ESG is Experiencing personal conflicts regarding sustainability
„We cannot solve our problems with the same thinking we used when we created them“ — Albert Einstein.
Investors are looking for more sustainable, still profitable investments. They are changing their focus toward the organisation’s environmental, social and governance (ESG) reporting (a way of assessing companies on their environmental, social and governance performance). But how are the ESG’s and UN development goals aligning? Are the sustainable development goals (SDG) driving a real impact on a sustainable future for our planet?
If you are someone like me who works in an industry extremely focused on sustainability, you would want to learn and deeply understand this concept.
First of all, during 2023 winter, we experienced a temperature of 17°C outside in Italian Alps, so you can imagine what that means.
It felt like was being baked in an oven; therefore, I did not want to let go of the air conditioning (that made our lives much easier) and was finding ways to justify that being in a cooled room was not contributing to climate change or to the increase of CO2.
Moreover, most of us are working for companies that do focus on profit. On the contrary, do organisations need to let go of the profits to enable a more sustainable future? Is it the vision that the business’s primary objective is to create profit for the shareholders that brought us here?
ESG in European and CSRD entered into force on January 5, 2023. However, as a European Directive, it does not directly create obligations for subject undertakings. Those obligations will be created under each EU Member State’s national legislation adopted pursuant to the CSRD (for brevity, in this Alert we refer to the CSRD rather than the implementing national legislation). EU Member States will have until June 16, 2024 to transpose the CSRD into their national laws. Our planet is at risk.
Under the EU emissions trading system (EU ETS), industrial installations considered to be at significant risk of carbon leakage receive special treatment to support their competitiveness.
Carbon leakage refers to the situation that may occur if, for reasons of costs related to climate policies, businesses were to transfer production to other countries with laxer emission constraints. This could lead to an increase in their total emissions. The risk of carbon leakage may be higher in certain energy-intensive industries.
At Eaas we measure carbon and electricity mix. We don’t want to go over the limit to lower our planet lifespan.