Navigating the ESG Landscape: A Guide for Retailers and Manufacturers
In the evolving business landscape, Environmental, Social, and Governance (ESG) reporting is becoming a mandatory requirement, echoing practices already established in various parts of the world. Australasian standards are currently undergoing final consultations, setting the stage for retailers to delve into the complex process of reporting and auditing their entire supply chain's carbon emissions footprint.
Understanding the ESG Landscape
Sustainability, a broad spectrum encompassing modern slavery, bio-diversity, and carbon emissions, often leaves businesses questioning where to start without disrupting their operations. With a global shift towards ESG reporting, retailers are urged to initiate the process now, particularly focusing on measuring and reducing carbon emissions. Beyond regulatory compliance, early adoption brings benefits to supply chains and overall business, fostering a competitive advantage in the market.
Key Accreditations and Global Standards
Navigating the accreditation landscape can be overwhelming, but for carbon emissions, Global Standards such as ISO 14064 and GHG Protocol are crucial. Science-Based Targets and adherence to Climate-Related Disclosures legislation further solidify a commitment to sustainability, building trust with stakeholders.
When to Start the ESG Journey
For retailers, the time to start the ESG journey is now. Mandates are on the horizon, with large institutions and listed companies already mandated in NZ. Beyond compliance, the move towards sustainability is driven by consumer expectations and the global commitment to achieve net zero by 2050.
Greenwashing, Carbon Offsets, and Genuine Reductions
Measuring emissions is the first step towards impactful reduction plans. While carbon offsets are considered, the emphasis is on genuine reductions, leveraging technologies like Generate Zero's reductions module. This not only aligns with standards but ensures a credible and lasting impact on the environment.
Sustainable Practices: A Competitive Edge
Contrary to the misconception that sustainability adds cost, embracing sustainable practices creates a competitive edge. Industry leaders like IKEA, Unilever, and Amazon showcase the potential for innovation, cost savings, and customer loyalty through sustainable initiatives. Results from the Spring BDO Board Pulse Survey highlight this point, with 33% of Board members and CFOs claiming ESG initiatives reduced their supply chain risk and 32% stating that it created new or innovative revenue streams.
Sustainability as an opportunity
The 2024 CFO outlook survey underscores the strategic importance of sustainability reporting. Thriving companies see sustainability issues as an opportunity not as a constraint. Boards are increasingly embedding ESG principles into core business strategies.
The Risks of Non-Compliance
Businesses unprepared for mandatory climate-related disclosures face financial, reputational, and innovation challenges. Proactive alignment with sustainable practices is crucial for financial stability, reputation management, and future viability.
Activity based measurement and the power of automation
Choosing between spend-based and activity-based measurement methods is pivotal. While spend-based reporting is simpler, activity-based methods provide accurate data adhering to global standards, essential for compliance reporting.
Attempting to measure carbon emissions manually may lead to errors and inefficiencies. Purpose-built software, such as the Generate Zero platform, offers automated solutions with generative AI and ML, streamlining data ingestion, reporting, and compliance in line with global standards.
The time to start is now!
Businesses need to embark on their ESG journey now, leveraging expertise and purpose-built tools to navigate the complexities of reporting, meet stakeholder expectations, and ensure a sustainable and resilient future. At Generate Zero our carbon accounting software is designed to ensure organisations can scale their climate action with automation of data ingestion, powerful data analytics and visualisations, reduction libraries and for those needing to disclose, full audit capability built into the software. To find out more talk to our team today.