For this week's #1MinuteClimateSnippet we're focusing on #ESG. The intent behind it is to require companies to look at their operations & pinpoint the risks & opportunities to contribute to a more sustainable future.
ESG is the acronym for Environmental, Social, and Governance.
ESG criteria include the non-financial indicators that help to determine how sustainable a company is, and are used by socially-conscious investors to screen companies prior to investing in them.
ESG can serve as an umbrella term for environmental protections, wage disparities, social considerations, and much more. ESG has been a hot topic as of late. Tesla’s founder, Elon Musk, claimed ESG is “an outrageous scam” after Tesla lost its place on an S&P Global Index that tracks companies on their ESG standards.
How can ESG drive companies to consider their climate impact?
The intent behind ESG disclosures is to require companies to look at their operations and pinpoint risks and opportunities to contribute to a more sustainable future. This raises the question of does this achieve the desired result? Are more companies actually setting sustainable and measurable goals?
With trillions of dollars at stake, meeting ESG criteria can control access to capital and hold the key to future opportunities.
It’s been said that to compete in today’s competitive market, companies need to implement and act on these practices. This raises yet again another question, are ESG standards driving more companies to act sustainably, or is it in Musk’s words a “scam?”
On Tuesday, the IPCC's Sixth Assessment Report (AR6) was released, representing the most comprehensive scientific evaluation of climate change.
In response to a changing climate, we must create technologies and infrastructure improvements that are designed to mitigate and/or withstand the effects.