Sustainability and ESG Overview PDF

Sustainability and ESG Overview RAJESH RAY [email protected] +919830678171 What is Sustainability? The Greatest Challenge Meeting t...

Sustainability and ESG Overview RAJESH RAY [email protected] +919830678171 What is Sustainability? The Greatest Challenge Meeting the needs of the present without compromising the ability of future generations to meet their own needs Source: United Nations World Commission of Development and Environment Arctic sea ice drops to its lowest level since modern recording recording began. Scientists call event “tipping point" in global warming. RAJESH RAY, [email protected] +919830678171 Planetary Cycles Scientific Foundations Nitrogen Cycle Water Cycle Carbon (CO2) Cycle RAJESH RAY, [email protected] +919830678171 What all scientists agree upon Open system with respect to energy Closed system with respect to matter 1) Nothing disappears 2) Everything disperses « Photosynthesis pays the bill » Sustainability is about the ability of our own human society to continue indefinitely within these natural cycles Slow geological cycles Slow geological cycles (volcano eruptions and (sedimentation and weathering) mineralization) RAJESH RAY, [email protected] +919830678171 How we influence the system Physically inhibit nature’s ability to run cycles Barriers to people meeting their basic needs worldwide Introduce persistent compounds foreign to nature Relatively large flows of materials from the Earth’s crust RAJESH RAY, [email protected] +919830678171 4 System Conditions of a Sustainable Society In a sustainable society, nature is not subject to systematically increasing......concentrations of substances extracted from the Earth’s crust,...concentrations of substances produced by society,...degradation by physical means, and, in that society......people are not subject to conditions that systematically undermine their capacity to meet their needs. RAJESH RAY, [email protected] +919830678171 1. Reduce and eventually eliminate our 2. Reduce and eventually eliminate Operating contributions to the systematic Manual for the Planet our contribution to the systematic Objective accumulation of materials taken from1 accumulation of substances the earth’s crust. produced by society. Inefficient Use Efficient Use Inefficient use Efficient use Dissipative Use Tight Technical Persistent and Abundant & Cycles Unnatural breakdown easily Scarce metals Abundant metals Tight Technical Dissipative use Cycles Fossil Fuels Renewables 4. Reduce and eventually eliminate our 3. Reduce and eventually eliminate our contributions to conditions that contributions to the ongoing physical systematically undermine people’s abilities degradation of nature. to meet their own needs. Inefficient use Efficient use of Unsafe and unhealthy Safe and healthy of resources resources and production and use production and use and land land Resources from Resources from Violations of human Respect for human poorly managed well-managed rights rights ecosystems ecosystems Economic barriers Sufficient resources RAJESH RAY, [email protected] +919830678171 for livelihood. Sustainability Related Topics Shareholders and Investors ask about RAJESH RAY, [email protected] +919830678171. Climate Change. Evidence that climate is changing Global average temperature has increased by 0,19 oC since 1880, according to NASA. http://earthobservatory.nasa.gov/blogs/earthmatters/2016/09/1 2/heres-how-the-warmest-august-in-136-years-looks-in-chart- form/ Artic ice minimum reduced by 13,4% per decade Carbon Dioxide raise to 404.07 parts per million RAJESH RAY, [email protected] +919830678171 How big is the climate risk problem? Customers & Channels 11 RAJESH RAY, [email protected] +919830678171. Climate Change Impacts Source: http://www.worldbank.org/en/news/infographic/2016/04/07/the-world-bank-group-climate-change-action-plan RAJESH RAY, [email protected] +919830678171. Climate Change Topics Climate Change 1. Emissions 2. Biodiversity & forestry 3. Electricity They are all important! 4. Materials and raw materials But where should my 5. Waste company focus??? 6. Product & Operational Efficiency 7. Packaging 8. Transportation 9. Water management 10.Supply Chain emissions 11. Local identity/context 12. Disaster recovery RAJESH RAY, [email protected] +919830678171 The pressure to move to radically reduce GHG emissions is ratcheting up Acceleration in technological innovation is essential to get to Net Zero by 2050 14 RAJESH RAY, [email protected] +919830678171 What is ESG? ü ESG stands for environmental, social and governance. Customers & Channels ü These are the pillars based on which a company should measure it’s performance. ü Only financial measures are not enough for sustainable operations of a company. ü The goal of ESG is to capture all the non-financial risks and opportunities inherent to a company's day to day activities. ü The first group to coin the phrase ESG was the United Nations Environment Programme Initiative in October 2005. RAJESH RAY, [email protected] +919830678171 15 Each of ESG Pillars can have multiple criteria Customers & Channels RAJESH RAY, [email protected] +919830678171 16 Financial Reporting alone is no longer enough - ESG Vs. Annual Report Customers & Channels RAJESH RAY, [email protected] +919830678171 17 ESG is not just one function – Need to be embedded in whole value chain Customers & Channels 18 RAJESH RAY, [email protected] +919830678171 What’s in it for me and my business or organization? New Market Potential Competitive Differentiation Platform for Innovation Reduced Energy Bills and Operating Costs Risk Avoidance (law suits, new environmental regulation and taxes, and market shifts) Improved Employee Morale Increased Productivity and Reduced Employee Absenteeism Improved Public and Community Relations Do well by doing good RAJESH RAY, [email protected] Be a hero to your children and grandchildren +919830678171 Business Case for ESG – The 5R’s Customers & Channels RAJESH RAY, [email protected] +919830678171 20 ESG had become the central theme for investment Customers & Channels 21 RAJESH RAY, [email protected] +919830678171 Why Investors are bothered about ESG Customers & Channels 22 How ESG can connect all stakeholders Customers & Channels RAJESH RAY, [email protected] +919830678171 23 What is Sustainable Development? “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs” the globally accepted definition adopted in 1987 at the World Commission on Environment and Development In other words, Sustainable Development is the criteria for achieving social and economic progress in ways that will not exhaust the earth’s finite resources and not exploit or impoverish one grouping of people for the enrichment of another. RAJESH RAY, [email protected] +919830678171