Welcome to Part 1 of a two-part series on ESG
Note: we usually keep these updates exclusively for our clients and team, but figured we’d start summer by sharing a sneak peek of what we’re watching and why you should be watching it too. Interested in our ESG media expertise?
Reach out to jesse@waterandwall.com!
With ESG seemingly in the news all day, every day, it’s hard for even those of us focused on this space to keep up with everything happening. Here’s the top ESG news you need to know as we head into spring.
1. The Intergovernmental Panel on Climate Change (IPCC) finished publishing its first major climate change report in eight years, marking its sixth comprehensive assessment since it began reporting in 1990.
Established in 1988 by the World Meteorological Organization and the United Nations Environment Programme, the IPCC aims to “provide governments at all levels with scientific information that they can use to develop climate policies.” Their reports also play a key role in international climate change negotiations such as those at the annual UN Climate Change Conference.
While the IPCC puts out a number of different reports, its most in-depth reports are its regular Assessment Reports, issued every six to eight years. These reports offer a comprehensive detailing of the current state of climate change and what we need to accomplish to mitigate the impact. Each Assessment Report includes contributions from each of the three Working Groups, as well as a Synthesis Report summarizing changes since the last assessment.
The Sixth Assessment Report is the IPCC’s latest major report. Its first Working Group report, published last summer, focused on the underlying science behind the assessment’s conclusions. The second and third Working Group reports, published this spring and coming in at over 3,600 and 2,900 pages respectively, focus on the impact of climate change and what can be done to mitigate it still.
Writing in the second report, UN Secretary-General António Guterres said the assessment, “reveals how people and the planet are getting clobbered by climate change.” Describing it as, “an atlas of human suffering and a damning indictment of failed climate leadership,” Guterres called upon developed countries, development banks, private financiers, and others to act now, declaring, “the G20 must lead the way, or humanity will pay an even more tragic price.”
While the picture painted by the reports is dire, scientists caution against climate pessimism. Speaking in a press release published alongside the third report, IPCC Chair Hoesung Lee said, “We are at a crossroads. The decisions we make now can secure a liveable future. We have the tools and know-how required to limit warming.” The question now is whether we can gather the financial investment and political willpower necessary to take those actions and curb global warming.
Our take:
While it can feel like there’s a new climate report every week, if you’re going to read up on one, make it this one. With 195 member governments and thousands of volunteer experts giving their time to create these reports, they represent (in this author’s humble opinion) the most comprehensive possible overall picture of the current state of climate change, where we’re headed, and what we can do to change that future. Ignoring its findings or failing to act on them is a risk that no government or business should take. For those of us working on the PR side of things, staying up to date on the report and how countries react will be critical to staying ahead of the ESG media cycle.
Read more here:
2. The U.S. Securities and Exchange Commission (SEC) formally proposed new rules around climate disclosures.
The proposed rule changes have been under development since last year, and mark the first major efforts around climate change by the SEC since 2010. Coming in at more than 500 pages, the proposal would require public companies to report their greenhouse gas emissions (Scope 1) as well as those produced from purchased electricity or other forms of energy (Scope 2). In some cases, companies would also need to disclose indirect emissions from other activities (Scope 3).
While the proposal still needs to go through a public comment period before the agency begins finalizing the rule, and is likely to face legal challenges, the suggested changes mark a crucial step towards the U.S. catching up to climate disclosure requirements elsewhere in the world, and the markets as a whole shifting closer to a global climate disclosure standard. The requirements would also help address concerns around corporate greenwashing—a growing issue for investors seeking to compare the ever-growing number of ESG-labelled funds in the market.
Our take:
The SEC’s proposed rules, if enacted, represent a historic shift towards the U.S. government *actually* dealing with climate change—something everyone in ESG should be applauding. Over and over, we’ve heard institutional investors call for exactly this kind of public regulation around climate disclosures. Without it, investors are left to sift through whatever a given company decides to disclose, in whatever format/detail the company chooses to disclose it…and that’s if a company even decides to disclose climate risks to begin with. The SEC’s proposal marks the first step towards the U.S. and the greater international community moving towards a common standard for ESG disclosures, something sorely needed.
Read more here:
Stay tuned for the second part of the series next week!