[AMFINANCE] SUSTAINABILITY AND INTRODUCTION TO SUSTAINABILITY ACCOUNTING AND REPORTING

Sustainability

“Meeting the needs of the present withoutcompromising the ability of future generations tomeet their own needs.”

Air pollution

• From the production of greenhouse gases, chemicals and other potentially hazardous substances

• Threats to biodiversity and land degradation though habitat destruction and deforestation

Water pollution

• which could lead to the depletion of marine resources and access to fresh water.

• Production of excessive waste with inadequate disposal systems

Noise pollution

• National environmental issues

• Environmental issues are interrelated and could cause climate change

1960s and 1970s

Birth of the Green Movement. This period saw increasing concern about environmental protection.

1980s to Mid-1990s

Social and environmental failures, corporate and institutional responses, sustainable development emphasis. Social and environmental problems became more recognized, leading organizations and institutions to respond and emphasize sustainable development.

Millennium and Today

When Globalization and recognition of the fatality of environmental and social issues

Important developments include:

• UNSDG 2030

• Intergovernmental Panel on Climate Change report

• Mandatory Sustainability Reporting

• Human Rights

  • Including indigenous and minority rights

• Labor

• Health and Safety

• Product Responsibility

• Community Well Being

• Society

Significant Social Issues (6)

International and local responses

The Global Challenge for Government Transparency: The Sustainable Development Goals (SDG) 2030 Agenda

In 2015, 195 nations agreed with the United Nation that they can change the world for the better.

This will be accomplished by bringing together their respective governments, businesses, media, institutions of higher education, and local NGOs to improve the lives of the people in their country by the year 2030.

Climate Change

• Changes in temperature, air quality, precipitation, air mass behaviour, solar characteristics etc.

Direct Effects on Your Business

1. Cost of supplies (energy)

2. Regulation on operations (emissions)

3. Response by consumers ('green' is good)

Indirect Effects on Your Market Environment

1. Consumer behavior

2. General prices

3. Capital market reactions

Climate change can affect businesses directly and indirectly.

_____ Effects on Your Business

1. Cost of supplies (energy)

2. Regulation on operations (emissions)

3. Response by consumers ('green' is good)

______ Effects on Your Market Environment

1. Consumer behavior

2. General prices

3. Capital market reactions

Greenhouse Gas

Emissions

Carbon tax

Abatement

Emissions Trading - cap and trade

Other Green jargon (5)

EMISSIONS TRADING

• sometimes referred to as "cap and trade" or
  "allowance trading," is an approach to reducing pollution that has been used successfully to protect human health and the environment.

• limit (or cap),

• tradable allowances

• Emissions trading programs have two key components: (2) a ________ on pollution, and _________ equal to the limit that authorize allowance holders to emit a specific quantity (e.g., one ton) of the pollutant.

• limit (or cap),

• tradable allowances

[two key components of EMISSIONS TRADING]

• _______ - ensures that the environmental goal is met

• _______ - provide flexibility for individual emissions sources to set their own compliance path.

• market-based

• This limit ensures that the environmental goal is met and the tradable allowances provide flexibility for individual emissions sources to set their own compliance path. Because allowances can be bought and sold in an allowance market, these programs are often referred to as
  "________."

ABATEMENT

• is a general term used for methods or technologies that reduce the amount of pollutant generated in a chemical or other manufacturing facility.

• cleanup and remediation

• refer to removal or appropriate disposal of the pollutants after they have been generated; these methods are also often referred to as end-of-the-pipe treatment.

• Carbon tax

• a tax levied on the carbon emissions from producing goods and services.

ABATEMENT

• Current industrial practice places more emphasis on _______ (also known as pollution prevention) and follows the following simple rule: "if you don't make it, you don't treat it."

Carbon reduction methods for business

Sustainable Finance

integrates environmental, social, and governance (ESG) factors into financial decision-making, promoting investments that support sustainable economic growth and address global challenges.

Sustainable Finance

• refers to the practice of considering ESG factors when making investment decisions. This approach aims to foster longterm investments in projects and activities that are environmentally f riendly, socially responsible, and governed by ethical standards.

• Environmental Factors

• These involve considerations such as climate change mitigation, biodiversity preservation, pollution prevention, and the promotion of a circular economy.

• Social Factors:

• This includes issues related to inequality, inclusiveness, labor relations, and human rights.

• Governance Factors

• This pertains to the management structures, emp loyee relations, and executive remuneration practices of organizations.

Paris Climate Agreement and the European Green Deal.

Sustainable finance plays a crucial role in the transition to a more sustainable economy.

It helps channel private investments into carbon-neutral projects and supports the objectives of global agreements like the __________ and ____________.

These initiatives aim to reduce greenhouse gas emissions and promote sustainable development.

Sustainability Accounting and Reporting

Process of measuring and communicating sustainability performance and of being accountable to internal and external stakeholders for an organisation's social, environmental, and economic performance

Sustainability Accounting, Sustainability Reporting

• _________ - Information management and accounting method that creates sustainability information.

• _________ - Formalised means of communication to disclose sustainability performance