The ESG News Review: A red alert that will dominate all else

There is absolutely no doubting what the big ESG story has been this week, or the words that have carried it.

“Code red for humanity” was the striking headline that made us all draw the deepest of breaths on Monday morning.

While of course ESG strategies and change programmes now typically align to comprehensive frameworks that aim to bring balanced focus across the spectrum, climate change is undoubtedly the biggest threat to the world, and rightly front and centre of the ESG agenda.

The report from the United Nation's Intergovernmental Panel on Climate Change (IPCC) provided the most sobering assessment yet that “there is no time for delay and no room for excuses” in tackling climate change.

Everyone involved in communicating on ESG issues and shaping strategies will have poured over the contents of the report, but from a communications perspective - setting aside the obvious requirement for greater ongoing transparency - there seemed to be several important take-aways:

  • The warning that a 1.5 degrees warmer world will be a reality by 2040. With so many companies and organisations having set 2030 carbon net-zero goals, the need to report on progress regularly and with scientific methods is surely now in even sharper focus
  • How this impacts ‘ESG investor’ attitudes over the coming months will demand particular scrutiny
  • In the wake of the report, expect even more calls, initiatives and policy updates from governments ahead of COP26 as well as in Glasgow itself
  • The UN’s statement that “strong and sustained reductions in emissions of carbon dioxide (CO2) and other greenhouse gases, could quickly make air quality better, and in 20 to 30 years global temperatures could stabilise” brings more perspective to what corporate action can potentially achieve – so expect to be reading the words “strong and sustained” often
  • Of all ESG drivers defined across the frameworks out there, greenhouse gas emissions is surely one that now warrants deeper understanding of reputation risk, stakeholder considerations and what action will create the most impact
  • Water and wastewater management merits a separate ESG driver focus, with eyes wide open on the breadth of risk and the strategic imperative it creates

I’d considered sharing a short wrap-up of how media treated the story, but thankfully The Guardian has saved me the job.

The IPCC report will doubtless be referenced constantly in the run-up to COP26 in Glasgow this November. It cannot be ignored, and adds stark context to all corporate net-zero goals, let alone the broader ESG agenda.

Get used to those “code red” words. You’ll be reading them often.

The ESG News Review is written by Steve Earl, a Partner at BOLDT.

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