What's going on in the world of ESG, CSRD, CSDDD, SDGs etc...
1. GLENCORE’S EX-HEAD OF OIL CHARGED WITH BRIBERY OFFENCES
Unfortunately, this is not the first time Glencore has been getting these kind of headlines. This story underlines why we need Business Conduct disclosures like those included in ESRS G1.
Alex Beard (56) has been charged with bribery offences relating to the Swiss commodity trader's operations in Africa.
The former head of oil at Glencore, Beard is charged with two conspiracies to make corrupt payments to government officials and officials of state-owned oil companies in Nigeria between 2010 and 2014 and in Cameroon between 2007 and 2014.
According to the Serious Fraud Office he is one of five ex-Glencore employees charged with conspiracy to make corrupt payments.
Reference: https://tinyurl.com/mry3bx2m
2. HUMANS USED PLANET’S RESOURCES FOR THIS YEAR ON AUGUST 1
Not the best news to start this week.
August 1, 2024, was the day when we used up all resources the planet can regenerate in one year – Earth Overshoot Day 2024.
In 1971, the date was December 25th – we were nearly in equilibrium. The earlier date in 2024 reflects greatly increased consumption.
Overshoot Day is based on UN data to work out ‘biocapacity’ – the planet’s ability to produce renewable resources and absorb waste, and ecological footprint – the measure of consumption of resources and emissions.
We are very clearly out of whack. We can’t increase biocapacity quickly, so we need to reduce consumption and emissions.
Clear as day.
Reference: https://heatmap.news/politics/kamala-harris-climate-record?
3. WIND AND SOLAR OVERTAKE FOSSIL FUELS IN 2024, IN EU
New analysis from Ember finds that wind and solar have overtaken fossil fuels in EU electricity in the first half of 2024.
This critical milestone was reached in four member states for the first time - Belgium, Hungary, Germany and the Netherlands - meaning there are now 13 EU Member States that have reached this status.
Increased renewable generation is scaling rapidly across Europe, aided this year by a drop in demand due to mild winters. Fossil generation continues to fall in the EU, even as demand rebounds.
Scaling of renewables needs to be continued to ensure the phase out of fossil fuels. We need to remember that 1,259 new oil and gas licenses were awarded in the last year.
Reference: https://ember-climate.org/insights/research/eu-wind-and-solar-overtake-fossil-fuels/
4. EFRAG APPROVES XBRL TAXONOMY FOR ESRS REPORTING
EFRAG has signed off on the XBRL Taxonomy for ESRS. XBRL is a way to digitally tag financial info. CSRD requires disclosures to be machine readable, using XBRL.
Based on consultation, some edits have been incorporated since the February version.
A method has been included to ensure the mathematical consistency of quantitative disclosures. E.g. It would ensure that the metrics for Scope 1, 2 and 3 GHG emissions are consistent with metrics in ESRS E1-6.
Tagging narrative information on Policies, Targets and Actions has been simplified and changes have also been made to enhance interoperability with XBRL Taxonomy for ISSB.
This development is a marked progression for ESRS and puts digital systems at the centre.
Reference: https://www.corporatedisclosures.org/content/top-stories/efrag-approves-xbrl-taxonomy-for-esrs.html
5. GRI AND TNFD ALIGN ON NATURE DISCLOSURES BRINGING ISSB CLOSER
The Global Reporting Initiative (GRI) and Taskforce on Nature-related Disclosures (TNFD) have released a map of alignment on biodiversity reporting.
The mapping tool shows a high level of alignment across GRI 101: Biodiversity 2024 standard and the TNFD recommendations.
Given that GRI 101: Biodiversity 2024 and ESRS E4 Biodiversity and are closely aligned – they joined each other's technical expert groups and shared information – both include similar instruments in biodiversity. The GRI 101 standard was designed in close cooperation with EFRAG to align with ESRS E4.
When TNFD is taken over by ISSB (like its TCFD sibling), this will mean increased similarity between ISSB and ESRS. That can only make things easier for reporters.
Reference: https://tinyurl.com/ydpy23bp
6. NO DECARBONISATION PLANS FOR QUARTER OF BIG FASHION
Almost a quarter of the world’s biggest fashion brands, such as Reebok, Tom Ford and DKNY, do not have a public plan for decarbonisation, a report has found.
The fashion industry can be highly polluting. In some cases, forever chemicals have been found in the waters near factories. The industry is also a concerning source of waste, with fast fashion accused of encouraging overconsumption.
The What Fuels Fashion? report analyses and ranks 250 of the world’s biggest fashion brands and retailers – those with turnover of $400m (£313m) or more – based on public disclosure of their climate goals and actions.
You can vote with wallet and choose other labels, or even better choose vintage.
Reference: https://tinyurl.com/42sraerk
7. UN GLOBAL COMPACT UK NETWORK CHOOSES DOUBLE MATERIALITY
Up to now the UK focus has been on the ISSB single materiality lens. The EU under ESRS applies double materiality, considering not just the financial risk from climate change, but also the impact a company’s operations has on people and planet.
"Preparing for new Sustainability Reporting Regulations" from the UN Global Compact UK Network says companies want to go beyond a short-term finances only perspective.
“In the choice between single (financial) … or double (including the impact on people and planet), Global Compact member companies are firmly recommended to take the latter, more comprehensive approach.”
I didn’t see this coming, but it is truly very welcome.
Reference: https://tinyurl.com/jbth7em6
8. ANTARCTIC 28C DEGREES WARMER THAN NORMAL
Ground temperatures in East Antarctica have soared more than 28C (50F) above normal in the second major heat wave to afflict the region in the past two years. This is an ominous sign of major temp spikes this polar climate is seeing more frequently.
Several factors may be helping to intensify the heat wave. Antarctic sea ice cover is the second-lowest on record for this time of year. Sea ice helps keep the polar regions cool by reflecting sunlight. It also helps keep the air cool by acting as a barrier between the colder air and warm waters below, which have been exceptionally warm.
Climate scientists’ models have long predicted that the most significant effects of anthropogenic climate change would be on polar regions. This is happening!
Reference: https://tinyurl.com/4bfj5kpc
9. FINANCIAL REPORTING AND SUSTAINABILITY GETTING CLOSER
In a move that points to the future home for sustainability reporting, the International Accounting Standards Board (IASB) released guidance on how companies can use their accounting standards when reporting the effects of climate-related risks in their financial statements.
As investors factor climate-related risks into decision-making, they want to do so in a manner that is familiar to them. The guidance shows how climate risks can be integrated with financial reports, strengthening the connection between financial and non-financial disclosures.
The IASB and International Sustainability Standards Board (ISSB) are both housed by the IFRS, a strong signal that finance will be the owner of sustainability reporting.
Reference: https://tinyurl.com/2p9wzs5b
10. CSRD TRANSPOSITIONS ARE RUNNING A LITTLE BEHIND SCHEDULE
The deadline for transposing the CSRD (6 July) has been and gone, but it has only been introduced into national law in 10 EU states.
At the time of writing, the CSRD has entered into force in France, Denmark, Hungary, Sweden, Lithuania, Romania, Finland, Ireland, Slovakia, and partially in Czechia. Slovenia and Latvia are almost there.
Germany, Netherlands, Italy, and Spain - are in the process while Portugal, Austria, Malta and Iceland – have yet to get started. Most are hoping to adopt the legislation in 2024 to ensure it can be effective 1 January 2025.
Delays will "inevitability create uncertainty for businesses, as well as financial markets, creating complications in terms of access to finance and investment in sustainability initiatives".
