The E in ESG: Sustainability News Roundup
The E in ESG ?curates the week’s latest?#sustainability ?news; focusing on regulatory developments, innovation, and the intersection of?#environmental ?and organizational best practices.
This week's Newsletter includes:
E-SCRAP IS WORTH... BILLIONS?
Researchers in Minnesota recently estimated what a statewide 100% e-scrap recycling rate would look like in terms of metals recovery, finding that it would generate 78.6 million pounds of metals worth $2.8 billion.
The?pilot study , conducted by analysts from Repowered, Macalester College and the Iron Range Partnership for Sustainability, brought together “industry, environmental activism and academia” to spark further inquiry into and investment in Minnesota’s e-scrap recycling capacity, the report noted.?
The study aggregated reports, local data and peer-reviewed research on e-scrap from 2017 to 2022 to estimate the total weight of 62 elements.
The researchers then estimated what the market value would be at a 100% recycling rate. Currently, Minnesota has a 23.7% e-scrap recycling rate, the report noted, and about 266 million pounds of e-scrap is available for recycling in the state every year.
In the future, e-scrap processors in California could receive state money to recycle electric toothbrushes, electronic greeting cards, toys and a host of other items with embedded batteries, state regulators recently suggested.?
The California Department of Resources Recycling and Recovery (CalRecycle) recently held a workshop to explore just what the signing into law of Senate Bill 1215 could mean for the country’s oldest regulated e-scrap program. In short, it will entail major changes, even as substantial questions remain to be answered by forthcoming regulation.
“This is an expansion of our e-waste program, which is over 20 years old and has done a lot for the state of California to collect and appropriately recycle electronic waste for the people of California,” said Rachel Machi Wagoner, director of CalRecycle, discussing how she was involved with crafting the original e-scrap program legislation while working in state government in the late 1990s. “The evolution of this program is very exciting to me.”?
ESG WARS: TALENT AND RATINGS
It’s time to end the war for ESG talent, so companies can get to work advancing their sustainability goals.
The corporate sustainability profession is in crisis. Countless companies struggle to fill roles critical to meeting sustainability goals, even as they overlook an army of job seekers looking to join the fight.?
In this?"War for ESG Talent ," as Joel Makower called it a few years ago, companies take turns luring a limited contingent of experienced talent from other companies over to their own lines. While holding out for a rare ESG veteran may be rational at the organizational level, at the systems level this is resulting in catastrophe.?
When Company A loses ESG talent to Company B, then Company A recruits someone from Company C, who then fills that vacancy with talent from Company D. And so on. While this certainly benefits ESG talent (who get title and pay bumps), and recruiters and career coaches (for obvious reasons), this does little to expand the overall ESG talent pool or end the so-called war.??
The War for ESG Talent is a distraction from the real fight. With multiple interconnected existential threats — including the climate crisis, biodiversity loss, natural resource scarcity, economic inequality and racial injustice, among others — our war is for the future of the planet, for our survival as a species. Companies, governments, nonprofits and other organizations must stand shoulder-to-shoulder to take on the overwhelming forces stacked against us.
Companies are spending up to half a million dollars a year on a sustainability rating to meet investor demands for such data, yet are often dissatisfied with the results, new research shows.
Publicly-listed companies spend, on average, between $220,000 and $480,000 on ratings-related costs per year, with their private counterparts being billed for up to $425,000, based on a survey by sustainability consulting firm ERM.
Common criticisms related to the accuracy and transparency of the data and ratings, as well as a company's ability to correct errors, the report said.
Growing demand for environmental, social and governance (ESG) data and a reliance by many smaller investors on external providers to assess companies has driven?rapid growth ?of the unregulated industry, drawing the attention of?regulators .
The ERM report said companies' dissatisfaction with the accuracy of ratings was based largely on their experience of finding errors in raters' analysis of company supplied data, undermining their trust in the overall rating.
Total US consumer spending?accounts for over $14 trillion annually and two-thirds of the US GDP. An important subset of this spending goes toward everyday consumer packaged goods (CPG), ranging from foods and beverages to cosmetics and cleaning products. The sheer size of the CPG sector—with millions of employees and trillions of dollars in annual sales—makes it a critical component in efforts to build a more sustainable, inclusive economy.
When consumers are asked if they care about buying environmentally and ethically sustainable products, they overwhelmingly answer yes: in a?2020 McKinsey US consumer sentiment survey , more than 60 percent of respondents said they’d pay more for a product with sustainable packaging. A recent study by NielsenIQ found that 78 percent of US consumers say that a sustainable lifestyle is important to them. Yet many CPG executives report that one challenge to their companies’ environmental, social, and governance (ESG) initiatives is the inability to generate sufficient consumer demand for these products. There are many stories of companies launching new products incorporating ESG-related claims only to find that sales fell short of expectations.
ESG IN PRACTICE
With all the noise about ESG in the news, it can be hard to discern what is really happening. We know that the increased demand for companies to address environmental, social and governance issues has meant that organizations have had to make significant changes to how they work. But when it comes to addressing, measuring and reporting on ESG performance and impact, what’s really going on behind corporate doors???
In this episode of ESG in Conversation, we explore that question by examining how the responsibilities of CSR and sustainability professionals are changing to address their company’s material ESG issues. You’ll hear about the results of the Morningstar Sustainalytics Corporate ESG Survey, with insights about the challenges, concerns, and evolving roles of CSR and sustainability professionals around the world.?
In the last few weeks, there has been significant regulatory action in Australia around greenwashing.
The ACCC and ASIC are working closely on greenwashing issues, and the recent action by ASIC reflects the enforcement priorities for both regulators. This?Insight?considers some key emerging trends in ASIC's and the ACCC's enforcement activities around greenwashing and sustainability that will be major themes in 2023. It also provides 13 specific recommendations for avoiding making representations that could give rise to greenwashing risk.
Directors & Boards: What are some examples of U.S. companies having to report on their ESG efforts internationally?
Maura Hodge:?In the U.S., understandably, many companies are looking to the SEC on climate-related disclosures, and we are anticipating a final ruling as soon as April. That said, ESG reporting is in full swing in several places internationally, including in the European Union.
DB: Are there examples of American cities that are requiring ESG reporting from companies as part of doing business?
MH:?Just as ESG has gone global, it has also gone local. We’re seeing cities across the United States propose and pass their own legislation related to sustainability reporting. Cambridge, Mass., for example, requires large building owners to track and report on their annual energy usage to the city. The city then discloses that data to the public.?
New York City also has energy efficiency requirements and greenhouse gas (GHG) emissions limits for large buildings. So, in addition to monitoring the international reporting environment, companies need to be mindful of any local rules and regulations in every location where they operate.
领英推荐
A group of climate activists has called on 30 insurance company bosses to "immediately" stop underwriting new fossil fuel projects in the wake of a stark climate warning from U.N. scientists, a letter seen by Reuters showed.
The six-page letter, signed by 23 climate groups, including non-governmental organisations (NGOs), said the insurance industry had failed to do enough to meet the world's climate goal of limiting global warming to 1.5 degrees Celsius.
Other demands included stopping insurance for new fossil fuel customers not aligned with the goal, and adopting binding targets to reduce insured emissions by July 2023.Insure our Future, a global consortium of activists, said it sent the letter dated March 21 to companies including Munich Re (MUVGn.DE), Zurich Insurance (ZURN.S) and AXA (AXAF.PA).
"Insurers, as society's risk managers, have a special responsibility to act and the power to drive change: without insurance most new fossil fuel projects cannot go ahead and existing ones cannot continue to operate," it read.
The letter follows?last week's warning ?from U.N. Secretary General Antonio Guterres that the "climate time bomb is ticking" and urged rich countries to cut emissions sooner after a new assessment from scientists said there was little time to lose in tackling climate change.
"Numerous loopholes in policies and standards allow insurers to continue underwriting the expansion of fossil fuel production," the letter said.
Scope 3 emissions?are a category of greenhouse gas (GHG) emissions originating from business operations by sources that are not directly owned or controlled by an organization, such as supply chain, transportation, product usage, or disposal. Also referred to as value chain emissions, they are the hardest to measure and reduce.
Specifically, Scope 3 requires organizations to look for instances of carbon emissions outside of their direct physical footprint and quantify them through the value chain outside of their direct control. This includes embodied emissions within resources or raw materials consumed by the organization—paper used, waste produced, coffee consumed—and the emissions of any suppliers, which are especially important to organizations that produce physical products.
Key points:
'Sustainable investment labels are too reliant on narrative-based reporting'
The UK needs a much tougher system of financial regulation to meet the Paris climate goals with revised fund labels, full Financial Conduct Authority (FCA ) regulation of rating agencies and a climate-data based system for companies, markets and funds, as part of a comprehensive change in approach.
At the Financial Inclusion Centre we recently published a report,?Time for action: the Devil is in the policy detail – Will financial regulation support a move to a net?zero financial system? ,?which concludes that existing and planned regulations won’t be enough to align financial market behaviours with the UK’s statutory climate goals.
It argues that current regulatory plans could leave investors confused with a risk of?greenwashing ?and ‘impact-washing’, while stymying ambitions for the UK to become a leading green finance centre.
Therefore, the FCA should carry out a review of current sustainability and ESG marketing to understand where asset managers are complying with or breaching existing requirements to be clear, fair and not misleading.
Mercedes-Benz announced today a new goal to achieve an 80% reduction in CO2 emissions from production by 2030, on a 2018 basis.
The new ambition was unveiled as part of a series of ESG-related goals and initiatives announced by the company at its ESG Conference to investors and analysts today, encompassing areas including renewable energy, supply chain decarbonization, circular economy and human rights, among others.
UPCOMING EVENTS
April 19: Sustainability LIVE New York
Don't miss Sarah Thuo 's Keynote session! Sustainability Magazine
Paul Houde, MBA , Galina Mishiev , Dianna Heard , Miao Zhang-Cohen , Nicole Park , Dorothy Quincy , Matt Hodak , Richard Douglass