Understanding the Impact of AI on ESG

As ESG frameworks begin to move from voluntary to mandatory, the data required to meet these obligations will increase. Artificial Intelligence (AI) solutions will have to replace traditional approaches to managing information if organizations want to remain compliant.
As ESG frameworks begin to move from voluntary to mandatory, the data required to meet these obligations will increase. Artificial Intelligence (AI) solutions will have to replace traditional approaches to managing information if organizations want to remain compliant.

Over the last few years, the world has started to look like a very different place. A global pandemic, international political instability, a drastic increase in climate-related disasters and greater calls for an end to social inequalities are changing the way we look at the world and the way we interact with our stakeholders. As just one example, according to the World Meteorological Association, there have been 11,000 reported weather-related disasters resulting in more than 2 million deaths and USD $3.64 trillion in damage since 1970. With many environmental researchers predicting that this is likely to worsen in the decades ahead, it becomes clear that we are living in a time … Read more...

How the War in Ukraine Is Impacting ESG and Supply Chain

Business resiliency and crisis management are more critical than ever, and supply chains that can adapt quickly to global disruption by developing diverse supplier relationships should become the norm and not the exception.

Russian’s invasion of Ukraine on February 24, 2022 marked a radical shift in global geopolitics. Almost two years after the COVID-19 pandemic caused unprecedented global disruption, the rapid changes across Eastern Europe has further demonstrated that the world as it existed in 2019 is over.

As Blackrock’s Larry Fink has pointed out, the era of globalization that we’ve come to consider the natural order of things over the last 30 years is over. Only time will tell what the implications of these events will be. In the meantime, organizations will have to come to terms with new ways of working in a world in which cataclysmic disruptions can happen in a day and change the global landscape … Read more...

The Future of ESG Readiness: How To Use Technology for Strategy and Goal Setting Beyond Compliance 

The recent SEC proposal for climate-related disclosures proves that not only is ESG here to stay, but that regulatory disclosures are going to become a lot more complex and strategic.

Not long ago, the way businesses interacted with the market was based on simple supply and demand: businesses offered goods and services, customers bought them and the system worked more-or-less as designed. Considerations of environmental impact, social justice and principled governance were important, but because they weren’t standardized or enforced according to any universal benchmarks, they often existed in the more erudite realm of ethics or Corporate Social Responsibility (CSR), and environment, society and corporate (ESG) compliance seemed far away from reality.

Jump ahead a few years to the present day and you’ll see that considerations regarding ESG have changed, and so have the ways we think about risk, stakeholder engagement and materiality. ESG has given consumers and investors the … Read more...

Proposed Climate-Related Rules from the SEC: What Do They Mean For You? 

The SEC’s proposed rules on climate-related disclosures are an important step in the fight against climate change. They also promise big obligations for your business. Are you ready?

The Securities and Exchange Commission (SEC) has released its proposed rule changes for climate-related disclosures. These proposals represent a strong commitment to the principles of ESG on the part of the government and the business community. If enacted, they also promise more rigorous environmental reporting obligations for many organizations.

According to The Enhancement and Standardization of Climate-Related Disclosures for Investors, a 509-page document, disclosure “would require information about a registrant’s climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. The required information about climate-related risks would also include disclosure of a registrant’s greenhouse gas emissions, which have become a commonly used metric to assess a registrant’s exposure to such risks. In … Read more...

How AI Helps Connect ESG With Your EHS Systems

As public awareness rises around such issues as the environment, human rights and ethical corporate governance, companies are increasingly looking to communicate their progress on these fronts to investors, prospective customers, regulators and the general public.

Collectively known as Environmental, Social and Governance (ESG), these non-financial factors have become a key focus of reporting for organizations, which realize that it is no longer simply about the bottom line. Investment decisions are increasingly based on how much an organization is doing to create a safe, sustainable and just world. What’s more, regulatory bodies are now requiring such reporting by law.

As such, getting their reporting right on ESG is crucial for companies that want to win new business and satisfy today’s socially conscious investors.

Enter Artificial Intelligence

A key component of a firm’s overall ESG performance is their record on Environmental, Health and Safety (EHS) achievements. Are they doing enough to … Read more...

External Materiality and ESG: What You Should Be Looking For

Material risk management, or materiality, is a concept that is growing in importance as companies try to determine the material threats to their business.

As a business leader thinking about operational risk, do you consider internal risks first? For example, when considering operational risk, are regulatory compliance, talent retention or catastrophic asset failures resulting in production shutdowns top of mind? When you consider external risks, do you land on those that are most obvious, such as shifts in regulatory burdens, currency fluctuations, competitive threats, etc.…? (The list goes on and on.)

Like most leaders, you probably pay attention to ongoing issues, while staying as up to date as possible about evolving challenges and threats to the business so you aren’t caught off guard.

The problem with this approach is that it leaves an organization in an inherently vulnerable position. It’s hard to truly stay up to date. External risks are … Read more...

Highlights from COP26 – Will Leaders Deliver on Promises Made?

The tools needed to solve the environment crisis exist and commitments promised by world leaders last week could help the world move towards solutions.
Over 130 leaders of countries representing more than 90 percent of the world’s forests pledged to halt and reverse deforestation and land degradation by 2030.

The halfway point of the 2021 United Nations Climate Change Conference or COP26 saw many green commitments made by world leaders, but will these promises be kept?

Judging by a historical lack of collective action from the international community to reduce greenhouse gas emissions, the answer to that question would seem to be a resounding “no!” The Intergovernmental Panel on Climate Change (IPCC) had estimated in 2011 that limiting global average temperature increases to 1.5C would require a reduction of carbon dioxide or CO2 emissions of 45 percent in 2030, or a 25 percent reduction by 2030 to limit warming to 2C.  

Discouraging news came this week with the latest results of Nationally Determined Contributions (NDC) from more than 100 nations monitoring their CO2 … Read more...

Resiliency and Risk: Lessons from the Adaptation Gap Report 2021

At COP26, work is being done to figure out how we can adapt to inevitable climate disruption and protect vulnerable people, closing the adaptation gap.

The Gathering Storm: Adapting to climate change in a post-pandemic world is the 2021 Adaption Gap Report from the United Nations Environment Programme (UNEP). As Glasgow hosts a diverse group of stakeholders at COP26, the Adaption Gap Report (AGR2021) assess global trends in the planning, finance and implementation of adaptation efforts to mitigate the impact of global warming. 

The basis of the report is that even the most optimistic of achievements to curb global warming—including reaching the goal of net-zero emissions by 2050—are probably not sufficient to undo the damage that has already been done. The Intergovernmental Panel on Climate Change (IPCC), in its report Climate Change 2021: The Physical Science Basis, recently concluded that the impact of global warming, particularly on the oceans and ice sheets, is irreversible, and that … Read more...

Insights from NAEM Part II: Risk and Regulations

The NAEM conference on sustainability delivered expert insights on ESG, the impact of ESG on EHS professionals, risk and the outlook for environmental regulations in 2022. Read our summary of select sessions to learn how EHS is leading the way to ESG success.
A session on understanding risk and resilience in ESG gave attendees a solid grounding in the who, what, when, where and why of managing ESG. The discussion began by defining ESG as a collective consciousness for social and environmental factors with risk management and value opportunities.

Day Two of the EHS & Sustainability Management Forum from the National Association of EHS&S Management (NAEM) brought together subject matter experts to examine the impact ESG is having on the EHS practice, as well as new EHS regulations on the horizon for 2022. Here are some highlights from select sessions. 

Morning Coffee Roundtable 

The first discussion of the day explored some of the key themes relating to ESG and its place in the practice of EHS, including disclosure demands, data collection, team composition and supplier engagement.  

Participants discussed the overall increase in market pressure relating to ESG. Customer inquiries about ESG requirements relating … Read more...

COP26 and the Scary Season of Environmental Urgency

Where does the world stand in achieving the 2° – and 1.5°C ideal – for global warming? A much more detailed answer is forthcoming as COP26 bears witness to nationally determined contribution (NDC)
Nothing is more intensive and polluting than coal and there continues to be significant reliance upon it for two-thirds of the world’s electricity production. Switch to LED bulbs to reduce electriity consumption. Save the planet while saving money!

Perhaps it’s no coincidence that this year’s United Nations Climate Change Conference in Glasgow, Scotland—COP26—begins on the frightful day of Halloween.

These are scary times on the environmental front and the global risk of damaging climate change has never been greater. More chilling is the fact that the window for averting the worst is rapidly closing. The time to act is now.

So, this year’s 26th annual conference—the first was held in 1995—features world leaders from more than 190 countries and is the most crucial ever. Will the international community at last heed the urgency and aggressively act on reducing carbon emissions and slowing the rate of inevitable climate … Read more...