Only Electric Vehicles will be allowed to be sold from 2030
The success of this will require Finance, Investment, and Innovation. While Regulation is a driver here, the solutions to this are a big opportunity.
So, let’s look at some of the issues:
1. The Big Hitters
The big hitters include Petrol, Mining & Industrial Conglomerates. These are companies that extract and exploit precious raw materials and have tremendous environment damage – Next up are Real Estate, Transport and Food industries. This is where ESG is needed the most. Businesses have been urged to move away from their reliance on fossil fuels after some of the world’s best-known brands were named and shamed in a list of this year’s top plastic polluters. The Coca-Cola Company, PepsiCo and Nestlé have been named as the companies with the worst waste records in a new report by environmental campaigners Break Free from Plastic (BFFP), with thousands of plastic items discovered across dozens of countries in 2020. It is no surprise that big Hitters have embraced ESG – I encourage you to google any of these and you will see on the website a page focused only on sustainability
Let’s look at https://www.adm.com/. AMD is a very large food conglomerate that, in the past has come under considerable criticism for environmental abuse. They have fully embraced the ESG story, on their home page, amongst other items they have this. What about service companies, SMEs and companies in the supply chain? Will they need to embrace ESG to keep their Customers (B2B, B2C) and be part of the Supply chain. The food chain is a major challenge, Tesco, the leading UK food retailer, launched an initiative to onboard their suppliers.
We live in the consumer age – we overconsume We like to travel, eat a good steak , own more than one car or property. Are we conscious of how buying or eating impacts the environment? Today, around 30% of methane emissions are due to gas emissions from around 1.5 billion cows that are being used to produce milk and meat (1). So, should all become vegans? Today the alternative meat , Milk, eggs, and more are all the rage. What about Fish? –50% of all fish caught is discarded (2) Just look at this is an extreme and sic example,” Look carefully: these fins should be attached to the ultimate Apex Predator - the shark. I almost choked when I read those 1/4 million sharks are killed EVERY DAY for the sole purpose of making shark fin soup” Stephen Fern of https://ark2030.org The Restoration of Oceans is a critical landmark program in our battle to end the climate crisis and the destruction of eco systems which support life on earth. Restoring global whale populations is the equivalent of planting 100 billion trees. https://www.jpost.com/environment-and-climate-change/cows-cause-30-percent-of-methane-gas-emissions-israeli-team-plans-to-reduce-it-687810
The cost of food waste in the UK is GBP 10.2 billion, in Israel, net US$ 4 Billion the USA a staggering $161 billion. This has both huge Environmental & social impact. Sometimes we do have choice , but there are some things which are not in control . So, the question of who is responsible is a complex - For example , should one donate money to offset the Co2 when one fly? or drive?. Is buying an Electric Car such a big advantage, CO2 saving over gas cars ? They still need recharging electricity, and metal components and battery disposal are issues.
What about Plastic – Today, there are good recycling options. Look at https://www.ubqmaterials.com/ and Israel company recycling plastic.
What about when buy or receive a Newspaper with all that waste of paper? In today’s Digital world, why do we still need printed Newspapers and Magazines? It is easy to blame the companies and products we consume, but our choices as consumers do make a difference.
3. Carbon offsets – Trees, Renewable Energy Reforestation,
Tree Planting is usedas a way of for companies to offset. How effective is this? Is the Carbon offset a price fair? Is this process too complicated ? In effect Mark Carney the United Nations' special envoy for climate action and finance, has stated ‘The use of carbon offsets should be a last resort to cover only a small fraction of emissions if the world is to achieve meaningful decarbonization, according to Mark Carney, the co-chair of the Global Financial Alliance for Net Zero.” In effect, each country needs to refutation and forest Conservation program supported by their largest conglomerates.
So, in essence, going forward, the focus has to be on reduction – Waste Recycling , Energy conservation, renewable energy and green building.
A 2nd look at E.
Is the criticism of ESG valid? There is an over-focus on E. Not all companies are equal. 20% of companies are responsible for 80% of the problem. Probably, closer to 5% and 90%. Is it fair to put the blame and responsibility on them? Let's go back to basics. Let's look at how we consume. At least in the developed world. Cars - we all use them. Fly - we like to travel. Consume, buy - we like to shop and buy goods, clothes Shipping - is a direct outcome of these needs Houses- we all need housing: Heating- , cooling, water etc. What have I left out? Waste, recycling, consuming less, consider how we travel. Can we push all the blame on the big corporations that provide us with these essentials? So, we can blame Oil and Fossil Fuels. Governments are making EVs compulsory. But wait, is EV so much better for the environment? What about mining the lithium, steel or aluminium or our product
What about the massive Fossil Fuel subsidies that go back to the horses and carts to the car revolution still in place? What about our housing? Concrete, concrete – lots of it, inefficient heating and cooling solutions.
Wood – is a problem? We are driven by economics and convenience – we are encouraged to buy and consume more to keep the economy strong. Who benefits from this? The Mega Rich gets richer. Does the average Joe really benefit? We have Inflation, and now a higher interest rate, higher housing costs, and higher taxes? But do our taxes go back into helping us?
More significant subsidies for EVs, provision of incentives or subsidies for renewable energy – solar panels. Japan just announced compulsory solar panels. What about encouraging smart grid, urban agriculture, waste, water recycling, and other innovative water solutions? There is no shortage of innovation, technology and ideas. We have the phenomenon when this mega-rich over-consume – with private jets, yachts and more. they set up foundations to support their pet causes, culture and the 3rd world without providing a real solution for change. Where have the Agra billions donated by Gates gone? Is there a meaningful improvement in talot of these small farm holders (800 million of them with a total of 2 billion dependent on them)?
Surely, there is a better way? Environment also includes our health and what we consume.
Agriculture is controlled by Big Agro Chemical Companies – unharmful pesticides andfertiliserss. Soil and water mismanagement, the way our meat is grown with more grazing land replacing forests. These also have health side effects. Medical side effects, damage to soil & naturalecosystems. There are valid alternative solutions and innovations – let’s call it regenerative agriculture. Agro Business. .
Healthy Alternatives to sprays, and more effective too. What about Big Pharma supported by the Government? We do not need to back further than Covid with all its continuing conspiracy theories. Is better health being encouraged? Are Gyms subsidised? Electric Bicycles, small electric cars made available for inner city travel. Are healthy alternatives encouraged?
What about waste in supply chains – food, clothing? I saw this headline - Time to unsold disclosure goods – clothing, food etc. https://apparelinsider.com/hm-refuses-to-share-unsold-clothing-figures-to-norwegian-authorities/
And what about the Media – controlled by the Mega Rich and these big 3 – Blackrock, Vanguard and State Street, We seem to be in a whirlwind, where COP27, WEF, and UN tell us we need to do more. But something needs to be done. Wink wink. nudge nudge.
So, I argue that E also represents Ethics. Without Ethics for S – Society, ESG is doomed to fail. These are still the early days of ESG. There will finetuning. There is not one size shoe fits all solution, but the ESG Movement is gaining momentum. Upgrading ESG aims to be the leading marketplace for ESG innovation, providers and resources. Topics covered include - ESG Getting started, ESG Data, ESG Accounting, ESG reporting, Mandatory ESG Reporting, ESG Case Studies, Innovation. and more.
Please feel free to reach out – ask questions, browse our website, and join our group on LinkedIn. https://upgradingesg.com