Climate Change: Causes and Impacts

Climate Change

• Climate change is a pressing issue that affects the environment and people, with a goal to keep the global temperature rise well below 2°C and pursue efforts to limit it to 1.5°C.
• The impact of climate change is significant, with rising temperatures, population growth, and urbanization leading to issues like deforestation, biodiversity loss, and pollution.

Sustainability Management

• Sustainability management is a holistic approach to business that considers environmental, social, and economic impacts.
• It involves initiatives like reducing greenhouse gas emissions, conserving water, minimizing waste, promoting diversity and inclusion, and giving back to communities.

Strategic Sustainability Management

• Strategic sustainability management (SSM) is a guideline for companies to operate based on sustainability principles.
• SSM covers three dimensions: economic, environmental, and social (ESG).

Sustainability Reporting

• Sustainability reporting is a form of risk management that addresses business risks across three areas: environment, society, and governance.
• The National Center for Corporate Reporting provides guidelines for sustainability reporting, which includes ESG risk management.

ESG Risk

• ESG risks include climate change, greenhouse gas emissions, deforestation, biodiversity, waste, and pollution, as well as social issues like human rights, labor, and community relations.

Sustainability Reporting Contents

• Economic: economic performance, job creation, local community, supply chain, tax, etc.
• Environment: energy, water, biodiversity, emissions, waste, etc.
• Social: human rights, occupational health and safety, training and education, diversity, etc.
• Governance: organizational structure, board management, committee under BOC, anti-corruption, whistleblower system, etc.

Key Signals from Sustainability Reporting

• Performance: impacts of the company's operations on the economy, environment, and society.
• Impacts: contribution to the Sustainable Development Goals (SDGs).

Background of Sustainability Reporting

• Voluntary era: 2003-2020, with companies like Kaltim Prima Coal, PTBA, Adaro, and ITM publishing sustainability reports.
• Mandatory era: OJK Regulation No. 51/2017 requires public companies to publish sustainability reports starting from fiscal year 2021.

Third-Party ESG Rating Agency

• ESG rating agencies include Moody's, S&P Global, MSCI, Bloomberg, and Sustainalytics.
• These agencies provide ESG ratings and scores, such as the CDP SCORE REPORT - CLIMATE CHANGE 2021.

Sustainability Journey

• The United Nations Conference on the Human Environment (1972) established the United Nations Environment Programme (UNEP).
• The World Commission on Environment and Development (1983) defined sustainable development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs."
• The Sustainable Development Goals (SDGs) were created in 2016 and consist of 17 goals and 169 targets.

Sustainability Initiatives

• WRI's mission is to move human society to live in ways that protect Earth's environment and its capacity to provide for the needs and aspirations of current and future generations.
• The Principles for Responsible Banking (PRB) are a unique framework for ensuring that signatory banks' strategy and practice align with the vision of society.
• The World Business Council for Sustainable Development (WBCSD) is a global business organization that aims to achieve a sustainable future.

Strategic Measures in Sustainability Initiatives

• Change energy consumption patterns by applying principles and managing rewards.
• Geothermal, solar, hydro, and wind energy are alternative energy sources.

Quiz 1 and Quiz 2

• Identify organization activities that impact the environment, economy, and society.
• List of activities and environmental impacts, including materials, energy, water, biodiversity, and emissions.
• List of economic impacts, including economic performance, procurement practices, market presence, indirect economic impacts, and anti-corruption.
• List of social impacts, including employment, labor/management relations, occupational health and safety, training and education, and diversity.### Organization and Reporting Practices
• Organization's details: name, location of headquarters, location of operations, ownership, and legal form.
• Entities included in the sustainability report and consolidated financial statements.
• Reporting period, frequency, and contact point for questions regarding the report.
• Restatements of information and external assurance.

Activities and Workers

• Activities, brands, products, and services provided by the organization.
• Markets served and scale of the organization.
• Business relationships, including supply chain, and significant changes to the organization and its supply chain.
• Information on employees and other workers, including workers who are not employees.

Governance

• Governance structure and composition of the highest governance body and its committees.
• Nomination and selection of the highest governance body.
• Chair of the highest governance body and its role in setting purpose, values, and strategy.
• Role of the highest governance body in overseeing the management of impacts and delegating authority for managing impacts.
• Governance body's role in sustainability reporting and communicating critical concerns.

Strategy, Policies, and Practices

• Statement on sustainable development strategy and policy commitments.
• Embedding policy commitments and mechanisms to remediate negative impacts.
• Mechanisms for seeking advice and raising concerns about ethics and non-compliance with laws and regulations.

Stakeholder Engagement

• Approach to stakeholder engagement, including identifying and selecting stakeholders.
• Collective bargaining agreements.

General Disclosures

• GRI General Disclosures applied to the report.
• Topic management disclosures, requiring a narrative explanation of how a material topic is managed.### GRI Topic Standards
• The GRI standards are divided into three categories: Economic, Environmental, and Social Impacts
• Each category has specific topics and disclosures related to it

GRI 200: Economic Impacts

• GRI 201: Economic Performance
  • 201-1: Direct economic value generated and distributed
  • 201-2: Financial implications and other risks and opportunities due to climate change
  • 201-3: Defined benefit plan obligations and other retirement plans
  • 201-4: Financial assistance received from government
• GRI 202: Market Presence
  • 202-1: Ratios of standard entry level wage by gender compared to local minimum wage
  • 202-2: Proportion of senior management hired from the local community
• GRI 203: Indirect Economic Impacts
  • 203-1: Infrastructure investments and services supported
  • 203-2: Significant indirect economic impacts
• GRI 204: Procurement Practices
  • 204-1: Proportion of spending on local suppliers
• GRI 205: Anti-Corruption
  • 205-1: Operations assessed for risks related to corruption
  • 205-2: Communication and training about anti-corruption policies and procedures
  • 205-3: Confirmed incidents of corruption and actions taken
• GRI 206: Anti-Competitive Behavior
  • 206-1: Legal actions for anti-competitive behavior, anti-trust, and monopoly practices
• GRI 207: Tax
  • 207-1: Approach to tax
  • 207-2: Tax governance, control, and risk management
  • 207-3: Stakeholder engagement and management of concerns related to tax
  • 207-4: Country-by-country reporting

GRI 300: Environmental Impacts

• GRI 301: Materials
  • 301-1: Materials used by weight or volume
  • 301-2: Recycled input materials used
  • 301-3: Reclaimed products and their packaging materials
• GRI 302: Energy
  • 302-1: Energy consumption within the organization
  • 302-2: Energy consumption outside of the organization
  • 302-3: Energy intensity
  • 302-4: Reduction of energy consumption
  • 302-5: Reductions in energy requirements of products and services
• GRI 303: Water and Effluents
  • 303-1: Interactions with water as a shared resource
  • 303-2: Management of water discharge-related impacts
  • 303-3: Water withdrawal
  • 303-4: Water discharge
  • 303-5: Water consumption
• GRI 304: Biodiversity
  • 304-1: Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas
  • 304-2: Significant impacts of activities, products, and services on biodiversity
  • 304-3: Habitats protected or restored
  • 304-4: IUCN Red List species and national conservation list species with habitats in areas affected by operations
• GRI 305: Emissions
  • 305-1: Direct (Scope 1) GHG emissions
  • 305-2: Energy indirect (Scope 2) GHG emissions
  • 305-3: Other indirect (Scope 3) GHG emissions
  • 305-4: GHG emissions intensity
  • 305-5: Reduction of GHG emissions
  • 305-6: Emissions of ozone-depleting substances (ODS)
  • 305-7: Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions
• GRI 306: Waste
  • 306-1: Waste generation and significant waste-related impacts
  • 306-2: Management of significant waste-related impacts
  • 306-3: Waste generated
  • 306-4: Waste diverted from disposal
  • 306-5: Waste directed to disposal

GRI 400: Social Impacts

• GRI 401: Employment
  • 401-1: New employee hires and employee turnover
  • 401-2: Benefits provided to full-time employees that are not provided to temporary or part-time employees
  • 401-3: Parental leave
• GRI 402: Labor/Management Relations
  • 402-1: Minimum notice periods regarding operational changes
• GRI 403: Occupational Health and Safety
  • 403-1: Occupational health and safety management system
  • 403-2: Hazard identification, risk assessment, and incident investigation
  • 403-3: Occupational health services
  • 403-4: Worker participation, consultation, and communication on occupational health and safety
  • 403-5: Worker training on occupational health and safety
  • 403-6: Promotion of worker health
  • 403-7: Prevention and mitigation of occupational health and safety impacts directly linked by business relationships
  • 403-8: Workers covered by an occupational health and safety management system
  • 403-9: Work-related injuries
  • 403-10: Work-related ill health
• GRI 404: Training and Education
  • 404-1: Average hours of training per year per employee
  • 404-2: Programs for upgrading employee skills and transition assistance programs
  • 404-3: Percentage of employees receiving regular performance and career development reviews
• GRI 405: Diversity and Equal Opportunity
  • 405-1: Diversity of governance bodies and employees
  • 405-2: Ratio of basic salary and remuneration of women to men
• GRI 406: Non-Discrimination
  • 406-1: Incidents of discrimination and corrective actions taken
• GRI 407: Freedom of Association and Collective Bargaining
  • 407-1: Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk
• GRI 408: Child Labor
  • 408-1: Operations and suppliers at significant risk for incidents of child labor
• GRI 409: Forced or Compulsory Labor
  • 409-1: Operations and suppliers at significant risk for incidents of forced or compulsory labor
• GRI 410: Security Practices
  • 410-1: Security personnel trained in human rights policies or procedures
• GRI 411: Rights of Indigenous Peoples
  • 411-1: Incidents of violations involving rights of indigenous peoples
• GRI 412: Human Rights Assessment
  • 412-1: Operations that have been subject to human rights reviews or impact assessments
  • 412-2: Employee training on human rights policies or procedures
  • 412-3: Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening
• GRI 413: Local Communities
  • 413-1: Operations with local community engagement, impact assessments, and development programs
  • 413-2: Operations with significant actual and potential negative impacts on local communities
• GRI 414: Supplier Social Assessment
  • 414-1: New suppliers that were screened using social criteria
  • 414-2: Negative social impacts in the supply chain and actions taken
• GRI 415: Public Policy
  • 415-1: Political contributions
• GRI 416: Customer Health and Safety
  • 416-1: Assessment of the health and safety impacts of product and service categories
  • 416-2: Incidents of non-compliance concerning the health and safety impacts of products and services
• GRI 417: Marketing and Labeling
  • 417-1: Requirements for product and service information and labeling
  • 417-2: Incidents of non-compliance concerning product and service information and labeling
  • 417-3: Incidents of non-compliance concerning marketing communications
• GRI 418: Customer Privacy
  • 418-1: Substantiated complaints concerning breaches of customer privacy and losses of customer data

Reporting with Reference to the GRI Standards

• An organization can report with reference to the GRI Standards if it cannot comply with all the requirements for reporting in accordance with the GRI Standards
• The organization can also report with reference to the GRI Standards if it uses selected GRI Standards, or parts of their content, to report information about specific topics for specific purposes
• The organization should explain how it manages its impacts for the topics it reports on using Disclosure 3-3 in GRI 3: Material Topics 2021
• The organization should transition to reporting in accordance with the GRI Standards in time as it will provide a comprehensive picture of the organization’s most significant impacts on the economy, environment, and people, including impacts on their human rights

How to Apply Reporting with Reference to the GRI Standards

• The organization shall publish a GRI content index that includes:
  • The title: GRI content index
  • The statement of use
  • The title of GRI 1 used
  • A list of the reported disclosures from the GRI Standards

Explore the reasons behind climate change and its effects on the environment and human populations.