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- Keeping up with ESG - September 2024
Keeping up with ESG - September 2024
New Era in ESG: Quiet & Pragmatic | CBAM Self-Assessment Tool Released | Must-Read Forced Labour Guide
Anastasia Kuskova
September 26, 2024
Hello reader 👋🏼
This edition read time: 6-7 minutes
Today we cover:
Companies opt for practical sustainability over lofty ambitions
EU releases tool to assist importers with CBAM compliance
LME CEO on industry trends and responsible sourcing
Prepare for the EU Forced Labor Regulation
IAASB approves global standard for sustainability assurance
Australia mandates climate reporting by 2025, and other news
KEY REPORTS
Shifting metals landscape: McKinsey’s outlook
McKinsey’s Global Materials Perspective 2024 outlines the surging demand for battery materials like lithium and nickel, long anticipated due to the energy transition. While traditional materials like steel, copper, and aluminium still dominate revenue (80%), companies have been shifting R&D strategies to prevent potential shortages. This shift, along with changes like the switch to alternative battery chemistries in the auto industry, adds uncertainty to demand forecasts.
Meanwhile, on the supply side, lithium and nickel production has ramped up faster than anticipated - lithium is now 20% above initial projections, driven by early investments in China and Indonesia. However, this is far from resolving the issue. Demand still outpaces supply, with copper emerging as a major bottleneck. To meet projected demand by 2035, the industry will require a substantial $5.4 trillion in investments.
The new face of ESG: Pragmatism and quiet progress
Corporate sustainability has taken a more restrained, pragmatic turn. The Visionary CEO’s Guide to Sustainability in 2024 by Bain shows that companies are moving from bold, ambitious goals to more pragmatic approaches. Inflation, AI, and geopolitical pressures have made long-term climate commitments harder to achieve within initial timelines.
Meanwhile, the Climate Impact Partners report shows that companies are still accelerating their climate efforts - 45% of Fortune Global 500 firms now have net-zero targets, up from 39% last year. And many are doing so quietly, opting for less public visibility due to increased scrutiny, sustainability cancel culture and political pushback. Especially positive to see growth from the North American firms with 79% of them having significant climate goals.
SEC quietly disbands the ESG task force
Speaking of quiet, in response to political pressure, the SEC has quietly dissolved its ESG Task Force, initially formed to tackle misleading ESG disclosures. Recently, Keurig was fined $1.5M for false recyclability claims. While the task force is gone, the SEC continues monitoring ESG fraud, embedding this work across its other divisions. It signals a shift in ESG oversight, but scrutiny isn’t going away.
LME CEO on LMEpassport's role in driving responsible sourcing
LME CEO Matthew Chamberlain recently spoke on the Fastmarkets podcast about LME's critical role in the energy transition and responsible sourcing. He highlighted LMEpassport as a key tool for transparency in tracking sustainability.
Sirius is excited to support this by allowing companies to submit data directly to LMEpassport, simplifying the process and ensuring data accuracy. This helps drive sustainability and interoperability across the metals industry.
Read more about LMEpassport submission using Sirius here.
CBAM ESSENTIAL UPDATES
New CBAM self-assessment tool
The European Commission has launched a CBAM Self-Assessment Tool to help importers determine whether their goods are subject to CBAM during the transitional period (ending 31 December 2025) and understand the specific reporting requirements.
This tool offers a straightforward way to navigate the complexities of CBAM compliance, providing an essential resource for professionals seeking additional support and guidance on the implementation of evolving regulations. Access the tool here.
"To effectively use the CBAM Self-Assessment Tool, start by inputting the CN Code for your product and selecting the relevant options from the dropdown menus. Pay close attention to the red cells, as these require accurate input. The green cells will then display the results, indicating whether your goods fall under CBAM and outlining the reporting requirements. This tool is a valuable resource, particularly as CBAM regulations continue to evolve."
Key documents updated this September
REGULATORY UPDATES
September CSO mood
My video on the overwhelming tasks CSOs face resonated with many - watch it here for a good laugh and some relatable moments.
EU Forced Labour Regulation: What you need to know
The EU Forced Labour Regulation is nearing final approval, and it’s one of the most comprehensive measures out there - applying to all sectors and companies, no matter their size. With its broad scope, this regulation will ban any products made with forced labour from being placed on the EU market or exported.
Sirius experts have put together a detailed Forced Labour Regulation guide that cuts through the complexity, with:
A clear breakdown of what the regulation covers
Steps to ensure your supply chain is ready
A spotlight on other global forced labour regulations
While the final sign-off is still pending, the regulation is just around the corner. Explore the guide and ensure you are ahead of the requirements.
IAASB approves Global Sustainability Assurance Standard
On September 20, 2024, the International Auditing and Assurance Standards Board (IAASB) approved ISSA 5000, a new global framework for sustainability assurance. Set for publication by year-end, it will apply to ESG reporting across multiple frameworks, enhancing transparency and investor confidence.
At New York Climate Week, IFAC, IOSCO, and IFRS leaders emphasised ISSA 5000's importance in combating greenwashing and improving global sustainability reporting. With the European Commission expected to adopt a sustainability assurance standard by 2026, the key question remains - will it adopt ISSA 5000 or develop its own?
Mandatory climate reporting in Australia from 2025
On September 9, 2024, Australia passed legislation requiring large and medium-sized companies to disclose climate-related risks and opportunities starting January 2025. Key updates include mandatory scenario analyses (1.5°C and 2°C scenarios) and phased-in Scope 3 emissions reporting.
This aligns Australian standards with global ISSB frameworks. Smaller companies and charities are exempt. The law also establishes the Net Zero Economy Authority, which will guide the nation's transition to net zero by reskilling workers and coordinating investment efforts.
Hong Kong aligns with global sustainability reporting standards
The Hong Kong Institute of Certified Public Accountants (HKICPA) has released exposure drafts proposing sustainability and climate-related reporting standards, aligned with the IFRS International Sustainability Standards Board (ISSB). Set to take effect in August 2025, the proposed HKFRS S1 and HKFRS S2 will cover general sustainability and climate-related disclosures for listed companies, banks, and financial institutions.
This move supports Hong Kong's goal of aligning local reporting requirements with global standards, enhancing transparency and comparability for investors. Public consultation on the proposals is open until October 27, 2024.
UPCOMING EVENTS
We’re excited to be part of these key industry events:
FT Mining Summit: Premier event for industry leaders
📅 September 26 - 27 (London, UK)
LME Week: Major annual metals industry gathering
📅 September 30 - October 1 (London, UK)
Aluminium: World’s leading trade fair for aluminium
📅 October 8 - 10 (Düsseldorf, Germany)
Expand North Star: Annual technology start-up event
📅 October 13 - 18 (Dubai, UAE)
Sirius has been selected as a national finalist at the World AI Summit for our groundbreaking technology. I will be pitching our vision for industry-focused algorithms that drive sustainability in San Francisco at the annual World AI Summit event in October. Wish me luck as we take our innovations to the global stage!