Incorporating ESG in tackling climate change

By Cliff Chiduku

Climate change stands as one of the most critical challenges facing humanity at the moment. It demands immediate and concerted action. The urgency to tackling this global emergency cannot be overemphasised, as its impacts are already being felt in so many ways.

From extreme weather events such as droughts, heatwaves, rising sea levels to the loss of biodiversity, the consequences of climate change are far-reaching. The scientific consensus is clear: human activities are driving unprecedented changes in world climate.

The window of opportunity to mitigate these adverse effects is rapidly closing, which then calls for swift and decisive action to reduce greenhouse gas emissions. Transitioning to renewable energy sources is a sure bet. Humanity has no choice but to adapt to the inevitable changes.

Addressing climate change is not merely an environmental imperative but a moral and economic one, vital for safeguarding the health, security, and prosperity of current and future generations.

However, as the world grapples with unprecedented environmental challenges, the integration of environmental, social and governance (ESG) framework is fast emerging as a sustainable way of tackling the climate crisis.  

ESG principles provide a framework for assessing and guiding the behaviour of corporate bodies to promote sustainable development. There is no doubt that ESG principles can contribute significantly to climate change mitigation and adaptation.

The environmental component of ESG focuses on how organisations manage their environmental impact. It includes issues such as carbon emissions, waste management, resource use, and biodiversity preservation.

The adoption of stringent environmental criteria is essential for combating climate change. For instance, companies are increasingly setting ambitious targets for reducing greenhouse gas emissions.

Many organisations in Zimbabwe are installing solar plants at their premises and are supplying surplus of clean energy to the national grid, thereby reducing the country’s carbon footprint. While others are transitioning to renewable energy sources, others are putting in place systems to improve energy efficiency. The emphasis on environmental criteria is pushing organisations to innovate and invest in green technologies, thus contributing to the broader goal of climate change mitigation.

Social criteria within the ESG framework address the impact of organisational practices on society. This includes issues related to human rights, labour practices, community engagement, and stakeholder relations.

The social criteria in tackling climate change involves ubuntu principles in their operations – it is all about “I am because we are”. This involves ensuring that the transition to a sustainable economy is equitable and just. For example, as companies shift towards greener technologies, it is imperative to consider the implications to vulnerable groups such as employees and women who might be displaced by the transitions. Implementing policies that support the vulnerable can help mitigate these effects and promote social resilience. Environment protection and Climate resilience are one of the key priorities as espoused in the National Development Strategy (NDS1).

Moreso, social criteria emphasize the importance of community involvement in climate action. Engaging local communities in environmental initiatives can foster a sense of ownership and encourages grassroots efforts to combat climate change. For instance, community-led projects such as urban greening and local recycling programmes can significantly contribute to reducing carbon footprints at the local level.

Governance refers to the systems and practices that guide an organisation’s decision-making processes. Strong governance structures are critical for effectively addressing climate change. This includes ensuring transparency, accountability, and ethical conduct in environmental practices.

Companies with robust governance frameworks are better positioned to manage climate risks and comply with regulations. Governance criteria also involve setting clear climate-related goals, monitoring progress, and reporting on environmental performance.

Moreover, the focus on ESG can drive innovation and create new business opportunities. As businesses seek to meet ESG standards, they are obviously compelled to develop innovative solutions to environmental challenges they are facing. This can result in the emergence of new markets and technologies that further advance climate action in a sustainable way.

The integration of ESG principles plays a pivotal role in addressing climate change. By focusing on environmental impact, social equity, and governance practices, ESG principles provide a framework for guiding corporate behaviour and development.

As the world continues to confront the impacts of climate change, the role of ESG in shaping a sustainable and equitable future becomes increasingly significant. By investing in the environment, we are investing in the future of our nation – we are creating a legacy of sustainability, resilience and prosperity that will benefit generations to come.

As Zimbabwe races towards achieving Vision 2030, it is incumbent on organisations to pull all stops in transforming lives, protect the planet, and build a better Zimbabwe for all.

Food for thought!

Cliff Chiduku is a communications, public policy and governance expert with bias towards climate change, agriculture and environmental issues. He writes in his personal capacity.  Feedback: cchiduku@gmail.com or Call/App +263775716517.