Sustainability & ESG insights July '23: Breaking Climate Records and ESG a top priority for Procurement Officers

??Via this monthly newsletter, we'll share more knowledge and content about what's arguably the most important domain of our generation: Sustainability and ESG. The goal is to inspire and share insights so each and every one of us can make a difference in the Environmental, Social and Governance domain we call Sustainability.

Valuable ESG & Sustainability news of July '23

??In this months’ newsletter:

ESG now #2 priority for Procurement Officers

• Breaking Climate Records Raises Concerns for Scientists
• Amazon to Require ESG Reporting on Supply Chain Emissions in 2024
• Global trends in climate change litigation: 2023 snapshot
• The Role of Chief Sustainability Officer is Changing?
• $4 Trillion Investment Required in Material Supply Chain for Decarbonization
• Singapore Proposed Mandatory Climate Reporting
• And more…

Global trends in climate change litigation: 2023 snapshot

This report reviews key global developments in climate change litigation, with a focus on the period May 2022 to May 2023, drawing primarily on the Climate Change Litigation databases maintained by the Sabin Centre for Climate Change Law. It is the fifth edition of our annual report on global trends in climate change litigation. Each report provides a synthesis of the latest research and developments in the climate change litigation field, outlining general trends to date as well as focusing on cases filed in the previous 12 months.

Key trends, May 2022–May 2023

• 2,341 cases have been captured in the Sabin Center’s climate change litigation databases, 190 of which were filed in the last 12 months. The growth rate in cases appears to be slowing but diversity in cases is still expanding.
• Climate change litigation has now been additionally identified in Bulgaria, China, Finland, Romania, Russia, Thailand and Turkey.
• More than 50% of climate cases have direct judicial outcomes that can be understood as favorable to climate action. Climate cases continue to have significant indirect impacts on climate change decision-making beyond the courtroom, too.
• Domestic legal protections (e.g. for the right to a healthy environment) along with domestic climate legislation, play a critical role in cases against governments.
• Litigants are employing recognizable strategies across different jurisdictions. Most recorded cases are ‘climate-aligned’ outcomes but non-climate aligned litigation (e.g. ‘ESG backlash’) is increasing.
• More cases are being filed against corporate actors, with a more complex range of legal arguments. Around 20 cases filed by US cities and states against the Carbon Majors are now likely to go to trial.
• There has been growth in ‘climate-washing’ cases challenging the accuracy of green claims and commitments. Some cases seeking financial damages are also challenging disinformation, with many relying on consumer protection law.
• Challenges to the climate policy response of governments and companies have grown significantly in number outside the US.
• Litigation concerning investment decisions is increasing and can help clarify the parameters within which decisions should be made in the context of climate change.
• High-emitting activities are now more likely to be challenged at different points in their lifecycle, from initial financing to final project approval.

Read more via the link below!

ESG now #2 Priority for Procurement Officers as shared by Deloitte's Global Chief Procurement Officer Survey 2023

Key takeaways

• In 2023, the role of the chief procurement officer (CPO) has never been more complex as leaders navigate unprecedented levels of supply chain disruption coupled with procurement’s increasing value proposition at the heart of the enterprise.
• High-achieving CPOs see this volatility as opportunity, investing in talent, transforming their operating models and accelerating their digital transformation efforts to successfully deliver on business priorities.
• Allocation of time matters. Top-performing CPOs are leveraging digital advancements and outsourced talent models to remove themselves from tactical, transactional and operational work to focus more on strategic activities like business engagement or supplier collaboration.

Shifting priorities

This year’s study revealed that procurement is engaging across a broader set of priorities than ever before, with environmental, social and governance (ESG) and corporate social responsibility (CSR) becoming increasingly important. Digital transformation remained a top priority as well as a key strategy found amongst Orchestrators of Value. Other insights include:

• Enhancing ESG and CSR jumped to the number two priority spot (72%), up from number seven in the last report.
• Driving operational efficiency (74%) remained the number one priority. Digital transformation (72%) tied for priority number two (up from its previous number three spot), while improving margins via cost reduction (71%) came in at number three (down from number two in 2021).
• The 2023 study found that Orchestrators of Value are three times more likely than their peers to be involved in digital transformation, the third most cited procurement priority.

Read more via the link below!

Amazon to Require ESG Reporting on Supply Chain Emissions in 2024

亚马逊 published its 2022 Sustainability Report. This report touches on renewable energy, electric fleets, waste, total emissions including supply chain emissions, sustainable design, supplier diversity, human rights, and sustainable products, clearly highlighting how the company is building a more sustainable future. One of the most notable highlights is Amazon’s decision to update its supply chain standards to require regular reporting and emissions goal setting. The decision to require reporting within their supply chain is one that is likely to create change across the board. Let’s dive in!?

In a summary of the report published by Amazon’s VP and Head of Worldwide Sustainability, Kara Hurst, we are given 9 key takeaways from the 82-page report.?

These highlights include:

1. Powering our operations with renewable energy with new wind and solar farms
2. Growing our fleet of electric and sustainable delivery options
3. Minimizing waste and excess packaging
4. Reducing supply chain emissions
5. Lowering our total emissions footprint and carbon intensity as the business grows
6. Designing data centers with a lower carbon footprint
7. Offering customers more sustainable product choices
8. Respecting human rights with responsible business conduct
9. Advancing supplier diversity

While there is a lot more to dig into in this report, and we recommend you take a look through this link, the requirement of supply chain disclosures is going to have monumental effects. With some of the biggest companies in the world now clearly prioritizing sustainability and ESG, it is clear that the rest of the world will need to follow suit. While Amazon has a plethora of resources, this will certainly be a challenge for smaller companies and will require innovative and agile solutions.

Read more via the link below!

The Role of Chief Sustainability Officer is Changing

In a recent blog post, The Evolving Role of Chief Sustainability Officers published in the Harvard Business Review , the authors explore how the responsibilities and influence of Chief Sustainability Officers (CSOs) have changed. Notably, this role has become increasingly critical as organizations worldwide grapple with the challenges of sustainable development and corporate social responsibility.?

Conclusion: As the world grapples with complex challenges such as climate change and social inequality, the role of Chief Sustainability Officers has evolved from a peripheral function to a central and influential position within organizations. CSOs are champions of sustainable development, driving change, and fostering innovation. Through strategic integration, stakeholder engagement, and a focus on transparency, CSOs help organizations become responsible corporate citizens, positively impacting society and the environment. The evolving role of CSOs reflects a growing realization that sustainable business practices are not only crucial for addressing global challenges but also for long-term business success.

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McKinsey Report Says: $4 Trillion Investment Required in Material Supply Chain for Decarbonization

麦肯锡 released a new report highlighting that a $4 trillion investment would be required to tackle the material shortages of key materials and achieve global decarbonization targets. This investment would be required to bridge the materials gap that is crucial to sustainability. McKinsey’s report titled, “The net-zero materials transition: Implications for global supply chains,” dives into the magnitude of the challenges we face in the global supply chain, specifically around shortages and the drivers of these shortages, as well as the implications of the decarbonization goals we have set and what investments in the future will be necessary to address things across the board.?

In order to address the challenges we see around materials and the supply chain, McKinsey outlined four areas where action can be taken.

1. Supply: The quick expansion of announced projects is crucial and will mean that accelerated mining will be necessary along with increased exploration, and investments of $3 trillion to $4 trillion by 2030. This all requires additional specialized mining professionals, expanded low-carbon energy capacity, and streamlined permitting processes.
2. Demand: Downstream industries should shift demand patterns toward proven technologies that are less materials-intensive or that use alternative materials with fewer supply constraints.
3. Innovation: To address things here, there would need to be a boost in investments in materials innovation and breakthrough technologies. Exploring material substitution options and enhancing recycling practices to address long-term-constrained or regionally concentrated materials would be necessary.
4. Policy: Lastly, the implementation of policies that facilitate supply expansion, would streamline permitting procedures, can guarantee a level playing field for alternative technologies, and safeguard regional security of supply and industry competitiveness is also needed.

Read more via the link below!

Singapore Proposes Mandatory Climate Reporting: A Step Towards Sustainability and ESG Transparency

Singapore has proposed mandatory climate reporting for both private and public companies. This new regulation represents a significant move towards Sustainability and ESG in the Asia Pacific Region and aims to drive greater transparency, accountability, and responsible corporate behavior. Aligned with the International Sustainability Standards Board (ISSB) this new regulation is lining Singapore up to rapidly become a sustainability leader in the region. Similar to what we are seeing with CSRD in Europe and the SEC Climate Disclosures in the United States, this new development certainly highlights the pressing need for innovative solutions that help with ESG and Sustainability disclosures and data aggregation, such as those offered by Sustaira in particular out of Singapore for the APAC region:

ACRA Assistant Chief Executive Kuldip Gill said:

“Trusted and consistent climate reporting is essential to drive accountability and decisive actions by companies. It will also rally companies towards contributing to Singapore’s net zero emissions commitments, expediting our transition to a green economy.”

SRAC Chairperson Esther An said:

“With more countries pledging for net zero and the rising carbon cost globally, climate strategy and reporting can help companies, listed or non-listed, to mitigate and adapt to risks in the transition to a low carbon economy. What gets measured gets managed. There is a strong business case for climate reporting as it has helped many businesses to improve performance and create stronger competitive advantage by capturing growth opportunities.”

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Breaking Climate Records Raises Concerns for Scientists

This summer, across the globe we have seen record-breaking temperatures that are leaving scientists concerned, many saying that these climate records are unprecedented given their speed and timing. Records broken include the hottest day on record globally in June and July, extreme marine heatwaves in the North Atlantic, highest Ocean temperatures, and record low Antarctic sea ice. What do these records mean for us moving forward?

On July 6th, 2023 the average global temperature surpassed 17C for the first time ever, reaching 17.08C. While this year is the first El Nino year since 2016 it is clear to scientists such as Dr Friederike Otto, from Imperial College London that:

“Humans are 100% behind the upward trend… If I'm surprised by anything, it's that we're seeing the records broken in June, so earlier in the year. El Ni?o normally doesn't really have a global impact until five or six months into the phase."

While all of these records and statistics feel alarming and scary, scientists do believe that we still have time to secure a livable future. The coming months will likely break more records and the hope is that scientists will be able to pin-point exactly why we are seeing such extreme jumps this year.?

Read more via the link below!

Nestlé Moves Away from Carbon Offsets to Focus on Emissions Reductions Across Brands

As shared by ESGToday.com, Global food and beverage company Nestlé will shift away from the use of offsets to achieve carbon neutral brands, focusing instead on actual emissions reductions in its operations and value chain, according to a company spokesperson, following media reports that the company was walking away from carbon neutral pledges for some brands.?

In the statement, the Nestlé spokesperson said:

“We are moving away from investing in carbon offsets for our brands to invest in programs and practices that help reduce GHG emissions in our own supply-chain and operations, where it makes the most difference to reach our net zero ambition.”

Nestlé announced a commitment in 2019 to achieve net zero greenhouse gas (GHG) emissions by 2050, and in 2020 the company published its “time bound plan” to reach its climate goals, which also include targets to achieve a 20% emissions reduction by 2025 and 50% by 2030.

In addition to efforts targeting agricultural emissions and transitioning to 100% renewable electricity, the plan included a pledge to be “continuously increasing the number of ‘carbon neutral’ brands.”? The company’s Net Zero Roadmap explains that in order to achieve carbon neutrality at the product level, GHG emissions from all stages of the product’s life cycle would need to be reduced or removed “or, as a last resort, accounted for through a system of offsets resulting in a product that has a carbon footprint of zero.”

95% of Nestlé’s GHG emissions come from the company’s value chain, including around two-thirds from sourcing ingredients, and only around 5% from its direct operations. One of the company’s key emissions reduction initiatives includes advancing regenerative agriculture and farming practices, such as improving soil health, integrating trees into livestock foraging areas, switching to organic fertilizers and increasing the ability of farmland to store carbon.?

Read more via the link below!

Climate change calls for cuts in carbon emissions. These US companies are leading the way

As shared by an article by Elizabeth Weise , America's Climate Leaders list, according to USA TODAY and Statista, recognizes companies' efforts to reduce greenhouse gas emissions.

Industry produces 23% of U.S. greenhouse gas emissions, which makes cleaning up businesses a crucial part of the fight against climate change.?

Evaluating such efforts is complex and daunting, requiring deep dives into multiple, sometimes conflicting metrics. Even how companies should measure their carbon footprints is a work in progress.??

To help cut through the confusion of which companies have reduced their greenhouse gas emissions, an inaugural list of America's Climate Leaders was developed for USA TODAY by market research firm Statista. It is a data-driven recognition of companies that cut their carbon footprint in recent years, a noteworthy achievement for investors, customers and anyone who is trying to make sense of these still-evolving measures.?

“The business sector is a major source of greenhouse gas emissions. That makes them a main point of potential improvement,” said @Magali Delmas, a professor of management and faculty director of the Center for Impact at the University of California, Los Angeles.?

After months of investigation and data-crunching, an original lineup of 2,000 U.S.-based companies was narrowed to 400 U.S. companies that cut their emissions intensity from 2019 to 2021.

Article: Why the U.S. Electric Grid Isn’t Ready for the Energy Transition

America’s fragmented electric grid, which was largely built to accommodate coal and gas plants, is becoming a major obstacle to efforts to fight climate change.

Tapping into the nation’s vast supplies of wind and solar energy would be one of the cheapest ways to cut the emissions that are dangerously heating the planet, studies have found. That would mean building thousands of wind turbines across the gusty Great Plains and acres of solar arrays across the South, creating clean, low-cost electricity to power homes, vehicles and factories.

But many spots with the best sun and wind are far from cities and the existing grid. To make the plan work, the nation would need thousands of miles of new high-voltage transmission lines — large power lines that would span multiple grid regions.

To understand the scale of what’s needed, compare today’s renewable energy and transmission system to one estimate of what it would take to reach the Biden administration’s goal of 100 percent clean electricity generation by 2035. Transmission capacity would need to more than double in just over a decade:

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IFRS to Take Over Responsibilities of the TCFD

As shared by ESGToday.com, The IFRS Foundation’s International Sustainability Standards Board (ISSB) will take over responsibility for monitoring progress of companies’ climate-related disclosures from the Financial Stability Board’s (FSB) Task Force on Climate-related Financial Disclosures (TCFD) as of next year, following a request from the FSB.

The transfer of responsibilities marks a significant step in the ongoing consolidation of sustainability reporting standards, following the publication last month of the ISSB’s global standards for sustainability and climate reporting.

The TCFD was established by the FSB in 2015, with the goal of developing consistent disclosure standards for companies, in order to enable investors and other stakeholders to assess the companies’ climate-related financial risk. The recommendations were published in June 2017, and have until now effectively been serving as the industry standard for climate-related disclosure.

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Check out free SEC and CSRD Disclosures webinars via the link below:

??Of course there are many more insightful articles, so please share your thoughts and recommendations in the comments below.

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