Top 10 ESG Markers - October 2021

Leading up to COP26, it was certainly another active month for ESG.?This month’s feature includes the Business Council of Australia and Minerals Council of Australia committing to Net Zero targets and NZ introducing climate reporting legislation.

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 October 2021, again not in any particular order.

More people than ever before worried humans are destroying the planet

Glocalities in cooperation with?Global Citizen conducted almost 250,000 interviews in 20 countries eliciting over 181,000 responses that conclude that more people now are worried that humans are ruining the planet than ever before.

Some highlights include:

- 78% of people globally worry about the damage humans cause to the planet including four out of five people in China, India, Japan, South Korea and Turkey said they were worried about the climate crisis.

- Anxieties about human made damage to planet Earth increasingly unite people from all walks of life and world regions.

- Among youth globally (18-24 years old and the highest educated generation ever in human history) the rise in environmental concern is steepest.

- The rise in environmental concern transcends the current polarization between progressives and conservatives globally – something that that is rarely seen in research.

- People who worry about damage to the planet have more trust in the United Nations than in their government.

COP26: Document leak reveals nations lobbying to change key climate report

A huge leak of documents seen by BBC News shows how countries are trying to change a crucial scientific report on how to tackle climate change.?The leak reveals Saudi Arabia, Japan and Australia are among countries asking the UN to play down the need to move rapidly away from fossil fuels.

It is reported that one senior Australian government official rejects the conclusion that closing coal-fired power plants is necessary, even though ending the use of coal is one of the stated objectives the COP26 conference. Australia has since said that its is committing to a Net Zero 2050 target, but the plan has been criticised by most quarters as not having sufficient detail.

Minerals Council confirms 2050 ambition of net zero emissions

The Mineral Council of Australia (MCA) confirmed the industry’s ambition to achieve net zero emissions by 2050 in support of the goals of the Paris Agreement. In June 2020, the MCA and members launched the Climate Action Plan as a clear commitment to do the work needed to achieve net zero emissions.

This ambition can only be achieved through significant investment in technology and member companies are proactively adopting or considering a range of technologies including those that are already available and others where breakthrough development technology is still required. The types of individual activities identified as facilitating emissions reductions at scale (greater than 100,000 tCO2 per annum) include: energy efficiency initiatives, considering where renewable energy can replace current energy sources, carbon capture and storage, additional flaring and gas capture equipment, flaring of underground emissions, ventilated air methane (VAM) abatement (subject to safety considerations), electrification and funding medium-longer term negative emission technologies.

EY Mining & Metals Report 2022 finds top 3 risks to be ESG related

Opportunities will continue to outweigh risks in 2022, as ongoing social disruption became the clear driver of change in the mining and metals industry. While there were fears that the COVID-19 pandemic may slow global progress on sustainability measures, the opposite has been true. It is clear from our survey results that purpose, long-term value and sustainability are no longer add-ons to business as usual — they are business as usual. External influences will keep driving risks and opportunities as stakeholder and capital market pressure continues to hold miners accountable. It’s not surprising then that the top three risks and opportunities this year for the mining and metals sector are: environment and social; decarbonization; and license to operate (social licence).

UN declares access to a clean environment a human right

The U.N. Human Rights Council this month recognised access to a clean and healthy environment as a fundamental right, formally adding its weight to the global fight against climate change and its devastating consequences.?The vote passed with overwhelming support, despite criticism in the lead-up from some countries, notably the United States and Britain.

The resolution, first discussed in the 1990s, is not legally binding but has the potential to shape global standards. Lawyers involved in climate litigation say it could help them build arguments in cases involving the environment and human rights.

The World Health Organization estimates that some 13.7 million deaths a year, or around 24.3% of the global total, are due to environmental risks such as air pollution and chemical exposure.

Swiss Re and Munich Re rule out backing for Australian coal mutual

Swiss Re and Munich Re have ruled out support for a controversial mutual fund proposed for the Australian coal industry due to their climate and coal policies would rule out their involvement in the scheme.

The coal industry mutual fund has been touted as a potential solution to the insurance challenges faced by the Australian coal industry, after insurers increasingly refuse coverage because of concerns about global warming and climate risk.

There is now a proposal for the Australian government establishes a $250 billion fund to lend public money to mining companies to finance and insure coal projects that the private sector is unwilling to support. The proposed loan facility could support the creation of a coal industry mutual fund.

UAE Sets 2050 Net-Zero Goal, First Among Gulf Petrostates

The United Arab Emirates has become the first of the Persian Gulf’s petrostates to commit to a net zero goal.?The new target aligns the UAE with most major economies. The commitment is the latest from countries ahead of United Nations-sponsored climate talks starting later this month in Glasgow, Scotland, and known as COP26.

The UAE relies heavily on the export of oil and gas, which makes up about 30% of its gross domestic product, despite decades of efforts to diversify the economy. The nation of 10 million people also has one of the world’s highest emissions rates per capita ahead of the likes of Australia and the U.S.

In mapping out a scenario for the world to reach net-zero, the International Energy Agency still sees the planet consuming as much as 24 million barrels of oil a day by 2050, down from around 100 million now. The plan indeed is to increase production in the near term, but reduce it in line with the net zero pathway over the medium and long term.?

Business Council of Australia commits to Net Zero 2050

The Business Council of Australia has called for a doubling of Australia’s efforts to slash carbon pollution over the next decade and unveiled a detailed plan to meet net zero emissions by mid-century while boosting the economy by $890 billion.

BCA says Australia must lift its 2030 emissions reduction target to between 46 and 50 per cent below 2005 levels. It calls for a four-fold increase in renewable energy and a greater effort to embrace low-emissions technology throughout the economy.

The BCA suggests that by accelerating emissions reduction and seizing the “first mover advantage”, average Australians would be $5000 a year better off by 2050, and those in the regions would gain the biggest economic benefit and the majority of almost 200,000 extra jobs by 2070.

It also recommends governments make significant charging and network infrastructure investments required to support the shift towards electric and hydrogen-based vehicles, as well as more state-based incentives for uptake. Hitting the new target would require an increased penetration of light electric vehicles in 2030 to 22 per cent and at least 10 per cent of the truck fleet being hydrogen-fuelled, the report found.

Australia’s major trading partners are reorientating their economies and shifting demand away from carbon-intensive imports. So far 14 of Australia’s largest 20 trading partners, including the US, Britain, Japan and South Korea, have committed to net zero, covering more than 70 per cent of the nation’s two-way trade and 83 per cent of its exports. The South Korean government recently announced it would lift its 2030 emissions reduction target from 26 per cent to 40 per cent.

BCA report’s key points

Targets

-?????????Lift 2030 emissions reduction target to between 46 and 50 per cent below 2005 levels

-?????????Formally commit to net zero by 2050 to drive new private sector investment

Actions

-?????????Rapidly decarbonise the electricity grid with renewable sources to allow other sectors to decarbonise

-?????????Accelerate deployment of commercially viable technology throughout the economy, including infrastructure to support electric and hydrogen vehicles

-?????????Create a domestic carbon offset market

-?????????Transition from fossil fuel exports to critical mineral exports

Benefits

-?????????Seizing a ‘first mover’ advantage in new technologies and export industries would leave average Australians $5000 better off each by 2050

-?????????Net zero emissions by 2050 would result in a $890 billion increase to GDP with 195,000 extra jobs by 2070

Farmers can hit net zero by 2040 while growing productivity: EY report

EY released a report that mapped out what it called a pathway under which the agriculture sector could reduce its 15 per cent share of the nation’s emissions to net zero within the next twenty years.?EY was commissioned to produce the report by Farmers for Climate Action. It mapped out a series of initiatives such as employing new low-emissions farm machinery,?using feed additives at feedlots to limit methane-laden burps from livestock, and harvest carbon stored in new tree plantings to offset other sources of greenhouse gases. Industry peak lobby group GrainGrowers has endorsed the NFF’s plans and committed to develop a grain-specific target for 2030 within the next 18 months. The red meat sector set a goal in 2017 to reach net zero by 2030.

NZ passes world-first climate reporting legislation

New Zealand has become the first country in the world to pass a law that will ensure financial organisations disclose and ultimately act on climate-related risks and opportunities.

The Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill has now passed its third reading. Once in effect, it is expected to make a significant contribution to New Zealand achieving?carbon neutrality by 2050.

Once passed, disclosures will be required for financial years beginning in 2023, subject to the publication of climate standards from New Zealand’s independent accounting standard setter, the External Reporting Board (XRB).