In this week’s Sustainability/ESG bulletin, we bring you findings of a recent study which shows that financial firms need to do more to explain terms like ‘ESG’ (environment, social and governance) to people, that Irish CEOs are giving a low priority to the low-carbon transition, how sustainability certification can be of value for companies, and how a new EU regulation may compel countries to boost their nature restoration efforts. You will also find articles, a podcast, a TedEd list, tips for how to talk about climate change and events coming up.
- In the news
- Technical updates
- Some extras
- Events
What does ‘ESG’ mean?
A survey by asset manager Amundi of more than 1,000 Irish-based savers has found that most of them are unsure about what terms like ‘ESG’ (environment, social and governance) and ‘responsible investing’ mean.
The findings of the survey, which are available in the Amundi report Your Planet, Your Future, found that 89 percent of respondents had not heard of the term ‘ESG’, and that one in four of those who had heard of it did not know what it meant. However, when it was explained to them respondents were categoric: “an overwhelming 86% strongly agreed that each of the E, S and G was important, with strong support in the three areas when looked at individually.”
It also found that a significant majority of savers appeared to conflate ‘responsible investing’ with ‘investing cautiously’, rather than the incorporation of ESG into the selection and management of investments. This reportedly highlights a significant gap between what people know about ESG investment and how the financial industry is communicating the concept. It also suggests that despite their efforts, financial firms were not closely associated with sustainability in the minds of consumers.
Describing the findings, CEO of Amundi Ireland David Harte stated that “the investment industry needs to do more to raise awareness of responsible investing; what it is, how it can contribute towards helping the planet, and how Irish people can benefit.”
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Low-carbon is a lower-priority for Irish CEOs but more focus on ESG
Research published by the business representative group Ibec this week shows that the low-carbon transition agenda is relatively low on the list of CEO priorities for 2022.
Among the responses of the 305 CEOs surveyed between December 2021 and January 2022, stakeholder and community engagement made it to only number 12 on their list of priorities for the year ahead, while sustainability and circular economy issues reached just sixteenth place. Diversity and inclusion were in eighteenth place out of the 20 items listed.
Only 25 percent of CEOs included sustainability and among their top five priorities, and transition to a low carbon economy was identified as a ‘minor challenge’ in just over half of the organisations surveyed.
Attracting, retraining and upskilling talent remained one of the key business challenges for organisations into 2022, followed by the cost of doing business, supply chain issues, the Irish business environment and employee wellbeing.
Three out of five respondent companies (60 percent) indicated that there was increased focus on ESG initiatives in their organisation than there was last year, with more employers prepared for gender pay gap reporting (33 percent) than for ESG reporting (11 percent). Only 12 percent listed prioritisation of ESG across the business among their ESG activities.
Click here for more.
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Business Working Responsibly Mark annoucmenet
Business in the Community Ireland (BITCI) this week announced the companies to be recertified to their Business Working Responsibly Mark and welcomed the new companies who have achieved it.
Speaking at the announcement event BITCI CEO Tomás Sercovich outlined the emerging trends in the post-pandemic corporate landscape in Ireland, including impacts of the climate crisis, Covid-19, and upcoming Irish and European legislation. Pointing to the value of certification of sustainability for companies, he stated:
“Companies are on a journey of continuous improvement. We know the pressures that companies are seeing when it comes to disclosure. [Certification] is about having the evidence that you’re on a meaningful journey towards sustainability. It’s also about leadership, and demonstrating to your employees, customers, suppliers, and community at large that you’re serious about this.”
Speaking at the event, Minister of State with responsibility for Trade Promotion, Digital and Company Regulation at the Department of Enterprise, Trade and Employment Rob Troy TD, praised the commitments and efforts of companies striving for continuous improvement with environment, social and governance credentials:
“At a strategic level, while your business bottom line is vital – without it businesses cannot continue - investors, consumers and jobseekers have become more conscious and discerning about which products and services to choose. Investors want businesses to demonstrate how they are engaging with the core business and societal challenges and how they are mitigating risks in areas such as diversity and inclusion, environmental sustainability, and human rights. Consumers are more conscious than ever of the environmental, ethical and social aspects of companies and their products and services. Jobseekers want to work for organisation that share their values and contribute positively to the local and global community.”
You can read more about Business in the Community and the resources they provide on their website.
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EU Nature Restoration Law
The European Commission is expected to present a proposal on 23 March for a regulation to compel countries to boost nature restoration efforts.
The proposal is one of the measures announced in the EU’s 2030 Biodiversity Strategy. This strategy aims to put Europe’s biodiversity, which is disappearing at an unprecedented rate, “on the path to recovery by 2030 for the benefit of people, climate and the planet”. Broadly, biodiversity is the biological variety and variability of life on Earth.
The EU Biodiversity Strategy contains specific commitments and actions to be delivered by 2030, one of which is an EU nature restoration plan. In this plan the EU aims to restore degraded ecosystems through concrete commitments and actions by 2030, and manage them sustainably, addressing the key drivers of biodiversity loss. The proposal, which is part of this plan, was expected by the end of 2021 but was postponed to 23 March 2022. We will keep members informed of all updates.
Leading science and industry bodies partner with TNFD
The Taskforce on Nature-related Financial Disclosures (TNFD) has announced that it is working with a multi-disciplinary group of leading international organisations to support its development of an integrated risk management and disclosure framework for nature-related risks.
The TNFD framework aims to provide companies and investors with decision-useful information to help shift the flow of global capital to nature-positive outcomes. As more than half of the world’s economic output – US$44tn of economic value generation – is moderately or highly dependent on nature, nature loss represents significant risk to corporate and financial stability.
Consultation and piloting testing of the draft risk management and disclosure framework is due to begin in April. You can read more about the TNFD here.
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Green Hydrogen
A Private Members Bill has been introduced to Dáil Eireann to require the Minister for the Environment, Climate and Communications to draft and publish a green hydrogen strategy for Ireland.
The Green Hydrogen Strategy Bill 2022 calls for the strategy to include an assessment of the contribution that green hydrogen (i.e., hydrogen that is produced using 100 percent renewable energy) can make towards the State’s national climate objective, as well as interim targets for the amount of green hydrogen production to be developed here by 2030 and 2040.
It also calls for a target for the number of quality jobs that can be created in the green hydrogen sector here, and a policy on how hydrogen production and storage can be developed on an all-island basis.
Read more here.
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Technical Updates
Click here for Technical Updates from our Professional Accountancy team.
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Some extras
ICAEW: Auditors and the Paris Agreement
This article from ICAEW discusses the key role auditors will have in the world achieving net zero emissions by 2050, which is crucial in order to achieve the goals of the 2015 Paris Agreement aims to limit the increase in global average temperature to 1.5°C.
What does the intersection of tax and ESG look like?
In this Forbes interview with Eelco van der Enden, the new CEO of the Global Reporting Initiative discusses the growing environmental, social, and governance landscape and why tax is a necessary and important part of ESG reporting.
Tips for how to talk about climate
Not everyone wants to lie down in front of lorries, according to Guardian journalist Elizabeth Cripps, so in this article she demonstrates how help people can take action on the climate crisis by using their own strengths and leveraging their expertise. This can include demanding that your bank or pension fund divest from fossil fuel, or reframing reasons for engaging in the climate action in terms of civil or human rights activism.
The McKinsey Report
Governments and companies worldwide have pledged to achieve net-zero emissions of greenhouse gases. But what would it actually take to fulfil that ambition? In case you missed it, revisit a definitive new report, available as a free download, on the economic transformation that a transition to net-zero emissions would entail. It estimates the changes in demand, capital spending, costs, and jobs, to 2050, for sectors that produce about 85 percent of overall emissions and assess economic shifts for 69 countries.
TedTalks
TedEd has created Earth School, a ‘one-stop-shop for celebrating our planet and understanding what we need to do to save it’, including a 5-question quiz you can take to test your knowledge of climate-change basics
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Events
Ireland
Wednesday 23 February, 1pm - ‘Ask the Expert’ - Electric Vehicles
Join SEAI’s Electric Vehicle Programme Executive
Emer Barry and Motoring Correspondent for the Sunday Independent,
Geraldine Herbert in the Ask the Expert Q&A about Electric Vehicles on Wednesday 23 February at 1pm.
Register here
Northern Ireland
Wednesday, 23 February, 12.30-1.30pm
Ulster Society - Public Sector Webinar: Climate Change and Sustainability Reporting
Debbie Caldwell, Belfast City Council; Dr Judith Wylie, University of Ulster Business School; Keith Scott, NI Water will examine how organisations can meet their sustainability obligations, act responsibly and play their part in addressing climate change.
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You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our online Sustainability Centre.
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