CDP has released its latest results report for its Non-Disclosure Campaign, which is an initiative for investors and financial institutions to engage with companies that have not responded to CDP’s climate change, forests or water security questionnaires. The campaign has demonstrated that companies are more than twice as likely to make disclosures if they are encouraged to do so by investors or shareholder groups. CDP says that 2022 saw more investors and environmentally impactful companies participating than ever before. And once companies have started to disclose the vast majority continue to respond and progress.
CDP picks out high emitting sectors transportation and power generation as being particularly receptive to shareholder engagement – being four and a half times more likely to disclose data once engaged. CDP says this is symptomatic of the development of more realistic net zero transition plans. However, indicating the scale of the challenge ahead, while there are plenty of positive signs in terms of the rate of response to the campaign, still only 388 of the 1,466 companies targeted responded.
UK-wide DRS, but not for glass
Long awaited plans to extend a drinks containers deposit return scheme UK-wide have been announced, catching England, Wales and Northern Ireland up with Scotland, where a such a scheme will go live in August 2023. The version in the rest of the UK is not expected to be live until 2025. A deposit return scheme or DRS involves consumers paying a small deposit when purchasing drinks that is then refunded when the used container is returned through a so-called verified channel, such as retailer outlets or reverse vending machines. The scheme in the UK outside of Scotland will be run by a new deposit management organisation.
Controversially, the current plans are that the DRS in England and Northern Ireland would not include glass containers. The scheme will focus on the 14bn plastic drinks bottles and 9bn aluminium cans used in the UK each year. Some in the glass sector have welcomed this move, preferring extending kerbside domestic recycling where it is easier to keep streams of different materials separate. Others point out that a DRS scheme can allow for real scaling of washing and re-use of glass bottles rather recycling – a significantly more circular approach.
Mixed palm oil response to EU DD regulation
The EU’s new due diligence regulations designed to remove products with deforestation risks from being imported into the bloc have not been well received by the governments of key southeast Asian palm oil producer countries Indonesia and Malaysia. The nations produce around 85% of the world’s palm oil between them, 30% of which is grown by around three million smallholder farmers. The governments have said that the EU rules risk marginalising smallholder farmers in particular as they may struggle to meet new standards and requirements.
However, the Indonesian Palm Oil Farmers Union says that these concerns are excessive and in fact welcomes the regulations as they call for financial and technical support to help smallholder growers. Some commentators have highlighted the opportunity the EU regulations represent to secure the long-term sustainability of farmer incomes as the industry adjusts to fully comply. This does seem to be the key point. As Innovation Forum has reported, there is an argument that if a palm oil company is looking to de-risk its supply chain it may look to cut out smallholder suppliers entirely. That is perhaps the most significant potential unintended consequence of the new EU rules.
Get with it or I quit!
New research from KPMG UK shows that a significant number of workers make employment choices based on their potential employer’s ESG decision making and corporate commitments more generally. One in five respondents said that they have turned down job offers based on the inadequacy of a company’s public values and over 80% want their employer to have focus on values and purpose.