Sustainability & ESG insights May '23: Younger Generations are driven by ESG and Climate concerns.

??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 everyone of us can make a difference in the Environmental, Social and Governance domain we call Sustainability.

Valuable ESG & Sustainability news of May '23

??In this months’ newsletter:?

• EU Parliament fights Greenwashing.
• $11b for developing Clean Energy for Rural America
• Deloitte: Younger Generations are driven by ESG & Climate concerns.
• ClimateWorks report on achieving global climate goals by 2050.
• A Low-code paradigm shift to tackle Industrial ESG challenges.
• Germany commits two billion for Climate Action in developing countries.
• New York bans Fossil Fuels in New Buildings starting 2026.
• The Net Zero Consulting services market will exceed $15 billion by 2028.
• ?MCSI: Only 19% of listed companies align with a 1.5°C pathway.
• Climate Inequality Report 2023.
• And more…

Climate Inequality Report 2023

A new report from the World Inequality Lab The aim of this report is twofold. It endeavors first to shed light on these various dimensions of climate inequality in a systematic and detailed analysis, focusing on low- and middle-income countries in particular. It then builds on these insights, together with additional empirical work and interviews with experts, to suggest pathways to development cooperation, and tax and social policies that tackle climate inequalities at their core.

Key findings:

• All individuals contribute to emissions, but not in the same way. The top 10% of global carbon emitters generate almost half of all greenhouse gas emissions.
• Better understanding how groups may win and lose from the energy transition is key to accelerating it.
• Carbon inequalities within countries now appear to be greater than carbon inequalities between countries.
• Over 780 million people globally are currently exposed to the combined risk of poverty and serious flooding, mostly in developing countries.
• Ending global poverty need not overshoot global carbon budgets.
• Climate change contributes to economic and material deprivation in myriad ways, now well documented.
• As a direct consequence, all governments need to reconsider their mitigation targets, and especially the historical emitters

More information and the complete report via the link below: https://wid.world/wp-content/uploads/2023/01/CBV2023-ClimateInequalityReport-1.pdf

MCSI: Only 19% of listed companies align with a 1.5°C pathway

Shared by David Carlin , Head of Climate Risk and TCFD, analysis by MSCI Inc. from their net-zero tracker report. While progress continues on disclosure, companies are rapidly burning through the 1.5 C carbon budget.

Key takeaways:

1. Listed companies are on a path to warm the planet by 2.7 C.

2. Only 19% of listed companies align with a 1.5°C pathway.

3. Listed companies are expected to use up their share of the 1.5 C carbon budget by the end of 2026.

Below, the implied temperatures of a variety of major economic sectors and the proportion of companies aligned with different temperature pathways.

For more information and the analysis see link below: https://www.msci.com/documents/1296102/38217127/NetZero-Tracker-May.pdf

EU Parliament Fights Greenwashing: Banning Green Claims Citing Only Carbon Offsetting

In recent years, with the rise of Sustainability and ESG across policies and media across the globe, there has been a surge in companies making green claims. However, these claims are not always what they seem to be raising concerns around greenwashing and misleading practices. To address this issue, the European Parliament is passing more policies to fight against greenwashing and promote genuine sustainability and ESG efforts and claims. This month, The European Parliament proposed to ban green claims that rely solely on carbon offsetting, without concrete emissions reduction efforts. This proposal also foresees banning the use of general claims such as labeling products as environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco”. This proactive measure aims to combat deceptive marketing tactics and ensure transparency in environmental claims.

The key takeaways from this proposal are as follows:

• Substantiating Environmental Claims: The regulations aim to establish clear criteria to substantiate environmental claims made by products and services, ensuring their alignment with sustainable practices.
• Consumer Empowerment: By providing consumers with reliable information, the regulations enable them to make informed choices, supporting companies genuinely committed to sustainability.
• Industry Accountability: The rules enhance industry accountability, encouraging businesses to adopt and promote sustainable practices throughout their value chains.

Read more via the link below!

VBDO's Call to Action on Plastics: Accelerate Action on Plastics to Reduce Environmental Impact

The Dutch Association of Investors for Sustainable Development (VBDO), managing €10 trillion in assets, has called on corporations to accelerate action on plastics to reduce their environmental impact. The VBDO has called for corporations to set ambitious targets to reduce plastic use and eliminate single-use plastics to reduce their environmental impact. This call to action is expected to have significant effects on corporations across the globe in terms of sustainability and ESG. This call to action by the VBDO regarding corporate action on plastics, is a strong reminder of the importance of sustainability and environmental, social, and governance (ESG) considerations for companies worldwide.?

As Angélique Laskewitz , the CEO of VBDO, explains, "Reducing plastic waste is a crucial issue, and companies need to step up their efforts to address it. This is not only an environmental imperative but also a business opportunity."

Read more via the link below!

The Biden-Harris Administration's $11 Billion Investment: Developing Clean Energy for Rural America

There was a major turning point in the United States’ commitment to sustainability and environmental stewardship. The Biden-Harris Administration's recent announcement of an unprecedented $11 billion investment plan for the creation of clean energy programs across rural America is the largest investment of this kind that the states have ever seen and is guaranteed to have residual impacts. This significant investment has the potential to accelerate the shift to renewable energy, stimulate economic growth, and combat climate change challenges. Let us examine the vital details and significant implications of this important undertaking.

“This is an exciting opportunity for the Rural Utility Service to work collaboratively with our great partners, the Rural Electric cooperatives, in order to advance a clean energy future for rural America… So this is an exciting and an historic day, and it continues an ongoing effort to ensure that rural America is a full participant in this clean energy economy.” - Tom Vilsack, U.S. department of Agriculture Secretary

The $11 billion investment strategy of the Biden-Harris administration will have a substantial impact on the ESG and sustainability environment.?

“All across America, rural cooperatives lift up our rural communities. President Biden’s investment agenda positions his Agriculture Department as the ultimate partner in this work – financing not just upgrades to clean and affordable power, but also economic empowerment and uplift… For so many of our rural communities, this is simply a game changer. It’s a big deal.” - Ali Zaidi, Assistant to the President and National Climate Advisor.

Read more via the link below!

Deloitte Survey Shows Younger Generations are Driven by ESG and Climate Concerns

The modern workforce is undergoing a significant transformation as younger generations step into the spotlight, bringing with them a distinct set of values and priorities that challenge conventional notions of employment. 德勤 's recent report, titled "The Shifting Workforce: Exploring the Impact of ESG and Climate Concerns on Gen Z and Millennials," highlighted that the newer generations are leaving jobs due to misaligned ESG values and ESG concerns. Here, we will highlight some of the key takeaways from the report:

• Deloitte's survey indicates that 82% of Gen Z and Millennials consider an organization's ESG commitments when deciding where to work. They actively seek employers who demonstrate a genuine dedication to environmental sustainability, social impact, and responsible governance.
• The report continues to highlight that ESG and climate concerns significantly impact employee retention. Approximately 64% of surveyed Gen Z and Millennials report having left a job due to misalignment with their values. This clearly indicates a growing dissatisfaction with organizations that fail to address environmental and social issues, leading to increased turnover rates.

Michele Parmelee , Deloitte Global Deputy CEO and Chief People and Purpose Officer, said:

“They’re looking for employers who can help empower them to make a difference. Organizations that actively listen and help address their needs and concerns will improve business resiliency and implement actionable change in our world.”

Read more via the link below!

Research: A systematic analysis of EU publications on the Circular Economy

As part of a collaboration between the Centre for Advanced Studies and the Circular Economy and Sustainable Industry Unit of the Joint Research Centre of the European Commission, Hans Saveyn and Brian Baldassarre conducted a systematic analysis of all official EU publications on the Circular Economy.

The research indicates a prominent focus on recycling and on plastic. The report containing a full account of the results of the analysis can be accessed via the link below.

The analysis of EU publications with the corpus linguistics method presented in this study has revealed an increasing interest in the Circular Economy by EU institutions, especially since the publication of the first Circular Economy Action Plan. At the same time, it appears that not all building blocks of the circular economy are equally well covered. The focus in the current set of publications is heavily skewed towards recycling, focusing on the material and product level and with a specific interest for plastics. Moreover, an analysis of the main publishing actors seems to suggest that the circular economy is still widely viewed as an environmental policy or research subject. Its potential for economic growth, strategic autonomy and especially climate mitigation might be well unexplored and underexploited.

For the complete research paper and download, see https://publications.jrc.ec.europa.eu/repository/handle/JRC133158

Achieving global climate goals by 2050: Pathways to a 1.5° C future

This is the second edition of ClimateWorks Foundation ’ report on achieving global climate goals by 2050, following an inaugural 2020 report. For the first time, it includes an additional Ensemble of scenarios, which helps capture a more nuanced story about the linkages and trade-offs inherent in any given climate change mitigation strategy. Philanthropy and the broader climate solutions community can use the findings highlighted in the report as a resource to better understand how emissions reduction opportunities are distributed across sectors and geographies — and the transformations needed to achieve 1.5° C targets.

Report highlights:

• Priorities for emissions reductions across geographies and sectors
• An Ensemble of scenarios that highlights linkages and trade-offs of prioritizing certain sectors or interventions
• The ability to track current emissions from the source all the way to the end uses
• Recommended priorities for a future research agenda
• Three downloadable datasets including report graphics, broader greenhouse gas inventory data, and IPCC-formatted data for wider comparability

Laura Aldrete , Tim Lau, and Seth Monteith are driving this research and the report is available for download via the link below:

A Low-Code Digital Paradigm Shift to Tackle Industrial ESG Challenges

?? New video and article: A Low-Code Digital Paradigm Shift to Tackle Industrial ESG Challenges!

? Excited to share my new article about a recent recent participation together with Sustaira ,? Siemens and Mendix at Hannover Messe 2023. It includes a recap video of our session and focuses on the need for a low-code digital paradigm shift to tackle Industrial ESG challenges, such as:

? 22% of all Greenhouse Gas Emissions relate to the Industrial sector

? Scope 3 Complexity & Transparency

? ESG Supply Chain Transparency and Data aggregation

? Industry 4.0 & Sustainability: Disrupt or be Disrupted

? Growing ESG disclosures pressure and changing requirements

? Ultimately these business challenges put a tremendous pressure on the digital capabilities of organizations and demand a more agile, building block approach for digital ESG and Sustainability solutions.

? Learn more via this article and the video below and let me know what you think?

Germany commits two billion euros for climate action in developing countries

As shared by Mafalde Duarte, CEO of the Climate Investment Funds, German Chancellor Olaf Scholz?announced a €2 billion commitment to the Green Climate Fund , a 33% increase from Germany's first replenishment pledge.

The Green Climate Fund is one of the largest climate action funds of the world. The creation of the fund was an important objective of the developing countries, which have an equal say in how funds are spent on climate mitigation and adaptation projects in developing countries.

When confirmed it will be the largest single contribution ever, and make Germany the largest cumulative contributor to date. Germany's pledge follows recent commitments from other countries including Austria and Czechia, and a $1 billion contribution from the US.

More information via the link below!

New York Bans Fossil Fuels in New Buildings Starting 2026

As shared by ESGToday.com, New York will become the first state to ban the use of gas stoves and heating, according to new rules released with Governor Kathy Hochul’s 2024 Budget, which included measures to decarbonize buildings and to invest in new renewable energy projects aimed at helping the state achieve its climate goals.

New York passed the Climate Leadership and Community Protection Act (CLCPA) in 2019, setting into law the state’s commitments to reduce economy-wide greenhouse gas (GHG) emissions by 40% by 2030 and at least 85% by 2050, on a 1990 basis.

Buildings account for more than 30% of New York’s GHG emissions.

In a statement announcing the adoption of the budget, the Governor’s office said:

“The final adopted Budget makes New York the first state in the nation to advance comprehensive legislation for constructing modern zero-emission new homes and buildings that will protect our families and our residents, while putting New York on trajectory to a cleaner, healthier future.”

How Financial Services Firms Are Wrestling with ESG Challenges and Opportunities

A 贝恩公司 article by Maria Teresa Tejada , Oren Salomon , and Michael Kochan . While financial institutions are increasingly integrating ESG factors into core processes, there’s still a gap between aspirations and results.

For several years, pressure has grown on financial institutions to clarify their environmental, social, and governance (ESG) commitments and strategies. While their internal and external stakeholders do not always share the same agendas, calls have been mounting for institutions to play a more active role in supporting the transition of the economy away from fossil fuels. Many are already taking steps to do just that.

But when it comes to devising and executing a longer-term strategy that responds to ESG imperatives, two perspectives have taken shape. The details of these perspectives emerge in Bain & Company’s new survey of 55 companies (mainly banks) globally, representing over $40 trillion in assets, that belong to the International Association of Credit Portfolio Managers (IACPM).

Here’s a summary:

• Bain’s new survey, together with the International Association of Credit Portfolio Managers (IACPM) , of 55 global financial services firms details how banks and other financial institutions are responding to ESG pressures from regulators, shareholders, and customers.
• Views differ on whether ESG pillars primarily represent downside risks to be managed or upside opportunities to be captured, with European respondents most bullish on the opportunities.
• While institutions are making progress, they’re hampered by a lack of consensus on frameworks and methodologies, as well as unclear decision rights and different regulatory priorities among the regions.
• Four areas merit attention: aligning stakeholders on decarbonization, deciding transition finance priorities, defining strategies to address customer demand, and augmenting climate-risk data analytics capabilities.

More info via the link below:

The Net Zero Consulting Services Market Will Exceed $15 Billion By 2028

Verdantix research led by analyst Alessandra Leggieri finds that the global market spend on net zero consulting services reached $3.5 billion in 2022, and will grow at a CAGR of 29% to exceed $15 billion by 2028. Verdantix reveals that the key drivers of this increasing spend are:

1. New climate-related disclosures. By the end of 2026, the CSRD will impact a total of 49,000 firms in the EU alone. Due to the stricter regulatory landscape worldwide, organizations will face data transparency and quality issues, which will in turn drive investment in third-party support. As a result, Verdantix predicts significant increases in spend on carbon accounting and data disclosure services .?
2. Stakeholder pressure. Realistic and data-driven net zero targets demonstrate firms’ decarbonization commitments to investors and customers, and consequently increase spend on net zero and climate change strategy support. Once science-based targets are set, organizations will face increased pressure to decarbonize their operations and meet their goals. In the next three years, Verdantix foresees an acceleration in spend for net zero programme management services: as firms’ decarbonization targets approach, they will need guidance on how to implement their strategies.
3. Industry-specific challenges. Standards such as the International Sustainability Standards Board (ISSB) ) are starting to incorporate industry-specific requirements. Net zero consulting service providers are well placed to support corporates and financial institutions with these challenges, coming from a variety of backgrounds, such as accounting, management consulting and sustainability specialists. Beyond reporting requirements, industry-specific expertise involves supply chain decarbonization support for Scope 3-heavy industries (such as wholesale and retail trade) and financed emissions calculation and reduction for financial institutions.

France Budgets 500 Million Euros Annually for Green Industry Tax Credit

As shared by ESGnews.com, the French government plans to budget half a billion euros annually for a new tax credit for environmentally-friendly investments as part of a bill presented on Tuesday to green the industrial sector, Finance Minister Bruno Le Maire said.

The tax credit makes France the first EU country to take advantage of a loosening of European state aid rules in recent months in response to new tax subsidies in the United States made available by the Biden administration’s $430 billion Inflation Reduction Act (IRA).

Le Maire’s ministry said the tax credit, which will be available on a temporary basis in line with the new EU rules until 2025, with the possibility of an extension to 2029, was expected to generate private investments totalling 23 billion euros by 2030 and directly create 40,000 jobs.

Meta slapped with record $1.3 billion EU fine over data privacy

Meta has been fined a record-breaking €1.2 billion ($1.3 billion) by European Union regulators for violating EU privacy laws by transferring the personal data of Facebook users to servers in the United States.

The European Data Protection Board announced the fine in a statement, saying it followed an inquiry into Facebook (FB) by the Irish Data Protection Commission, the chief regulator overseeing Meta’s operations in Europe.

The move highlights ongoing uncertainty about how global businesses may legally transfer EU users’ data to servers overseas.

More information via the CNN article below:

Record High Revenues From Global Carbon Pricing Near $100 Billion

Direct carbon pricing instruments, key policy to decarbonization, now cover almost a quarter of global greenhouse gas emissions, according to a new World Bank report.

Revenues from carbon taxes and Emissions Trading Systems (ETS) have reached a record high, about $95 billion, finds the World Bank’s annual “State and Trends of Carbon Pricing” report. This is despite the challenging context for governments facing high inflation, fiscal pressures, and energy crises.

“Carbon pricing can be an effective way to incorporate the costs of climate change into economic decision making, thereby incentivizing climate action.” said Jennifer Sara , Global Director for Climate Change at 世界银行 . “The good news from this report is that even in difficult economic times, governments are prioritizing direct carbon pricing policies to reduce emissions. But to really drive change at the scale needed, we will need to see big advances both in terms of coverage and price.”?

More information via the link below:

New series of webinars about ESG, mandatory disclosures and software solutions

Sign up or watch a recording via the link below. Topics include:

• Sustainability & ESG Software Evaluation Criteria: Adopting Software for your Sustainability and ESG needs
• Carbon Accounting: The Engine Behind ESG Disclosures
• How Sellen Construction is solving the top ESG and Sustainability Challenges Through Digitalization with Sustaira.
• Understanding CSRD with Sustaira
• Understanding SEC’s ESG regulations with Sustaira
• A low-code building block approach for ESG & Sustainability Software Applications in Manufacturing

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

??As always, we're open to feedback. If you have any ideas of content or want to collaborate, kindly do reach out. Please also like, share and subscribe so we can truly make this impactful.