Top 10 ESG Markers - April 2024

The month of April covers record rainfall floods UAE, disrupting travel and prompting climate speculation, ISSB priority research initiatives and work areas announced, European Parliament Approves Corporate Sustainability Due Diligence Law, world economy faces staggering 38 trillion dollars in annual damages from climate change, New York sues world's largest meat company for climate claims, Paris 2024 Olympic Games to feature a ground-breaking 60 percent meat-free menu,? recent study suggests swapping red meat for forage fish could save lives, few companies dominate global emissions, Woodside faces shareholder revolt over their climate strategy, Australians advised to brace for prolonged droughts, urgent call for further research into plastic impact on human health, coral reefs facing unprecedented global bleaching event, Amazon's climate tipping point looming, climate models puzzled by 2023's heat anomaly, UN climate chief issues urgent call to action and UN climate court rules Switzerland violated human rights.

Again, if I happen to miss some key markers in a particular month. Just drop me some comments, and I will pick them up next month!?

*‘ESG Markers’ – like biomarkers that tell us how healthy our body may be, ESG Markers showing us the big movements in the field of ESG in Oceania and globally.?

So, here are my Top 10 for April 2024, again in no particular order.

Record rainfall floods UAE, disrupting travel and prompting climate speculation

The United Arab Emirates (UAE) grappled with unprecedented rainfall, leading to flooding that inundated Dubai International Airport, a critical hub for international travel. Described by the state-run WAM news agency as a historic weather event, the downpour surpassed any recorded since 1949 (even before crude oil was discovered in this region!)l, when data collection began. While rainfall also affected neighbouring countries like Bahrain, Oman, Qatar, and Saudi Arabia, the impact was particularly acute in the UAE.

The repercussions of the deluge were substantial, with Dubai International Airport experiencing disruptions in flight operations and transport systems severely affected. Efforts to mitigate the flooding included pumping water from streets and highways, yet the scale of the crisis led to significant challenges in transportation and infrastructure management.

While rain is rare in the arid UAE, the recent events underscored the vulnerability of the region to extreme weather phenomena. Neighbouring Oman also faced tragic consequences, with heavy rains claiming multiple lives, including schoolchildren. As the UAE and its neighbours contend with the aftermath of the unprecedented rainfall, attention turns to resilience-building measures and strategies to address the escalating impacts of climate change.

ISSB priority research initiatives and work areas announced & European Parliament Approves Corporate Sustainability Due Diligence Law

The International Sustainability Standards Board (ISSB), following its recent consultation on future priorities, will embark on research projects concerning disclosure of risks and opportunities linked to biodiversity, ecosystems, ecosystem services, and human capital. These initiatives aim to cater to investors' informational needs in evaluating the potential impacts on a company's prospects.

Drawing from existing frameworks like the SASB Standards, CDSB guidance, and the Task Force on Nature-related Financial Disclosures (TNFD), the ISSB will scrutinise current disclosure practices, identify limitations, and propose solutions to establish more precise global sustainability-related financial disclosures.

While prioritising the implementation of its inaugural Standards (IFRS S1 and IFRS S2), the ISSB will dedicate attention to enhancing the SASB Standards and addressing emerging needs, in collaboration with the International Accounting Standards Board (IASB).

Notably, the ISSB opted against immediate projects related to human rights, but will monitor developments in this area for potential future inclusion in its agenda.

Chair Emmanuel Faber highlighted investors' growing demand for improved disclosures regarding biodiversity, ecosystems, ecosystem services, and human capital, emphasising their significance beyond climate-related concerns.

The ISSB aims to publish a summary of the feedback from its agenda consultation, along with its response and a two-year work plan, in June.

On April 24, the European Parliament endorsed the Corporate Sustainability Due Diligence Directive (CSDDD), advancing its path toward adoption by the EU. The CSDDD introduces legal accountability for companies regarding environmental and human rights breaches in their supply chains. Despite initial robust proposals, the final directive underwent significant dilution to garner consensus. It mandates sustainability due diligence for EU-based firms and certain non-EU entities operating within the EU, expanding liability to subsidiaries and suppliers. The law, phased in over five years, imposes obligations based on company size and turnover, with implementation expected at the national level within two years of EU adoption.

World economy faces staggering 38 trillion dollars in annual damages from climate change

A study published in "Nature" reveals that the world economy is already locked into a significant income reduction of 19% by 2050 due to climate change, regardless of immediate CO2 emission reductions. Led by scientists at the Potsdam Institute for Climate Impact Research (PIK), the study analysed more than 1,600 regions globally over 40 years to assess the future economic impacts of changing climate conditions.

The findings indicate that regions worldwide, including North America and Europe, will experience substantial income reductions, with South Asia and Africa being hit hardest. Economic growth factors such as agricultural yields, labour productivity, and infrastructure are particularly vulnerable to climate change effects.

With global annual damages estimated at a staggering 38 trillion dollars by 2050, rising temperatures, changing rainfall patterns, and increased weather extremes contribute significantly to these losses. Notably, countries least responsible for climate change are projected to suffer the most severe economic consequences, highlighting the inequity of climate impacts.

Lead researcher Maximilian Kotz emphasised the urgent need for adaptation efforts alongside immediate and drastic emissions cuts. Failure to act decisively could result in even larger economic losses, with projections suggesting potential global income reductions of up to 60% by 2100.

New York sues world's largest meat company for climate claims, Paris 2024 Olympic Games to feature a ground-breaking 60 percent meat-free menu & recent study suggests swapping red meat for forage fish could save lives

New York Attorney General Letitia James's lawsuit against JBS, the world's leading meat company, alleges deceptive marketing about its climate commitments, raising broader implications for corporate sustainability advertising. Experts suggest this lawsuit, among a series targeting large corporations in aviation, automotive, and fashion, signals a crackdown on greenwashing. JBS, which owns brands like Swift and Pilgrim's Pride, faces accusations of overstating its climate goals without concrete actions. The suit highlights the significant environmental impact of meat production, particularly beef, which contributes substantially to greenhouse gas emissions. Despite the environmental focus, the lawsuit primarily addresses consumer fraud, reflecting a growing trend of legal actions against greenwashing. Led by a state attorney general, this case signifies government intervention and signals a shift in regulatory scrutiny. The outcome could reshape corporate messaging on climate commitments, potentially influencing future business practices and consumer perceptions.

On better news, the Paris 2024 Olympic Games will feature a ground-breaking 60 percent meat-free menu, announced by organisers aiming to enhance sustainability and promote healthier dietary choices. The culinary offerings will include meat-free burgers, quinoa salads, and falafels, aligning with the Games' sustainability commitment. Moreover, 80 percent of dishes will be sourced from local produce in France, further underscoring environmental responsibility.

Separately, a recent study suggests that replacing red meat with forage fish like herring, sardines, and anchovies could save 750,000 lives annually and address the climate crisis. Red meat consumption is linked to health risks and environmental damage, while forage fish are nutritious and abundant.? Researchers from Japan and Australia conducted a comprehensive analysis involving data from over 130 countries. They found that substituting forage fish for red meat could prevent 750,000 deaths each year and reduce disability due to diet-related diseases.

This dietary shift could be particularly beneficial for low- and middle-income countries, where forage fish are affordable and heart disease rates are high. Forage fish are rich in nutrients like omega-3 fatty acids, calcium, and vitamin B12, and have a low carbon footprint.? Currently, much of the forage fish catch is used for fishmeal and fish oil in fish farming. The researchers proposed various scenarios for reallocating forage fish globally to maximize health benefits.

Few companies dominate global emissions & in Australia Woodside faces shareholder revolt over their climate strategy

A study reveals that only 57 oil, gas, coal, and cement producers are responsible for 80% of global fossil CO2 emissions since the 2016 Paris climate agreement. These entities, a mix of state-controlled corporations and multinational companies, have largely increased fossil fuel production and emissions post-Paris agreement. Notably, ExxonMobil tops the list of investor-owned contributors, linked to 3.6 gigatonnes of CO2 emissions over seven years. State and state-owned producers, particularly in Asia's coal sector, show significant emission growth, despite warnings against new oil and gas field developments. The Carbon Majors Database assigns responsibility for emissions to entities profiting from fossil fuel extraction, redirecting accountability from individual consumers to corporations. This update, available publicly, compares long-term emission trends with recent developments, highlighting China's dominance in historic and contemporary emissions. While some companies have set net-zero targets, criticism mounts for inadequate action to curb emissions. Calls for fossil fuel firms to contribute to climate damage compensation gain traction amid escalating climate threats.

One of Australia’s largest gas companies, Woodside, Australia's oil and gas giant, faced a significant investor revolt with 58% rejecting its climate plans as inadequate. Despite chairman Richard Goyder's engagement efforts, concerns persist over weak targets and new fossil fuel projects. While Woodside defends LNG as a transition fuel, shareholders demand concrete emissions reductions. The outcome shows escalating investor pressure on corporations to address climate risks.

Australians advised to brace for prolonged droughts

Recent research indicates that Australia should prepare for the likelihood of megadroughts lasting over 20 years. The study by the Australian National University suggests that while megadroughts have naturally occurred, climate change exacerbates their severity. Climate models indicate that future droughts could surpass previous records, with hotter temperatures intensifying their impact.

The study underscores the importance of readiness, citing the tinderbox drought linked to the Black Summer bushfires, lasting only three years. The research, using tree ring data and climate models spanning over 1,000 years, aims to inform proactive measures. Strategies such as water management plans, community support networks, and emission reduction are crucial in mitigating megadrought risks.

For farmers who experienced a four-year drought in 2016, preparation is essential. As Australia faces the prospect of prolonged droughts, proactive measures and adaptive strategies are vital for resilience in the agricultural sector and wider community.

Urgent call for further research into plastic impact on human health

New research highlights the pervasive presence of microplastics and nanoplastics (MPs/NPs) in human tissues, raising concerns about their potential health effects. The study, 'Mitochondria as a Target of Micro- and Nanoplastic Toxicity,' reviewed 130 studies, revealing that plastic particles can trigger oxidative stress and mitochondrial damage, leading to a range of health issues.

While primary particles, like microbeads, are well-known, secondary particles formed from plastic waste degradation pose a greater threat due to their abundance. Despite their prevalence in oceans, soil, and air, the health risks associated with these particles remain poorly understood.

The study underscores the urgent need for comprehensive research into the impact of plastic pollution on human health, especially considering the potential links to neurodegenerative and cardiovascular diseases. Moreover, existing research primarily focuses on polystyrene plastic, neglecting other plastic types and the effects of common additives and environmental pollutants absorbed by plastics.

Addressing these gaps in knowledge is crucial for developing effective strategies to mitigate the health risks posed by MPs/NPs and reducing plastic pollution at both individual and national levels.

Coral reefs facing unprecedented global bleaching event & Amazon's climate tipping point looming

Global heating has driven coral reefs into a fourth mass bleaching event, set to be the most extensive on record, according to US government scientists. Over 54% of coral reef areas have experienced heat stress leading to bleaching, with the Great Barrier Reef enduring its most widespread heat stress event ever.

The frequency and severity of bleaching events have escalated since 1998, with the current event projected to surpass previous records. Scientists warn that coral reefs are highly vulnerable to global heating, with mass bleaching confirmed across various regions, including the Americas, the Caribbean, the Middle East, and the Indian Ocean.

As sea surface temperatures rise due to global heating and El Ni?o events, coral reefs face shortened recovery periods between bleaching events. Predictions indicate that by 2040-2050, severe annual bleaching will affect every coral reef worldwide.

Moving to impacts on the Amazon, satellite data analysis indicates that approximately 47% of the Amazon rainforest faces the threat of environmental stressors by 2050, potentially nudging these regions towards a climate tipping point. ?Studies have long warned of the Amazon reaching a tipping point due to rising temperatures and deforestation, exacerbated by factors like El Ni?o and climate change. However, predictions on when and where such a tipping point might occur vary among climate and ecological models.

Analysing satellite data, researchers from the Federal University of Santa Catarina in Brazil identified regions at higher risk, considering factors like temperature, drought, fire, and deforestation. They found that 10% of the Amazon basin faces exposure to multiple stressors by 2050, while 47% faces at least one stressor, indicating potential degradation.

While protected areas and Indigenous territories show lower deforestation rates, uncertainties persist regarding the Amazon's future. Despite potential CO2 benefits, variations in nutrient and water availability contribute to modelling uncertainty, raising concerns about the ecosystem's stability.

Climate models puzzled by 2023's heat anomaly & UN climate chief issues urgent call to action

In 2023, the planet experienced a remarkable deviation from climate predictions, warming 0.2°C more than expected, posing a challenge for climate scientists. Despite statistical models accounting for greenhouse gas emissions and past observations, this unprecedented heat spike has exceeded projections.

Factors such as the La Ni?a-to-El Ni?o transition and reduced sulphur emissions from shipping contribute only minimally to the anomaly. While theories like volcanic eruptions and solar activity have been considered, they fail to fully explain the substantial deviation. The lag in obtaining comprehensive aerosol emission data further complicates the analysis.

NASA's PACE mission, launched in February, aims to provide critical data on aerosol particles, offering insights into climate modelling uncertainties. However, this knowledge gap underscores the urgent need for more agile data collection systems.

The unanticipated temperature rise suggests a potential shift in Earth's climate dynamics, challenging conventional statistical inferences. Rapid understanding of these changes is essential for refining seasonal climate predictions and understanding the broader implications for global climate stability.

Published in PNAS Nexus, this article highlights the interconnected crises of climate change, ecological destruction, and inequality. It emphasizes the need for comprehensive action to address these challenges, including urgent decarbonization, equitable development, and transformative financial support for lower-income nations. The authors advocate for a paradigm shift towards sustainability, resilience, and justice, urging global cooperation to navigate towards a future where human progress aligns with ecological integrity and social equity.

Coincidently, or not, the UN's climate chief has issued a stark warning, emphasising that the next two years are critical for averting catastrophic climate change. With global temperatures on the rise, urgent action is needed to cut greenhouse gas emissions by half by 2030, a target essential for preventing extreme weather events and rising temperatures.

Despite this imperative, energy-related CO2 emissions reached record highs last year, indicating a significant gap between current commitments and necessary actions. Simon Stiell, Executive Secretary of the United Nations Framework Convention on Climate Change, has stressed the need for stronger national climate plans to achieve substantial emission reductions.

Addressing the Group of 20 nations, responsible for 80% of global emissions, Stiell has called for immediate and intensified efforts. Stiell has also advocated for innovative financing mechanisms, including debt relief and taxes on shipping emissions, to mobilise climate finance.

UN climate court rules Switzerland violated human rights

In a landmark ruling, the European Court of Human Rights (ECHR) has declared that weak climate policies constitute a violation of fundamental human rights. The court's decision sets a precedent for legal action against government inaction on climate change.

The case, brought by a group of older Swiss women, highlighted the increased risk of death from heatwaves due to inadequate climate policies. The court found that Switzerland had failed to fulfill its obligations to mitigate climate change, emphasising the urgent need for stronger action.

The ruling has broader implications, opening the door for similar cases against other nations. With global emissions continuing to rise, the judgment underscores the urgency of addressing the climate crisis as a human rights issue.

Youth activists, including Greta Thunberg, celebrated the verdict outside the courtroom, highlighting the importance of holding governments accountable for climate action. The ruling signals a shift towards greater accountability for climate policies and sets a precedent for future legal action to ensure a sustainable future.

?

The views expressed in this article are the views of the author, not Ernst & Young (EY). This article provides general information, does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Liability limited by a scheme approved under Professional Standards Legislation.