EXECUTIVE INSIGHT
“ We need to be ahead of the curve , innovative , thoughtful and brave ”
THREE REGULATION BUCKETS
Michelle says businesses have to deal with an “ abundance ” of new sustainability regulations . She puts it into three buckets :
BUCKET ONE Disclosure regulations which are aimed at enabling stakeholders to have visibility of and assess sustainability risk and value in an organisation with which they engage now when the landscape and timing is uncertain but the downside of not doing so could be even more difficult to take responsibility for .
Q . WHAT ARE THE ISSUES BEING FLAGGED UP BY YOUR CLIENTS ?
» Financial institutions I would say have a good appetite for sustainable assets . The challenge is securing the scale and the returns . And because many financial institutions have significant forward looking liabilities eg pension funds , insurance companies etc , they require a longer term larger access to returns which will enable them to meet these . A common theme is that there simply are not enough investable projects and companies for them to deliver their own objectives on which most of us rely .
The increase in the cost of capital has not helped and I think traditional routes to capital which have emerged over the last five years or so are struggling . I think the whole ESG greenwashing agenda has also had an adverse impact on those funds and organisations which genuinely are delivering what they say they will on the tin .
BUCKET TWO Operational regulations such as those focused on the supply chain and circular economy which aim to change how an organisation operates
BUCKET THREE Greenwashing laws and regulations which aim to prevent organisations misrepresenting their sustainability position to stakeholders and the market more widely .
She says : “ There is a level of interaction between these regulations which are replicated in various jurisdictions in similar or different ways and this can present a challenge for many organisations in terms of compliance .
“ They can place quite an administrative burden on organisations , particularly in terms of data collation and how this feeds into a compliance programme .
“ But it doesn ’ t have to be overwhelming – with good management and infrastructure , including technical solutions , a company can often not only comply but find routes to value as well .”
26 October 2024