Does the private sector have a role in climate action?

In this consecutive three-part series, we will give you some insights to hopefully generate some ‘food for thought’ as we explore and discuss the science and trends of climate change, the traditional definition of "development" in our societies and gaining perspective on solutions for the Caribbean. This is the final instalment.

As the world continues to come to terms with the reality of climate change, debates are cropping up around the extent of the private sector’s role in climate action. In the last few years, this topic has certainly gained traction and is an emerging focus in business strategy today.

How can we bring the ESG (environmental, social, and corporate governance) discussion in our boardrooms and why?

Many businesses assume that their current corporate social responsibility (CSR) or environment, health and safety (EHS) programs mean they are meeting ESG requirements, but it is important to understand that while intersections exist between these programs, there are also clear delineations.

CSR and EHS are subsets of ESG, with many aspects of each touching on the ‘e’ and the ‘s’ pillars. However, the key difference is that ESG programs are broader and require measurement, validation and reporting of a company’s chosen metrics.

So, where an investment decision may have previously come down to differences in a company’s EHS strategy, it is now being made based on differences in their ESG strategies.

As businesses begin to evaluate their current environmental, social, and governance policies the opportunities for cost savings, risk mitigation and growth become apparent. Given the combination of business opportunity and climate action, private sector participation in ESG and climate action is highly incentivised.

However, if voluntary incentives do not drive participation, regulations are in the works to ensure compliance. The US and the EU are at various stages of introducing climate-related disclosures for the private sector, and closer to home, the Ministry of Planning and Development has announced that they are in the process of updating Trinidad and Tobago’s legal frameworks to introduce mandatory greenhouse gas emissions reporting for emitting entities (Ministry of Planning and Development).

Becoming ESG compliant

The most important thing when setting an ESG strategy is to provide your organisation with a holistic understanding of what ESG is and how it fits into the day-to-day operations of your business.

ESG is not the implementation of a new department, but rather part of the overall business strategy and purpose of the organisation.

Determine your baseline, including current practices and emissions, and set a defined timeline for your ambitions.

Once targets are confirmed, congregate a multi-disciplinary brainstorming team who will develop the initiatives s that will change the way you transact, who you transact with, and how the business will operate.

To monitor progress, there must be continuous measurement of actuals versus targets. This allows for the observation of patterns and the emergence of opportunities to provide the company with long-term value.

Businesses can utilise frameworks from the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and the Task Force on Climate-related Financial Disclosures (TCFD) to incorporate ESG reporting into business practices.

Public and private sector participation in sustainable development is undoubtedly a huge piece of the puzzle, however, with every supply curve there is also a demand element.

If governments are setting legislation, and companies are changing the way they operate, then what is left?

The final part of the solution lies with the individual. We are trying to adapt the world to our behaviours with technology advancements and new business practices, but a key piece of our attaining the 1.5 degrees is to reduce our consumption.

The Trinidad and Tobago Chamber of Industry and Commerce thanks Lauren Bain, sustainability consultant, EY (a Member of the TT Chamber), for contributing this article.