Global ESG Initiatives Strengthen: New Standards in Oil & Gas, Corporate Reporting, and Carbon Credits.

Greetings, Sustainability Trailblazers and ESG Pioneers! ??

Welcome to our cutting-edge newsletter on global ESG initiatives and regulatory shifts!

In this edition, we're diving deep into three game-changing developments that are reshaping the sustainability landscape. From decarbonization in the oil and gas sector to revolutionary corporate reporting practices in the EU, and a major overhaul in carbon credit standards, we're covering it all. These advancements are setting new benchmarks for environmental responsibility, corporate transparency, and climate action. Join us as we explore how these initiatives are propelling us towards a more sustainable and accountable business world. Get ready to be inspired and informed about the future of ESG!

SBTi Advances Oil and Gas Decarbonization Standard

The Science Based Targets initiative (SBTi) is developing a comprehensive standard for the oil and gas industry, recognizing its critical role in global decarbonization efforts. This standard aims to provide a structured approach for companies to set science-based emission reduction targets aligned with the Paris Agreement's 1.5°C goal.

The development process involves:

1. Comprehensive research: SBTi has conducted extensive studies on the industry's emission profiles and reduction potential.
2. Stakeholder engagement: An Expert Advisory Group (EAG) comprising technical experts from various organizations and companies is providing valuable input.
3. Holistic approach: The standard addresses three key areas:
4. Methodological rigor: The initiative is developing science-based target-setting methodologies to ensure credibility and effectiveness.
5. Ongoing refinement: An external expert review in January 2023 highlighted key technical and methodological issues, guiding further research.

The SBTi emphasizes that the oil and gas sector, with its considerable assets and influence, has the potential to drive ambitious climate action and lead the transition to a net-zero economy. This standard is seen as a crucial tool in facilitating this transformation and helping the industry align with global climate goals.

EU's CSRD Mandates 'Double Materiality' Reporting for Companies

The European Union's Corporate Sustainability Reporting Directive (CSRD) is introducing a new era of environmental and financial reporting. Key points include:

1. Companies must now conduct 'double materiality' assessments, considering both financial and societal environmental impacts.
2. An estimated 40,000 firms globally will be affected, including many outside the EU.
3. Currently, only 37% of the world's most polluting companies report climate-related financial risks in their statements.
4. A WTW poll showed 19% of companies have already started conducting materiality assessments.
5. The directive aims to provide investors with more comprehensive information on climate-related issues in corporate financial strategies.
6. Challenges remain in quantifying environmental impact, particularly in areas like biodiversity.

This new directive represents a significant shift in corporate reporting, integrating environmental considerations more deeply into financial statements and promoting greater transparency in global business practices.

Integrity Council Raises Bar for Carbon Credit Standards in Renewable Energy

The Integrity Council for the Voluntary Carbon Market has announced significant changes to carbon credit standards, particularly affecting renewable energy projects. Key points include:

1. Current renewable energy methodologies fail to meet the Core Carbon Principles (CCP?) label requirements.
2. This decision impacts 32% of the voluntary carbon market, or 236 million unretired credits.
3. New methodologies approved for methane leak detection and landfill methane capture, covering 2.6% of the market.
4. The council calls for more sophisticated methodologies that account for regional differences in renewable energy deployment.
5. Governments and regulators, including the US and UK, endorse the CCPs as a global standard.

These changes aim to ensure higher integrity in the carbon credit market, particularly focusing on additionality in renewable energy projects. The council emphasizes the need for rigorous, science-based assessments to build confidence in carbon credits and channel finance to the Global South for climate solutions.

Featured Insights

The Carbon Reckoning: Why Every Business Needs to Embrace Carbon Accounting Now

Enter carbon accounting - the process of quantifying, reporting, and ultimately reducing a company's carbon footprint. At its core, carbon accounting is about transparency and accountability. By measuring and disclosing their emissions on a regular basis, companies can track their progress, identify opportunities for improvement, and demonstrate their commitment to climate action.

Read more.

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This newsletter was curated by Jeevan from Newtral. Reach out to him at [email protected] or on LinkedIn.