Library | ESG issues
Environmental
The environmental pillar in ESG (environmental, social, and governance) assesses an organisation’s impact on the planet. It includes issues such as climate change, biodiversity, waste management and water management. Strong environmental practices help businesses reduce risks, comply with regulations, and drive long-term sustainability.
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Insurance regulation for sustainable development: Protecting human rights against climate risks and natural hazards
This report argues that insurance regulation has a critical role to play in protecting human rights against climate risk and natural hazards. Among its recommendations, the report calls for the proper pricing of climate risks, broader coverage from insurance, and the alignment of investments with the Sustainable Development Goals (SDGs).
Environmental risk analysis by financial institutions: A review of global practice
This report examines how financial institutions tackle environmental risk, with an emphasis on credit and market risks. The study highlights examples of successful risk mitigation and draws attention to gaps in practice, particularly around modelling approaches and short-term decision-making.
Looking for something that isn’t there: A case study of an early attempt at ESG integration in investment decision making
This report explores the challenges of incorporating Environmental, Social, and Governance (ESG) issues into investment analysis and decision-making. Through a case study of an early attempt at ESG integration in an equity investment team, the authors highlight fundamental discontinuities between financial and ESG accounting inscriptions, and question the adequacy of current regulatory efforts.
FERC's failure to analyze energy market forces: Risks to ratepayers, landowners and the overall economy
This report shows the Federal Energy Regulatory Commission (FERC) is failing to analyse vital energy market forces that should underpin assessment of new interstate gas pipelines. The research shows FERC’s decisions regarding these pipelines can impose unjustified costs on captive customers in the form of expensive and long-term contracts, and harm landowners and the wider economy.
The Ramsey discounting formula for a hidden-state stochastic growth process
The paper highlights how the choice of an appropriate discount rate is a critical issue in economics, and arguably more so for projects involving long time horizons. In particular, environmental projects and activities whose effects will be felt in the future pose significant challenges. The paper models such challenges as an evolving hidden-state stochastic process.
Climate horizons
This report explores how Australian companies and investors should manage and disclose climate-related risks and opportunities. It suggests scenario-based analysis is a key tool for this, which can be consistent with Australia's international climate commitments and the recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD).
Transition risks in the automotive sector
This report analyses the potential valuation of BMW, Daimler, and Volkswagen under two different climate change scenarios and pathways. The study reveals insights for equity analysis and company engagement with sensitivity to regional and technological factors. Authors present a warning not to see findings as investment recommendations or forecast.
Making global goals local business: A new era for responsible business
This report highlights the need for private sector involvement in achieving the Sustainable Development Goals (SDGs) of the 2030 Agenda. It showcases the progress made so far by various companies and organisations and the role they play in building a better world through responsible business practices.
An enhanced assessment of risks impacting the energy system
This report assesses the risks impacting the energy system. It explores the challenges, uncertainties, and opportunities organizations face in the near-term and long-term. The Dynamic Risk Assessment methodology is designed to incorporate future trends and their potential downstream exposures into risk management processes.
Climate endgame: Exploring catastrophic climate change scenarios
This report explores the potential for worldwide societal collapse and human extinction due to anthropogenic climate change. It argues that this topic has not been given enough consideration despite existing evidence of catastrophic outcomes. The proposed research agenda seeks to understand the likelihood and mechanisms of such events and their implications for policy.
Acute climate risks in the financial system: Examining the utility of climate model projections
This research examines the effectiveness of global mean temperature projections as a tool for identifying acute climate risks to the financial sector. The study highlights the limitations of current 'top-down' approaches and recommends the use of more granular 'bottom-up' methods to more accurately estimate regional-level financial risks.
The importance of resource security for poverty eradication
This report analyses the impact of resource scarcity on national economies and poverty. It found that 72% of the world’s population live in countries with biocapacity deficits and below-average income, creating an ecological poverty trap. Biological resource security is crucial for development success.
Farming our way out of the climate crisis
The report focuses on how modifications in farming techniques, land use practices, and food systems can commune climate change reduction, carbon sequestration and carbon sink development and initiates numerous opportunities to become a part of the solution. By changing farming techniques and food systems, we can create numerous opportunities for climate solutions.
Rethinking impact to finance the SDGs
This paper examines the financing gap for the UN’s Sustainable Development Goals (SDGs) and proposes new innovative solutions for stakeholders, including the need for stronger integrated planning, strategic thinking and policy integration to meet the US$5-7tn annual financing requirement.
Navigating the reporting landscape
This guide provides an introduction to sustainability-related reporting for finance professionals. It covers mandatory reporting requirements and reporting frameworks, as well as key reporting components for sustainability. The guide also explores recent developments in reporting standards and the accounting profession, highlighting the future of corporate reporting.
Earth beyond six of nine planetary boundaries
Six of nine planetary boundaries are exceeding safe thresholds, with ocean acidification and aerosol loading at tipping points. Maintaining functional biosphere integrity requires controlling human appropriation of net primary production. Earth system modelling illustrates the need to consider anthropogenic impacts on Earth in a systemic way.