There are a lot of acronyms flying around with ESG. There’s at least a dozen reporting frameworks out there, and it can be hard to know which one to use when a regulation may be coming down the line which mandates one over the other.
While the ESG space is mainly unregulated, legal requirements are coming in different countries and at different paces. Some are already in force and certain businesses may already find themselves having to undertake ESG disclosures depending on their size and industry.
Should your ESG effort include carbon literacy for all staff?
Carbon literacy means making people aware of the cost of climate change in everyday activities, and how emissions of carbon and other greenhouse gasses into the atmosphere can be reduced with individual, organisational and structural changes.
Carbon literacy is more than just hot air. It focuses teams to understand climate change from a scientific level. Climate change is one of the greatest threats to human life, with climate change already causing severe weather disruption around the world and putting millions of people at risk from extreme weather events. Carbon literacy helps a business to understand what that means, and what can be done.
How do you know if your business is ready to form one?
Forming an ESG committee is a crucial step to get started on your ESG journey. It can be informal and ad hoc, but bringing in more than one person or department will help to deliver on your ESG goals.
Before you decide to form a committee, you should think about your ESG maturity. Understanding where your business sits on the ESG maturity framework will help ensure that you are doing things in the right order and at the right time. There’s no point in forming an ESG committee for example if your business is not planning any investment whatsoever in ESG efforts.
It depends on how committed your business is to ESG
ESG consultants help companies determine what actions they should take to improve and build on their ESG efforts. They can undertake risk assessments, due diligence and impact assessments, as well as help to prepare reports and measure impacts.
They can also help to develop the right structures and processes inside the organisation if you are preparing for ESG disclosures. If you’re just getting started with ESG, you should also read our explanatory guide: ESG: What Businesses Need to Know. That guide provides a summary of the key terms and concepts you should be aware of before diving into ESG in more depth.
EU proposals will seek to uplift millions of workers, with the UK close behind
Workers throughout the gig economy in the EU, from Uber to JustEat, will be given minimum rights to sick pay, holidays, wages, and protections from algorithmic decision making under plans to crack down on sham self-employment. The EU’s draft legislation will shift the burden of proof for employment status to companies rather than individuals. Similar to what IR35 has sought to do in the UK, but more specifically for gig workers.
For years, workers have been embroiled in long-running legal disputes with gig platforms, going to court to gain access to basic rights such as the minimum wage. Uber recently lost its battle in the UK Supreme Court to maintain it’s 40,000 drivers were self-employed, and therefore not entitled to basic employment rights.
The UK just hosted the UN Climate Change Conference, known as COP26. This summit is one of the most consequential climate events since the negotiation of the Paris Agreement in 2015 and was attended by world leaders, politicians, business chiefs, climate change campaigners and sustainability experts.
With increasing ESG regulations coming across the world, particularly on the environment, what will the international effort to tackle climate change mean for environmental compliance?
In this webinar, we dissect government and international commitments following the conference and discuss what that means for businesses working towards net-zero.
We were joined by James Alexander, Chief Executive of the UK Sustainable Investment and Finance Association. As well as the impact of COP26, we heard from them about ethical investing and how businesses can set themselves apart through net-zero commitments and ESG compliance.
The webinar covered:
Current environmental regulations for businesses and what might change
The impact of COP26 on compliance
How companies can work towards net-zero
Understanding ESG reporting and preparing for ESG regulation
ESG – Environmental, Social and Governance – is the hottest acronym in the business world today. Global businesses are no longer working on environmental, social and governance issues in a silo. They are bringing them together under the banner of ESG to demonstrate the positive impact the business is having on the world.
By combining issues like carbon emissions, progressive hiring practices and strong compliance, businesses can show not only are they a sound investment, but they have a net positive impact on the world. ESG is about assessing that net positive impact in the world, and taking concerted, defined and measurable action to improve it.
VinciWorks has created a comprehensive guide about ESG that explains what it is and advises businesses on all they need to know and what steps they can take to work towards becoming ESG compliant.
New ESG regulations and net-zero commitments from Glasgow
COP26 is now entering its final week, but many major pledges have already been announced. The chancellor, Rishi Sunak, announced that most big UK firms and financial institutions will be required to publish their net-zero plans in line with the UK’s environmental disclosure framework: TCFD. With the ‘E’ part of ESG gathering significant attention at the Glasgow conference, it seems the UK is moving towards a regulated and mandated ESG disclosure framework.
The announcement by the Treasury means companies will have to set out detailed plans for how they intended to meet the UK’s goal of net-zero by 2050. Commitments though will not be mandatory, and it will be up to firms and shareholders to decide how to adapt to a low carbon future. The requirement is on the publication of the plans, with the aim of letting the market decide which plans are credible.
The Glasgow Financial Alliance for Net Zero (GFANZ) led by former Bank of England governor Mark Carney says more than $130trn (£95trn) of private capital “is now committed to transforming the economy for net zero.” In practical terms, this means financial institutions divest from highly polluting industries like oil fields and coal mines, and instead invest in renewable energy or provide a mortgage product that subsidises highly efficient homes.
Global businesses are no longer working on environmental, social and governance issues in a silo. They are bringing them together under the banner of ESG to demonstrate the positive impact the business is having on the world.
By combining issues like carbon emissions, progressive hiring practices and strong compliance, businesses can show not only are they a sound investment, but they have a net positive impact on the world.
VinciWorks will soon be releasing a new course covering a wide range of topics on the subject of ESG.
World leaders likely to make more ESG reporting mandatory
COP26 might be experiencing its own logistics problems, with delegates queuing for hours to get in and a foreign energy minister unable to access the venue because she is a wheelchair user, but the early spotlight at the conference has fallen on supply chains. Already one of the key takeaways from the global climate summit in Glasgow will be a need for businesses to pay much closer attention to supply chain due diligence as countries commit to more mandatory ESG reporting.
World leaders agreed a significant deal to tackle deforestation, committing billions of funding to restore degraded land, protect forests and mitigate damage. The UK is already pushing ahead with regulation to tackle deforestation. The Environment Bill currently going through parliament includes provisions to require large companies to undertake supply chain due diligence and report on the risks of deforestation in their supply chains.
