CSR news of 09/09/2024

Introduction

This week, in CSR news, the G20 countries have not yet adopted ambitious trajectories to get out of fossil fuels, and policies to reduce GHG emissions do not really have a significant effect... In short, the transition to action is complicated.

However, many solutions are being put in place, in particular the green taxonomy, which helps companies manage their CSR strategy, and CSRD, even if it is challenged by the Draghi report.

Find the 10 key CSR news of the week in this article.

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CSRD and CSR regulations under heavy attack

On September 9, the Draghi report was submitted to the European Commission and calls for a massive “simplification” of regulations, considered too restrictive for the competitiveness of businesses. Highly anticipated, it raises the question of the balance to be maintained between CSR performance and financial performance in the company.

Under the pressure of American and Chinese competition, business competitiveness would face a “regulatory burden”, say European Commission officials in the report. This directly threatens the CSRD, the CSDDD, the green taxonomy, the European waste regulation or the SFDR. These are all safeguards that frame the economic activity of European companies.

This simplification, praised by the report, would pave the way for deregulation, risking deregulation of practices that could seriously hamper the European green transition.

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20 years of climate policy ineffectiveness?

An article published in the famous magazine Science reports a profound lack of effectiveness of policies to reduce GHG emissions over the last 20 years. 1500 measures have been identified and studied, from 41 countries. The result: only 63 “had a really significant effect” on reducing emissions.

The researchers note that the only answer to this inefficiency is the combination of measures together: Taken in isolation, these measures have only a very small effect on reducing GHG emissions.

Thus, combining prohibitions, incentives and taxes in a single policy, applied to a given sector, would be the truly effective way to end the superfluous accumulation of measures that lack real climate ambition.

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How is the green taxonomy taken into account by French companies?

KPMG has published a study devoted to the relationship between French companies and European green taxonomies. Focused on a perimeter of 60 companies from 14 sectors affected by regulations, this study questions their CSR strategies.

It appears that 55% of them say they are managing their CSR strategy “taking into account the European green taxonomy”. Even more, 87% believe that their turnover, CapEx or OpEx “is in line” with at least one objective contained in these taxonomies.

In other words, the European classification of economic activities according to their sustainability seems to have an important influence on the impact strategies of French companies. That translates “a strong desire to make investments in a sustainable manner”, estimates the study.

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Is sobriety the only credible perspective for decarbonization?

The Jacques Delors Institute has published a decryption on energy sobriety. The latter questions the political value generally attributed to this concept. In fact, the sobriety is often invoked by public authorities in the event of a crisis, to temporarily justify austerity measures in the event of major imponderables and economic shocks, for example.

On the contrary, this report argues that sobriety should be made a “political object in its own right” part of the long-term development of public energy policies.

To do this, they call for measuring the potential benefits of sobriety, via evaluation and monitoring indicators, capable of underlining the value of a long-term sobriety policy. Indeed, such expectations, which require major investments in sustainable infrastructure, “will remain below the cost of inaction.”

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Carbon credits: 37 Chinese projects cancelled by a major organization

The major organization Verra, a specialist in the exchange and labelling of carbon credits, has removed 37 Chinese rice-growing projects from its certification register. Considered too unreliable, this decision is bad news for a voluntary carbon credit market that is already weakened.

These rice farming projects in China are proving to emit much more GHGs than announced, and the organization Verra seriously questions the additionality of these compensation projects.

Thus, we can fear that this carbon credit market will “deflate” gradually, with demand that fell by 56% in 2023. Gilles Dufrasne, from the NGO Carbon Market Watch, talk about a “awareness on the part of businesses”, who are increasingly turning away from it.

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What is the status of green bonds?

A bond that engages its issuer to finance environmentally friendly projects is said to be “green”. At the end of 2023, the green bond market weighed 1,834 billion euros. In full acceleration over the past 15 years, we can see that this market is financed by more and more diversified players.

Europe represents 41% of the global market for these green bonds, and the euro constitutes 50% of the issues. France, Germany and Italy form the top trio of major European emitters in 2023 and maintain the continent as the world leader in this field.

However, the banking sector on the one hand and public services on the other are players taking an increasing place in this market. In addition, we are witnessing the beginnings of a real geographical diversification of this dynamic, with the entry of emerging countries into the mix: “In 2023, India, Brazil, Egypt, and even Turkey issued their first sovereign green bonds.”

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How to properly measure its social impact?

While measuring a company's environmental performance is becoming more and more reliable, measuring its social impact continues to be methodologically unclear. To date, there are several reporting approaches, “all of which can be improved”.

The “avoided costs” method has become established in France, and refers to actions that make it possible to avoid expenses for the community. However, this approach is not convincing for everyone and tends to monetize approaches whose raison d'être is the positive impact.

Thus, monetizing approaches with a positive social impact can be an effective way to highlight their social value. However, this is not an end in itself, but rather a way of valuing its importance: “The risk would thus be to value only economic effects and not social effects that are sometimes predominant”, we read in a study carried out by ESSEC and the Impact Tank.

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A G20 shy about fossil fuels?

NGOs have expressed concerns about the weakness of the commitments made by G20 countries to adopt ambitious fossil fuel exit trajectories. However, it was a “crucial promise” of the last COP28.

We also learn that the draft declarations were originally supposed to include this commitment from COP28 to undertake a “just transition” towards an exit from fossil fuels. However, the Brazilian presidency of the G20 seems to have omitted it from its working documents.

For example, the Brazilian NGO Climate observatory says that “the resistance of countries” to mention “fossil fuels and the need to get out of them is obvious”. This is in line with the fears expressed by other NGOs and associations that far too little consideration is being given to the essential challenge of reducing the use of fossil fuels in energy systems.

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Methane emissions are a serious threat to climate goals

The rate at which emissions of methane (CH4) into the atmosphere are increasing is accelerating dangerously in recent years, according to a new global methane report published In the review Environmental Research Letters by nearly 70 scientists from Global Carbon Project.

While the second most important greenhouse gas, methane is responsible for about a third of global warming. Its big difference with CO2 is its lifespan: only 9 years in the atmosphere. However, its power to cause harm is 80 times greater over 20 years.

The report identifies that the source of these record emissions is mostly linked to fossil fuels, agriculture and waste. The year 2020, the most recent where complete data is available, shows the number of 400 million tons of anthropogenic methane emitted.

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Tech giants are cutting back on air travel

THE NGO Transport & Environment looked at the ecological impact of business trips by tech giants. Of the 26 companies studied, only 7 have “clear objectives” in this area.

However, there is an overall reduction of 49% in their emissions generated by their business trips, compared to 2019. From there, two elements must be taken into consideration:

These reductions are mainly due to a transformation in the methods of professional interaction, through the advent of teleworking and videoconferences.

The biggest tech players, such as Google or Apple, have not set specific reduction trajectories and show results nearly twice as low as other companies.

Thus, it appears that “the adoption of clear strategies” is a preferred way of adapting and mitigating climate change.

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The sources

Novethic: “The Draghi report could “kill” the CSRD and the European duty of vigilance”

Youmatter “Only 4.2% of global climate policies are really effective”

Youmatter “CSR Briefs, Green Taxonomy”

Carenews “The Jacques Delors Institute publishes a decryption on energy sobriety”

Novethic “For the first time, forty carbon credit projects cancelled due to their inefficiency”

RSE Magazine “Green bonds, a driver of the energy transition and financial lever for sustainability”

Youmatter “Should we monetize social impact to better value it?”

Sustainable news “Climate: NGOs are worried about the lack of ambition of the G20 on fossil fuels”

Le Monde “Methane emissions have never been higher, putting climate goals at risk”

CSR magazine “Big tech companies are halving their business travel emissions”