Climate Change and Sustainability Services
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E-Newsletter September 2017
Since GPIF selected stock indices for ESG investment, which looks at companies that focus on environment and corporate governance in July 2017, ESG investment is increasingly drawing attention. On the back of this, Daiwa Asset Management is expected to get their first ESG ETFs listed in late September. Currently, global ESG investment in total is estimated over 20 trillion dollars (approx. 2200 trillion JPY) and GPIF is to start ESG investment of 1 trillion JPY (however, CIO of GPIF Mr. Mizuno stated 1 trillion JPY is too small and will consider moving this to 10%). ESG investment has expanded mainly in Europe and the United States and now it seems to start growing in Japan. This trend pushes Japanese businesses to further more transparent disclosure.
Nonfinancial disclosure mandates have been spreading in Europe followed by the United States and ASEAN countries. As ESG investment increases, issues such as human rights abuses and environmental destruction become visible as management risk in the businesses. On the other hand, the issues are not just risk. Companies perceive these issues as market opportunities as well. In other words the companies that can maximize social and environmental values, as well as financial value, are expected to gain more investment from ESG interested investors.
The strategy of selecting a company with a less negative impact on the environment and human rights from an industry perspective, or a product that enables ‘smarter’ consumption, and investing in a project that helps in creating a market where the businesses support prosperity can be a winning one. This strategy may also push out enterprises that abuse human rights through their value chain, or products that promote large wasteful consumption and projects that devastate environment from market, even if they are cheaper.
This trend has already been observed in the market. Recently, UK and France have announced that they will stop selling gasoline vehicles and diesel vehicles domestically to shift to EV by 2040. China has started discussion on the EV shift. For businesses, their assets which have generated revenue until now may turn into stranded assets in the near future. The business environment may change significantly.
Why governments pursue such initiatives that companies would find difficult to follow? Why is this kind of discussion not more active in Japan? As new economic blocs are established, the way of operating businesses and the capital market are shifting to the next phase. Literally, the rules are changing. Sustainability is emerging as a new rule of business. Who sets out the next rule for business? How will companies preserve their competitive advantages? Who will get benefits by the new rules? And who would suffer losses?
In a global context, you wouldn’t be considered as having attended a meeting, if you do not say anything. It is about time Japanese businesses shift from passive management to a more proactive approach, one in which they proactively change the rules and to take initiative on global communication. This is not a future too far away to see; the new competition has already begun.
EY Japan CCaSS Leader, Managing Director
What is the HLPF?
The High-Level Political Forum (HLPF) on Sustainable Development was held from July 10th to July 19th at the UN headquarters in New York. In this year's HLPF, "Eradicating poverty and promoting prosperity in a changing world” was set as the central theme. Thematic reviews were held on seven of the SDGs, as well as 43 country Voluntary National Reviews (VNRs), including Japan. EY dispatched one representative to the Forum for two weeks, and investigated the latest trends and future prospects of the SDGs.
Based on the United Nations Conference on Sustainable Development (Rio +20), the HLPF is a conference on the "2030 Agenda", unanimously passed by the General Assembly in 2015, and its constituent 17 goals, focusing on the sharing of each country’s initiatives, progress, and methodologies. The Forum is extremely important as it accelerates and supports the achievement of the SDGs. This year’s Forum was the second of its annual holdings.
According to the UN reports, 77 government ministers, cabinet secretaries and deputy ministers alongside 2,458 registered stakeholders took part in the event, which included 150 official sub-events, held in addition to the main conference. The Forum showed great energy, with SDGs researchers, experts, company representatives, NGOs, government officials and ministers, engaging in events and discussions in and around the United Nations HQ.
During the Forum, two important reports were introduced, firstly the 2017 UN Sustainable Development Goals Report 2017. Secondly, the SDG Index and Dashboards Report 2017 by the Sustainable Development Solution Network. Active discussions were held on the contents of the two reports as well as what they mean for the future of the SDGs.
Key Highlights of This Year’s Discussion:
(1) The incompleteness of SDGs indicators
The SDGs consists of 17 goals, 169 targets, and 232 indicators. From the opening sessions on the first day, experts acknowledged the UN’s efforts on improving the SDGs indicators, but maintained that further research and effort is still necessary. For example, although SDG 1 declares to “End poverty in all its forms everywhere”, the international community does not have an agreed-upon definition for “poverty in all its forms”. One of the reasons for this is that there are forms of poverty that cannot be understood merely by income figures, and definitions for such types of poverty depend on each country's culture and society. In the SDGs indicators, the UN lends freedom to countries in their definition of “poverty” and their subsequent setting of indicators. However, civil society groups have raised critical opinions against this situation, as the indicators make it possible for countries to define poverty in such a way that doesn’t recognize the issue realistically. Furthermore, depending on the goal, although indicators are set, there is yet to be a methodology to collect data related to these indicators. Thus, research to establish a methodology will be necessary.
(2) SDGs inter-linkages
In addition, research on the inter-linkages between indicators, between targets, and between goals was mentioned as a pressing necessity. For example, poverty in SDG 1 and climate change countermeasures in SDG 13 are inter-connected, as climate change has a significant impact on the lives of those living in poverty, although the connection is not visible at the goal-level. In this way, inter-linkages, or connections amongst goals, targets and indicators that are not necessarily visible on the SDGs are yet to be organized. It was said that it is extremely important for each country to organize and understand these inter-linkages in order to accurately measure and understand their progress towards the SDGs.
(3) Lack of Funding for the SDGs
This year’s HLPF repeatedly heard criticism on the lack of SDGs funding – an issue persistent from the outset of the SDGs. Despite the desire to stimulate research through financial investment and capacity building in order to improve on the aforementioned indicators, it still remains to be discussed how to secure funding.
One of the suggested solutions to this problem is the utilization of private funds. During the presentations by regional SDGs officials, the EU official announced their prospect of securing funding through new financial schemes such as Green Finance. In addition, at a speech in the opening session of the HLPF’s second week, economist Jeffrey Sachs raised the importance of financial investment through responsible investment schemes such as the PRI and ESG investment. (Further information regarding SDG related investment can be found in a dedicated article of this month’s newsletter).
Criticisms on corporate accountability and social responsibility
In solving funding shortages of the SDGs, while expectations were raised towards companies and the private sector, many critical opinions on corporate accountability and corporate social responsibility were raised as well. In this regard, one moment that shocked the audience was when Mr. Jeffrey Sachs criticized specific companies in the gas and oil sector by name, and emphasized the importance of overseeing the private sectors by governments. As a whole, the trend was that of a consensus that companies will be expected to contribute to society, and at the same time be critically held responsible for accountability and social responsibility.
Next year's HLPF theme has already been set on “Transformation towards sustainable and resilient societies” which focus on Goal 6, 7, 11, 12, 15, 17. In 2019, the HLPF is planned to be held at the Heads of State and Government level. Goal 7 “Clean and Sustainable Energy” is one of the very important goals for Japan given its high reliance on thermal power plants, and in the following year at the Heads of State and Government level HLPF, it is expected that each country announce considerable achievements and progress. In 2019 Japan will be hosting the G20, and in preparation for it the Japanese government will need to become increasingly active. Following this trend, companies likewise will be expected to contribute to the achievement of the SDGs.
Natural Rubber – The Next Focus for Sustainable Forestry
This month, we take a look at how the definition of sustainable forestry is evolving, why sustainable natural rubber is rapidly becoming the newest focal point, and what companies can do to prepare for upcoming movement in their industries.
The evolving definition of sustainable forestry
Sustainable forestry has remained a major topic of conversation in the sustainability world for many years. The definition of what sustainable forestry is, and which forest products should be included in this definition has been evolving since the early 1990’s, when the timber industry began receiving pressure from NGOs on deforestation. Over time, it became more widely recognized that the timber industry itself was not harmful※1 if the timber was being sourced from forests managed sustainably - but what does it mean when a forest is managed “sustainably”?
At first, deforestation was the primary concern for sustainable forestry practices. However, sustainability is not a single issue with a single solution. It was and remains a complex topic that evolves quickly, varies based on specific conditions, and requires a multi-stakeholder approach to tackle. Today, NGOs, investors, and other stakeholders expect companies dealing with forestry products to approach sustainable forestry in a more holistic way, covering a broad range of environmental, social, and governance issues. While a “zero-deforestation” commitment is considered a minimum requirement, a modern company’s definition of sustainable forestry must also include considerations beyond deforestation – such as water and soil management, peatland protection, biodiversity considerations, land rights, livelihood support, child labor, and many others.
In addition to the definition of sustainable forestry widening to cover more issues, the types of industries this definition applies to is also widening to cover more than timber, pulp, paper, and the like.
For example, in 2010, the NGO Greenpeace launched a campaign against Nestle, criticizing the company’s use of palm oil in their widely known brand, KitKat. Oil palm plantations, which provide the palm oil used to produce various foods, soaps, detergents, and many other consumer goods products, can lead to deforestation, peatland destruction, biodiversity loss, and carbon emissions when plantations are not sustainably developed or managed.
Following the campaign, Nestle committed to sourcing its palm oil more sustainably, explaining※2, "By setting critical requirements for its procurement process and checking compliance with our supplier code, Nestlé wants to ensure that its products have no deforestation footprint."
This commitment was the start of a cascade of commitments by other companies that handled palm oil, including Unilever, Starbucks, L’Oreal, Hershey’s, and Procter & Gamble. Today, many global companies have sustainable palm oil procurement policies and practices, and NGOs continue placing pressure on those that do not with annual rankings, scorecards※3, and campaigns.
Shifting focus to natural rubber
In more recent years, the natural rubber industry has been rapidly becoming a major focus in the context of sustainable forestry.
Although a few scattered initiatives have existed for the development of sustainable natural rubber supply chains, the issue gained greater attention in 2016, when Michelin published their Sustainable Natural Rubber Policy※4 , which included a commitment to zero-deforestation.
Since then, other industry players have been joining in on making public commitments to sustainability and sustainable natural rubber procurement, including tire manufacturers and auto makers. NGOs, like World Wildlife Fund (WWF) and Global Witness, have been quite vocal about the natural rubber industry as well, some approaching companies in a collaborative way, and some attacking companies via reports and campaigns.
Below is a snapshot of major sustainability movements in the natural rubber and auto industry over the past year. These events further highlight a trend towards industry commitment and action, indicating the likelihood of other companies and organizations following suit in the coming months.
What can companies do?
The first thing a company must consider doing when thinking about sustainability as it relates to forest or agricultural products, is understanding their own supply chain. Fully mapping at least 1st tier suppliers would be a good starting point. Then, understanding the global conditions and risks related to those supply chains and suppliers can help the company identify which risks or opportunities are most important to their business.
Engaging with stakeholders, both internally and externally can help the company decide where it stands on its most important sustainability issues, and what it aims to achieve should action be taken. From there, policy and strategy can be drafted, and management systems can be developed to implement the policy, engage with the supply chain, and mitigate those risks identified while generating value for the company.
If a company already has a policy in place for forestry related products, or for sustainable procurement in general, it could be worth considering the incorporation of key wording and taking additional measures to meet the current expectations of society. A gap assessment of current conditions and policies against best practices or stakeholder expectations can help inform the level of enhancement that needs to occur.
Should you or your company wish to learn more about sustainable forestry or agriculture, EY’s CCaSS team has extensive experience in identifying gaps in existing operations, mapping supply chains, engaging with stakeholders, drafting policy, and implementing sustainable management systems. Feel free to contact us any time.
Finance Sector under Pressure: Rising human rights expectations flow with funding
There has been a greatly increased focus on the finance industry in recent times in the context of business and human rights, and in particular on the expectation that the industry uses its leverage to contribute to combatting such abuses as modern slavery. In this article we discuss a report released in July by the United Nations University outlining these expectations and suggested strategies for the finance industry to meet them, and note the flow-on effect on other sectors.
According to the Global Slavery Index, a horrifying 45.8 million people, mostly women and girls, are enslaved today. Although human trafficking is illegal, it is big business. The International Labor Organization estimates that forced labor generates USD150 billion in revenues every year. In March 2017 the United Nations University held a workshop that focused on the role of financial institutions in combating this widespread human rights abuse; the report※1 was published in July.
The UNU workshop - entitled “25 keys to unlock the Financial Chains of Human Trafficking and Modern Slavery” - involved various organizations, including private investment firms and agencies, institutional investors and public investment bodies, as well as financial sector regulators and anti-slavery organizations. Although the proposed actions summarized below were not designed to represent a consensus agreement or recommendations, they are intended to be used as guidance for the stakeholders mentioned above to take a step forward.
|Financial Sector’s role||Government’s role|
Strengthening Sectoral Knowledge Uptake
1. Form a multi-stakeholder Financial Sector Working Group and develop, exchange and uptake strengthened knowledge tools including;
2. Encourage financial institutions’ leadership to prioritize internal action against human trafficking and modern slavery by:
3. Encourage financial sector actors to share tools and techniques to identify and address human trafficking and modern slavery
4. Develop financial sector engagement strategies for high-risk sectors, including palm oil, cocoa, conflict minerals, South-East Asian fisheries, hotel industry and mega-sports event construction
Improving Regulation, Encouraging Leadership
1. In addition to national governments’ own risk assessment and monitoring of suspicious activities/transactions, civil society organizations report suspicious activities/transactions relating to human trafficking and modern slavery
2. Review existing whistle-blower laws, protections, incentives and reporting lines to encourage reporting of modern slavery crimes
3. Encourage public prosecution and private litigation to recover victims’ stolen wages and other forms of restitution
4. Stimulate awareness and action by consumers, shareholders and employees to create pressure on banks and other financial institutions that are handling the proceeds of human trafficking or investing in businesses that profit from modern slavery
5. Encourage industry associations to reward leadership in the sector
Promoting Information Partnerships
1. Where “safe habour agreement” (policy agreement between countries to import/export and handle personal data) exists , periodically review their effectiveness
2. Review whether statutory measures are required to protect civil society actors
3. Develop scalable, accessible, reliable and safe information-sharing software or infrastructure to allow civil society and other actors to share relevant information with the financial sector.
As financial institutions increase their uptake of these actions, there will be a commensurate increase in the cascade effect as the pressure on the sector flows through to the companies and projects receiving financing. We will see a marked increase in banks taking proactive steps to engage with their stakeholders and clients on these issues, particularly in the context of higher-risk sectors.
It was pointed out in the UNU workshop that a significant majority of modern slavery cases are in Asia and Africa. In addition to being aware of the issue in their Asian supply chains, Japanese companies should be aware that the Global Slavery Index study mentioned above found that an estimated 290,200 people in Japan, or 0.23 percent of the population, are in “slave-like servitude”, including people trafficked for sex work or trapped in debt bondage and forced labor. That study called on “Japan to enact laws . . . to ensure that companies and other organizations are held to account for their role in using forced labor in their supply chains, and to empower independent oversight※2.”
The steps outlined in the UNU workshop report that target government action link to the calls for countries (and the Japanese government’s commitment※3) to develop a National Action Plan on Business and Human Rights. A number of countries are reviewing and strengthening their whistle-blower laws, protections, incentives and reporting lines to encourage reporting of human rights related abuses, and in particular modern slavery. As this activity increases, then not only financial institutions, but also other business sectors will confront more pressure from civil society, including anti-slavery organizations. Partnerships amongst three parties, government, business sectors and civil society, are also crucial to not only identify risks and eradicate the incentives for people and institutions to engage in such abuses, but also to bring enslaved people back to society.
Tapping into the potential of Impact Investing in SDGs financing.
Many reports indicate that there is a huge funding shortfall to realize the Sustainable Development Goals (SDGs) by 2030. One of the efforts to close the gap is to navigate private finance to investments with strong social and environmental benefits that eventually contribute to the SDGs. In this article, we discuss the positive developments of impact investing in SDGs financing and how impact investing connects to SDGs.
Required investment for SDGs and its reality
The Sustainable Development Goals (SDGs) represent the aspirational new global agenda for 2030, which address critical issues for humanity and set up a universal framework that aims to end poverty, protect planet and ensure peace and prosperity for all people. However, price tag for fulfilling these goals is expensive. It is estimated that the SDGs require annual investment of 5-7 trillion USD with an investment gap in developing countries of about 2.5 trillion USD※1. The actual funding falls far behind this number, especially developing countries which account for the largest part of the deficit※2. This gap is important when we see the Official Development Assistance (ODA) reached a new peak of USD 142.6 billion in 2016, an increase of 8.9% from 2015※3. Despite the progress, it is still insignificant portion to the required funding to fulfilling the agenda.
To support and accelerate the achievement of the SDGs and to fill the financing gap, the UN announced the launch of SDGs financing platform in 2016, which aims to identify and pilot innovative finance instruments, drive investments, and mobilize private sector capital into SDGs. This platform will develop guidance on impact investment strategies that support the SDGs. The ultimate goal is to improve the risk/return profile of SDG investments to attract investors to such kinds of impact investments, and therefore solve some of the current lack of funding of the SDGs. So what is impact investing and what does it mean for investors?
In short, impact investing covers investments where you can pursue financial returns while also intentionally addressing social and environmental challenges. It subsequently challenges conventional profit-driven investment strategy and is different from philanthropy. It is proposed as a win-win solution where you bring measurable impact while having various levels of financial return.
However, this new term doesn’t appeal to everybody and it has its fair share of criticisms. Some critics focus on the ambiguity of financial return where societal impact is concerned and yet we see and increased recognition of the role of business as a powerful force that can be harnessed for good. There is an increase in social and environmental entrepreneurship and the creation of profit generating companies which solve important problems. Impact investing as a term provides a rhetorical umbrella for a wide range of investors that could resonate well and could huddle.
First coined in 2007, ‘impact investing’ is no longer nascent market and has been gaining exponential popularity as investors started to focus on this investment strategy. Because the term was the best to capture the purpose of SDGs, it therefore provides investment opportunities※4 which are aligned with these goals. According to Global Impact Investing Network survey, there has been roughly 441% growth from in the time period covering 2013 to 2016 in the impact investing market. Additionally, the 114 billion USD of impact investment in 2016 is expected to increase by 25.9% in 2017※5.
Despite this significant growth, this amount is equivalent to only 0.2% of the global financial market, which means there is significant potential to scale up and fill the financing gap in SDGs. For example, if this share rises to 2 %, it would be almost 2 trillion USD in impact driven assets※6. Effective communication and building up investor trust in this market as well as building up and enabling the investment environment by creating interactive platforms between all stakeholders including investors, investees, NGOs, governments are required to accelerate this movement. Though impact investing is being suggested as one of the preferred solutions for SDG funding because it is a natural fit, it could be deemed as risky to investors. Therefore, considering environmental, social and governmental risks into investment decision making could be a solid starting point.
To attract more investors into impact investing with the goal of contributing into SDGs, GIIN launched a campaign※7 in 2016, calling asset owners and managers around the world to channel their capital into impact investment. Amit Bouri, CEO of the GIIN emphasizes the importance of impact investing in the SDGs in his statement as below:
“If sufficient investment capital can be channeled to these goal areas through impact investing, the SDGs are achievable. We need more of the world’s investors to join in this world-changing initiative if we’re going to make the SDGs a reality. There’s no time to waste.”
Aligning SDGs in impact investing
Most of the investors think that the SDGs help to contextualize and strategize the impact outcome that might be difficult and communicate with various stakeholders. According to GIIN investor survey, 60% of impact investors reported they actively track the impact investment performance with respect to SDGs or plan to do soon. Also, as a part of the campaign, GIIN profiled different types of impact investors※8 to show how impact investors began to utilize the SDGs into their investment to address social issues. As for the tracking and measuring the impact, many of the investors are aware of the SDGs framework has its limits in terms of measurability due to its nature since most of the goals and targets are country level, therefore they utilize either IRIS※9 metrics or their own metrics based on GRI and IRIS for measuring the impact and aligning it to the SDGs.
Outlook and conclusion
To achieve SDGs, a significant amount of capital needs to be mobilized into, not only developing countries, but also developed countries. It represents new opportunities for investors who are already interested in ESG investment to shift their investment into the growing impact investing realm. Taking ESG risks into investment making decisions and aligning investment strategies with the SDGs offers an entry point for investors not yet engaged in impact investing and helps them to simplify as well as articulate the relationship between investments and impact goals.
CCaSS does a great deal of work in this area in Japan and around the globe. Our dedicated team of experts in SDGs and ESG will help you to get on board with UN SDGs and be part of the solutions to global issues.
What is driving so many Japanese companies to set Science Based Targets(SBT)?
Science-based targets are an essential step in the integration of environmental long-term goals into a company’s business strategy. Companies who are able to effectively communicate a well-considered long-term vision can improve investor confidence in their approach to managing non-financial risks and opportunities, particularly in relation to climate change.
The need behind Science-Based Targets
Following the ratification of the Paris Agreement, the first-ever universal, legally binding global climate deal, businesses, investors and governments alike were left wondering what a future global economy under ‘two degrees’ will look like. How deep do the emissions reductions need to be? Which businesses will thrive in a rapidly decarbonising economy, and which will not?
Whilst the global business community has largely embraced the need to report on Greenhouse Gas emissions arsing either directly or indirectly from operations, often accompanied by targets for reducing these emissions, approaches for disclosing on this performance is not consistent between sectors or even within sectors. Many voluntary guidelines exist – the Global Reporting Initiative (GRI), the Carbon Disclosure Project (CDP), and a myriad of country-level guidelines. However, the voluntary nature of these guidelines have inevitably resulted in a patchwork approach, making it difficult for other stakeholders, such as investors or NGOs, to analyse the information provided. Most critically, this approach to disclosure does not provide company performance within the context of global commitments to a two degree future. How then, can we assess whether a company is compatible with a two degree future?
The Science Based Targets initiative (SBTi) offers an approach to demonstrate precisely this. An emissions reduction target can be considered science-based if it aligns with the level of decarbonisation required to meet a two degree commitment. The SBTi independently assesses and approves a company’s SBT, as well as offers tools and resources for adopting such a target. As a partnership between the Carbon Disclosure Project (CDP), UN Global Compact, World Resources Institute (WRI) and World Wildlife Fund (WWF), it is a powerful platform for promoting companies leading the charge in setting SBTs, as well as sharing best practices in the field. As of this September, 297 companies have committed to setting SBTs, 37 of which are headquartered in Japan.
Businesses are realising tangible benefits from setting SBTs
Aside from enhancing external stakeholder’s ability to assess business performance, companies themselves are realising benefits from using SBT as an approach to understanding and managing their risks related to climate change. Japanese consumers demonstrate strong preferences towards more environmentally friendly products, thus driving Japanese brands to incorporate environmental awareness and responsibility as a core part of its corporate identity. SBTs act as a tool to boost competitive advantage of businesses, by both enhancing the internal capacity of the business to manage climate-related risks, in particular transition risks, whilst capitalising on the opportunities associated with being a ‘climate conscious’ business. SBTs are expected to result in※1:
- Increased innovation: The transition to a low-carbon economy will not be business as usual – new technology and operational processes will be needed to meet the challenge. Businesses that will rise to this challenge will be those that understand the magnitude of change their sector will undergo.
- Reduced regulatory risk: Whilst governments globally have introduced climate-related policies with varying force and scope, the nature of the Paris Agreement will result in these regulations becoming strengthened with time. Early adoption of SBTs may enable businesses to prepare for such changes, and manage transition risks.
- Strengthened investor confidence and credibility: Transparent disclosure of the process a business has undergone to understand their necessary emissions reductions provides confidence to investors that effective risk management process around climate change exist internally. The approval of an SBT by SBTi adds further credibility to this claim, and helps attract a growing market of ‘Responsible Investors’.
- Improved profitability and competitiveness: Reduced operational costs from improvements to energy and emissions efficiency have long been the driving force in securing buy-in internally around emissions reduction initiatives. Business is now increasingly turning to low carbon products as way of attracting environmentally conscious consumers, and increase market share. Ambitious targets will aid business in becoming leaner and more resource efficient, which will be a key advantage in an increasingly resource scarce society.
Challenges for business in adopting an SBT
Businesses planning to adopt in SBT should set out a business plan for how it will address initial challenges, such as※2:
- Balancing emission reductions and business growth: Companies will need to explore how emissions reductions can be made whilst still driving business growth – renewable energy, low carbon products and circular economy principles all provide opportunities.
- Capital cost: Implementation of new technologies may require substantial capital investment, requiring assessments of short term vs long term targets, prospective emissions pricing and ability to sell emissions reduction credits in some regions.
- Collaboration and communication amongst stakeholders: Stakeholder understanding and support is required for development and implementation of SBTs. Companies rely on data from different parts of the value chain and hence the understanding of the processes and parameters by various internal and external stakeholders is crucial.
- Data availability: Companies are likely to face challenges with respect to collection and quality of data on scope 3 sources, that is emissions occurring within the broader value chain of the business, that do not fall under the reporting company’s ownership or control. Businesses may need to seek external assurance over the assumptions and modelling underpinning calculations.
Integrating SBTs into everyday business
The embedding of SBTs into the core corporate strategy of the business can in the long-term result in a number of tangible and intangible benefits, as discussed above. The process in setting and embedding such a target forms part of long term planning, and requires buy-in across the business. As such, businesses planning on adopting an SBT should begin laying the foundations early and connect with other stakeholders in the value chain to identify opportunities for developing mutual understanding, and leveraging existing best practices.
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