Spark Newsletter – April 2023
This month’s Spark newsletter examines:
- The IPCC report on climate change
- Why supply chains are in the spotlight
- How to improve workplace safety through digitalization
- How to avoid greenwashing in finance
- The CDP and its importance
IPCC Report on Climate Change Issues Stark Reminder
On July 22, 2022, the World Economic Forum reported that Europe was already in its third heat wave of the summer—the hottest summer on record for Europe. By then, the related death toll in Portugal and Spain had already exceeded 1,000. Pakistan’s floods of 2022 were estimated to have displaced at least 7.9 million people.
Meanwhile, the U.S. experienced 68,988 wildfires in 2022, up from 58,985 in 2021, according to the National Interagency Fire Center. According to the latest report from the Intergovernmental Panel on Climate Change (IPCC), these and similar events will increase in number and intensity unless immediate action is taken to address the causes of climate change.
Read more about the final installment of the IPCC’s Sixth Assessment Report.
Supply Chains Are in the Spotlight: What You Need to Know
Supply chains are an integral part of doing business, and for a business to thrive, its supply chain needs to function with the precision of a Swiss watch. At the same time, supply chains must provide cost efficiencies, which means that labor costs and the costs of raw materials are keenly considered in the mapping of supply chains. Naturally, where labor is concerned, the pure economic decision is for companies to look for suppliers in countries where supply is plentiful and labor costs are low. But it’s not uncommon for these characteristics to exist in countries where worker protection is also comparatively low.
However, supply chains today are very complex. This is especially true when it comes to rare commodities and/or materials that come from specific regions (think semiconductors and solar panels). In this regard, China in particular has received a great deal more attention given its outsized role in global supply chains.
Read more about why supply chains are in the spotlight.
Improve Workplace Safety Through Digitalization
Most large companies have begun their digitalization journey, with many deploying digital tools to improve safety in the workplace. While the pace of progress varies from company to company, many operational risk management (ORM) and process safety management (PSM) professionals believe that technology solutions offer a reliable way to improve safety.
In fact, 96% of the ORM and PSM professionals surveyed for Sphera’s Safety Report 2022 agree that technology enables or has the potential to enable effective process safety and operational risk management.
Read more about why digitalization is key to safety, efficiency and productivity.
How to Avoid Greenwashing in Finance: Embracing ESG and Transparency
Greenwashing occurs when businesses portray their products or services as being more environmentally friendly than they actually are. Mike Zamis, Sphera’s chief product officer, joined Sharlene Key, Sphera’s director of ESG product management, on the SpheraNOW podcast to discuss why greenwashing happens, how regulations can be used to combat it and how standardized ESG metrics can help prevent it.
When discussing whether some factors are easier to control from a business perspective than others, Mike explains:
“Companies can always control their data. Now, whether they can get good data, that’s another question. One of the fundamental challenges we’re seeing in the marketplace is companies being able to operationalize this ESG data. How do we not make it a once-a-year data-collection exercise and actually embed it in our business operations that we execute every single day? Think of financial reporting. We don’t wait until the year end to see what the company financials are. Every day, every week, every month, every quarter, every year—we have financial professionals working against defined frameworks. These are accredited professionals, who are then audited by third parties to make sure the data is correct. I think that is the same kind of environment we need in place in ESG and sustainability reporting to prevent greenwashing.”
Listen to the full conversation on greenwashing in finance.
What Is the CDP and Why Is It Important?
In the world of sustainability reporting, the CDP is growing in stature. The non-profit charity manages a global disclosure system that enables companies, cities, states and regions, as well as investors, to report and manage their performance with respect to the environment.
The organization aims to halt climate change and environmental degradation by focusing these public and private entities “on building a sustainable economy by measuring and acting on their environmental impact.” The CDP does this by providing a platform that enables transparent reporting on climate, deforestation and water security impacts, with corrective action as the ultimate goal.
Read more about the CDP and its importance.