COP26 ended with much left to do. It’s legacy, including the creation of the new International Sustainability Standards Board, will mean significant change for the UK and delivering on the promises made will require all organisations to play their part.
1 What opportunities could ESG bring to my business?
Climate-related issues have never been higher in people’s considerations from both a business and personal perspective, and this is set to rise. Integrating ESG so that it aligns to your organisation’s strategy, purpose and values, could add value in a number of ways
Help create new markets for goods and services
Access to finance
Opportunities to innovate
More resilient business models
Improved bottom-line performance
Greater ability to attract and retain talent
2 What are ESG metrics and how do you report on it?
Amount of greenhouse gas emissions
Amount of energy used
Amount of waste generated
% of product from recycled materials
% of product that is recyclable or compostable
Number of product recalls
Number of data breaches
Fines related to data security
Health and safety incident rates
Diversity on the board
Revenues in countries with high corruption risk
% of equity owned by the board
Executive remuneration linked to ESG programmes
Fines or litigation related to business ethics
3 What is net zero?
The term net zero means achieving a balance between the greenhouse gases emitted into the atmosphere versus the greenhouse gases that are removed from it. Net zero will be achieved when the amount of carbon we add into the atmosphere is equal to or less than the amount removed.
4 What is ESG investing and what are ESG funds?
ESG investing allows people to invest in companies that are taking ESG factors into consideration. ESG funds are a form of sustainable investing as they consider the impact the investments have on the planet.
5 What is TCFD reporting and is it mandatory?
TCFD stands for Task Force on Climate-related Financial Disclosures. It was created by the Financial Stability Board to improve and increase reporting of climate-related financial information. TCFD can help companies disclose climate-related financial risks to all stakeholders, including investors, lenders and insurers. These rules are mandatory for premium-listed companies and the UK government announced in 2020 that TCFD-aligned disclosures will be fully mandatory by 2025.
6 What are science-based targets?
Science-based targets provide companies with a clearly defined path to reduce emissions in line with the Paris Agreement goals. More than 1,000 businesses around the world are already working with the Science Based Targets initiative (SBTi).
Targets are considered science-based if they are in line with what the latest climate science says is needed to meet the goals of the Paris Agreement: limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.
7 What are scope 3 emissions?
TheGHG Protocol categorises greenhouse gas emissions into three groups known as ‘scopes’. Many businesses already account for their scope 1 and 2 emissions. Scope 3 has risen up the agenda as it includes accounting for other emissions that the organisation is responsible for
Scope 1 are direct emissions from owned or controlled sources (eg, company vehicles, energy/heat generation at facilities).
Scope 2 are indirect emissions from the generation of purchased energy.
Scope 3 are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions (eg, employee commuting, transportation and distribution, franchises and investments).
Sustainable nappy brand receives £13 million for global growth
We advised sustainable nappy brand Bambino Mio through a highly competitive auction process to secure £13 million investment from BGF. The investment will support Bambino Mio to expand and accelerate its growth in the UK and internationally.
"As consumers become more conscious of environmental and social issues, businesses with a sustainability purpose continue to grow in appeal. This consumer-driven approach is translating into a change in perspective at strategic levels, resulting in an investor appetite to acquire businesses with an ESG approach embedded into their long-term plans.
That’s why mid-market businesses are now highlighting ESG credentials as part of transaction processes. At the same time, investors have become wary of ‘greenwashing’, and see ESG as a topical focus during due diligence checks."