Environmental Social Governance: Managing Risk and Expectations

Description

Increasingly, companies are being judged by their performance in terms of Environmental Social Governance (ESG). But exactly what does it mean, and what should be done about it? While much ambiguity exists, it is no longer sufficient to negotiate the environmental assessment process successfully. ESG is an ongoing process that spans the entire life cycle of a company and its operations. This book is aimed at business leaders – senior executives and company directors – and particularly those involved in the extractive industries and other ventures that significantly affect the environment and host communities. Guidance is provided on the major ESG issues that confront all business leaders. Strategies are provided to address ESG risk and to handle crises when they occur. Cover Half Title Title Page Copyright Page Table of Contents Foreword About the authors Acknowledgements 01 Environmental and social aspects of governance in a changing environment: the Board’s role ESG considerations no longer “Nice to Have” but a must ESG enters the boardroom Boards that adapt will prosper Board composition The coming impact of ESG on strategy Directors’ dilemma: ESG obligations or overkill in the boardroom Looking ahead: identifying key trends in ESG 02 Yes, sustainability can be a strategy Concept of sustainable development Profit, People, and Planet What makes our business sustainable? Sustainability: cost that pays for itself Role of Government regulation and leadership in increasing sustainability Sustainability and its connotations Green accounting and sustainability performance reporting Shaping a more sustainable future for our companies 03 How do ESG values change Company culture? Values, principles, and policies Mission Statements Codes of Conduct Cultural awareness Grievance management Job descriptions Use of expatriates Your environmental team Organisation and reporting relationships Use of consultants Embedding ESG values in the Company 04 ESG factors in project finance and M&A transactions Pros and cons of international project finance Working with equator principles financial institutions Importance of risk management in our business Project screening and categorisation Role of lenders’ environmental and social consultants in environmental and social due diligence Equator principles as example of private code of conduct Covenants in financial agreements The bigger picture Key takeaways 05 Environmental and social planning and management: what’s measured improves Key elements of proactive environmental and social management Environmental and social business aspects Proactive management means prevention Plan for the unexpected Documentation Environmental and social management as continuous interlinked effort Need for adaptive environmental and social management Environmental and social management as bureaucratic approach to sustainability 06 Safety governance inside the boardroom Directors and prison Safety and environment How mature is safety governance at your Company? Policeman or doctor Safety and systems Preventing fatalities The problem with LTIFR The safety pyramid fallacy Fatality prevention models Golden rules Work stress and corporate response What you can do as a Board member 07 Impacts of development on communities: sharing benefits Social impact assessment Gender considerations Indigenous peoples Community concerns Community aspirations and expectations Conflicts Community development Selecting the social team 08 Access to land as a human rights issue Land and human rights Resettlement principles Minimising need for resettlement Attention to livelihood restoration Managing resettlement Allocating resettlement budget Involvement of communities in land acquisition and resettlement Cut-off date Willing buyer/willing seller Host communities Land management solutions Questions to ask 09 Water resources in the future: problems and solutions Water scarcity Water resource planning requires baseline data Saving water Smart water management Protecting water Standards and regulations Offsets Emerging contaminants Source, save, and protect 10 Industry and biodiversity Critical habitats and biodiversity impacts Mitigation hierarchy to avoid and minimise biodiversity loss Biodiversity offsets to achieve no net loss Additional Conservation Actions Alien invasive species Biotechnology and genetic resources 11 Enterprise risk management: putting ESG risks into a business context Political risk Risk events Risk scenarios Scenario A – Cyanide Truck Collision Scenario B – Sulphuric Acid Truck Collision Risk assessment Risk acceptability Uses and limitations of risk scores Role of Board in risk management 12 Environmental liabilities: risks beyond the balance sheet Tailoring scope of environmental due diligence Evaluating regulatory compliance in acquiring ongoing operations What lies beneath – on-site contamination Offsite contamination on former sites Offsite disposal of hazardous wastes In-migrating contamination Building materials and indoor air quality Emerging issues in environmental due diligence Allocating environmental risks in transaction agreements Environmental insurance policies Environmental risks/liabilities reporting requirements – damned if do and damned if don’t End of lease/tenement clean-up 13 Strategies for climate change risk management: stemming the tide Climate change risks to industry sectors Climate change opportunities for industry sectors Energy and GHG emissions management Climate variability in future Climate change risks to operations Company impacts on host communities and climate change How companies commit to climate-proofing 14 Crisis management: don’t wait for a crisis to come up with a crisis plan Crisis versus normal operations Crisis management models Scenario-based versus capacity-based model Proactive versus reactive crisis management model Issue and crisis management relational model Incident command system model Crisis management cycle Crisis management systems Crisis Management Plan 15 Right way to close an operation Delay, closure, or sale? Workforce redundancies Closure process Contractual provisions and Government requirements Clean-up: key influences Relinquishment of lease and permits Long-term closure liabilities Closure in the mining sector Closure in the oil and gas sector Other industries Documentation Our role as business leaders during closure 16 Looking ahead Millennials Gender and diversity Environmental and social issues are the next phase of good governance Accelerated climate action Internet of Things and big data Energy management Relationship to plastic Access to water New technologies Biodiversity as an emerging material risk Extending green practices along the supply chain Sustainability as competitive advantage Appendix: managing catastrophic risk – tailings disposal Acronyms and abbreviations References Index