[vc_row][vc_column][vc_column_text]Are you a supplier of goods and services or third-party service provider at the upstream of the business value chain?<\/p>\n
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If you are, your customers may have come knocking at your door to ask the following questions:<\/p>\n
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Why do your customers ask such questions? It could be due to either or both of the following:<\/p>\n
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Overwhelmed by the above? Let\u2019s demystify these ESG terms so that you can get your engine going to justify your Corporate Sustainability Responsibility<\/em><\/strong>1<\/sup> to your customers.<\/p>\n <\/p>\n What is ESG?<\/strong><\/p>\n <\/p>\n ESG means Environmental, Social and Governance, where specific and measurable criteria are set in the following areas:<\/p>\n <\/p>\n The focus of this article is on the Environmental pillar, as this in our view, is a journey in itself to understand these environmental risk terms and their applications to your business. \u00a0Our articles aim to help your business get a good understanding of the ESG terms to smoothen your process to meet ESG standards.<\/p>\n <\/p>\n What are the common ESG Terms?<\/strong><\/p>\n <\/p>\n We shed some light on ESG Terms that appear frequently in the public domain.<\/p>\n <\/p>\n Greenhouse Gases<\/strong><\/p>\n <\/p>\n Gases that are emitted when we burn fossil fuels, produce and consume goods and services. \u00a0These gases include carbon dioxide, methane and nitrous oxide. \u00a0Such gases contribute to the greenhouse effect i.e., warm our Earth\u2019s atmosphere.<\/p>\n <\/p>\n Carbon Emission<\/strong><\/p>\n <\/p>\n Emission of carbon in the course of conducting your business which involves your entire value chain. \u00a0This effectively includes your suppliers\u2019 and service providers\u2019 emissions (upstream), your use of electricity and fossil fuels, your employees\u2019 emissions and your customers\u2019 emission (downstream).<\/p>\n <\/p>\n There are 3 types of emissions described under the Greenhouse Gas Protocol2<\/sup>:<\/p>\n <\/p>\n Carbon Footprint<\/strong><\/p>\n <\/p>\n Total greenhouse gas emissions associated with an organisation.\u00a0 Basically, it is the total of Scope 1, Scope 2 and Scope 3 emissions of an organisation.<\/p>\n <\/p>\n Carbon Neutral<\/strong><\/p>\n <\/p>\n Carbon dioxide that is released into the atmosphere from an organisation\u2019s activities are balanced by the same amount being removed.<\/p>\n <\/p>\n Net Zero Emission<\/strong><\/p>\n <\/p>\n It is the same concept as carbon neutral, but it is on a much larger scale and typically used as a term at the country and global level. \u00a0It also covers all greenhouse gases and not just carbon dioxide.\u00a0 Take for example, Singapore has targeted net zero emission by 2050.<\/p>\n <\/p>\n Carbon Offset<\/strong><\/p>\n <\/p>\n Reduction in greenhouse gas emissions or an increase in storage of carbon dioxide via planting of trees, land restoration etc, that compensates for emissions that occur in other activities.<\/p>\n <\/p>\n There are projects that reduce the emission of greenhouse gases that can be considered for carbon offset, such as renewable energy implementation, industrial energy efficiency and planting of trees.<\/p>\n <\/p>\n ESG Disclosure<\/strong><\/p>\n <\/p>\n Disclosure of data relating to your business\u2019 environmental, social and governance performance.\u00a0 It is used interchangeably with Sustainability Reporting<\/strong> and ESG Reporting<\/strong>.<\/p>\n <\/p>\n Such disclosure is increasingly being emphasized by regulators for compliance by businesses.\u00a0 In Singapore, we are pending decision by SGX RegCo and ACRA to advise on a roadmap for sustainability reporting by Singapore-incorporated companies3<\/sup>.<\/p>\n <\/p>\n Where do you go from here?<\/strong><\/p>\n <\/p>\n Increasingly, your customers and investors would want to see concrete milestones in your roadmap and concerted efforts by your business to reduce your carbon footprint over time.<\/p>\n <\/p>\n To start the ball rolling, it is important for your organisation to review and document the areas where your business is contributing Scope 1, 2 and 3 emissions, followed by determining the areas where your business could reduce the level of greenhouse gas emissions over time or combine with carbon offsets from other activities.<\/p>\n <\/p>\n <\/p>\n LEARN MORE in our articles on ESG and Sustainability to kickstart your <\/em><\/p>\n Corporate Sustainability Responsibility<\/u><\/em> journey!<\/em><\/p>\n <\/p>\n <\/p>\n Footnotes:<\/u><\/p>\n 1\/ Our article on Corporate Sustainability Responsibility (\u201cCSR\u201d) – LGD Personal Development<\/a> provides an overview of ESG landscape applicable to a business.<\/p>\n 2\/ Greenhouse Gas Protocol website at Greenhouse Gas Protocol | (ghgprotocol.org)<\/a><\/p>\n\n
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