The ESG Hatefest
Can ESG make the world a better place
M In the last few months, there have been a number of earthquakes in the fight for 1.5% , ESG, Carbon Offsets .
There has been criticism of ESG, false pledges, hypocrisy, greenwashing, and a lack of faith in Government and Business. ESG is now under vicious attack, and it is fascinating to observe how broad the spectrum is of those who hate the idea are. It is easy to become despondent in face of this criticism. The principles of ESG are solid, but like all changes is hard. ESG is a new Business Regime. It says, no longer will be business be measured by profit alone , but on profit on + Impact. Yes – ESG in the current setup is flawed. This article looks at what we practicality do upgrade ESG into Impact. Big Business despite fancy slogans on the websites need to embark on soul searching. There is a growing disconnect between consumers, people who desire a fairer world vs Big Business , and Government with their “empty” or misguided pledges ESG is based on the UNSDgs and this is the underlying principle - The key to meeting the UN SDGs is these affirmations and making the world a better and fairer place.
So, let’s have a look at the state of play today.
1. ESG Measurement & Reporting Organisations have started to adopt ESG in in their own organizations and across all its Portfolio Companies and Supply Chains . As Sir Ronald Cohen says – you cannot change what you do not measure. This is a start but is not enough. Companies needs to lead by example.
2. The need to upgrade ESG to Impact Companies are still driven by one thing Profit. It is not easy to task to change mindsets. Why change a good thing. Some examples – Hard to make Real Estate become Green Build, Agro Chemical will still promote their core harmful, inefficient Products despite alternatives , Insurance Companies still put profit before their customers , Big Pharma will not encourage cheaper , alternative medicine. Change means breaking with the mold of thinking and requires courage. It means that these Companies need to change. We all know what happened to Kodak when they did not foresee the change and act.
3. Key UN SDSs not being met While the big story is Climate Change, the main subchapter should be Food. The Russian Invasion Ukrainian has exposed the vulnerability of the Food Chain. Together with overconsumption, over killing of Fish and animals, Food Waste, smallholder farming Poverty this remains a major challenge as can be seen in these ,
SDGs that needs a lot more Action.
SDG2, SDG11, SDG13, SDG15, and SDG16. 2- ZERO HUNGER 11 - SUSTAINABLE CITIES AND COMMUNITIES 13 - CLIMATE ACTION 14 - LIFE BELOW WATER 15 - LIFE ON LAND Recently, I came across this study – “An assessment of requirements in investments, new technologies, and infrastructures to achieve the SDGs” https://enveurope.springeropen.com/articles/10.1186/s12302-022-00629-9
In this Study - the finding suggest that the scope and width of resources limitation are currently undermining the implementation of the SDGs. Apart from the fact that the pace of progress has been insufficient, the potential of the SDGs in pursuing sustainability and improving life quality is not fully realised. This trend suggests that a substantial acceleration of the efforts is needed, especially for the five SDGs whose progress since 2015 has not been optimal, namely SDG2, SDG11, SDG13, SDG15, and SDG16. So, let’s explore some ways to make ESG more meaningful. Summary I recently made new connections on LinkedIn. Both of these gentlemen are promoting strong ideas of needed change which resonate strongly my ESG / Impact Journey, yes – ESG / Impact is journey of learning , change and influencing the agenda. The world is broken, and we need to explore ideals to make this change for a fairer world. Frank Dixon. is promoting System Change Investing(SCI) – whereby current ESG is focused on symptoms (i.e., climate change), not on root causes (flawed systems). And the biggest flaw is in the Food System as articulated by Daniel Hudson. So, basically, you have in these two worlds views the story of upgrading ESG to impact . My Journey of ESG as an Accountant / CFO started with ESG Measurement and systems of reporting and governance. Realizing that this not enough, I am promoting Investment Opportunities – Sustainable Finance into Sustainable Agriculture and Living – the knock-on effect/ impact of saving the world – one fruit at a time. A deeper discussion and the needed solutions.
So, let’s start with Frank Dixon. – Promoting System Change Investing https://www.linkedin.com/in/frank-dixon-32b8805/ His profile states- “A desire to help resolve the major challenges facing humanity caused me to work in the sustainability field since the 1990s.
My company pioneered return enhancing ESG investing (positive screening). In 2003, I developed the first models for integrating system change into responsible investing and corporate sustainability (System Change Investing – SCI). I then researched and wrote a series of books (Global System Change – GSC) about evolving human society into sustainable form, with an emphasis on the optimal corporate and financial sector roles in societal transformation. I advise private and public sector clients (e.g., Walmart, US EPA) and work with allies to launch the most advanced responsible investing and corporate sustainability strategies. As the head of research for the largest ESG research firm (Innovest/MSCI), I saw that no company could fully eliminate negative impacts and remain in business. Flawed economic and political systems unintentionally compel all companies to degrade the environment and society. These systems are the root causes of climate change and essentially all other major challenges. System change is at least 80 percent of the sustainability solution. But until recently, it was getting nearly zero percent of the attention in the corporate and financial sectors. Current responsible investing and corporate sustainability approaches provide many benefits. However, environmental, social, economic and political problems are rising rapidly, in part because these approaches are focused on changing companies, instead of the systems that control them. They also are focused on addressing symptoms such as climate change instead of root causes (flawed systems). GSC and SCI shift the focus of ESG and corporate sustainability to system change and root causes. They enable asset managers to enhance reputation, investment returns and assets under management.
Daniel Hudson, on his Profile, writes the following https://www.linkedin.com/in/daniel-j-hudson-69b59412b/ “Agriculture is the number one cause of habitat loss, which in turn is the number one cause of loss of land species. Overfishing and pollution from agricultural chemicals are leading causes of the loss of sea life. Food as a whole has more greenhouse gas emissions than any other sector.
If we are to change direction from a mass extinction event, we must transform food in the industrial world Farming is to be considered much larger than food alone. We can grow our buildings, energy, clothing, cosmetics and materials for many other manufacturing processes. These can all be farmed ecologically Pioneers in ecological agriculture (agroecology) are constantly proving there are many ways we can farm while simultaneously creating resilient abundant ecologies which support the lives of myriad living things. Many of the pioneers of ecological production are working in obscurity. We serve to publicize their work, provoke dialogue about what is possible and invite participation in transforming our mode of production so that we can transition into a world of ecological abundance. Working with Prof. Martin Wolfe I developed a commercial model which can substantially increase the profitability of industrial arable and pasture farmers by transitioning their farming to agroecological systems developed by Prof. Wolfe at Wakelyns Agroforestry over 25 years I have campaigned in the UK Parliament to make policy more favourable to ecological farming, working with people right across the spectrum of farming in the UK, from politicians and the aristocracy to smallhold farmers in decentralised communities, and collaborated with academic institutions, campaign organisations, farmers unions and fundraisers.” This leads to . Sustainable finance into Sustainable Agriculture and Living Together - Saving the world, one fruit tree at a time And this, unfortunately will not be led Government or Big Business, but my you and me – the individual, the investor, the customer, the consumer. Abstract Can we change the world one fruit tree at a time? Let’s see how? One fruit tree leads to farmers and farms. From this base of increased output and income you get better living conditions, less disease and malaria, sustainable villages with low-cost natural houses, solar, water, and hopefully schools and reverse the tide of urbanization. .Food as our main area of focus: Together - Saving the world, one fruit tree at a time So, what we have today are birth pains in the ESG / Impacts story. It is clear that people will lead the change. Greta Thunberg has shown that anybody can make an impact.
By mutual cooperation, you the individual, the customer, and the company can make a change - help mitigate climate and reduce world poverty, hunger (and disease) as part of a collective effort. Saving the world, one fruit tree at a time. Current Net Zero initiatives are done by planting Trees - Carbon Token https://carbontoken.tech/ is promoting planting fruit trees initiatives for greater impact. This holds the key to economic success and independence for small farm holders. The story does not end here – From One Fruit Tree, you get Fruit Farms. By cooperation, you get higher sales and Exports creating Viable Agro Businesses and Industries, which is Dream Valley Global's dream. https://www.dreamvalleyglobal.com/
To make an Impact . Together, we can save the world – one fruit tree a time. One small step , a big change for humanity and the world. So, what we do about this - call to action. In this blog, I have highlighted the approach and actions needed to upgrade ESG into Impact. ESG is not a one stop fit all solution. It requires people with authentic experience and ESG Reporting or Accounting Software. While most all the focus on Focus on E – Environment, S- Social and G- Governance is equally Important – Scope 4 adds corporate responsibility of one's Products, and this leads to increasing Governance and Director skills , responsibilities, and risks. ESG3.0 is a platform addressing these concerns.
About us Persofi allows your company to upgrade your ESG story.
1. ESG support for CFOs and Directors
2. Provision on Non-Executive ESG Director service
3. ESG3.0 - Digital ESG Tool Kit
4. Upgrading ESG to Impact Strategies Pesofiy is a breakthrough approach to ESG that incorporates a digital data-driven approach of data collection, management and reporting and Energy Reduction. The approach is both a Digital and Consultancy offering for companies providing a holistic next generation, strategy, data-driven, tech-based ESG solution, with a lower cost and more practical than the larger consulting firms. It is provided together with GCX have decades of subject matter experience – resulting in ESG Accounting, ESG Measurement, ESG reporting and improved accuracy and transparency of your company's ESG rating.
We invite you to find out how we can help you in your sustainability journey. Please feel free to reach out to me by email: email@example.com or browse my blogs on https://www.persofi.com/ where we cover topics with a focus on: ESG Accounting | Carbon Accounting | ESG Measurement | ESG Rating | Net Zero | CO2 Reduction | ESG Reporting Emission | Supply Chain | Investment Portfolio | Upgrading ESG into Impact