Esg

Question 1

What is ESG

Answer 1

It approaches sustainability through a corporate lens, providing a framework for stakeholders to assess how business has managed its risks and opportunities relating to environmental, social and governance

Question 2

3 components of ESG

Answer 2

Environment- focus on quality and functioning of natural environment

Social- rights, well-being and interest of people.

Governance- Issues relating to the oversight of control and direction of a business.

e.g diversity, size, share holder rights and executive pay.

Question 3

ESG rating

Answer 3

Measures business performance in environmental, social and governance lenses.

High rating is good.

Businesses can use ESG ratings to

Provide a benchmark to performance

Identify improvement areas

Communicate commitment to sustainability to stakeholders.

Question 4

Greenhouse gas protocol

Answer 4

This is a method for GHG accounting (part of environmental component of ESG.)

They issued the corporate standard providing a science based framework for calculating GHG in value chain.

They provide standardised methods for calculating GHG emissions so there is consistency and comparability across global organisations.

Question 5

Corporate standard

Answer 5

requires measuring a range of GHG emissions such as methane and nitrous oxide which are calculated and converted to carbon dioxide equivalent.

The corporate standard classifies GHG emissions across scopes

Scope 1: GHG from owned/controlled sources e.g owned vehicles, burning fossil fuels.

Scope 2: Indirect emissions from generation of purchased emissions e.g buy electricity, heating activities. The emissions happen at the powerplant.

Scope 3: All other indirect emissions occurring in the businesses value chain including supplier upstream/down stream activities.

Question 6

Benefit of corporate standard

Answer 6

Understand emissions across company value chain.

Allows us to focus efforts where value chain has greatest impact.