Check out the above calendar for the fantastic green finance events for Jul
2024! Interested to join and know more about the events? Click the links below for details:
The World
Benchmarking Alliance – Allies Assembly in Bangkok from June 10-13, 2024 provided
a crucial platform for global stakeholders to come together and share insights
on the role of business in achieving the United Nations Sustainable Development
Goals (SDGs). As a Certified ESG Analyst (CESGA) representing Friends of the
Earth (HK), it is my honor to attend this premier sustainability conference and
gaining firsthand perspectives on the progress, challenges, and collaborative
efforts underway. The 4-day program, covering critical issues such as social
challenges in supply chains, the evolving role of investors in driving
sustainability, and the pressing need to develop globally accepted ESG
standards and frameworks. The insights gleaned from this assembly offer
valuable lessons and a roadmap for businesses, investors, policymakers, and
civil society organizations to accelerate progress towards a more sustainable
and equitable future.
Social Issues in Supply Chain
Southeast Asia
plays a pivotal role in the global supply chain, especially in food and marine
products. The environmental and social status of this region requires urgent
attention due to small-scale, dispersed suppliers with low education and
technological adoption, leading to challenges in supply chain engagement and
data collection. The fishing industry, dominated by small-scale suppliers, is
problematic in terms of human rights violations[1],
with weak law enforcement and ineffective whistleblowing mechanisms.
Just transition
in the supply chain is also critical, ensuring fairness while pursuing
environmental and social improvements. Small-scale suppliers may face
increasing production costs to meet sustainable standards, impacting their
vulnerable income and living conditions. Participants proposed collaborative
efforts from large companies, governments, and NGOs are essential. Companies
must ensure fair profit distribution, invest in sustainable practices, and
support small-scale suppliers with tailor-made education and technological assistant.
NGOs are
working for human rights and support vulnerable communities on-site, like The
Labour Protection Network (LPN) combating human trafficking in the fishing
industry. LPN operates centers for migrant workers, investigates wage disputes,
and provides legal services. Raising awareness and educating employees is
crucial, as victims may be unaware of their rights. LPN faces challenges such
as fake documents, difficulty reaching small-scale supplier employees, and
accusations of damaging Thailand’s image. The organization advocates for
transparency in supply chains and data sharing but struggles to obtain
compensation and evidence for long-term cases involving workers on boats.
During our
visit to LPN, government representatives emphasized the importance of private
sector support reaching those in need and enforcing laws. Collaboration between
ministries, police, and trade unions is crucial for social welfare and
whistleblowing. The ministry partners with NGOs to provide education, training,
and facilities for victims, but comprehensive mechanisms and law enforcement to
protect migrant labor are insufficient.
Stewardship and Engagement
Foreign
investors play a pivotal role in driving sustainable development through the
effective utilization of their shareholder power. Participants in the
discussion emphasized the significance of finance in unlocking sustainable
business opportunities in Asia, highlighting the evolving skills and knowledge
required for effective stewardship. Institutional investors are increasingly
adopting a proactive approach, engaging with companies as collaborators to
drive meaningful changes in sustainable development practices. Rather than
simply divesting from companies, investors are holding them accountable to
develop and implement real transition plans. Given that Asian companies tend to
be less open to engagement compared to their Western counterparts, investors
are encouraged to leverage shareholder resolutions and co-file with NGOs to
amplify their influence.
Initiatives
such as Climate Action 100+ have made significant progress in persuading
companies to make net zero commitments and improve their governance and
disclosure practices. Investors are gradually shifting their emphasis from mere
compliance and disclosure to integrating sustainability commitments into the
core business strategy of the companies they invest in. Additionally, there is
a growing recognition of the importance of addressing social issues, as
investors understand the impact of these issues on economic systems and company
performance.
Transparent and
globally comparable standards and frameworks are essential for engaging
stakeholders effectively, particularly when addressing complex social issues
such as wages and inequalities. By adopting a comprehensive approach that
encompasses both environmental and social considerations, investors can play a
vital role in shaping a more sustainable and equitable future for businesses
and communities alike.
Allies in Action Discussion – Addressing the Gap in
ESG Standards and Frameworks
At the Allies
in Action session, I was invited to co-lead a table discussion on addressing
the gap in “Standards and Frameworks”. The primary issue is the
absence of globally accepted reporting standards that align with global
agendas, resulting in a lack of transparency and comparability of ESG
performance among companies.[2]
Challenges identified
for this topic such as lack of primary data, standardized quantifiable units of
measurement, and consensus on ESG concepts and expectations due to diverse
cultures and values across countries and sectors.
Participants
suggested collaboration and communication on unified standards and frameworks,
also making them more layman and accessible to ordinary people. However, reporting
standards for corporates should be detailed and formal as it is a legal
obligation, while performance metrics and scores can be easily understood and comparable
by the general public despite the risk of “Black box”.
Establishing a
globally accepted reporting standard for ESG disclosure is just the first step
towards meaningful sustainability practices. The real challenge lies in
developing a performance standard that drives actual change and improvement.
While reporting standards ensure comparability, they do not guarantee active
efforts towards better ESG performance, as seen with the slow improvement in
lifecycle assessment despite the ISO 14040 standard being the sole
internationally recognized framework for this issue.
Developing a
globally accepted performance standard is significantly more difficult due to
the subjective and context-specific nature of ESG issues. Achieving consensus
requires the active participation and buy-in from diverse stakeholders with
different priorities and concerns. Nevertheless, a robust and widely accepted
performance standard is essential for driving meaningful change, ensuring
credibility and effectiveness of ESG practices, and creating a level playing
field for companies to compete on ESG performance.
Conclusion
While ESG and
sustainability have made significant progress, there are still numerous areas
that require improvement. The Allies Assembly in Bangkok provided a valuable
platform for stakeholders from various sectors to collaborate and share
insights. The conference highlighted the critical social issues faced by
small-scale suppliers deeply embedded in supply chains, emphasizing the need
for immediate action. Investors are increasingly leveraging their influence
through engagement and stewardship to drive meaningful changes in sustainable
development practices. However, the key to achieving consensus and establishing
globally accepted standards and frameworks for ESG reporting and performance
setting lies in collaboration. By fostering partnerships among diverse
stakeholders, including companies, governments, NGOs, and investors, we can
work towards addressing the complex challenges in the ESG landscape and create
a more sustainable and equitable future for all. The Allies Assembly served as
a catalyst for fostering partnerships and accelerating collective action
towards a more sustainable and equitable future.
Article is written by EFFAS Certified
Environmental, Social, and Governance Analyst (CESGA). CESGA is highly
recognized in Europe and globally which has been steadily increasing in the
worldwide. If interested in enrolling, please refer to https://bit.ly/3tFUQ1M
至於作為世界五百強之一的建築公司，中國中鐵（00390）不僅獲得了環境、社會及管治（Environmental,
Social, and Governance，ESG）評級的AAA級，並獲中國上市公司協會選為ESG最佳實踐案例。其業務項目多與環保有關，更投入大筆資金研發綠色科技，將可持續發展作為企業使命。可惜現實偏偏相反，中鐵經常收到環境罰單，更在2022年因違法使用和破壞林地，被罰款約65萬元人民幣；同年，中鐵子公司也因排污和噪音問題違規，罰款逾160萬元人民幣。
確立綠色認證標準
歐洲方面，為了打擊企業漂綠行為，歐盟議會在本年1月17日正式通過《為綠色轉型賦權消費者指令》（The Directive on
Empowering Consumers for the Green Transition，ECGT）。這項指令作為歐盟循環經濟計劃的一部分，旨在透過取締誤導性產品資訊和籠統環境聲明，協助消費者作出較佳購買選擇。
Mr. Anthony Cheung CESGA, Vice-Chairperson & Green Finance Convenor of Friends of the Earth (HK)
On World Environment Day, I had the privilege of serving World Vision and FoE(HK) as a panelist in a thought-provoking discussion titled “Supporting Natural Regeneration Projects: The Role of the Private Sector.”
Mr. Tony Rinaudo, the Forest Maker, Principal Climate Action Advisor, World Vision Australia
Mr. Daniel Misson, Carbon Programming and Partnerships Manager, World Vision Australia
Mr. Ken Chiu, Head of Carbon & ESG Products, HKEx
Mr. Calvin Wong, Head of Sustainability Assurance Services, SGS Hong Kong
During our engaging conversation, we delved into the benefits, challenges, and opportunities for corporations and investors interested in engaging in Farmer-Managed Natural Regeneration (FMNR) and other natural regeneration initiatives. I would like to highlight several key takeaways from this insightful exchange:
1. Return on Investment and Realizing Impacts
Panelists emphasized the relatively swift realization of tangible benefits in these initiatives, often surpassing expectations compared to traditional tree planting projects. For instance, Tony shared instances where farmers experienced remarkable increases in crop yields, sometimes doubling, within the first year of FMNR projects. The advent of remote sensing technology enables more frequent monitoring and verification of carbon projects, allowing investors to witness carbon credit generation sooner. Moreover, natural regeneration projects contribute to multiple Sustainable Development Goals (SDGs), enabling corporations to showcase their ESG investments. Implementing robust monitoring and evaluation frameworks facilitates the tracking of environmental, economic, and social impacts over time.
2. Reporting Impact and Elevating biodiversity Considerations
Accurately quantifying and reporting impacts emerged as a significant concern for stakeholders. Calvin underscored the significance of not merely presenting narratives but also adopting new ESG reporting frameworks such as GRI. Given the growing importance of ESG reporting and frameworks, companies must proactively address these issues. The panel further emphasized the need for corporations to mitigate environmental and biodiversity risks, highlighting the extensive economic value at stake due to biodiversity loss. Initiatives like the Taskforce on Nature-related Financial Disclosures (TNFD) emphasize the mounting focus on biodiversity. Companies that proactively integrate biodiversity considerations within their reporting will be better equipped to navigate emerging risks and opportunities.
3. Collaborating with Stakeholders To Foster Sustainability
The panel explored how corporate partnerships can support carbon reduction initiatives. Ken remarked that HKEx adopts a multifaceted approach, leading by example in setting ambitious targets for carbon neutrality and net zero. HKEx focuses on engagement, awareness, and practical implementation through educational initiatives.
In my view, it is essential for corporates to recognize the interconnection of Sustainability reporting, biodiversity, and financial performance, and take action to address these issues in a comprehensive and proactive manner.
Greenwashing poses one of the biggest risks in the sustainability transition. To tackle this, developing robust measurement metrics, KPIs, and a comprehensive framework is crucial. Sharing and standardizing these tools among all stakeholders will be essential in combating greenwashing and ensuring genuine progress towards sustainability goals.
4. Balancing Risks and Ensuring Long-Term Viability
In his keynote speech preceding the panel, Daniel highlighted FMNR’s low-risk nature, based on decades of experience. The key lies in designing projects with appropriate long-term economic incentives for communities and accounting for challenges expected over a project’s 30 to 40 years lifespan. This entails local assessments, adaptive management plans, and empowering local teams to make informed decisions. Addressing potential obstacles necessitates counterparty risks consideration, implementing effective ongoing monitoring, and engaging stakeholders to articulate project relevance and impact.
In conclusion, this audience instilled a sense of urgency and inspiration, urging concrete action in safeguarding the environment and biodiversity. FMNR and natural regeneration projects offer exciting opportunities for the private sector to effect transformative environmental and social change. By designing projects with appropriate long-term incentives, addressing potential risks, and partnering with key stakeholders, responsible companies can generate meaningful returns while restoring landscapes and empowering communities. As mandatory sustainability reporting continues to evolve, companies must proactively develop robust measurement frameworks to track progress, combat greenwashing, and demonstrate genuine sustainability commitments.
Bien Wong, Governor and Honorary Treasurer, Friends of
the Earth (HK)
Happy World
Environment Day! I hope this message finds you all in good spirits and ready to
make a positive impact on our planet. As the Board Governor of Friends of the
Earth (HK), I am delighted to share with you a groundbreaking collaboration.
Together with
the Lingnan University, we have launched the Executive Certificate in
Sustainable Finance & ESG Analytics, a programme that I firmly believe will
be a turning point in the realm of environmental sustainability.
By aligning the
programme with the globally recognised professional CESGA qualification, this
not only lays the foundation for the graduates’ success in their careers but
also signifies a crucial step forward in our mission to drive sustainable
change.
The curriculum
has been meticulously crafted to be both engaging and practical, with seasoned
instructors from the finance and business sectors sharing their invaluable
expertise. Moreover, all learning hours are qualified to earn Continuing
Professional Development (CPD) hours.
If you are
interested in learning more about the Executive Certificate in Sustainable
Finance & ESG Analytics, I encourage you to visit the website and explore. For
the programme details, please visit: https://bit.ly/3VbUXOt
