Sustainable Business Management Shared Interest Group

An Introduction to Environmental, Social and Governance

ESG provides quantifiable indicators (including sustainable, ethical and corporate governance issues such as managing the company's carbon footprint and making sure there are systems in place) to measure accountability. It applies numerical figures as to how companies treat their staff, manage supply chains, respond to climate change, increase diversity and inclusion, and build community links.

The world's climate is changing rapidly as a result of the amount of CO2 in the atmosphere. We release into the atmosphere around 51billion tonnes of CO2 every year. The consequence of such a change will be more extreme climate conditions, more extreme weather especially flooding, drought, and rising seawater levels. Within three generations, large parts of the planet will become uninhabitable with food and water shortages commonplace.

The world's communities are now starting to come together to combat and mitigate this changing climate and its consequences. COP 29 was the latest example of such an event to discuss how we tackle this problem. 

At present there are no technologies that remove CO2 from the atmosphere at scale other than trees. We therefore must decarbonise our energy systems and move away from fossil fuels, replacing them with green renewables such as solar, wind, hydro and wave whilst finding convenient energy storage such as batteries or hydrogen

Climate change poses significant risks for businesses, and they will be impacted in a number of ways. It could be directly by the weather if they are in food production, an energy cost spike as is occurring at the moment on their cost base or by legislation as governments seek to "save" the world and rebalance the CO2 concentrations that are causing the problem.

Energy drives all our manufacturing. It also requires materials to make things. We extract over 90 billion tons of virgin material out of the planet every year and most businesses operate a linear model of "make, use and dispose". Less than 9 billon tons of materials are recycled every year. Virgin material is getting harder to find and consequently more expensive. We need to embrace a "new" approach of the circular economy if we are going to continue making things. How do we reuse materials, repurpose them and make them last longer? Recycling an item reduces its worth to less than a tenth of its original cost.

This is an introduction into how your business can become part of the solution, be purposeful, be a better neighbour and be more profitable.  

A force for Good.