- Author: Brandon Fang
- Translator: Peggy Tsai
ESG Uncovered: The Business Imperative of Sustainability Strategy and Carbon Management
ESG has risen to international prominence, evolving beyond metrics for evaluating a company’s performance on environmental impact. ESG not only builds a positive brand image and reputation, but also earns customer trust and attracts top talents. For instance, the tech giant Apple has pledged to achieve 100% carbon neutrality across its supply chain and product line by 2030, with its 2023 Apple Watch 9 as the pioneering carbon-neutral product.
In response to global calls for sustainable development and net-zero goals, governments worldwide are taking proactive measures. Many countries are enacting laws and regulations to reduce carbon emissions, and further collaborating on a global scale through international agreements and partnerships, such as the Paris Agreement, to address climate change collectively.
What is ESG?
ESG stands for Environmental, Social, and Governance. Let’s look at the three pillars of ESG:
- Environmental
The environmental pillar of ESG refers to a company’s dedication to environmental sustainability through carbon emission reduction, sustainability promotion, and pollution management.
- Social
This dimension involves a company’s social practices concerning human rights and social responsibilities, encompassing labor welfare, workplace conditions, a green supply chain, community involvement, diversity and inclusivity in the work environment.
- Governance
The aspect focuses on a company’s transparency in operations, financial integrity, shareholder rights, board diversity and corporate ethics to drive sustainable growth, increase investor trust and reduce risks.
The Need for Carbon Management: Carbon Inventory, Carbon Reduction and Carbon Neutrality
Phased in from October 2023, the EU Carbon Border Adjustment Mechanism (CBAM), driven by the objectives of Paris Agreement, represents a significant step towards motivating producers in non-EU countries to reduce their carbon emissions by regulating EU-based importers to report the embedded emissions of their goods from non-EU countries, which promotes greater transparency and accountability in global supply chains.
Then how do we perform carbon management? Carbon management encompasses “carbon footprint inventory,” “carbon reduction,” and “carbon neutrality”:
- Carbon Inventory
Companies define the scope of carbon neutrality and calculate emissions, employing software to quantify direct and indirect carbon emissions.
2. Carbon Reduction
Understanding their carbon footprint enables companies to identify and address primary emission sources, adopting strategies to reduce emissions and optimize performance periodically.
3. Carbon Neutrality
For residual emissions, companies can purchase certified carbon credits to achieve neutrality, aligning with international regulations while contributing to their long-term development and reputation.
However, integrating ESG and carbon management practices into quantifiable operational data presents challenges.
GreenSwift: Facilitating a Sustainable Ecosystem for Businesses
TPIsoftware’s one-stop integrated carbon data management platform GreenSwift offers a comprehensive solution for ESG data collection and analysis, helping companies establish compliant and flexible carbon footprint processes.
Developed and delivered by a team of experts certified in international ISO standards and with extensive ESG consulting expertise, the platform aims to support companies in adhering to the ISO 14064-1 standard for carbon footprinting, ESG disclosure, carbon reduction initiatives and carbon trading, thereby fulfilling environmental responsibilities and stakeholder expectations.
For questions about carbon emissions, reduction, management or sustainability reporting, please feel free to contact us.