5 must reads for the weekend

We keep our ear to the ground for the interesting stats, insights and discussion points you need to feel in the know about sustainability. 

1. Climate confessions

Even though more companies are sharing their climate disclosures, it's not happening fast enough to dodge the climate crisis. Most companies know they're at risk from climate change, but only 19% have plans to deal with it. So, why aren't companies spilling all the details about their climate efforts? Well, there are a few reasons. First off, they might not want to share sensitive business info. Then, there's the fear of being accused of pretending to be more eco-friendly than they really are, or greenwashing. And let's not forget the legal risks; if they don't follow through on their climate promises, they could get sued by stakeholders. But sometimes, it’s even simpler than that. They might just not have a good story to tell because they’re not doing enough to fight climate change. To really make a difference, businesses need to step up their game in decarbonization and the energy transition...

2024 EY Climate Action Barometer  

2. Credits for change 

As businesses feel the heat to tackle climate change, carbon markets are stepping into the spotlight. With trillions needed each year for climate finance, these voluntary markets could become the next big thing — if companies embrace standardized frameworks and transparency. The latest report from the EY Net Zero Centre highlights how carbon credits are game-changers in decarbonization. Here’s how it works: a carbon credit lets a company release a set amount of CO2. If they cut emissions, they can earn or buy credits. These credits can then be traded to help meet their ESG goals. Firms that leverage these credits often set bolder emissions reduction goals. Sure, rising demand and costs can be tricky, but exciting new initiatives are working to boost market integrity and trust. By diving into carbon markets and making smart use of these credits, businesses can not only hit their sustainability targets but also contribute to a future where people and the planet thrive together. 

Can carbon become a new commodity class?  

3. Bridging the ESG gap 

Companies and investors aren't on the same page about how to integrate sustainability into corporate reporting. Investors want clear, robust ESG (environmental, social and governance) disclosures to understand a company's long-term risks and opportunities, but many companies aren't meeting these transparency expectations. Investors are pushing for more detailed and reliable ESG data, but companies are still focused on short-term pressures. This gap could undermine trust and the smooth functioning of capital markets. To bridge this divide, companies need to better understand what long-term investors expect and involve finance leaders in ESG reporting to build confidence. The EY Global Corporate Reporting and Institutional Investor Survey suggests two main actions... 

How can corporate reporting bridge the ESG trust gap? 

4. Profit with purpose 

If you thought ESG was just another buzzword, think again. Integrating ESG principles isn’t just good ethics — it’s smart business. Today’s private equity landscape shows that firms nailing their ESG game can see internal rates of return soar by up to eight percentage points, which is really significant in the world of investments. That’s not just good karma; it’s a major financial win. But here’s the kicker: too many companies still treat ESG like a checkbox instead of weaving it into their entire strategy. To really stand out and boost value, it’s time to integrate ESG into everything — from sourcing deals to planning exits. This isn’t just about looking good; it’s about driving real returns and attracting the right buyers… 

How private equity can optimize ESG 

5. Empowered by AI

A new report is calling for a collective effort to harness AI for good, ensuring no one is left behind in achieving the Sustainable Development Goals (SDGs). It raises three key questions: Where do we need to improve connectivity and local ownership of AI solutions to speed up SDG progress? How can we build trust and transparency in AI to protect vulnerable populations? And which alliances can boost AI's potential for inclusive development? EY, in collaboration with Devex, explores how AI can drive inclusive, equitable progress conducting a comprehensive survey with over a thousand professionals in SDG-aligned fields, along with in-depth interviews and roundtable discussions with AI and social impact experts. AI has the power to accelerate solutions to global challenges, but its positive impact depends on a responsible, inclusive approach that creates value for everyone.

AI for good: Why AI has the potential to achieve the SDGs

If you do one thing:

Shape the future with confidence.

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