Capital 2: Flashcards
What are the key questions to consider for a company ESG vision and ambition?
- What role should ESG considerations play in shaping future corporate strategy?
- What is the company’s vision of the world in 2050 that can shape strategy?
- What are the company’s unique strengths and USP features that enable it to achieve a differentiated ESG approach?
- Do you want to commit to public targets for environmental, social, and corporate governance?
What was the example about Daimler and theior ESG vision and ambition?
- Daimler had to correct their targets about only having E-cars in their fleet
–> ESG and company vision should go hand in hand and be aligned –>IMPORTANT: What do we want to communicate to the outside?
Cornerstones of ESG vision:
What role should ESG considerations play in corporate strategy?
Sustainability is a driving factor, enabling business portfolio evolution and new business opportunities, such as:
- Decarbonization partnerships
- Offsetting projects for industry
Cornerstones of ESG vision: key questions ESG vision
How should companies express their ESG ambition and commitment?
- Commit beyond climate and new businesses
- State measurable, quantitative ESG targets
- Position as an industry leader in specific dimensions
What is a materiality assessment?
=A structured process to determining ESG issues that could
- impact the business or internal/external stakeholders, and an
- assessment of impact on business, society and environment
Why do we do a materiality assessment?
- Regulatory compliance: Required under European Sustainability Reporting Standards (ESRS) for large comapnies, and for companies reporting to GRI
- Focus ESG efforts: Prioritizes material topics in ESG transformations
What are the key steps in conducting a materiality assessment?
1.Scan the environment to identify ESG topics
2.Engage with relevant stakeholders and experts to prioritize topics
3.Assess the significance of impacts on business, society, and environment
4.Present findings in a materiality matrix.
What topics are included in the environmental dimension of materiality?
- Energy, emissions, and climate change
- Circular economy: waste, resource management, and recycling
- Water
- Biodiversity and land
What topics are included in the social dimension of materiality?
- Human rights and inclusiveness in the supply chain and workforce
- Safety and well-being
- Socio-economic development (local and national)
- Access and inclusiveness in products and services
What topics are included in the governance dimension of materiality?
- Corporate governance and ethics
- Advocacy strategy and policy shaping
- Anti-corruption
- Reporting and KPIs
What are examples of the Short-list of 38 topics used in materiality assessment?
Emissions and Resource Management
Emissions:
- GHG emission in operations
- Product lifetime GHG emissions
- Pollutant emissions in operations (NOx, etc.)
Resource management:
-Minimal/sustainable water use in operations
- (Client) Water stewardship
- Sustainable and transparent material choice
- Hazardous materials management
What are examples of the Short-list of 38 topics used in materiality assessment?
Energy and Labor
Energy:
- Energy efficiency in operations
- Product energy efficiency
Labor:
- Employment conditions & individual employee benefits
- Occupational Health and Safety
- Employee development
What is a materiality matrix and what are on the axis?
A visual tool that highlights the importance of ESG topics for stakeholders and their criticality for business, people, and the planet.
It incorporates:
Y-axis: Importance of ESG topics for stakeholders (e.g., investors, clients, NGOs).
X-axis: Double materiality (financial and impact materiality).
What is double materiality in ESG?
applying financial and impact materiality independently, without ignoring interactions
- Financial materiality: Impact of ESG topics on the value of the enterprise
- Non-financial materiality: Impact of business on the environment and society
–>These are assessed independently but with consideration of their interactions
Why use a materiality matrix in ESG assessments?
- To prioritize ESG topics by their relevance to stakeholders and business impact
- To align ESG initiatives with both financial performance and societal/environmental goals
