Govt, private, public sectors must be socially responsible

Minister of Planning and Development Pennelope Beckles has said the government is far from excused when it comes to adopting environmental, social and governance investing (ESG) policies.

ESG investing is used to assess investments based on corporate policies encouraging responsible citizenship by corporate entities.

Speaking at the American Chamber of Commerce’s (Amcham) ESG conference, on Tuesday, Beckles said ESG has very direct implications for governments and TT is far from exempt from its impact, especially with the unusual weather recently.

The purpose of the conference was to educate and bring awareness to importance of investing in ESGs. Amcham president Toni Sirju-Ramnarine said companies investing in ESG will see social changes which will help manage their relationships with employees, suppliers, customers, and the communities where they operate.

Sirju-Ramnarine said, “ESG goals have been brought to the forefront with the majority of today's workforce – millennials and Gen Z. They have more social consciousness, citing they value companies that actively endorse DEI (diversity, equity, and inclusion) policies, climate-change initiatives, transparency and have sustainable business practices that positively impact social change.”

Beckles said she was pleased to announce that government had already started to incorporate that sort of thinking as she referred to theme five of the National Development Strategy Vision 2023, Placing the Environment at the Centre of Social and Economic Development.

She said, “Losses suffered by individuals and the damage to national infrastructure highlight the need to incorporate three main variables into national development strategies, namely exposure to climate risk, long-term social effects and governance issues.”

Beckles said since this is a recurring problem, funds allocated to development projects such as schools’ infrastructure and programmes are redirected to rebuilding efforts.

She added that TT has committed in its nationally-determined contribution policy to a reduction in overall cumulative emissions from the three main emitting sectors – power-generation, industry and transport – by 15 per cent, or 103 million tonnes of carbon dioxide, by 2030.

Beckles said even though the private sector has taken initiatives to increase the standards for ESG reporting, virtue signalling and greenwashing have become practices that undermine confidence and investment potential. Greenwashing happens when a company makes a claim about having environmentally-friendly products –which doesn’t exist– to promote a sense of environmental responsibility.

Beckles added that the ministry is also planning to have a functional measurement, reporting and verification system for greenhouse-gas emissions, managed by the Environmental Management Authority (EMA).

“I hope to take a note to Cabinet soon to formalise this system into the legislative framework to make greenhouse-gas reporting and mitigation actions mandatory, and I expect to get the relevant technical drafting instructions from the EMA soon to set this in motion.”

She added that there is also a carbon reduction strategy, a long-term strategy for reducing greenhouse gas emissions by 2050, created by the nationally-determined contribution under the Paris Agreement.

Sirju-Ramnarine said, “We will transform our electrical, transport, and industry sectors by decreasing emissions and replacing fossil fuels with renewable energy. Financial institutions will consider the likely impacts of climate events and pursue energy efficiency in all aspects of their operations, especially mobilising capital for green and low-carbon investments in the broader context of environmentally sustainable development.”

In terms of governance, Sirju-Ramnarine said, “For the corporate-governance aspects of ESG to be successful, we must be transparent with the public. Therefore, it will be a requirement for companies to disclose information such as their carbon footprint, pay equality, and ensure that there is no corruption within their operations so that everyone is doing things appropriately and ethically.”

She added that ESG investment has already had an impact, citing renewable-energy projects by energy companies, waste-reduction campaigns by conglomerates, and the introduction of low-carbon products.