challenges of developing data pool on ESG
by dr. K. Srinivasa Rao Commercial entities are broadly focused on business centricity. The regulators also orchestrate surveillance and supervision to monitor the quality of operations, governance, risk and compliance (GRC). They are seldom focused on overseeing compliances related to parameters measuring Environmental Social Governance (ESG) efforts. In the process, though the organizations are ESG centric, they may not find it necessary to develop data base making it difficult to measure the efforts. Historically, ESG activities are considered as philanthropic for the well-being of the society. They are not reckoned as an integral part of mainstream activities of the organization and are usually not mapped to the data system making it equally difficult to monitor, measure and intensify ESG efforts. This puts ESG compliance on backfoot. Looking to the intensity of environmental degradation, global warming, pollution, deforestation, exploration of fossil fuels, etc. and their consequential threat to the life and livelihood of people, the focus is shifted back to ESG compliance. The frequency of natural calamities and its fury is already creating crisis for people in different geographies. The trend is even threatening the habitability of the planet for coming generations. Unless corporate entities act now with multipronged inclusive approach working upon concrete contribution towards ESG, it will be difficult to contain the fury of climate risk. Collective and concerted action across the globe is needed, among others, for afforestation, shunning dependency on fossil fuel (coal, gas and oil), reduction of fossil fuel subsidies and its explorations.
1. COP26 deliberations: It can be recalled that 26th United Nations Conference of Parties (COP26) at Glasgow have highlighted the overwhelming climate risks posing serious threat to the planet. There was consensus to adhere to COP 21 - Paris agreement (2015) accords to contain rise in the average global temperature limited to 1.5 degrees above pre-industrial levels. Participating countries were encouraged to strengthen their emission reduction resolution and to align their national climate action pledges with the Paris Agreement. The two-week long COP26 deliberations convincingly impressed upon members to act and realize its goals in both letter and spirit.
Intelligent Risk - April 2022
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