At the sector level, among those that have made net-zero commitments, energy and power and utilities are the most highly represented. This reinforces the fact that high-emitting (and hard-to-abate) industries are often front and centre when it comes to climate action, placing them in the complex and critical role of being part of both the problem and its solution.
Japan-based conglomerate Mitsubishi Corporation, which has a large energy business, is grappling with these issues head-on. ‘Japan is expected to cover about 40% of its energy demand with renewables,’ explains CEO Takehiko Kakiuchi. ‘Natural gas is vital for the remaining 60%, and while getting to a consensus around offsetting mechanisms is challenging, carbon-neutral LNG [liquefied natural gas] offers a promising solution.’ There are also questions about what will ultimately be both acceptable to other stakeholders and cost competitive. Nuclear power, the most economical option, is fraught. ‘In Japan, nuclear energy provides a veritable source of clean power, but innovative approaches to safety concerns are essential to overcome public opposition.’
Meanwhile, among CEOs of companies that have not made a commitment to achieve carbon neutrality—attained when a company offsets its greenhouse gas emissions to zero (for example, by purchasing voluntary carbon credits)—or a net-zero commitment, 57% indicate that they don’t think their company produces a meaningful amount of GHG emissions. CEOs from the technology (74%), business services (72%) and insurance (71%) sectors were most likely to place themselves in this category.
Many of those companies may be focusing on their Scope 1 (direct) emissions and Scope 2 (indirect from the purchase of electricity, steam, heat or cooling) emissions, as opposed to Scope 3 emissions (those created through the use of their products and across the full value chain, including the contributions of suppliers and other partners). Scope 3 emissions are harder to quantify, and a large number of CEOs report that they lack both the ability to rigorously measure emissions and an established industry-wide approach for decarbonising—highlighting the need for reliable data and consistent processes.
https://www.arator.gr/wp-content/uploads/2022/01/33.jpg7461536panoshttps://www.arator.gr/wp-content/uploads/2021/02/Arator_no-background-325x100-1-300x92.pngpanos2022-01-18 13:37:012022-01-21 14:26:28PWC: In Our Global Sample, the Largest Companies are Three Times More Likely to Have Made a Net-Zero Commitment Than the Average Company.
The COVID-19 pandemic maintains a grip on the world with severe human and economic consequences; and as variants bring new uncertainties, society’s efforts to save lives and safeguard livelihoods should continue unabated. But innate to any crisis is the potential to fundamentally reshape a person, an economy, and possibly an entire society.
In the case of the pandemic, businesses have tried to cushion their employees, customers, and operations from the worst blows of the economic shocks and responded to COVID-19’s massive productivity accelerants and the disruptions under way.
The resulting innovation and behavioral changes have initiated a three-phase ripple effect in the economy, each with the potential to deliver a jolt of growth and prosperity—if business leaders respond strategically.
This may be the moment to commit to growth
As society stands at the dawn of 2022, business leaders may want to consider a stance of clear-eyed optimism about growth—and reflect it in their business agendas. Despite the vicissitudes of the past two years, could there be a postpandemic boom on the horizon?
This will likely depend on business leaders’ ability to respond to the productivity and growth “jolts” born from the pandemic.
https://www.arator.gr/wp-content/uploads/2022/01/9.jpg7461536panoshttps://www.arator.gr/wp-content/uploads/2021/02/Arator_no-background-325x100-1-300x92.pngpanos2022-01-16 13:27:332022-01-21 14:27:49McKinsey & Company: The CEO agenda in 2022: Harnessing the Potential of Growth Jolts
Investors prize clarity about the initiatives companies are undertaking, the reporting they are doing—and the returns they will generate. Here’s how leaders can answer the bell.
For companies stretching to find their way amid similar trade-offs, our survey points to a few actions leaders can take immediately that will advance their ESG agendas and bring their investors and other stakeholders with them along on the journey.
1. Harness the power of the C-suite. In our survey, 82% said companies should embed ESG directly into their corporate strategy. Investors also emphasized the importance of leadership from the top team, starting with the CEO. The chief executive is particularly well-positioned to communicate the importance of ESG to all stakeholders—including customers, employees, and shareholders—while making difficult resource-allocation trade-offs associated with ESG initiatives. Other members of the C-suite have a critical role to play, too. Observed one credit ratings analyst we interviewed, it’s when C-suite leaders are “actively engaged” with ESG that “we have seen it cascade through the business.” Intuitive as all this may seem, it’s not always consistent with reality. For example, according to PwC’s most recent Global CEO Survey, just 40% of CEOs have factored climate change into their strategic risk management, without which it is more difficult to drive a corporate sustainability agenda.
2. Think holistically about your ESG story. According to our survey, investors use annual reports, sustainability reports, and investor presentations by far the most frequently to understand how a company is addressing ESG issues. These sources, and the ESG story they convey, are well within your control. The breadth of issues covered in ESG reporting points to the need for a wide range of expertise to pull it all together in a cohesive way. Sustainability teams, risk teams, financial reporting teams, and investor relations teams should work together—giving further evidence that a company takes its ESG reporting as seriously as it does its financial reporting, and recognizes the market-moving information that ESG reporting increasingly provides.
A holistic approach to reporting should not be an end in itself; your reporting will inform a proactive dialogue with your investors, helping to assure them that your company is on the right track when it comes to advancing ESG strategy. If they can’t see that you are making progress, our survey indicates that they’ll consider actions ranging from engagement on executive compensation to voting against directors and resolutions to—in more extreme cases—divesting
https://www.arator.gr/wp-content/uploads/2021/12/bigstock-Spa-still-life-with-bamboo-fou-LR.jpg7481536panoshttps://www.arator.gr/wp-content/uploads/2021/02/Arator_no-background-325x100-1-300x92.pngpanos2021-12-20 11:40:352022-01-21 14:28:44PWC: The Economic Realities of ESG
PWC: In Our Global Sample, the Largest Companies are Three Times More Likely to Have Made a Net-Zero Commitment Than the Average Company.
/in Investment & Strategy /by panosAt the sector level, among those that have made net-zero commitments, energy and power and utilities are the most highly represented. This reinforces the fact that high-emitting (and hard-to-abate) industries are often front and centre when it comes to climate action, placing them in the complex and critical role of being part of both the problem and its solution.
Japan-based conglomerate Mitsubishi Corporation, which has a large energy business, is grappling with these issues head-on. ‘Japan is expected to cover about 40% of its energy demand with renewables,’ explains CEO Takehiko Kakiuchi. ‘Natural gas is vital for the remaining 60%, and while getting to a consensus around offsetting mechanisms is challenging, carbon-neutral LNG [liquefied natural gas] offers a promising solution.’ There are also questions about what will ultimately be both acceptable to other stakeholders and cost competitive. Nuclear power, the most economical option, is fraught. ‘In Japan, nuclear energy provides a veritable source of clean power, but innovative approaches to safety concerns are essential to overcome public opposition.’
Meanwhile, among CEOs of companies that have not made a commitment to achieve carbon neutrality—attained when a company offsets its greenhouse gas emissions to zero (for example, by purchasing voluntary carbon credits)—or a net-zero commitment, 57% indicate that they don’t think their company produces a meaningful amount of GHG emissions. CEOs from the technology (74%), business services (72%) and insurance (71%) sectors were most likely to place themselves in this category.
Many of those companies may be focusing on their Scope 1 (direct) emissions and Scope 2 (indirect from the purchase of electricity, steam, heat or cooling) emissions, as opposed to Scope 3 emissions (those created through the use of their products and across the full value chain, including the contributions of suppliers and other partners). Scope 3 emissions are harder to quantify, and a large number of CEOs report that they lack both the ability to rigorously measure emissions and an established industry-wide approach for decarbonising—highlighting the need for reliable data and consistent processes.
READ MORE
McKinsey & Company: The CEO agenda in 2022: Harnessing the Potential of Growth Jolts
/in Investment & Strategy /by panosThe COVID-19 pandemic maintains a grip on the world with severe human and economic consequences; and as variants bring new uncertainties, society’s efforts to save lives and safeguard livelihoods should continue unabated. But innate to any crisis is the potential to fundamentally reshape a person, an economy, and possibly an entire society.
In the case of the pandemic, businesses have tried to cushion their employees, customers, and operations from the worst blows of the economic shocks and responded to COVID-19’s massive productivity accelerants and the disruptions under way.
The resulting innovation and behavioral changes have initiated a three-phase ripple effect in the economy, each with the potential to deliver a jolt of growth and prosperity—if business leaders respond strategically.
This may be the moment to commit to growth
As society stands at the dawn of 2022, business leaders may want to consider a stance of clear-eyed optimism about growth—and reflect it in their business agendas. Despite the vicissitudes of the past two years, could there be a postpandemic boom on the horizon?
This will likely depend on business leaders’ ability to respond to the productivity and growth “jolts” born from the pandemic.
READ MORE
PWC: The Economic Realities of ESG
/in Investment & Strategy /by panosInvestors prize clarity about the initiatives companies are undertaking, the reporting they are doing—and the returns they will generate. Here’s how leaders can answer the bell.
For companies stretching to find their way amid similar trade-offs, our survey points to a few actions leaders can take immediately that will advance their ESG agendas and bring their investors and other stakeholders with them along on the journey.
1. Harness the power of the C-suite. In our survey, 82% said companies should embed ESG directly into their corporate strategy. Investors also emphasized the importance of leadership from the top team, starting with the CEO. The chief executive is particularly well-positioned to communicate the importance of ESG to all stakeholders—including customers, employees, and shareholders—while making difficult resource-allocation trade-offs associated with ESG initiatives. Other members of the C-suite have a critical role to play, too. Observed one credit ratings analyst we interviewed, it’s when C-suite leaders are “actively engaged” with ESG that “we have seen it cascade through the business.” Intuitive as all this may seem, it’s not always consistent with reality. For example, according to PwC’s most recent Global CEO Survey, just 40% of CEOs have factored climate change into their strategic risk management, without which it is more difficult to drive a corporate sustainability agenda.
2. Think holistically about your ESG story. According to our survey, investors use annual reports, sustainability reports, and investor presentations by far the most frequently to understand how a company is addressing ESG issues. These sources, and the ESG story they convey, are well within your control. The breadth of issues covered in ESG reporting points to the need for a wide range of expertise to pull it all together in a cohesive way. Sustainability teams, risk teams, financial reporting teams, and investor relations teams should work together—giving further evidence that a company takes its ESG reporting as seriously as it does its financial reporting, and recognizes the market-moving information that ESG reporting increasingly provides.
A holistic approach to reporting should not be an end in itself; your reporting will inform a proactive dialogue with your investors, helping to assure them that your company is on the right track when it comes to advancing ESG strategy. If they can’t see that you are making progress, our survey indicates that they’ll consider actions ranging from engagement on executive compensation to voting against directors and resolutions to—in more extreme cases—divesting
READ MORE