We’re are pleased to share our latest thinking on “Building Resilience in ESG”. Earlier in Part 1, we shared “How Firms can begin their ESG Journey” across sectors by making the case for action and establishing targets.
In this Part 2, our ESG focus is on firms in the asset-intensive energy and resource sectors. We believe that to build resilience, firms will have to simultaneously 1) examine their carbon-intensive asset-base, operations and supply chains to evaluate the viability of Energy Transition options, and 2) improve current approaches to investment decision-making to better incorporate stakeholder values, long-term changes and external risks and uncertainties to deliver progress on decarbonisation. In this regard, Energy Transition is an enabler to building resilience in ESG. We discuss four imperatives with case studies and examples that firms can learn from to support their current efforts.
Achieving ESG targets will not be achieved by defensive, business-as-usual practices. Firms that view ESG as an enabler to managing risk and maintaining relevance will consider Energy Transition as an opportunity to re-invent themselves, overcome challenges pertaining to asset transition, and build new organisational capabilities, which will ultimately close the gap between ESG aspiration and performance. Firms that aspire to deliver best-in-class ESG performance will take a hard look at Energy Transition, and will likely go further in considering Business Transformation. It will take bold leadership to make this happen.
