Bringing back the focus on social equity
The panel reflected that given the magnitude of climate issues, a lot of attention is placed on the environment and as a result, social equity can sometimes be overlooked, particularly in emerging markets. They added that the ‘E’ and ‘S’ in ESG are closely linked and highlighted the importance of climate justice given that the effects of climate change are most deeply felt by lower-income communities.
One of the panellists provided an overview of potential metrics to measure social impact, such as looking at the benefits of providing people with improved access to finance, education, healthcare, and more, in the same way we would quantify the reduction of carbon emissions. Robust impact measurement will enable investors to place a greater focus on social investing.
The panel also shared that often, paying attention to the ‘S’ in ESG can have a positive impact on a company’s business operations and bottom line. For example, when InterContinental Energy identified the potential for a large-scale green hydrogen project on the traditional lands of the Mirning Nation in Western Australia, they first established a groundbreaking partnership with the Mirning involving carried equity, a permanent board seat, and other benefits. By incorporating ‘S’ considerations upfront, innumerable benefits have already been seen, which are leading to a larger and better project.
In sum, the panellists concluded that achieving a net-zero economy while also advancing social equity and enabling a just transition is possible, but ultimately requires greater action from everyone from consumers to businesses to government bodies.