CSR news from 12/08/2024

Charles Lorin

August 12, 2024

What's the latest in CSR news for the week of August 12 to 16, 2024?
First, the UK announces legislation to better regulate ESG rating providers by 2025, the European Commission answers all your questions about CSRD in a FAQ, France, a major consumer of plastic, is fined 1.5 billion,...
Find out the 10 CSR news stories of the week between social and environmental challenges!

‍

Regulation of ESG ratings: the UK takes the lead

Legislation to better regulate ESG rating providers is planned for 2025, announces the British government. Its two priorities are the transparency of rating approaches and the clarification of methodologies. In a context of strong regulatory inflation, this is a significant political choice to position ourselves as major players in sustainable finance.

Designed to be in line with the International Organization of Securities Commissions (IOSCO), this recommendation has international ambitions. This will enable us to better target sustainable investment by economic players worldwide.

This recommendation will be overseen by the Financial Conduct Authority (FCA), a stock market regulator independent of the UK government.

FAQ on CSRD from the European Commission

A Frequently Asked Questions (FAQ) page has been put online by the European Commission to provide guidance to the 50,000 companies concerned by the implementation of the new non-financial reporting rules. An initiative that testifies to the complexity of CSRD and the need for professionals to refer to an official source of information.

To achieve reliable and effective sustainability reporting, it is essential to have a clear picture of Europe's regulatory expectations. This FAQ is intended to be comprehensive, providing practical advice on the use of the European Sustainability Reporting Standards (ESRS).

Finally, it takes a stand on the crucial issues of auditing and insurance , "detailing requirements for the approval and training of auditors, as well as the accreditation of independent assurance providers."

Workers at the world's largest copper mine demand 1% of dividends

In northern Chile, workers at the world's largest copper mine are on strike. They are demanding a better distribution of value, up to 1% of the dividends paid to foreign investors. During negotiations, the latter benefit from the very strong pressure their strike exerts on the entire global copper supply chain.

The situation is delicate for the mine's majority shareholder, as the workers' union represents "98% of front-line workers", without whom production cannot take place.

A 10-day strike would have an impact amounting to 250 million in profits for the majority shareholder. In addition, other mines are starting strike action around Escondida. The risk of a massive social movement and global economic destabilization is therefore very real.

Another setback for the carbon credit market

The Integrity Council for the Voluntary Carbon Market (ICVCM) has developed a new "high-integrity label", which doubles the requirements for carbon credits. Under this scheme, 1/3 of credits linked to renewable energies on the voluntary market "would not be sufficiently reliable".

In other words, 32% of the offset market has been blacklisted for its lack of credibility. Specialists are concerned about the lack of additionality of certain carbon credits linked to renewable energies.

Additionality is the principle that "the sale of carbon credits should finance projects that would not have been possible without this funding". However, the ICVCM notes a real lack of methodological rigor in the assessment of the additionality of carbon offset projects. This highly demanding approach is designed to build a market free of abuse and excess, in favor of a high-integrity ecological transition.

Bolloré Group under fire for human rights violations

The Norwegian sovereign wealth fund's ethics board has commissioned a field investigation into the Bolloré Group's activities on palm oil plantations in Cameroon. The investigations revealed "serious human rights violations", and the Norwegian fund is now recommending that the group be excluded.

The charges are as follows:

2/3 of the 7,000 workers are paid below the legal minimum,
80% are housed in insalubrious dwellings,
Sexual and gender-based violence.

NBIM, the Norwegian asset management company, refused the recommendation to exclude him, giving him 2 years to rectify the situation. It's a dubious decision, given that the Bolloré group has been accused of these acts for almost 15 years now.

What's the latest on the US Inflation Reduction Act?

It's been 2 years since the Inflation Reduction Act (IRA) was signed into law by President Biden. One of its aims was to combat inflation by massively producing energy, with priority given to green energy. This raises the question of its effectiveness: has it encouraged sustainable foreign investment in the US?
The Americans, through massive investment in energy complexes, are conducting a major campaign to attract foreign investors, particularly from Europe. Their main argument is access to clean, "almost inexhaustible" energy.

However, of the 230 billion in state investment in 114 projects under the IRA, 40% are behind schedule or suspended(Financial Times). What's more, U.S. investment remains well below that of Europe, even though it is rising sharply.

The ambiguity of the IRA's balance sheet is therefore up for debate, "between bluff and reality".

France, a major consumer of plastic, fined 1.5 billion euros

France is one of Europe's biggest consumers of plastic, with an average of 70 kg per capita. This figure is rising year on year. As a result, Europe has ordered France to pay a fine of 1.5 billion euros for its 2023 consumption under the "plastic tax".

Europe's target of 40% recycled plastic waste is a long way off: we only recycle 23% of our waste. This is well below the levels achieved by other European countries such as Slovakia, Belgium and Spain, which exceed 50%.

There are two key issues in tackling plastic overconsumption. Firstly, the need for appropriate industrial infrastructures in the region. Secondly, the integration of this issue into the CSR policies of companies, who must learn to free themselves from their "plastic dependency".

A new UN index to help small states cope with hazards

The UN has launched a "Multidimensional Vulnerability Index" (MVI) which, in addition to GDP, provides a more equitable measure of the needs of small island developing states. The latter are too rich to benefit from aid, yet too exposed to the impacts of climate change not to need it. A situation that has been debated for years now.

This MVI index aims to prevent exogenous risks linked to the dependence of island states. Its aim is to serve as a tool for development banks and international financiers to help these states.

Fatumanava-o-Upolu III Dr Pa'olelei Luteru, Samoa's ambassador to the UN, shared his hope that the index would initiate "a new way of thinking and acting about development".

When mega-fires emit too much CO2

A groundbreaking study published by Earth System Science Dataan international research journal, concludes that between March 2023 and February 2024, giant fires emitted 8.6 billion tonnes of CO2. This represents up to 3.9 million km2 of charred forest.

At this time of year, these mega-fires mainly affect large areas of Canada and the Amazon. Canadian fires are said to be responsible for "almost a quarter of global emissions". An ecological catastrophe which, in addition to massive emissions, is ravaging ecosystems and forest biodiversity.

According to the authors of the article, climate change is greatly favoring the multiplication of these mega-fires. This is due to drought conditions, as well as the increased risk of human-caused outbreaks.

Breaking with the idea of a "punitive" ecology

Le Monde conducted a survey, meeting the residents of Cluny and its municipality, to better understand how to initiate an ecological transition "without alienating" a population often resistant to the idea of a transition perceived as the fruit of disconnected city centers.

The first strategy is to calm the debate by banishing the divisive terms "sobriety" or "ecology", which can give the impression of lecturing rural people. They are replaced by notions of defending local natural heritage and the economic benefits of transition.

The Clunisois intercommunality is leading major projects such as the implementation of a mobility network to limit car travel, or the rescue of unsold and surplus food from waste. To achieve this, it can rely on its rich network of 600 local associations. In short, it's a culture of compromise that is guiding transitions in this region.

The sources

Charles Lorin

Head of Sales - EcoVadis expert