ESG Reporting

The economic impact of sustainability and the political aspect of climate change

Sep. 24, 2020

“Going where the wind blows.” In the future, the metaphorical expression could cease to be a mere figure of speech, and it could become the bitter truth instead. How come? Migration waves are not just the consequence of certain political decisions that often have more to do with economic interests than with the interests of the people involved, but they are deeply linked to the side effects of climate change as well.

The issue of migration commonly evokes dramatic scenes of political unrest following an economic crisis or depression – as was the case in the recent economically-collapsed Venezuela – or even war, and the flight from violence is therefore seen as fundamental motivation for the human displacement that is taking place worldwide.

The problem, however, is also related to changing climatic conditions. Predictably, climate conditions such as extreme drought, water shortage, and the subsequent famine waves will exacerbate demographic changes. The present national, as well as international debates seem to be characterized by compromises which don´t quite offer the best solution in view of sustainability and sustainability measures.

Real change comes from below: to influence politics, people should come together. The behavior of individuals, as well as corporate conduct, have the power to shape future laws and regulations and to avoid catastrophes on an economic, ecological, and social level.

Investors And Consumers Prefer Sustainable Companies

  • GRI standards are currently being implemented as de facto standards, and legal guidelines will be soon set out and extended
  • 35 countries already embrace and implement GRI standards in their sustainability principle
  • 47% of the world´s biggest corporations are enforcing GRI standards

What Are The Main Challenges Faced By Companies?

Even though companies acknowledge the benefits of sustainability measures, they don´t quite know what to report or how to do it properly. Data collection from different sources is rather expensive and time-consuming, and current sustainability KPIs are often based on manual processes that are not one hundred percent reliable. Moreover, internal and external auditing of reported data is also very expensive and it requires great efforts.

Doubts remain. Should companies be able to depend on sustainability management to increase their profits? And how can they convert to GRI standards in an uncertain time for investments? The answer is in line with current international practice. To refer back to the original metaphor: it is not about redirecting the wind. It is about adjusting the sails accordingly.

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