ESG, or Environmental, Social and Governance, is a framework used to evaluate a company’s sustainability and corporate social responsibility. It examines the performance of a company in terms of its overall environmental impact, as well as policies regarding social welfare and corporate governance that help maintain a sustainable balance between financial returns and societal concerns. ESG metrics provide an impartial assessment of business practices related to economic efficiency and environmental protection. Ultimately, this ensures organizations adhere to standards of ethical behavior while promoting long-term value-creation for their shareholders.
GHG inventory and monitoring
A GHG inventory and monitoring program is an essential element of effectively managing emissions of greenhouse gases. The inventory is the first step towards understanding where and how much your organization is emitting, along with identifying potential mitigation opportunities. Once the inventory process has been completed, a well planned environmental monitoring system can help in tracking progress over time, as well as identify inefficient or high-impact practices that need to be addressed. Such systems can provide powerful insights into trends in emissions levels and allow you to better assess and compare the effectiveness of different strategies. Additionally, these systems support many other areas of your business such as data compliance management and corporate sustainability reporting.
3 Scopes of GHG
Greenhouse gas (GHG) emission inventories can be divided into three categories, or scopes.
Scope 1 emissions encompass direct emissions from sources owned and controlled by a company, Scope 2 relates to indirect emissions purchased by the company , usually in the form of electricity consumption.
Scope 3 accounts for all other indirect emissions that are not related to purchasing of electricity and occur in the value chain outside of a company’s ownership, including upstream and downstream activities such as transportation and waste disposal. The quantification of GHG emissions within all three scopes is essential for companies striving to implement cost-effective measures such as investing in carbon offsets or improving energy efficiency. By having an expansive view on their full environmental impact, businesses can better understand where GHG reduction measures will have the biggest return on their investment with regards to both financial savings and sustainability goals.
ESG Reporting Through GRI:
The Global Reporting Initiative (GRI) is a not-for-profit organization that provides organizations with the standard framework for sustainability reporting. GRI sets out standards and guidelines for measuring, disclosing, and analyzing their economic, environmental, and social performance. Its vision is to ensure that organizations’ sustainability activities are more transparent and accessible to stakeholders in order to create sustainable value for all parties. The GRI structure includes a robust governance system composed of Preparers, Professionals, Practitioners, Advisors, Skeptics and Consumers of sustainability information. This facilitates widespread adoption of the standards by providing users with insights from different perspectives on how they can best use the GRI Framework. Additionally, GRI provides an independent ‘verification’ system which enables companies to publicly demonstrate progress in their attempt towards increased environmental and social sustainability. The framework is regularly updated to reflect the most recent advancements in sustainability thinking as well as changes in stakeholder expectations.