The Age of Transparency is Here:
The National and International Environmental Reporting and Climate Disclosures
Mandatory reporting of climate and environmental disclosures is coming to US public companies, as well as many international companies globally. What does this mean for your site, company, and how should you prepare for it?
The past decade a growing momentum has been to disclose their carbon emissions and climate risks voluntarily. Organizations such as CDP Worldwide and the
Sustainability Standards Board (SASB) have been collecting and compiling such data from companies. The voluntary disclosure of environmental and sustainability data is now widely commonly recommended given there is a variety of stakeholders that look for and expect this climate related and Environmental Sustainability Goals (ESG) information from companies.
Voluntarily sharing ESG disclosure is now promoted by a variety of stakeholders, given the rising demands for climate related and ESG information. In addition to pressure from many pension and investment funds, activist investors are looking to invest only in an encouraging investments in ESG-friendly companies.
The Net Zero targets are set by the 1.5°C report of the climate working groups at the COP26.
What is ESG and Where did it come from?
Environmental, Social and Governance, otherwise known as ESG, is a program to identify and measure the impact of an organization’s policies and procedures that relate to environmental, sustainability and social standards.
ESG did not happen overnight. ESG focuses a company in providing both visibility into its environmental and its social impacts. ESG governance assesses the corporate structures and processes that are designed to ensure accountability and transparency.
Many of ESG environmental components stem from EU regulations, like the Non-Financial Reporting Directives, which provide disclosure in relation to non-financial information. The EU Taxonomy Regulation, which was adopted in July 2020, is used for an activity to be environmentally sustainable.
Climate change mitigation
Climate change adaptation
The sustainable use and protection of water and marine resources
The transition to a circular economy
Pollution prevention and control
The protection and restoration of biodiversity and ecosystem
Sustainability Issues are Business Issues
Many companies across many verticals should use a framework or a methodology to measure their impact and report on ESGs. There are many forms and templates to develop and conduct such assessments and compliance practices. Besides the many tools for such reporting, which are now somewhat automated in variety of forms (such as in subscription software), companies should refer to their local jurisdictions (in EU or US) to see which programs apply. Navigating the various programs, reporting, and conducting such evaluations in house may be somewhat complicated. More details on these will be shared in future blogs.
Exergy recommends that sites first conduct a full-scale material, resource use and waste review.A review of operating unit processes will reveal the practices that need to be reviewed, modified, or updated. Also, it will reveal the use and waste of material, especially if it leads to water/material use and discharge. Exergy's proven strategy for the review of water- intensive manufacturing processes allow for a comprehensive evaluation of theopportunities for water use reduction and wastewater elimination. We have proven overand over that this process works and leads to savings in operating costs, as well as, processquality improvement in every case.
(1) This will be several of a series of blogs we intend to publish regarding the ESG reporting requirements in the coming months.