Did you know that only a third of the emissions reductions required to achieve the country’s 2030 target are currently covered by credible plans?
As a result, we can expect to see more mandatory and voluntary regulations that require carbon emissions reporting to verify your ESG and net zero claims.
In this episode, Mel closes out the ESG Reporting Disclosures series by explaining what Corporate Sustainability Due Diligence Directive (CSDDD) is, it’s key emissions reporting requirements, the verification requirements and who qualifies for CSDDD.
You’ll learn
- What is CSRD?
- Key requirements of CSDDD
- Key emissions reporting requirements
- the emissions verification requirements for CSRD?
- Who qualifies for CSDDD?
- The likely impact of CSDDD
Resources
In this episode, we talk about:
[00:30] Join the isologyhub – To get access to a suite of ISO related tools, training and templates. Simply head on over to isologyhub.com to either sign-up or book a demo.
[02:10] Episode summary: Mel closes out the series on ESG reporting requirements by diving into CSDDD.
[03:10] What is CSDDD? – The Corporate Sustainability Due Diligence Directive (CSDDD) is a new EU directive that promotes sustainable and responsible corporate behaviour in companies’ operations and across their global value chains.
Purpose: It aims to promote sustainable business practices, protect human rights, and address environmental challenges.
The CSDDD was adopted by the European Commission on the 23rd of February 2022 and approved by the Council of the European Union on the 24th of May 2024. The new rules ensure that companies in scope identify and address adverse human rights and environmental impacts of their actions inside and outside Europe. The CSDDD is expected to start affecting companies from 2027 at the earliest once the directive has been transposed into national legislation.
[05:10] What are the key requirements of CSDDD?:
- Human rights due diligence: Companies must identify, prevent, and mitigate adverse human rights impacts within their value chains.
- Environmental due diligence: They must assess and manage risks related to climate change, biodiversity loss, and pollution.
- Disclosure obligations: Companies must disclose their due diligence processes, findings, and any remedial actions taken.
[06:20] What are the Emissions Reporting Requirements? Under the CSDDDD, companies are required to report on their greenhouse gas (GHG) emissions within a climate transition plan.
This includes considerations for Scope 1, 2 and 3. These were explained in more detail in a previous episode on CSRD, so go check that out if you want to learn more about the individual scope requirements.
What if you fit the requirements of both CSRD and CSDDD, do you have to double report on emissions? In short – No!
The climate transition plan required by the CSDDD will be reported within CSRD reporting, as organisations just need to adhere to the CSDDD’s implementation requirements for the transition plan.
[10:10] What are the Emissions Verification Requirements? More definitive guidance on verification requirements is expected closer to 2027. Companies will more than likely need to verify the emissions data reported through CSDDD, as the directive mandates a climate change transition plan that aligns with the Corporate Sustainability Reporting Directive (CSRD), which does require companies to verify their emissions data.
[09:55] Who qualifies for CSDDD? The Corporate Sustainability Due Diligence Directive (CSDDD) applies to both EU and non-EU companies depending on their workforce size and revenue:
EU and non-EU companies (or the ultimate parent company of a group):
- With more than 1,000 employees and a global net turnover of at least €450 million in the last fiscal year; or
- Which have franchising or licensing agreements in the EU in return for royalties with more than €22.5 million generated by royalties in the EU and have a net worldwide turnover of over €80 million in the last financial year.
[11:10] What is the possible impact of this new directive? Similar to the other ESG disclosures I’ve covered over the past few weeks in this series on reporting disclosures, the impact of the CSDDD will result in 3 key impacts:-
- Increased transparency: This directive will provide stakeholders with a clearer picture of companies’ sustainability efforts, to combat greenwashing.
- Enhanced accountability: Companies will be held accountable for their environmental and social performance.
- Stimulation of sustainable business practices: The directive will encourage companies to adopt more sustainable practices, including regular reporting.
If you would like to learn more about CSDDD or inquire about the related course, please get in touch with Carbonology.
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- Share the ISO Show on Twitter or Linkedin
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Businesses are coming under increasing pressure to monitor, report and reduce their energy use and carbon emissions to meet net zero targets.
As a result, we’re seeing an increase in both mandatory and voluntary regulations that require carbon emissions reporting to verify your net zero claims.
In this episode, Mel continues the ESG Reporting Disclosures series by explaining what The International Sustainability Standards Board Climate-related Disclosures (ISSB S2) are, the emissions reporting and verification requirements and who qualifies for ISSB S2.
You’ll learn
- What is ISSB S2?
- What is the scope of ISSB S2
- What are the emissions reporting requirements for ISSB S2?
- Emissions verification requirements
- Who qualifies for ISSB S2?
Resources
In this episode, we talk about:
[00:30] Join the isologyhub – To get access to a suite of ISO related tools, training and templates. Simply head on over to isologyhub.com to either sign-up or book a demo.
[02:10] Episode summary: Over the course of September, Mel will be exploring the latest climate change regulations that may affect your organisation. In this episode she dives into The International Sustainability Standards Board Climate-related Disclosures (ISSB S2).
[03:20] What is ISSB S2? – The International Sustainability Standards Board Climate-related Disclosures (ISSB S2) is a new global standard that mandates entities to provide comprehensive information about climate-related risks and opportunities.
The ISSB S2 was issued by the International Sustainability Standards Board on the 26th of June 2023 and is effective for annual reporting periods beginning on or after the 1st January 2024. The new standard ensures that companies disclose physical and transition risks and their potential impact on the move towards a low carbon economy.
[04:20] Further learning with Carbonology: Carbonology have created a half-day course which walks you through all of the various carbon reporting disclosures and sustainability disclosure reporting requirements.
If you would like to learn more, get in touch with Carbonology.
[07:00] What does ‘Acute and Chronic Physical risks’ mean in the context of ISSB S2? Climate related physical risks are risks resulting from climate change that could be event driven, so an example of an acute physical risk could arise from weather related events like storms, floods and heatwaves, which are increasing in frequency.
These could have a knock-on effect to businesses, taking a heat wave as the example, you will need to consider:
- Can your IT systems and datacentres cope with it?
- Have you got resilience built in to your operations to be able to deal with that sort of disruption to your organisation?
Chronic physical risks arise from longer term shifts in climatic patterns, including changes in precipitation and temperature, which could lead to sea level rises and reduced water availability and changes in soil productivity.
These risks could carry a weighty financial burden either through direct damage to assets, or indirectly through supply chain disruption.
[09:35] Join the isologyhub and get access to limitless ISO resources – From as little as £99 a month, you can have unlimited access to hundreds of online training courses and achieve certification for completion of courses along the way, which will take you from learner to practitioner to leader in no time. Simply head on over to the isologyhub to sign-up or book a demo.
[11:43] What does ‘Transition risk’ mean in the context of ISSB S2? This is looking for a climate related transition plan, which should include targets, actions and resources for the transition towards a lower carbon economy.
This would include actions such as reducing greenhouse gas emissions.
[12:30] What is the scope of ISSB S2? This Standard applies to:
- climate-related risks to which the organisation is exposed, which are:
- climate-related physical risks; and (ii) climate-related transition risks; and
- climate-related opportunities available to the entity.
Climate-related risks and opportunities that could not reasonably be expected to affect an organisation’s prospects are outside the scope of this Standard.
- The Standard covers:-
- Governance
- Strategy
- Climate related risks and opportunities
- Business Model and Value Chain
- Financial position, financial performance and cash flows
- Climate resilience
- Risk Management
[14:10] What are the emissions reporting requirements for ISSB S2? – Under ISSB S2, companies are required to measure and disclose their greenhouse gas (GHG) emissions across three scopes:
- Scope 1 Emissions: Direct emissions from owned or controlled sources. For example, emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.
- Scope 2 Emissions: Indirect emissions from the generation of purchased energy. This includes emissions from the production of electricity, steam, heating, and cooling consumed by the company.
- Scope 3 greenhouse gas emissions: Indirect greenhouse gas emissions (not included in Scope 2 greenhouse gas emissions) that occur in the value chain of an entity, including both upstream and downstream emissions. Scope 3 greenhouse gas emissions include the Scope 3 categories in the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011).
[16:20] Emissions verification requirements – Under ISSB S2, companies are required to have their reported greenhouse gas (GHG) emissions data verified.
Verification can provide users of financial reports confidence that the information is complete, neutral and accurate.
Disclosure of inputs to Scope 3 greenhouse gas emissions needs to disclose information about the measurement approach, inputs and assumptions it uses.
[18:30] Who qualifies for ISSB S2? – ISSB S2 applies to all entities that are required by law, regulation, or administrative provision to prepare financial statements. This includes, but is not limited to:
- Publicly listed companies
- Large private companies
- Financial institutions such as banks and insurance companies
- State-owned enterprises
Entities are encouraged to adopt the ISSB S2 voluntarily, even if they are not mandated by law or regulation. Early adoption is permitted and encouraged to enhance transparency and accountability in climate-related disclosures.
If you would like some help with your carbon emissions reporting, please get in touch with Carbonology.
We’d love to hear your views and comments about the ISO Show, here’s how:
- Share the ISO Show on Twitter or Linkedin
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As the urgency to address the climate emergency heightens, businesses are coming under increasing pressure to monitor, report and reduce their energy use and carbon emissions to meet net zero targets.
As a result, there is an increase in regulations to ensure that companies are taking the climate emergency seriously and not pay lip service to climate action.
During September, we’ll be taking a look at a few of the latest regulations that may affect your organisation, including:
In this episode, Mel Blackmore breaks down what Streamlined Energy and Carbon Reporting (SECR) is, its reporting requirements, it’s qualifiers and how it can work in tandem with other carbon management initiatives.
You’ll learn
- How do these regulations relate to ESG reporting?
- What is Streamlined Energy and Carbon Reporting?
- What are the SECR Emissions Reporting Requirements?
- Who qualifies for SECR?
- How can SECR work with other carbon management initiatives?
Resources
In this episode, we talk about:
[00:30] Join the isologyhub – To get access to a suite of ISO related tools, training and templates. Simply head on over to isologyhub.com to either sign-up or book a demo.
[02:10] Episode summary: Over the course of September, Mel will be exploring the latest climate change regulations that may affect your organisation. In this episode she dives into Streamlined Energy and Carbon Reporting (SECR).
[03:20] How do these regulations relate to ESG reporting? – ESG requirements include a commitment to sustainability, and reducing your overall impact. All of these regulations contribute towards an organisations ESG reporting requirements, as they require tangible proof to back up your ESG claims.
They will require you to provide comprehensive emissions reporting, the level of detail of which will depend on the specific applicable regulation.
[04:05] Future content to look forward to: During September Mel will look at involuntary emissions reporting schemes, but in October she will be looking into the voluntary schemes that many are already adopting as part of their Stakeholder requirements.
This will include:
[05:50] What are the SECR Emissions Reporting Requirements?: SECR has been around since April 2019, and was originally introduced to replace the Carbon Reduction Commitment Scheme.
This is a mandatory scheme, so it is a legal requirement for those that meet it’s criteria. For those that are familiar with ESOS (The Energy Savings Opportunity Scheme), it functions in a very similar way.
This scheme isn’t solely focused on reporting energy usage and carbon emissions, it’s also looking for organisations to report on efficiency measures that are undertaken on an annual basis. Which is reflected in the financial reporting that you will also have to submit.
It’s important to note that SECR has specific requirements for the disclosure of greenhouse gas (GHG) emissions and energy consumption. Emission reporting requirements vary slightly between quoted companies and large unquoted companies and LLPs.
For quoted Companies:
- Global Scope 1 and 2 GHG emissions must be reported. Scope 3 emissions reporting is strongly recommended but voluntary.
For large unquoted companies and LLPs:
- UK based Scope 1 and Scope 2 emissions and associated energy consumption. Scope 3 emissions from the combustion of fuel in vehicles or equipment not owned by the company.
[10:10] Join the isologyhub and get access to limitless ISO resources – From as little as £99 a month, you can have unlimited access to hundreds of online training courses and achieve certification for completion of courses along the way, which will take you from learner to practitioner to leader in no time. Simply head on over to the isologyhub to sign-up or book a demo.
[12:05] Who qualifies for SECR?: All UK Quoted Companies: Any company that has shares listed on the UK Stock Exchange is required to comply with SECR.
Large Unquoted Companies and Large LLPs: These are companies and Limited Liability Partnerships (LLPs) that are not listed on the UK Stock Exchange but meet two or more of the following criteria:
- Turnover: More than £36 million per annum.
- Balance Sheet Total: More than £18 million.
- Number of Employees: 250 or more employees.
These criteria ensure that SECR framework targets large organisations that have a significant impact on the UK’s energy consumption and carbon emissions. By complying with SECR, these organisations can contribute significantly to the UK’s sustainability goals.
[14:10] When is the SECR disclosure made? SECR reporting must occur alongside financial reporting, being included within annual reports and Directors’ Reports, which are then filed with Companies House.
[14:30] The importance of Accurate SECR Reporting and Carbon Reduction – The reporting process can unlock valuable insights and opportunities for operational improvements, leading to enhanced energy efficiency and reduced carbon emissions over time.
Demonstrating your organisation’s commitment to energy efficiency and carbon reduction can enhance brand perception and foster positive relationships with stakeholders, including investors, clients, and regulators.
[16:05] Integrating SECR Reporting with Other Carbon Management Initiatives – You are missing a trick if you’re keeping your SECR reporting separate from the rest of your business activities. It should be included as a part of your sustainability umbrella, and can be invaluable if you’re going for other reporting requirements such as EcoVardis and CSRD.
There’s no need to reinvent the wheel if you already have something like an Environmental Management System in place, simply weave the additional requirements in with your usual annual maintenance. Established systems will already be adhered to across the business, meaning any new requirements will soon become business as usual.
You could incorporate this as part of your Net Zero strategy, or Carbon Reduction Plan if PPN 06/21 is one of your reporting requirements. You could also incorporate this into your supply chain emissions reporting.
If you would like some help with SECR, please get in touch with Carbonology.
We’d love to hear your views and comments about the ISO Show, here’s how:
- Share the ISO Show on Twitter or Linkedin
- Leave an honest review on iTunes or Soundcloud. Your ratings and reviews really help and we read each one.
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ESG is a very broad topic to try and address for any organisation, leaving many scratching their heads on where to start with ESG reporting.
Currently, there is no official certification for ESG, however there are a number of schemes that will give you either a score or rating for your level of compliance against their requirements.
For those currently working towards one of these schemes, you may already have a solid foundation in place if you’re certified to one or many ISO Standards.
In this episode, Ian Battersby and Ali Henshaw discuss ESG compliance and how elements of an ISO Management system can help with ESG reporting.
You’ll learn
- What is ESG?
- Is ESG reporting required?
- Is ESG a nice to have or good solid business practice?
- Is ESG certifiable?
- How can ISO Standards help to address the 3 pillars of ESG?
- How ESG compliance helps to combat Greenwashing
Resources
In this episode, we talk about:
[00:30] Join the isologyhub – To get access to a suite of ISO related tools, training and templates. Simply head on over to isologyhub.com to either sign-up or book a demo.
[02:00] Episode summary: Ian and Ali will be discussing how ISO Standards can help with ESG reporting.
[02:20] What is ESG? – ESG stands for Environmental, Social, and Governance. Analysis and evaluation against these three elements help organisations to consider different areas within their overall sustainability profile.
The Environmental section looks at issues surrounding climate change and actions to address an organisation’s environmental responsibility. This includes monitoring and management of your energy consumption, waste management and pollution. It also seeks to tackle how organisations can address, reduce and mitigate their overall environmental impact.
The Social aspect is based around the relationships an organisation has with its stakeholders. This is focused on employees and looks at a broad range of topics including employee wellbeing, fair and competitive pay, benefits and human resource related policies. Considerations can also include wider business relationships such as supplier relations, local community and government work.
[05:00] The pillars of ESG aren’t silos – You shouldn’t approach each pillar of ESG in isolation, as they cross over in a lot of areas.
For example, in environmental management you may manage hazardous substances, you’ll have a duty to ensure those substances don’t pollute the surrounding area or bodies of water. However, you will also need to consider the health and safety aspect of storing and working with that material. So already you have 1 issue that crosses both the Environmental and Social pillar of ESG.
[05:50] What does the Governance pillar cover? – Governance criteria focuses on creating a business environment that is fair, transparent, and accountable. Considerations in this area include board composition, fairness in pay structures and executive compensation, business ethics and risk management.
[07:05] What types of ESG reporting are required? – For small organisations, there is currently no set requirement as it stands, but you many encounter stakeholder or customer requirements that encourage ESG reporting on some level.
For larger organisations at certain sizes there are mandatory reporting frameworks that you will be required to fulfill. At the moment it’s quite sector specific but this is a trend that will only increase over time.
Like with anything new, this is likely to trickle down to smaller organisations over time, however there will likely be funding and grants available to assist when that time comes.
[08:25] Is ESG a nice to have or good solid business practice? If you want to be a sustainable business, with good legacy that has the ability to grow and develop, ESG is a fantastic tool.
Investors are now looking for sustainable businesses, it’s become a market trend for an ever increasingly environmentally conscious consumer base. You either need to move with the times of get left behind, and sustainability is one key factor that will determine which of those categories you fall into.
[09:50] Which ISO Standards can support ESG?: From a holistic point of view, the structure of ISO standards, the plan do check Act (PDCA) cycle, the need for monitoring and measurement and the need for improvement supports the principles of ESG in terms of quantifiable results.
The additional aspect of having set objectives and proof of tangible improvement actions was something that fulfilled CSR (Corporate Social Responsibility), which in turn has been superseded by ESG.
ISO Standards high-level structure and life cycle approach lend themselves to support various aspects of ESG, depending on the Standard you implement.
ISO 14001 for example, would support the environmental pillar, as it looks at your significant aspects and impacts in addition to that of your supply chain. You’ll need to factor these into your objectives and overall business strategy.
ISO 45001 would tackle elements of the social pillar as it directly addresses the well-being of your employees. It also includes a clause for the consultation and participation of workers, so work directly with employees to identify and address risks that may be missed by management.
[13:40] Is there a certifiable Standard for ESG?: Not currently, but an ISO guidance document is in the works.
Standards that address core elements of ESG include ISO 26000 (Social Accountability) and ISO 20400 (Sustainable Procurement). Again, these aren’t certifiable, but provide invaluable guidance.
Guidance documents have the advantage of being selective in what elements you decide to adopt. The ESG one in development is a good example, ESG as a topic is huge, a smaller organisation may not realistically be able to implement all of the advice.
But, it can be used as a starting point for a materiality assessment that will allow you to be selective of the core subjects you apply to your business.
The idea of guidance documents is not to be a bolt on, as those quickly get forgotten. It’s all about embedding their elements into existing processes.
[17:10] Utilising elements of ISO Implementation for ESG reporting: If you’ve already got an ISO Management System in place, i.e. ISO 14001 or ISO 45001, then you’ll already have objectives, processes and monitoring & measurement in place to address those elements.
ISO 26000 is another good example as it covers a wide range of topics, including human rights, labour practices, the environment, community involvement and development, consumer issues and fair operating practices. Some may not be applicable to you, but as mentioned, it’s a guidance document so you have the freedom to be selective about the aspects you incorporate into your management system.
You need to decide what really applies to you. It’s better to prioritise and take 10 steps on one subject vs 1 on 10 subjects.
[20:25] ESG isn’t a once a year activity: There’s no tick box exercise that you can do once a year and claim compliance, ESG is an on-going endeavor for as long as your business is running. It’s a way of operating, much like ISO Standards. It will develop and grow with your business.
[21:30] Join the isologyhub and get access to limitless ISO resources – From as little as £99 a month, you can have unlimited access to hundreds of online training courses and achieve certification for completion of courses along the way, which will take you from learner to practitioner to leader in no time. Simply head on over to the isologyhub to sign-up or book a demo.
[23:36] Will elements of ESG become certifiable down the line? We’ll never say never! It’s still very much a developing field. There is currently a framework being developed by the International Standards Organisation, it’s currently in draft form.
Ali herself is on the commenting committee for it’s development, and can confirm that the framework is looking at the links between certifiable Standards and the tangible application.
ISO Standards require third-party verification of your claims before getting certified. In that aspect, they’re the perfect tool to provide tangible proof that you are doing what you say you’re doing, but only in select aspects.
ESG is broad, almost too broad to certify. It’s not really feasible for one person to come in and assess a whole business like they would do for an ISO Assessment, there’s simply too much to cover!
[25:00] The trouble with ESG verification: Currently, a lot of voluntary schemes require you to report against and fulfill, but they are very sector specific because a general one would be too broad and likely will not cover every aspect appliable to every business.
Schemes out there are doing something to battle greenwashing, as the environmental aspects are easier to verify, however social aspects are a lot more tricky and can get even more complicated outside of the UK where there is no HSE annual reporting available.
[26:20] How can you support the Social aspect of ESG?: Measuring your social value can difficult, many think of education as the solution. Here are some ideas to consider:
- Working with local schools – Improvement projects driven by Student run business studies
- Work experience
- Charitable work – allow staff to have a charity day as part of a benefits package
[28:10] How can we prevent the greenwashing of ESG compliance?: Government Bodies are working to tackle this. It’s being built into legislation to prevent greenwashing in future where self-policing hasn’t gone far enough.
Trade Associations are also pushing their members towards more legitimate frameworks to ensure they do remain accountable and transparent about their activities in relation to ESG compliance.
[30:00] What resources do Blackmores have to help? We’ve developed an ESG Gap Analysis, based on the guidance provided in ISO 26000 Social Accountability.
This ESG Gap Analysis will highlight where you’re already compliant and where there is work to be done.
You may be surprised to see that you’re more compliant that you think! Especially if you’re certified to one or many ISO Standards.
We also have a Materiality Assessment, which will help you to determine which topics are of importance to your business and your stakeholders.
You can take the findings from both to help develop your ESG Strategy. If you’re not mandated to do any reporting, you can leave it at that. However, you may want to consider sector specific frameworks to get ahead of the curve for when elements of ESG do become mandated down the line.
[36:00] Where should you start with tackling ESG using ISO Standards? If you’re certified to one or many ISO Standards, then you will have processes in place that can support an ESG initiative program strategy, and you can make it as big or as small as you want.
Start by looking at your environmental, social and governments impacts and work to embed ESG into your existing ISO Management System before they become mandated by stakeholders and legislation – being ahead also feeds into the principles behind social responsibility.
You’re embedding a culture, and it becomes a norm which can be developed further. Then, when legislation or customer requirements come in, you’re already prepared to answer.
Also, with ESG there is a focus on people and you can’t have a successful business without good people. ESG isn’t only attractive to your customers, but also to potential employees who will want to work for ethical, sustainable businesses. If you aren’t keeping up and fulfilling that, you will struggle to find new talent.
It also goes without saying that being ESG compliant will attract consumers. Greenwashing, as frustrating as it is, exists for a reason – because people want businesses to be sustainable. People wouldn’t lie about it if it wasn’t important to someone, so stand out by beating the greenwashing allegations and take the right steps towards tacking ESG.
If you’d like to book a demo for the isologyhub, or would like help with an ESG Gap Analysis, simply contact us and we’d be happy to give you a tour.
We’d love to hear your views and comments about the ISO Show, here’s how:
- Share the ISO Show on Twitter or Linkedin
- Leave an honest review on iTunes or Soundcloud. Your ratings and reviews really help and we read each one.
Subscribe to keep up-to-date with our latest episodes:
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ESG compliance has fast become a focus for many organisations looking to address their wider sustainability profile.
However, its broad framework has left many scratching their heads on exactly where to start with evaluating and addressing various elements of Environmental, Social, and Governance compliance.
For those looking for some direction, you may already have a solid foundation in place if you’re certified to one or many ISO Standards.
Today Steph Churchman will explain what ESG is, how it can be scored and what role ISO Standards can play in ESG compliance.
You’ll learn
- What is ESG?
- What scoring systems are available for ESG?
- How can ISO Standards support ESG compliance?
- What ISO Standards can support each pillar of ESG?
Resources
In this episode, we talk about:
[00:30] Join the isologyhub – To get access to a suite of ISO related tools, training and templates. Simply head on over to isologyhub.com to either sign-up or book a demo.
[02:05] Episode summary: Steph will be breaking down what ESG compliance means, how ISO Standards can support ESG compliance and give some examples of what ISO Standards can support each pillar of ESG.
[02:50] What is ESG? – ESG stands for Environmental, Social, and Governance. Analysis and evaluation against these three elements help organisations to consider different areas within their overall sustainability profile.
The Environmental section looks at issues surrounding climate change and actions to address an organisation’s environmental responsibility. This includes monitoring and management of your energy consumption, waste management and pollution. It also seeks to tackle how organisations can address, reduce and mitigate their overall environmental impact.
The Social aspect is based around the relationships an organisation has with its stakeholders. This is focused on employees and looks at a broad range of topics including employee wellbeing, fair and competitive pay, benefits and human resource related policies. Considerations can also include wider business relationships such as supplier relations, local community and government work.
Governance criteria focuses on creating a business environment that is fair, transparent, and accountable. Considerations in this area include board composition, fairness in pay structures and executive compensation, business ethics and risk management.
[04:15] An evolution of CSR – CSR (Corporate Social Responsibility) is very similar to ESG, but is less sustainability focused. It also lacked substance in the form of effective and accountable scoring systems that held businesses to account. This is where ESG differs, with many scoring systems, certifications and even mandatory requirements driving businesses to address their compliance.
[04:45] ESG scoring – There are many schemes, scoring systems and certifications available for ESG, some of which are specific to industry sectors and company sizes. What one you pick will be up to you (note that some many be mandatory in select countries), however, here are a few examples:
The S&P Global ESG Score – This assesses a company’s performance and management of ESG risks and opportunities using a combination of company disclosures, media analysis, and industry-specific questionnaires. A score of 0-100 is given based on their findings and are relative within a company’s industry sector.
Fitch Ratings ESG Relevance Scores – Fitch Ratings assigns ESG Relevance Scores alongside their traditional credit ratings. These scores assess how ESG factors could impact a company’s creditworthiness. Their scores range from 1-5, with 5 indicating the highest ESG relevance to credit risk.
MSCI – They offer ESG ratings for a broad range of companies, it’s not really limited by sector or size. They use a letter grade system, going from AAA-CCC, to assess a company’s relative ESG risks and opportunities compared to its peers. The scoring for this one assigns companies as either an ESG leader, average or laggard within their industry.
[06:10] How can ISO Standards support ESG Compliance – It’s important to clarify that there’s no single ISO standard that guarantees ESG compliance because ESG is a broad framework. However, ISO standards provide a strong foundation for implementing many aspects of an ESG strategy.
[06:35] Supporting ESG – Structure and Framework: ISO standards offer a structured approach to managing environmental, social, and governance practices. This helps companies identify key areas for improvement and develop a systematic plan to address them.
[07:10] Supporting ESG – Improved Performance: By following ISO standards, companies can demonstrably improve their environmental performance, social responsibility, and governance structures by putting in frameworks that align with best practice standards
[07:30] Supporting ESG – Transparency and Credibility: Achieving certification to a relevant ISO standard involves a third-party audit, which verifies that a company’s systems and processes meet the standard’s requirements. This certification acts as a credible signal to stakeholders such as your investors, customers, regulators, that you’re committed to ESG principles.
[07:55] Supporting ESG – Risk Management: Proactive management of ESG risks is a key component of any ESG strategy. Many ISO standards focus on risk identification and mitigation. For example, ISO 37001 (Anti-Bribery Management Systems) helps identify and address bribery risks, which can have significant financial and reputational consequences. Or ISO 45001 health and safety management, which requires risk assessments to be carried out to ensure the safety and well being of your employees on site locations, which would fall under the social aspect of ESG.
[08:30] Supporting ESG – Competitive Advantage: Strong ESG performance is increasingly sought after by investors and stakeholders. Implementing ISO standards can help companies demonstrate their ESG commitment and gain a competitive advantage in the marketplace. You’ll also feel the benefit of gaining multiple badges, through ISO certification and possibly an ESG score if you choose to go through one of the official scoring schemes.
[08:55] Think of ISO standards as building blocks. They provide the foundation and structure for a strong ESG strategy. By implementing relevant standards and achieving certification, you can demonstrate a dedicated commitment to ESG principles.
[09:50] Join the isologyhub and get access to limitless ISO resources – From as little as £99 a month, you can have unlimited access to hundreds of online training courses and achieve certification for completion of courses along the way, which will take you from learner to practitioner to leader in no time. Simply head on over to the isologyhub to sign-up or book a demo.
[11:55] What ISO Standards can support the Environmental aspect of ESG Compliance?:
- ISO 14001: Environmental Management – This provides a framework for managing environmental impacts, reducing waste, and improving your resource efficiency.
- ISO 50001: Energy Management – this helps companies monitor and optimize their energy use with the aim to help reduce greenhouse gas emissions.
- ISO 20400: Sustainable Procurement – This will help you to adopt sustainable procurement principles and practices within your organisation, by looking at how you can reduce waste, choose more sustainable options for required resources, how you can extend the life of resources available through remanufacturing and recovery of waste, and encourages the use of more innovative products and services.
- ISO 20121: Sustainable Event Management – This Standard is mostly applicable to the events sector, and aims to help reduce the amount of waste produced during events, either through potential energy savings and the production and recycling of resources used during an event. It’s recently had an update, so check out our latest episode to find out what the changes are.
- ISO 14064: Greenhouse Gas Verification – This provides a framework for measuring and managing greenhouse gas emissions. This is a crucial step if you’re working towards Net Zero, as you need to know what your baseline is before you can work on reducing and offsetting remaining emissions.
- ISO 14068: A framework for helping businesses achieve Net Zero, this standard will replace PAS 2060 in November 2025, so anyone looking into PAS 2060 now may be better off going with ISO 14068 as it includes more guidance on purchasing credible carbon credits.
[14:15] What ISO Standards can support the Social aspect of ESG Compliance?:–
- ISO 26000: Social Responsibility – which offers guidance on integrating social responsibility practices throughout your organization.
- ISO 45001: Occupational Health and Safety Management – which helps companies create a safe and healthy work environment. It provides a robust set of requirements designed for improving workplace safety in organisations and supply chains, with the aim of reducing workplace injury and illness.
- ISO 45003: Psychosocial Health & Safety Management aka Mental health in the workplace. For the last 4 years or so, work related stress, depression and anxiety has been the leading cause for work related ill-health cases and lost working days. That’s according to the annual HSE reports, which clearly highlights a big issue that many more need to consider and address.
[14:15] What ISO Standards can support the Governance aspect of ESG Compliance?:–
- ISO 9001: Quality Management – this is the leading global ‘quality mark’ for businesses and designed as a vital business improvement tool. It’s quite simply A blueprint for running your business successfully.
- ISO 22301: Business Continuity Management – Which provides a basis for planning to ensure your long-term survivability following a disruptive event. This is a Standard that many align with, but don’t always certify to, and for good reason as it provides some invaluable guidance for establishing robust Business Continuity Plans.
- ISO 27001: Information Security – This is a Standard that is common place for most sectors now, given how reliant we all are on tech. ISO 27001 will help you to implement an Information Security Management System (ISMS), which is a systematic approach to managing sensitive company information, ensuring it remains secure and available. It encompasses people, processes and IT systems.
- ISO 37001: Anti-Bribery Management Systems – It’s the International Standard that allows organizations of all types to prevent, detect and address bribery by adopting an anti-bribery policy, appointing a person to oversee anti-bribery compliance, training and carry out risk assessments.
- ISO 44001: Collaborative Business Management – This was originally a British Standard that had been created to provide a framework for creating and managing collaborative business relationships between organisations. The standard promotes the best way for businesses to work together, thus effectively developing and managing their interactions with each other for maximum benefit to all.
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The demand for tangible sustainability action is becoming more pressing as we inch closer to our 2030 and 2050 Net Zero targets.
However, that is still quite a way off, and many businesses are dragging their feet when it comes to taking action. Sure, some may have an ESG Policy or mention it on their website, however that term is starting to become synonymous with green washing due to poor implementation in many cases.
So, what can you do to make a difference right now?
In this weeks’ episode Mel explains the principle of Parkinson’s law, how ISO Standards can help to tackle climate change and how you can achieve Net Zero in just 90 days.
You’ll learn
- What Parkinson’s Law is
- How can ISO standards help tackle climate change
- The 3 reasons why businesses are behind on achieving net zero
- How you can achieve Net Zero in just 90 days using the Net Zero Planner
Resources
In this episode, we talk about:
[00:25] Come visit the Carbonology stand at EMEX! – EMEX is a free exhibition to learn about carbon management, ESG and sustainability. It takes place at ExCeL London on 22nd – 23rd November 2023 – Carbonology will be at Stand G38. Come grab a free Net Zero Planner while you’re there! Register your place here.
[02:10] Episode Summary – Today we’ll be talking about why we need to act now rather than in a decade or two, how ISO Standards can play a critical role in tackling climate change and using the Net Zero Planner to help you set achievable objectives to work towards Net Zero in just 90 days.
[02:55] We need to act now rather than later! – Our 2030 and 2050 targets are very far away, which results in businesses not doing much to address them in the meantime.
They might have an ESG policy or they might have something referencing ESG on their website, but are they actually taking action right now to make that happen? In many cases, no. Which is where Parkinson’s Law comes into play.
[03:40] What is Parkinson’s Law? Parkinson’s Law is the idea that work expands to fill the time allotted for its completion. This may mean you take longer than necessary to complete a task or you procrastinate and complete the task right before the due date.
Parkinson’s Law is the old adage that work expands to fill the time allotted for its completion. The term was first coined by Cyril Northcote Parkinson in a humorous essay he wrote for “The Economist” in 1955.
Lets say you are given a task to complete a report in 3 weeks, chances are if you were given the task to do in 1 week – you’d make it happen.
Parkinson’s Law says that the perceived importance and difficulty of a task will grow in proportion to the amount of time given to finish it.
[05:30] Is it possible to achieve Net Zero in 2024?: Yes! Carbonology® been turning around projects to help businesses to build net carbon neutral in less than three months – so why can’t you?
[06:05] The Net Zero Planner – The Net Zero in 90 days planner gives you a pathway to follow to achieve Net Carbon Zero.
Each day focuses on a specific task, enabling you to make step by step progress to achieve your goals.
Your Net Zero Planner provides the foundations for not only achieving Net Zero but also achieving verification to Carbon standards along the way. Grab a copy here!
[08:25] What role do ISO Standards play in tackling climate change? Standards have a critical role in helping meet climate goals. Particularly when there is an influx of greenwashing across industries.
The international standards for carbon verification (ISO 14064) and carbon neutrality (PAS 2060, due to be ISO 14064 in 2024) support the Sustainable Development Goals (SDG) and create a level playing field, providing transparency, reliability, accountability and without a doubt, credibility.
[10:00] So why are businesses struggling to achieve Net Zero? there are three reasons why businesses are behind on achieving Net Zero:-
- Time and resources have not been dedicated.
- Lack of focus and structure
- Lack of knowledge on what to do
The Net Zero Planner will help to address these challenges.
[11:15] Carbonology is there to support you – Some of the tasks in the planner may be tricky – quantifying your emissions for example, this is always going to be challenging.
Carbonology is there to support you, either with consultancy or digital resources via the Carbonologyhub. If you need some extra assistance, simply contact them.
[11:55] How can the Net Zero Planner help you? – First and foremost, Net zero is not going to happen, unless you prioritise your time.
This starts with designing your ideal week. Imagine how would you structure your week if you had 100% control. What does your ideal week look like?
Remember, What gets scheduled gets done. Sticking to a plan takes discipline, but imagine if every business dedicated 2 hours a day for 3 months, we’d be achieving net zero well before 2050!
By setting aside 2 hours a day to complete a Net Zero task, you and your team will be well equipped to put your planning in place and achieve Net Zero accreditation! Of course, not every week will be aligned with your ideal week, but it’s a guide that you can refer back to.
[13:00] Making progress with the Net Zero Planner – It’s imperative you review progress on a weekly and monthly basis and at the end of the 9O days. This will help to drive momentum when you see what you’ve achieved and also provide a reality check if you need additional support or time.
The weekly, monthly and quarterly review provides an opportunity to look back at your progress and allows you time to reflect on what went well, and where you’ve been having challenges which may result in making decisions to address any shortfalls.
This could include allowing more time for a specific task the following week, delegating responsibilities internally or outsourcing activities i.e. carbon quantification or verification.
It’s recommended that you schedule this review and reflection time in your calendar i.e. 1 hour on a Friday afternoon or at the end of the month. In addition to the structured planner pages, there are blank pages for expanding on your ideas and taking notes.
[15:25] Special Deal! – The Net Zero Planner is available for Amazon at a reduced price of £7.99 until the 15th December 2023. The Standard price will be £14.99. If you’re at EMEX on the 22nd or 23rd November 2023, we have 100 free copies to give away!
Lastly, if you have an questions or would like to learn more about how Carbonology can help you, feel free to book a call in via David’s Calendly.
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