Momentum Builds for Esg in 2021

Vol. XXXIV, Numbers 7/8, 2021 Environmental Social Governance 2021 Environmental Business International Inc.

Growth of UN Principles for Responsible Investment: 2006-2020 MOMENTUM BUILDS FOR ESG IN 2021

SG is here to stay. Or so says a consensus of environmental industry executives who have been seasoned Eby the not always fulfilled promises of the proactive environmental industry market drivers of the past. Whereas sustainability and various sets of corporate or sector- based principles were mostly voluntary, ESG has quickly emerged as a more influ- ential ‘license to do business’ or ‘cost of doing business’ for all entities in the private Source: Principles for Responsible Investment. PRI is an investor initiative in partnership with UNEP Finance and public sector. Foremost in the short Initiative and UN Global Compact In 2005, the United Nations invited a group of the world’s largest institutional investors to join a process to develop the Principles for Responsible Investment. A 20-person investor term, a firm’s legitimate ESG standing is group drawn from institutions in 12 countries was supported by a 70-person group of experts from the the ‘entry ticket’ to continue to engage in investment industry, intergovernmental organisations and civil society and launched the PRI movement in April any significant capital market around the 2006. Since then the number of signatories has grown from 100 to over 3,800 in 2021. world. And for those that ignore ESG, or can’t live up to it, investors have, and increasingly will, abandon their positions. Inside EBJ: ESG Advisory Services 2021

While not yet compulsory for global Environmental Social Governance is sweeping the globe and shaking up due corporations, adherence to certain ESG diligence, investment committees, board rooms and communications departments. standards, and public declarations of the EBJ survey captures a 2021 profile of practices, client expectations and emerging same, have been demanded and driven pri- standards, and a variety of competitors line up to compete for C-level business... 1-16 marily by investors, and developed by the analysts and rating agencies that serve their Opportunities in the Carbon Economy; Management Consultants & the Decade of ESG; Deloitte Says Climate is a Business Emergency and a Big Opportunity...... 17 information and diligence needs. The investment community has not pushed ESG Alvarez & Marsal ESG Practice Starts with Risk Mitigation and Aims to Support entirely on its own, however, but with the Investment in Measurable Long-Term Value in ESG Terms...... 23 support of the UN, global NGOs and oth- Cardno Accelerates its Pursuit of Internal Sustainable Development Goals; Builds er elements of the public and private sector Global ESG Practice for Both Private and Public Sector Clients...... 26 with a stake in sustainability. Jacobs Stands Out in ESG Services, Pairing Strategic Advisory with Downstream More recent investor pressure has come Planning, Design and Delivery Solutions...... 31 from exchange traded funds (ETFs) and Anthesis other aggregated index funds depended on Commitment to Sustainability Bolsters Approach to ESG; Digital Tools are Key; Palatine Acquires a Significant Minority Share of Anthesis...... 37 by institutions, pension funds, and retail mutual funds accessible to individual inves- WSP SECC & CRS Practices Evolve to Address Client Needs in ESG Strategy and tors as ESG has become more mainstream, Execution; Focus is on Innovation...... 42 so that by the beginning of 2021, 36% of Matrix Solutions Well Positioned in Sustainability & ESG as a Middle Market all professionally managed assets are now Consulting Firm in Canada...... 47 sustainable assets, according to the Global Sustainable Investment Alliance. IDC ESG Advisory Practice Benefits from Client Demand for Metric-Driven Approach to Sustainability...... 50 So if ‘money makes the world go Keramida around’ as the saying goes, it is now money Sustainability Strategy Consulting Firm Develops Integrated ESG Practice; Remains CDP Accredited; ESGeo Leads with Integrated Software Application for that is making ESG do the rounds of every End-to-End Process of Corporate Sustainability...... 53 board room, investment committee and Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 EBJ ESG Survey Respondent Profile EBJ ESG Survey Respondent Profile Environmental Consulting & Engineering 56% $500 mil+ 25% Sustainability Consulting 9% Engineering or Planning 9% $100-500 mil 39% Renewable/Clean Energy C&E or Services 6% Renewable/Clean Energy Systems & Equipment 2% $50-100 mil 7% Remediation or Industrial Services Contracting 2% Management Consulting or Accounting 2% $20-50 mil 2% Instruments or Information Systems & Software 2%

$10-20 mil 5% Financial Services or Financial/Risk Analysis 2% Environmental Industry Analysis 2% $5-10 mil 7% Ecological Restoration and Mitigation Banking 2% Design Engineering 2% $0-5 mil 16% Climate Change Consulting 2%

0% 5% 10% 15% 20% 25% 30% 35% 40% EPC or Engineering, Contracting & Construction 2% Source: EBJ 2021 Survey of ESG Advisory Services. Question was: Please Source: EBJ 2021 Survey of ESG Advisory Services. Question was: Please classify your classify your firm by primary business unit or function. n=44 company by size in gross revenue. e x h i B i t 5 professional fund management firm of anyThe List of Potential ESGVanguard’s Issues Is Extensive Short and ListGrowing of Potential ESG Issues significance in 2021. Environmental Air emissions and air quality Fossil fuels Occupational health and safety Biodiversity protection Hazardous materials use Renewable energy sources ESG is not entirely new. Environmen- Community health, Land contamination Waste generation tal, Social and Governance (ESG) issues safety, and security were first mentioned using the ESG ac- Energy conservation Natural resource preservation Waste use and conservation ronym in the 2006 United Nation’s Prin- Social Adequate housing Consumer privacy Opioids Abortion providers Employment of minorities Religious values ciples for Responsible Investment (PRI) and women report. After a slow start and initial defini- Adult entertainment Human rights standards Tobacco tional issues that persist today, capital has Alcohol Income inequality Union relationships been increasingly funneled to ESG-orient- Animal testing Manufacturers of birth Weapons ed funds over the past decade. Global as- control products Casinos and gambling Obesity Workforce exploitation sets under management by PRI signatories equipment passed $100 trillion in 2020 (see graph on Governance Antitrust violations Consumer fraud Political contributions page 1). Auditor independence Disclosure of material risks Reporting transparency Board independence Executive compensation Short-term focus A 2020 socially responsible investing and elections trends report published by the U.S. Fo- Board diversity Oversight of strategy and risk Voting rights rum for Sustainable and Responsible Note: This represents a sample, not an exhaustive list, of ESG issues. Investment (US SIF) found that U.S. as-Source: Vanguard. Environmental Business Journal ® (ISSN 0145-8611) is published by Environmental Business sets under management using sustainable International, Inc., 4452 Park Blvd., #306, San Diego, CA 92116. © 2021 Environmental investing strategies grew from $12 trillion to take,Business if any, based International, on the investor’s Inc. preferences, All rights reserved. beliefs, Thisfossil publication, fuels may wantor any to part, examine may which not be firms are con- expertise, resources, and circumstances. Exhibit 4 illus- ducting undesired behavior. Some may prefer focusing in 2018 to just over $17 trillion in 2020. duplicated, reprinted, or republished without the written permission of the publisher. trates the key steps in this decision-making process. on the highest carbon-dioxide-emitting companies, so Some speculate that COVID may have To order a subscription, email [email protected],they call must619-295-7685 determine ext.what 15 the or criteriavisit www. is for inclusion highlighted the importance of sustainable Defineebionline.org/ebj. Goals A corporate electronic subscriptionon thatwith list. internal Others reproduction may worry aboutlicense the supply chain of fossil fuels. and resilient business models, but more and access to data files starts at $1,500 and allows up to five registered users with rates believe COVID was largely immaterial to Identify the issues. For investors to determine what In turn, the question that often arises is, “Which approachesincreasing may be in an five appropriate user increments. option, they Individual must editionscompanies or discounted in each part corporate of the supply subscriptions chain count?” Some the ESG momentum. Recent ESG metrics first decideare available what ESG for issue firms or setwith of underissues 100they employees.want investors prefer zero tolerance, meaning that any com- include: to address. This decision is not always easy, especially pany participating in an undesired business activity is if multipleEditor parties in Chief, are involved, Grant suchFerrier as in Federal cases with Analyst, considered. Andrew Others Paterson prefer setting a threshold as a per- • The PRI reported 662 new signatoriesinvestment Research committees. Director, A large Laura and Carranzagrowing list Managing of centage Editor, of company Lyn Thwaites revenue from the business activity, during 2019-20, a 28% increase; ESG-relatedContributors, issues may beGeorge important Stubbs, to different Jim inves Hight- Researchin cases where Analyst, the activity Laura may Fernandes not be a core business tors, as shown in Exhibit 5. practice. However, there are examples where the busi- EDITORIAL ADVISORY BOARD • The Sustainability Accounting Clarifying the areas of focus is important for all ness activity is a small percentage of the firm’s revenue types ofAndrew ESG investing Paterson strategies., Chairman; For some approaches, James Strock but, theFounder, activity representsServe to aLead sizable Inc.; percentage of market Standards Board (SASB) stated that translatingP.S. an Reilly, issue orPresident, set of issues NextGen into a clear Today; set of Albertshare Spiers of that, undesired2020 Environmental activity’s sales (for Group; example, gun more than 170 investor organizations companiesSteven or countries Maxwell that ,exhibit TSG; desired Paul orZofnass undesired, Environmental retailers and Financialmanufacturers Consulting of nuclear weapons).Group managing $55 trillion in assets now ESG behavior can be difficult. For instance, investors Some investors also question how to address com- who are concerned about the environmental impact of panies that they feel are engaged in certain undesired 2 Strategic Information for a Changing Industry

52 ESG, SRI, and Impact Investing: A Primer for Decision-mAking Fall 2020 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 Demand for ESG Advisory & Deployment in the Next Two Years: By Type of Company

Highly Not Very Very Definitely Definitely Very Likely Likely Unlikely Likely Likely Unlikely Not

European companies 22% 54% 16% 3% 0% 5% 0% 0% UK companies 19% 44% 31% 3% 3% 0% 0% 0% Publicly traded 17% 46% 23% 14% 0% 0% 0% 0% Global companies 14% 23% 31% 14% 9% 6% 3% 0% Japanese companies 9% 23% 40% 23% 0% 6% 0% 0% Private equity owned 8% 16% 30% 30% 14% 3% 0% 0% USA companies 5% 13% 39% 34% 8% 0% 0% 0% Family owned 0% 17% 19% 19% 25% 8% 8% 3% Chinese companies 0% 6% 11% 46% 17% 0% 17% 3%

Source: EBJ 2021 Survey of ESG Advisory Services. Question was: Customer ESG Demand Trends: How likely do you think each client sector or type of company is to sponsor complete ESG advisory and follow-on execution and deployment strategy in the next two years?

ESG Services Most Frequently Performed for Clients

General ESG advisory or strategy 21%

ESG planning and analysis 19%

Adhering to ESG standards of 3rd party 15% organizations like GRI or TCFD

Ongoing ESG monitoring and reporting for internal 15% benchmarking

,External ESG commitments, reporting 14% communications and declarations

Net Zero or carbon neutrality planning: Target 11% setting and timeline

Long-term management and execution of carbon 10% neutrality projects

Renewable energy power purchase agreements 9%

Acquiring offsets/managing/trading emissions 9% credits

Developing/managing carbon positive projects 6%

Gender and ethnicity management accounting and 4% acceleration

Board of Directors screening and recruitment 3%

0% 5% 10% 15% 20% 25%

Source: EBJ 2021 Survey of ESG Advisory Services. Question was: For approximately what percentage of all of your clients have you performed the following work in ESG or ESG related services:

Strategic Information for a Changing Industry 3 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 Clients Most Liekly to Sponsor ESG Advisory & Deployment Work in the Next Two Years: By Sector

Highly Somewhat Not Very Very Definitely Very Likely Unlikely Likely Likely Likely Unlikely Pharm/Biotech 22% 30% 35% 11% 3% 0% 0%

Tech & E-Commerce 27% 27% 27% 11% 5% 3% 0%

Consumer Products 16% 32% 27% 22% 3% 0% 0%

Transpo Mfg (auto/aero) 21% 24% 32% 18% 0% 5% 0%

Power Utilities 21% 23% 31% 18% 8% 0% 0%

Oil & Gas 26% 18% 21% 24% 8% 0% 3%

Food & Beverage 19% 16% 41% 22% 3% 0% 0%

Major Retailers 14% 22% 44% 14% 3% 3% 0%

Chemical 25% 11% 36% 19% 3% 0% 6%

Cities 11% 36% 25% 14% 6% 6% 3%

Hospitality 11% 35% 22% 27% 0% 5% 0%

Mgmt Consulting & Financial Svcs 19% 19% 28% 22% 6% 0% 6%

Water Utilities 13% 28% 21% 28% 10% 0% 0%

Port authorities 11% 22% 43% 14% 5% 3% 3%

Waste utilities & companies 13% 23% 28% 28% 5% 3% 0%

Private Equity Investors 19% 14% 35% 16% 11% 0% 5%

Banks & Law Firms 11% 32% 19% 22% 11% 0% 5%

Electronics Mfg. 14% 22% 24% 27% 11% 3% 0%

Federal government agencies 11% 18% 42% 18% 5% 3% 3%

Healthcare 14% 22% 19% 35% 5% 5% 0%

Transportation authorities 8% 19% 43% 14% 11% 3% 3%

States 11% 19% 30% 24% 8% 5% 3%

Mining 20% 14% 11% 31% 11% 3% 9%

Metals 17% 11% 19% 25% 22% 6% 0%

Pulp & Paper 13% 11% 13% 45% 13% 5% 0%

Other Manufacturing 8% 14% 16% 51% 11% 0% 0%

Private Education 6% 19% 22% 28% 17% 6% 3%

Property Developers 11% 8% 28% 28% 11% 11% 3%

Public Education 5% 16% 19% 32% 16% 11% 0% Source: EBJ 2021 Survey of ESG Advisory Services. Question was: Customer ESG Demand Trends: How likely do you think each client sector or type of company is to sponsor complete ESG advisory and follow-on execution and deployment strategy in the next two years? Note: Sectors are ranked by a weighted index of responses.

4 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

formally support its materiality standards; Sustainable Investment Review by Global Sustainable Investment Alliance • The Task Force for Climate-Related Financial Disclosures (TCFD) saw 613 In July 2021, the Global Sustainable Investment Alliance (GSIA), released its new supporters in 2020, compared to biennial Global Sustainable Investment Review 2020, revealing an industry that has 375 in 2019; grown to US $35.3 trillion, and is up 15% since 2018. Sustainable Investment comprised 36% of all professionally managed assets globally at the start of 2020 (based on • The United Nations Framework assets reported by the United States, EU, Australia/New Zealand, Canada and Japan). Convention on Climate Change (UNFCCC) reported that 2020 Sustainable investment assets under management (AUM) is largest in the United saw a three-fold increase in net-zero States with $17.1 trillion, followed by Europe ($12.0 trillion), Japan ($2.9 trillion), commitments from companies (1,541 Canada ($2.4 trillion) and Australia/New Zealand ($906 billion). Canada experienc- in 2020, up from approximately 500 in ing the largest increase in absolute terms over the past two years (48% growth), fol- 2019). lowed by the United States (42% growth), Japan (34% growth) and Australia/New Zealand (25% growth) from 2018 to 2020. ESG integration is the most prevalent HISTORY OF PROACTIVE sustainable investment approach globally, affecting $25.2 trillion in assets, followed MARKET DRIVERS byFIGURE negative/exclusionary 3 Growth of sustainable screening, applied investing to $15.0 assets trillion by region in assets in and local corporate currency 2014-2020 The $400-billion environmental indus- engagement/shareholder action with $10.1 trillion. try has spent much of its 50-year history NOTE: Asset values are expressed in Sustainable Investment in the United States: 1996-2020 GROWTH PER PERIOD COMPOUND ANNUAL billions. New Zealand assets were depending on regulations and their en- GROWTH GROWTH GROWTH GROWTH RATE converted to Australian dollars. In forcement as the primary driver of reactive 2014 2016 2018 2020 2014-2016 2016-2018 2018-2020 (CARG) 2014-2020 2020, Europe includes Austria, Belgium, Bulgaria, Denmark, France, Germany, environmental spending by their clients, Europe* (EUR) €9,885 €11,045 €12,306 €10,730 12% 11% -13% 1% Greece, Italy, Spain, Netherlands, the majority of them motivated purely by Poland, Portugal, Slovenia, Sweden, the United States (USD) $6,572 $8,723 $11,995 $17,081 33% 38% 42% 17% UK, Norway, Switzerland, Liechtenstein. compliance and ‘staying one step ahead of *Europe and Australasia have enacted the law’. Canada (CAD) $1,011 $1,505 $2,132 $3,166 49% 42% 48% 21% significant changes in the way sustainable investment is defined in Drivers like sustainability, ISO 14000 Australasia* (AUD) $203 $707 $1,033 $1,295 248% 46% 25% 36% these regions, so direct comparisons between regions and with previous and corporate social responsibility (CSR) Japan (JPY) ¥840 ¥57,056 ¥231,952 ¥310,039 6,692% 307% 34% 168% versions of this report are not had the potential to have a sustained posi- easily made. tive impact on demand for proactive advisory, engineering, design and project management services in the environmen- Proportion of sustainable investing relative to total tal industry (in addition to a number of FIGURE 4 Proportion of sustainable investing assets relative to total managed assets sector-based corporate operating stan- managed assets 2014-2020 dards that never quite made it to main- Proportion of Sustainable Investing Assets Relative To Total As shown in Figure 4, the proportion of sustainable investing rela- stream adoption). These movements, if Managed Assets 2014-2020 70% tive to total managed assets continued to grow strongly in Canada, you can call them that (and people ques- 63.2 61.8 58.8 the United States and Japan. tion whether ESG can be called a move- 60% Canada 52.6 ment), never impacted much more than a 50.6 small minority of the world’s corporations. 50% In contrast, Australasia and Europe both reported a lower proportion 50.6 These previous CSR & ISO movements 48.8 41.6 of sustainable investing assets relative to total managed assets for 40% 37.8 Europe Australia/NZ were largely voluntary, much like ESG is 31.3 37.9 2018 to 2020. This reflects significant changes in the way sustain- United States today, without real prescriptive measures 30% 25.7 33.2 able investment is defined in these regions, making comparisons that became mainstream business prac- 21.6 Japan 18.3 with previous versions of this report very difficult, and highlights an 20% 17.9 24.3 tices. And whereas ESG is not a regulatory evolution of the sustainable investment markets in both regions. In requirement in many jurisdictions, many 16.6 10% Europe, this was driven in large part by a strong legislative push believe it, or something similar, soon will 3.4 that now explicitly sets out sustainability standards for sustainable be. Harmonizing standards will be key. 0% 2014 2016 2018 2020 finance products. In Australasia, this was due to two main factors: But the real difference of ESG com- one being a shift in sustainable investment standards expected for Source: Global Sustainable Investment Alliance; Global Sustainable Investment Review 2020. Australasia and pared to the others is that ESG came from Europe both reported a lower proportion of sustainable investing assets reflecting significant changes in the inclusion in the regional survey data undertaken by RIAA, as well as the financial analysis community and wa wayREGION sustainable investment is defined2014 in these regions, making2016 comparisons with2018 previous versions of 2020GSIA a changed data source used to define the total market size based on reports difficult, and highlights an evolution of the sustainable investment markets. In Europe, this was driven first for the investment community. And it Europe* 58.8% 52.6% 48.8% 41.6% the domestic central bank definition. has gained momentum quickly as analysts in large part by a strong legislative push that now explicitly sets out sustainability standards for sustainable finance products. In Australasia, this was due to two main factors: one being a shift in sustainable investment have been progressively been better able standardsUnited expected States for inclusion in the17.9% regional survey data21.6% undertaken by RIAA,25.7% as well as a changed33.2% data to qualify, rate and assess the companies, sourceCanada used to define the total market31.3% size based on the 3domestic 7.8% central bank50.6% definition. 61.8% Proportion of global sustainable investing assets by region Australasia* 16.6% 50.6% 63.2% 37.9% Strategic Information for a Changing Industry 5 Japan 3.4% 18.3% 24.3% The United States and Europe continued to represent more than 80% of global sustainable investing assets during 2018 to 2020. *Europe and Australasia have enacted significant changes in the way sustainable investment is defined in these The proportions of global sustainable investing assets in Canada regions, so direct comparisons between regions and with previous versions of this report are not easily made. (7%), Japan (8%) and Australasia (3%) have remained relatively un- changed over the past two years.

FIGURE 5 Proportion of global sustainable investing assets by region 2020

Japan Australia/NZ* SUSTAINABLE INVESTMENT STRATEGIES 8% Canada Proportion of sustainable investing assets by strategy 3% Europe* 7% and region 34% The largest sustainable investment strategy globally is ESG integration, as shown in Figure 6, with a combined USD25.2 trillion in assets under management employing an ESG integration approach, also being the most commonly reported strategy in most regions. The next most commonly deployed sustainable investment strategies 48% include negative/exclusionary screening (USD15.9 trillion) followed by corporate engagement/shareholder action (USD10.5 trillion). United States

* Europe and Australasia have enacted significant changes in the way sustainable investment is defined in these This result shows a change from 2018 when negative/exclusionary regions, so direct comparisons between regions and with previous versions of this report are not easily made. screening was reported as the most popular sustainable investment

10 GLOBAL SUSTAINABLE INVESTMENT ALLIANCE Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 projects, investment funds or any entities ly’, ‘very likely’, ‘highly likely’, or ‘definite- tives, or governance issues, is not a logical that financiers invest in or loan to. ly’ going to sponsor significant ESG strat- match for most clients. Hence the trend of egy and project work in the next two years. a number of firms enhancing their man- Does that mean ESG is better then cor- 17% said private equity-owned firms were agement consultant credentials with key porate standards or industry sector prin- either ‘unlikely’ or ‘not very likely’ to make hires, or elevating career sector-focused ciples agreed upon by trade associations the commitments to follow through on consultants into more strategic advisory or advocated by non-government organi- ESG principles, and 44% of respondents roles. Environmental firms have had some zations? Not necessarily. But it does seem said family-owned firms where not very success with both of these tacks so far, as to have a higher likelihood of broad ac- likely, unlikely, very unlikely or definitely evidenced in the company profiles that fol- ceptance and compliance if ESG credibil- not going to engage ESG advisory services. low in this EBJ review of ESG markets. ity continues as a de facto ‘cost of doing business’ in any financial market, or as an SERVICES CONTINUUM However, as the partial list of 42 po- embodiment of the public trust. tential ESG issues by retail investment The EBJ survey question on ESG ser- firm Vanguard on page 2 illustrates, there So ESG is here to stay. And so we state vices regarding the most frequently per- are several issues in the social and gover- at EBJ, but what does the environmental formed for clients in 2021 confirms that nance categories in which environmental industry say? To find out, EBJ conducted it is early days in the ESG services mar- consultants are unlikely to be able to dem- a survey of service providers in the nascent ket (see bar chart on page 3). First, and onstrate deep expertise compared to their ESG services market in July and August remembering that a large proportion of professional services peers in management 2021. The respondent population for the respondents were larger consulting com- consulting and accounting, leading to the EBJ 2021 Survey of ESG Advisory Servic- panies, it is notable that even the most generally acknowledged early leadership by es is summarized on page 2 is not as large frequently performed services are only cur- the top management consultants and as- as some of our other EBJ surveys, but it is rently only conducted for about a fifth of surance firms in ESG advisory. decidedly more tilted towards larger com- the respondent’s current client base. panies. Almost 65% of respondents gen- MOST LIKELY SECTORS erated revenues higher than $100 million, Second, of the ESG services that are and one in four more than $500 million. being performed for the still large minor- Sectors that the environmental industry Environmental consulting & engineering ity of clients, most are analysis, planning, believes are most likely to sponsor full-on (C&E) firms were the strong majority of and other services leading to general advi- ESG advisory and deployment strategies respondents for their ‘primary business’ sory or strategy work. Also included in the are ranked on the table on page 4, and the and could even be characterized as 86% of more frequently deployed services are of- rankings illustrate some interesting delin- respondents if you lump many of the spe- ferings making sense of the variety of stan- eations across the sectors. cialty consultancies on the table on page 2 dards, and current and likely future report- The ranking portrayed is devised from as the more broader environmental C&E. ing requirements in multiple jurisdictions. weighing the proportions of the seven The EBJ survey characterized service Below this analysis and preliminary possible responses. Purely looking at the providers expectations of client demand advisory work is a next tier of services figures for clients expected to ‘definitely’ and found ownership status as the stron- where about 10% of clients on average sponsor ambitious ESG responses in the gest determiner, and regional variations are engaged in decarbonization or net zero next two years paints a somewhat different stronger than sectoral for the time being, planning, and beginning to execute long- picture than the overall ranking. not surprising due to the more advanced term carbon neutrality projects involving Pharmaceutical, biotechnology, tech- focus on sustainable investing in Europe. renewable energy, power purchase agree- nology and e-commerce companies are Survey results show a clear expectation ments, and offsets or emissions trading. rated in the top spots on the overall rank- that companies based in Europe are much Close to 5% or about 1 in 20 clients ings for the understandable reasons of their more likely to be better prospects as clients are currently hiring consultants to con- prominent and high-market-capitalization for ESG advisory and follow-on execution sider developing carbon positive projects, positions in public markets, as well as and deployment strategies in the next two an area several observers expect to be well across the private investment commu- years. U.S. companies are not rated as poor suited to the environmental project man- nity in venture capital, private equity and prospects for ESG type of work, but they agement community, especially those with hedge funds. are clearly in a lower-tier than companies well-developed practices in natural re- based in Europe and the United Kingdom. sources or ecological restoration. Oil & gas, chemical, automotive manufacturing, and power utilities also all have While these regional variations are ap- Currently, less prevalent in client work responses of over 20% of respondents ex- parent in the rankings on the table on page for the EBJ survey respondents are the pecting clients in these sectors to ‘definite- 4, ownership is perhaps a stronger indica- ‘S’ and ‘G’ portions of ESG. Using their ly’ sponsor ambitious ESG strategies in the tor. 100% of survey respondents said that ‘environmental consultants’ to support short term. publicly traded companies would be ‘like- social and diversity aspirations and objec- 6 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

Some would say this is because the lead- It seems clear from the survey results Global Sustainable Investment Alliance ers in these sectors have the most to lose that the environmental industry com- on page 5. by not doing so. Another way to put it munity in 2021 expects fewer players in would be that firms are taking a defensive petroleum industries to carry on with the The changing standards, the tools to position to protect themselves from repu- resistant approach, but that a larger vestige figure out how to apply them, and then to tational risk, investor flight, and therefore of the culture of resistance may remain in deploy them on behalf of investor, corpo- value depreciation. Others assert that more the mining industry. rate, institutional, and government clients individual clients than one would expect is only hinted at on three sample exhibits are already ‘playing offense’, or taking a The second tier of sectors expected to on page 8. Mapping the ESG Research proactive approach to their public ESG be good markets for ESG advisory services Ecosystem in its simplest form for con- posture as evidenced by the wave of public includes consumer-facing sectors like food sumer investor markets by CNBC has four commitments to carbon neutrality. & beverage, major retailers and hospital- quadrants, but an unshown, more detailed ity. Each of these sectors have firms whose map by the World Economic Forum has Carbon neutral or ‘net zero’ pro- brand equity is a larger portion of their 9 categories and almost 70 service provid- nouncements frequently lead to the now overall value, and which are in a generally ers in one summary graphic. The Digital seemingly inevitable defensive posturing non-ending cycle of customer retention ESG Ecosystem according to ESGeo (see around ‘greenwashing’ for most global cor- and customer acquisition, thus accelerat- page 44) portrays the increasingly crucial porations, regardless of their past record ing the pace of change. data management, tracking, reporting and — another service category across the ESG display tools needed for ongoing metrics continuum that is well suited to the need Occupying the third tier in client rank- and eventually compliance. The ESG Rat- for support from third party environmen- ings are a sprinkling of utilities, govern- ings Landscape table illustrates just some tal experts. ment entities and authorities or institu- of the more prominent rating agencies, but tions likely either still in a wait-and-see each of these are mere snapshots of the still Also notable for its presence on the mode as to what the benefits of a major rapidly emerging and evolving slices of the 20%+ crowd is the mining sector, which ESG strategy may bring them, or in a service provider ecosystem. is perhaps even more remarkable for the holding pattern until more clear standards polarity of its ratings. Mining is one of or reporting requirement surface. But even The ESG market has attracted some of only seven of the 29 sectors with 20% of in this lowest tier of the rankings of all the world’s largest service companies like respondents expecting companies in that 29 of these sectors, those deemed as ‘not the 330,000-person Deloitte (see page 18) sector to ‘definitely’ sponsor major ESG very likely’, ‘unlikely’ or ‘very unlikely’ to down to yesterday’s startup raising capital initiatives, but it also has the highest re- engage in serious ESG consideration and in a branch of the climate change industry sponse rate of those expecting them to be commitment are only in the 20% to 30% that EBJ will accept as ‘climate tech’. Satel- ‘very unlikely’ to sponsor such an initia- range, indicating that no part of the econ- lites, drones, big data and digitalization of tive, sending mining well into the bottom omy is immune to the ESG movement. project management and project reporting quartile of the overall rankings. are here to stay just as ESG, but here to SUSTAINABLE INVESTMENT stay implying stagnant technology is cer- A broad spread of environmental strat- tainly not. egy, from denial to reactive to proactive, The foundation of this across-the-board has perhaps been most evident in the oil activity and investment in environmental Technology and data management will & gas industry for some time, but a spread social and governance principles is what certainly be indispensable tools to effec- of approaches also is evident in chemicals, has generally been referred to as the sus- tive ESG services propositions, but under- mining and other sectors. This leads many tainable investment movement, and its standing the culture and circumstances of consultants to observe that making a gen- rapid acceleration and maturation dur- each client and translating climate invest- eralization by sector is often less applicable ing the last few years. The chart on page ments in business-speak and technical- than assessing short-term opportunity in 1 and the review on page 5 highlights the speak will be just as important in the strat- proactive environmental or climate ap- pace of this acceleration, and especially egy development phase. proaches as a function of each company’s in North America. It also illustrates the culture or leadership. moving target that classifying and validat- Multi-disciplinary firms are required to ing sustainable investing has been — and compete at the highest level for sure, al- Most sectors have had fairly obvious continues to be. The changing of standards though hiring specialist firms in each of the examples of leaders on the sustainabil- and definitions of sustainable investment three ESG disciplines is a likely outcome. ity front, as well as some obvious laggards in Europe and Australia, for example, are Environmental firms have been quick to resisting legislation, doing only the bare the primary reason why the proportion of identify talent and strong motivation to minimum in compliance and funneling investment activity in those regions has add to their Social & Governance creden- millions into lobbying efforts to reverse or declined recently, according to one of the tials and credibility both internally and stop the flow of environmental policy. more frequently cited standards applied by externally. A new generation of executives the regional authorities mentioned by the coming of age today may never remember

Strategic Information for a Changing Industry 7 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

The ESG Research Ecosystem According to CNBC the days before ESG, or the movement could be re-branded to something related, especially as climate appears the trump suit overshadowing ESG. So carbon neutral or decarbonization or NetZero, perhaps even ‘CESG’, but the tide has changed in how the global financial community evaluates risk across the whole spectrum of issues related to climate change.

Do we put a number on the ESG Ad- visory Services market size in 2020? EBJ could make an educated guess knowing many of the key players and projecting head-count revenue production across professional services categories. But we’re happy as of mid-2021 with a $33-billion figure for the U.S. Environmental Con- sulting & Engineering and current ESG revenue figures higher than the $1.7 bil- The Digital ESG Ecosystem According to ESGeo lion Strategic Environmental Manage- ment, CSR, Sustainability service sub-category that we admit we have re-branded ourselves over the years.

RATING THE RATING SYSTEMS More detail is provided on the ratings methodology by MSCI (a Morgan Stanley company) for a rating tool frequently used by investors, but by no means a singular one separating from the pack. It is clear from the responses to Deloitte’s own survey on page 9, that the industry is in greatest need of more consistency and compa- ESG ratings landscape BenchmarkingESG of Ratings approaches Landscape: used by rating Benchmarking agencies of Approaches Used by Ratings Agencies

Robeco SAM FTSE ISS ESG Many Sustainalytics CDP MSCI Refinitiv Vigeo Eiris Covalence (S&P Global) Russell (Oekom) more…* 7.200 securities Company 2019: over 14.000 stock and 4.600 issuer compr. consti- 6.300 8.400 fixed income 180 sovereign tuents of FTSE companies profile > 7.000 > 6.000 11.000 corporates companies, 800 7,300 companies issuers (mostly states, All-World Index, ∼726 states & … # performed companies companies cities, 120 part of MSCI ESG research on FTSE All-Share regional ESG ratings states/ regions indices) 4.500 issuers Index, Russell authorities∼ 1000® Index Issuer (corporate Corporates, subsidiaries, local Companies, Companies, Application Cities, States/ authorities, SMEs, Corporates Companies Stock and fixed Corporates Companies Securities countries and … Regions, mid-cap compa- Coverage income indices green bonds, Investors nies, associations etc) Objective financial/ credit financial/ credit financial/ credit financial/ credit financial/credit financial/ credit financial/ credit risk green behaviour risk green behaviour risk green behaviour risk risk … risk risk green behaviour green behaviour green behaviour green behaviour Scope Environmental E (climate ESG, E, S, G & E, S, G, CSR, ESG (E) ESG, E, S, G change, forests, question level E, S, G E, S, G E, S, G E, S ,G … ESG Controversy research Social (S) water security) scores Governance (G) Questionnaire Questionnaire (incl. internal) avail. from Issuer, Comp/Stakeh. (incl. internal) Feedback on A List RepRisk stakeh Interviews Publicly available Publicly available public inform. Publicly available verification Publicly available Publicly available Publicly available Publicly available … Data sources information information Publicly available information information information information information Media Media information Media A List RepRisk Media Multiple sources Media Media (controversies) (controversies) verification

https://www.sustainalytics.com/e https://www.refinitiv.com/co http://vigeo- https://www.ftserussell.com/ sg-ratings/ https://www.spglobal.com/es https://www.msci.com/esg- ntent/dam/marketing/en_us/ https://www.issgovernance.c https://www.cdp.net/en eiris.com/solutions-for- https://www.covalence.ch/ data/sustainability-and-esg- Website g/scores/ ratings documents/methodology/esg- om/esg/ … investors/esg-indices-ranking/ data/esg-ratings © 2021. Deloitte Polska scores-methodology.pdf 15 8 Strategic Information for a Changing Industry

MSCI ESG Ratings Methodology | November 2020

1 EXECUTIVE SUMMARY From natural resource scarcity to changing governance standards, from global workforce management to the evolving regulatory landscape, ESG factors can impact the long-term risk and return profile of institutional portfolios. MSCI ESG Ratings are designed to help investors to understand ESG risks and opportunities and integrate these factors into their portfolio construction and management process. Our global team of over 200 experienced research analysts assesses thousands of data points across 35 ESG Key Issues, focusing on the intersection between a company’s core Environmentalbusiness and the Business industry issuesJournal, that Volume can create XXXIV, significant Numbers risks 7/8, 2021 and opportunities for the company. Companies are rated on a AAA-CCC scale rability across ratings methodology, as this relative to the standards and performance of their industry peers. was cited as the most important change or FigureMSCI 1: ESG ESG Rating Rating Framework Framework and Process and Overview Process Overview solution desired in the short-term.

The environmental industry seems to DATA 1000+ data points on ESG policies, programs, and performance; have a strong preference, or at least accep- Data on 100,000 individual directors; up to 20 years of shareholder meeting tance of the Global Reporting Initiative results as a benchmark, although four others are EXPOSURE METRICS MANAGEMENT METRICS How exposed is the company How is the company managing frequently used by 44% or more of EBJ to industry material issues? each key issue? Based on over 80 business 150 policy/program metrics, respondents on client projects (see table and geographic segment 20 performance metrics; on page 10). Worth noting and illustrated metrics 100+ Governance Key Metrics SOURCES well on the graphic provided on the bot- KEY ISSUE SCORES & WEIGHTS tom of page 10 is the audience for the met- 100+ specialized datasets (government, NGO, models) 35 Key Issues selected annually for each INSIGHT industry and weighted based on MSCI’s rics and reporting standards: whether they Company disclosure (10-K, mapping framework. Specialized ESG research are devised for investors or used as invest- sustainability report, proxy report); team provides additional 3400+ media sources monitored insight through: ment tools, or used for internal tracking or daily (global and local news ESG RATING (AAA-CCC) Company reports sources, government, NGO). Industry reports disclosure support. These are not neces- Issue scores and weights Thematic reports combine to overall ESG Analyst calls & webinars sarily separate tracks and may ultimately rating relative to industry peers. merge in a more harmonized system, but MONITORING & E, S, G scores also available again illustrates the ongoing challenge of QUALITY REVIEW DATA OUTPUTS a more universal system that supports and Systematic ongoing daily monitoring of Access to selected underlying controversies and governance events; data regulates sustainability and environmental Systematic communication with issuers to Ratings, scores, and weights on over 600,000 securities and climate performance.  verify data accuracy In-depth quality review processes at all 17 years of history stages of rating, including formal committee review.

Source: MSCI ESG Ratings Methodology, November 2020 About MSCI & ESG Ratings © 2019 MSCI Inc. All rights reserved. Please refer to the disclaimerMSCI at the ESG end of this Ratings document. MethodologyMSCI.COM | November | PAGE 2 OF 2020 17 MSCI’s team of over 200 research An MSCI ESG Rating measures a company’s resilience to long-term, industry

analysts assesses thousands of data material environmental,Information social Classification: and governance GENERAL (ESG) risks. MSCI uses a rules-based points across 35 ESG Key Issues, fo- methodology to identify industry leaders and laggards according to their exposure to cusing on the intersection between a ESG risks and how well they manage those risks relative to peers. MSCI ESG Ratings company’s core business and the in- range from leader (AAA, AA), average (A, BBB, BB) to laggard (B, CCC). MSCI also dustry issues that can create significant rates equity and fixed income securities, loans, mutual funds, ETFs and countries. risks and opportunities. To arrive at a Figure 1 MSCI ESGMSCI Key ESGIssue KeyHierarchy Issue Hierarchy final ESG Rating, the weighted average of individual Key Issue Scores is 3 Pillars 10 Themes 35 ESG Key Issues normalized relative to ESG Rating Environment Climate Change Carbon Emissions Financing Environmental Industry peers. After any committee- Product Carbon Footprint Impact level overrides are factored in, each Climate Change Vulnerability Natural Capital Water Stress Raw Material Sourcing company’s Final Industry-Adjusted Biodiversity & Land Use Score corresponds to a rating between Pollution & Waste Toxic Emissions & Waste Electronic Waste best (AAA) and worst (CCC). These Packaging Material & Waste assessments are not absolute and are Environmental Opportunities in Clean Tech Opportunities in Renewable Opportunities Opportunities in Green Energy explicitly intended to be interpreted Building relative to a company’s industry peers. Social Human Capital Labor Management Human Capital Development Health & Safety Supply Chain Labor MSCI is a provider of investment Standards decision support tools including in- Product Liability Product Safety & Quality Privacy & Data Security Chemical Safety Responsible Investment dexes, analytical tools, data, real estate Financial Product Safety Health & Demographic Risk benchmarks and ESG research. Most Stakeholder Controversial Sourcing of it revenue is subscription or asset- Opposition Community Relations based fees. Q2 2021 operating rev- Social Opportunities Access to Communications Access to Health Care Access to Finance Opportunities in Nutrition & enues were up 22% to $498 million Health with headcount at 3,910 employees. Governance* Corporate Governance Ownership & Control Pay MSCI was formerly Morgan Stanley Board Accounting Capital International. Global financial Morgan Stanley Corporate Behavior Business Ethics services firm is the Tax Transparency controlling shareholder of MSCI Inc. * The Governance Pillar carries weight in the ESG Rating model for all companies.

Strategic Information for a Changing Industry ESG RATINGS 9 To arrive at a final ESG Rating, the weighted average of individual Key Issue Scores is normalized relative to ESG Rating Industry peers. After any committee-level overrides are factored in, each company’s Final Industry-Adjusted Score corresponds to a rating between best (AAA) and worst (CCC). These assessments are not absolute but are explicitly intended to be interpreted relative to a company’s industry peers.

Information Classification: GENERAL Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 Standards or Benchmarks Most Frequently Used When Conducting an ESG Advisory Engagement LIKELY REGULATORY Global Reporting Initiative (GRI) 65.9% REPORTING OR CDP (formerly the Carbon Disclosure Project) 46.3% COMPLIANCE Sustainability Accounting Standards Board (SASB) 43.9% REQUIREMENTS International Organization for Standardization (ISO) 43.9% FOR ESG UN Sustainable Development Goals (SDGs) 43.9% EBJ Survey Question: What do you think is the most logical or likely stan- Task Force on Climate-related Financial Disclosures (TCFD) 31.7% dard, regulatory reporting or compli- Other standards or benchmarks 31.7% ance requirement for ESG?

Global Real Estate Sustainability Benchmark (GRESB) 24.4% GRI and SASB

International Business Council (IBC) 17.1% GRI

European Union (EU) Non-Financial Reporting Directive (pre-dated SFDR) 14.6% ISO

World Economic Forum (WEF) 14.6% GRI

Carbon Disclosure Standards Board (CDSB) 14.6% GRES CDP and TCFD Principles for Responsible Investment (PRI) 14.6% GRI International Accounting Standards Board (IASB) 12.2% ASTM International Integrated Reporting Council (IIRC) 9.8% GRI European Union’s Sustainable Finance Disclosure Regulation (new in 2021) 7.3% UNSDGs United Nations Environment Programme Finance Initiative (UNEP FI) 4.9% EPA Latin American Quality Institute 0.0% GRI Others listed include: ResponsibleSteel, ISI Envision, PEER, LEED, WELL, SEC Human Capital & Climate Disclosures, Energy Infrustructure Council, OECD Blue Dot Network, SBTi, CA Title 24 SASB

Source: EBJ 2021 Survey of ESG Advisory Services. Question was: Which standards or benchmarks have you used SBTi continued on facing page when conductingGlobal an ESG Standards advisory engagement, are or completedDriving analyzing Best or reporting Practices ESG performance, for a client? Global Standards Driving Best Practices in ESG

Source: Cardno; ESG Services presentation ESG Services

10 Strategic Information for a Changing Industry ESG ratings landscape Views on ESG ratings

Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

We focus on the E not the S or G. Most Deloitte Survey on ESG Ratings Quality & Improvements measures of E are lousy. We focus on quan- Factors determining rating quality Preferred changes and solutions over the next five years of ratings tifiable Scope I strategy and projects, and (% of respondents) (% of respondents) Analysis and evaluation of Scope II and Scope III emissions related measures and Greater engagement of rated Common usage by investors strategy. We also do evaluation of other 66 companies in evaluation process 28 non-emissions-based measures such as tox- icity, biodiversity, public health, etc. Disclosure of methodology 80 Better linkage to company financial performance 31 ISO, however not in its current state. Requires more comprehensive data gather- Experience of research team 80 Consolidation of ratings 44 ing, and 3rd party auditing. Focus on material issues SASB, however, even that is not com- 90 Greater focus on relevant/material issues 56 ESG ratings landscape pressive enough so it is likely to be a combination of standards for the foreseeable Quality of methodology Improved quality/disclosure of Views on ESG ratings 90 57 future methodology Credibility of data sources 95 Greater consistency/comparability across Programmatic systems tied to reliable 66 standards traceable to Gold Standard cri- rating methodologies Factors determining rating quality terion. Most have already been exploited Preferred changes and solutions over the next five years of ratings (% of respondents) with less discernable or unreliable criteria. (% of respondentAlmost alls) respondents agree that the credibility of data sources is the most important factor in More than sixty percent of respondents want to see greater From how the financial community, Greater engagement of rated . Common usage by investors 66 determining the quality of a rating, followed28 closely by consistency and comparability across ratings methodologies from a capital investment perspective, is companiesquality ofin evaluationthe methodology process and focus on material issues. looking at a business’ near-and long term Disclosure of methodology 80 Better linkage to company horizon forecast, TCFD will become in- financial performance 31 creasingly important. Additionally, the Source: Rate the Raters 2019: Expert Views on ESG Ratings Experience of research team expected launch of 80the International Consolidation of ratings © 2021. Deloitte Polska 44 17 Financial Reporting Standards (IFRS) Focus on material issues Foundation’s International Sustainability 90 Greater focus on relevant/material issues 56 Standard Board (ISSB) at COP26 in No- vember is a welcome effort to harmonize Quality of methodology 90 Improved quality/disclosure of disclosure and establish a consistent global methodology 57 sustainability reporting framework going Credibility of data sources forward. 95 Greater consistency/comparability across rating methodologies 66 It is company specific or in some cases Source: Deloitte; Rate the Raters 2019: Expert Views on ESG Ratings Almost all respondents agree that the credibilityindustry or sector specific. of data sources is the most important factor in More than sixty percent of respondents want to see greater determining the quality of a rating, followedYet closelyto be determined, by but needs a stan- ECconsistency Sustainable and comparabilityFinance Action across Plan ratings & EU methodologies Taxonomy . quality of the methodology and focus ondardized material set issues. of requirements with a consis- The European Commission’s Sustainable Finance Action Plan is intended to direct tent method of measurement. capital toward sustainable activities and prevent greenwashing. Its cornerstones, the EU Source: Rate the Raters 2019: Expert Views on ESG Ratings Taxonomy and Sustainable Finance Disclosure Regulation (SFDR), will subject invest- Any... as long as it becomes enfocable. ment firms, asset managers and other in-scope market participants to expanded dis- © 2021. Deloitte Polska GRI/CDP have the best starting point. 17 closure and reporting requirements starting in January 2022. The EU Taxonomy for GRI for annual metric disclosures and sustainable activities is a classification system established to clarify which investments are TCFD for risk evaluations. environmentally sustainable, in the context of the European Green Deal. Investments are judged by six objectives: climate change mitigation, climate change adaptation, the A tough question... But if you are not circular economy, pollution, effect on water, and biodiversity. part of the solution, you are a problem. On April 21, 2021, The European Commission adopted an new, ambitious and com- Source: EBJ 2021 Survey of ESG Advisory Services. prehensive package comprised of: The EU Taxonomy Climate Delegated Act makes it clearer which economic activities most contribute to meeting the EU’s environmental objectives; A Corporate Sustainability Reporting Directive (CSRD) to improve the flow of sustainability information in the corporate world; Six amending Delegated Acts on fiduciary duties, investment and insurance advice will ensure that financial firms include sustainability in their procedures and their investment advice to clients.

Strategic Information for a Changing Industry 11 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

proven that sustainable investing produces better returns in difficult times, ESG is IS ESG A FAD? EBJ ESG ADVISORY SERVICES here to stay. SURVEY RESPONDENTS WEIGH IN Disagree. More than ever before, ESG is finding it’s way deep into corporations, The EBJ 2021 Survey of ESG Advisory Services conducted in July 2021 included open-end- including rethinking of corporate purpose ed questions allowing respondents to provide more detail on their practices, standards, regula- and models to shift from shareholder pri- tory drivers and whether or not they considered ESG or the ESG movement as a fad. The follow- macy to stakeholder primacy. The Business ing pages include these responses mostly as they were entered and only lightly edited for clarity. Roundtable has taken a lead in this area EBJ Question: Some have observed that ESG may be a temporary phenomenon as a with the statement on corporate purpose market driver like Strategic Environmental Management, Corporate Social Respon- signed by 181 CEOs in 2019. sibility and Sustainability in the 1990s, 2000s and 2010s. Do you agree or disagree? Disagree. ESG is the next step in the What leads you to believe the ESG movement will have more significant and long- evolution of sustainability and key to our lasting impact on the environmental performance of corporations and other entities effort to combat climate change. ESG is and on the demand for environmental services in the 2020s? the mechanism through which we will I agree. I doubt it will have a lasting im- Is ESG is a Fad or a build a more sustainable world. pact. Agree - too many standards and no Temporary Phenomenon as coordination; Agree; Agree - temporary. Disagree - it has been a longstanding a Market Driver issue and has been developing more and

Agree. Who is really going to govern Agree more over the years. this and how are they going to enforce it. 17% Big data? AI? Satellite imagery to desktop Disagree. There are financial motivators dashboards? Well maybe you have some- through green bonds / green loans. Also, climate change is accelerating the demand thing there, and yes this could be a big op- Not Sure portunity for our industry. 11% for large, global companies to disclose a path forward. I do believe it is a temporary phenomenon being driven by social media and cur- Disagree. ESG has better performance rent political client and believe there will Disagree measures and may have a greater impact 72% be a regression to the mean. on corporate bottom line results. Source: Environmental Business Journal July 2021 Likely going to be temporary under the Survey of ESG Advisory Services Disagree. The timing of recent events current definition. will reinforce the need for sustainability in shift the environmental cost burden to all categories of business. Agree unless a uniform measurable others - especially spread amongst many, standard is consistently employed as sys- then it will, because it’s profitable and easy. Disagree, particularly as the financial temically contrived results are obvious benefits of engaging on ESG become more We disagree. These practices are more across many companies presently pursuing visible. than a movement. Investors, stockhold- such efforts. ers and stakeholders are only becoming Disagree. I think ESG is here to stay. Don’t know. Too soon to tell; Not sure. more and more sophisticated and taking The principles of ESG are not just envi- a healthy interest in what they purchase, ronmental. There is a human element to it It is more than SEM, CSR, CERES and who they purchase from, the impacts on and a commitment to being for people in sustainability yes... but it is really too soon our daily lives. We believe the trends will general. This is why I think ESG is going to tell how lasting the impact will be. It continue for more transparency, more dis- to stick around. will depend on the financial regulators to closures and greater alignment for what Disagree. The goals we are seeing clients a large degree, but the environmental in- companies (private and public) are sharing develop are clearly based in science and a dustry and the wider professional services with all their interested stakeholders. industry should have a significant role. larger consideration of planetary health. Disagree. There are many positive ben- Financial institutions are driving this Disagree, but it is just past the fad phase efits and features of ESG activities and re- and consumers are educated about it. It today. porting. helps consumers chose one product or Disagree. It is not a temporary phe- Disagree, investment markets are look- business over another. nomenon. But it requires taxes on emis- ing to make better, broader decisions, cli- Strongly Disagree -- The difference this sions and other externalities to have last- mate change is impacting business opera- time is the significant shift in institutional ing success because any time someone can tions more each year and the pandemic has 12 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

investor expectations. This trend combined Is ESG a Fad?: No Way Says Chris Kline, Global Senior Principal with the daily evidence of climate change, for Sustainability and ESG at Cardno social inequity, and global democratic/gov- I strongly disagree that ESG is a temporary phenomenon. I believe it is a once-in- ernance threats indicate to me that ESG a-generation, if not multi-generational, shift in the way we think about economics, will increasingly be the lens through which the environment and human’s role influencing both. Several factors inform my view. institutions are evaluated.

First, a broad, global, science-based consensus exists which recognizes that hu- More long lasting with tangible evi- man-caused climate change presents an existential threat to life as we know it and that dence of climate change in daily lives a broad, global, coordinated response will be necessary to address this fact. While we along with social unrest. These issues are are obviously still struggling with exactly how to respond, it is clear that the “E” part broadening out to affect society/customers of ESG is integral to addressing this fact. where they live; not hypothetical or “some- place else”. Second, the pandemic and recent social upheavals have helped reveal fundamental inequities which exist in communities throughout the world. A consensus is develop- Long-term. Several firms have been ing that businesses, NGO’s, and governments must collaborate in order to address doing this type of work but it hasn’t been these inequities in order to reduce conflict, improve harmony, and advance oppor- classified as ESG. tunities for the global community. Again, we don’t have all of the answers to these The advance of technology and the abil- challenges, but in my view, the “S” aspects of ESG will be foundational to effective ity for consumers and end-users to inves- responses. tigate entities to uncover whether or not Third is the fundamental importance of trust and credibility in the actions taken they are corporately responsible is some- by institutions, particularly governments, multi-national corporations, and interna- thing that is growing with each generation tional NGOs to address the “E” and “S” challenges described above. This is where and will not slow down. the “G” factors integrated into ESG frameworks become so important. Transparency, Disagree; the ESG aspects and impacts equity, and fairness must be integrated into our environmental and social solutions. will gain traction and become a core ele- Finally, something I learned during my eight years as a Senate oversight committee ment of our business, though not necessar- staffer and reinforced when I served for eight years on a local public school board is ily a large revenue driver. “follow the money.” Public and private investment on an unprecedented scale is lin- ESG is here to stay and become more ing up behind ESG principles. This situation, combined with the three observations stringent with reporting requirements. described above, make me believe that ESG is not some “shiny new object” which will be quickly cast aside for the next new thing. Now more than ever, there is a need for Because climate change is going to credible, science-based professionals to provide ideas, analysis and solutions to address force large scale migration and limitations these challenges. The opportunities which already exist for the environmental consult- to natural resources. It will be a security ing industry will only grow. I remain quite optimistic about the future. and military threat if we do not.

Disagree. It is fundamental now. Early Days for ESG says Jan Walstrom, Global Environmental Market Director at Jacobs Disagree. The diversity of ESG topics and its wide applicability to all sectors of the economy. Triple bottom line has per- This is early days for ESG. For the environmental industry, there will manently replaced profit only. always be solutions we deliver in this space and it’s important to The principles behind ESG, and the note that ESG, which is being driven by the financial community, is transparency around each pillar of these principles will never go away. Perhaps ESG not supplanting sustainability. In fact, the UN SDGs have been and will be a permanent part of corporate and will continue to drive the global agenda going forward for decades institutional lexicon... or there may be an even more appropriate term or acronym to come. We, as an industry, need to view this as a complementary befitting the climate lens needed to be ap- lens -- not something that is in conflict. While the management plied to every entity of significance in the consultants are leading the C-suite conversations at present, actual global economy. progress will require the resources and talent of our industry to The need for safe and sustainable environmental conditions never goes away. drive implementation and meaningful progress. Source: EBJ 2021 Survey of ESG Advisory Services.

Strategic Information for a Changing Industry 13 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

tip of the spear. The others mentioned are Climate change is a major contributor also key drivers. Perhaps we should think to the ESG movement. Carbon account- HOW BIG IS of the drivers as the pillars of ESG. ing is becoming de facto requirements for THE ‘E’ IN ESG? publicly-traded companies and will be rip- Climate change is a driving factor that pling through the global supply chain over RESPONDENTS RATE is helping to illustrate the social problems, the next few years. however the Diversity, Inclusion and Eq- THE SIGNIFICANCE OF uity are self-driven. Major factor - especially with more CARBON & CLIMATE frequent and destructive climate events It is probably the most important and occurring throughout the US and world. CHANGE TO ESG most quantifiable until it gets to Scope II Very tangible. and Scope III emissions. Then it stinks and EBJ ESG Survey Question: In your needs some serious work to improve. It is significant. Balancing ESG and so- opinion, how significant is climate cial justice with driving economic growth change to driving momentum behind It is significant, but it also the culmina- and CV-19 recovery will be key to the suc- the ESG movement, or is it merely one tion of demand for transparency - includ- cess of the Biden administration. of several factors along with social jus- ing of social inequalities - and the backlash tice, racism, gender inequality, wealth against greenwashing that is driving stake- Climate change will exacerbate the oth- concentration and others? And how does holder pressure to respond. er issues mentioned above and will gradu- this guide your planning business propo- ally increase inequality. sitions around ESG in the 2020s? I believe that climate change is “in addition to” other listed factors for ESG. We All elements are important. Climate It is one of the many factors that is driv- are in the initial stages of trying to figure change adaptation and resilience are sig- ing the ESG movement. Collectively they out how it fits with our current service nificant drivers of the environmental com- are all powerful drivers and involve a va- lines, clients and markets. ponent of ESG. The social and governance riety of stakeholders. We are growing our aspects are front and center in all planning. team to be well versed in all of these areas. VERY - E is the valued driver for most The subject matter expertise is important interest and tracking. Climate change is the primary driver to being able to confidently deliver advi- behind the ESG reporting, behind letter E. Climate change is a significant driver sory and implementation services to our behind the ESG movement and is as im- The most significant; social justice and clients. portant as other social factors listed, at the other issues cannot be addressed with- It is one of top three driving forces; least in the USA but perhaps not elsewhere out climate security. Phasing out of any One of several factors. Very important. globally. fossil fuel work.

Significant. Very significant. While all other factors are impactful, One of several factors. changing climate is felt by everyone with- Climate Change is one of several driv- out exception. Likely will remain a concern. ers but it is perhaps the most significant Significant; probably the most signifi- driver because it has broader environmen- It is perhaps the most quantifiable mea- cant. tal, social and governance issues to it, so it sure for change, regardless of need or application, and as such can be used to ad- touches all aspects of a business. It is im- Climate Change is of paramount im- dress other factors noted. portant to help companies improve their portance and compounds all other issues. operations to have less impact on climate Climate change is the highest priority As a consultancy, we are focusing on pro- change and to help them be prepared for issue facing humanity and currently domi- viding E-related services. the already changing climate the operate nates the environmental, social and gover- in. Climate change is the primary driver nance (ESG) conversation as a macro risk for ESG. With all the recent attention on diver- factor... From an internal and external per- sity, equity and inclusion, climate change spective, inclusion in all of its forms and Central. has become one of several factors. How- the pandemic have been and continue to ever, climate change or “climate collapse” be at forefront of our thinking and actions. Very significant. remains the most significant driver for I think climate change pales in com- I doubt the sincerity of what you call a many utilities and businesses to take ac- parison to the other ESG drivers. movement.... didn’t you just call it a fad in tion. With recent events, urgency around the last question? climate change response will only grow. One of many factors. Makes approach more brood based. Source: EBJ 2021 Survey of ESG Advisory Services Climate change is one of the key drivers behind the ESG movement -- perhaps the 14 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

support; Built asset resiliency, particularly focused on climate risk; Natural resources WIDE VARIETY OF EARLY STAGE ESG PRACTICES assessment, management, and restoration; Modern Slavery support; Supply chain EBJ ESG Survey Question: Describe your ESG practice, your specialties and the ap- evaluation; GHG analysis, benchmarking, proximate percentages of qualifications and experience of your practice and project and target setting. team by technical, professional or business disciplines. We specialize in comprehensive plan- We are highly integrated team and conduct everything from ESG due diligence (DD), ning around greenhouse gas inventories, to Sustainability Management Systems, Gap Analysis, to Reporting and Disclosure - and climate resilience planning and sustain- policy writing, performance and guideline development, and overall ESG and Sustain- ability planning for State/local govern- ability strategy development across the business’ enterprises. Our disciplines range from ment, public transit agencies, institutions attorneys, to MBAs, to environmental, geology, mining and engineering. such as health care and higher education.

Expertise covers range of ESG and services are often advisory in nature in assisting We have a small concentration of sub- companies develop and evaluate performance towards goals. ject matter experts and practitioners with experience in materiality assessment, GHG ESG Investing - 25%; ESG Strategy - 30%; Climate Change - 20%; Reporting & emissions, carbon footprint analysis, vol- Disclosure - 25% untary reporting, stakeholder engagement, It occurs as an adjunct to our EHS compliance practice. zero waste, etc. experience with third party ESG rating systems GRI, SASB, and best Our sustainability services groups within the firm provide full service ESG reporting practice consultation. and sustainability/resilience consulting. As an infrastructure services consultant we integrate these services into projects as allowed by the clients. Our services include: Strategy Develop- ment, including Materiality Assessments Media, government and investor relations for clean energy, environment technologies and Benchmarking; Reporting and Verifi- and sustainable infrastructure; 100 percent; project team fully professional/business dis- cation/Assurance (GRI, CDP, SASB, etc.); ciplines. Greenhouse Gas Mitigation and Climate Strategies. and ESG Risk Screening Our ESG practice is focused on the collection and maintenance of accurate data and creating the individual narrative describing a client’s particular and unique approach to Clarifying an internal ESG vision, mis- developing and achieving ESG goals. sion statement, and priorities; Identifying investors’ motivations and expectations As a contractor, our focus is on providing the services tied to desired outcomes such as during fundraising; Creating an ESG pol- sustainable restoration and carbon offset systems. icy and implementation framework; Con- As a long-standing environmental industry leader, we see ESG as a natural and com- structing a customized ESG action plan plementary extension of the sustainable solutions we’ve been providing our clients for to fit present and future goals; Defining decades. Our team is comprised of strategic advisors, economists, sociologists, technolo- ESG Key Performance Indicators (KPIs) gists, environmental scientists, water scientists, data scientists/analysts, urban planners, to measure the ESG performance across sustainability experts, carbon/GHG experts, energy consultants, biologists/ecologists, the portfolio; Developing industry trend waste management and circular economy professionals, healthcare and life sciences profes- reviews and risk assessments; and provid- sionals, professional engineers across all disciplines, ESG project and program managers, ing tailored ESG training. and more. ESG SaaS Software. AB32 Verification We have experience developing ESG scorecards, tracking, measuring carbon sequestra- services. tion and reduction, wildlife habitat services and other triple benefit ESG services. MS, GHG Accounting, Reporting, We support private equity investors, corporate boards, and investment fund manag- SUS Supply Chain, ESG Strategy, Carbon ers with a comprehensive suite of ESG services focusing on risk management and due Reduction 100%. diligence. Our strengths begin with our world class team of >4,000 environmental sci- We’re focusing on measurable impact; entists, engineers, public and environmental health specialists, and ESG policy experts. design strategy. Our team works together to apply the best physical and health sciences thinking to ESG challenges and opportunities which boards and investors face. We help prioritize and im- Under development; Opportunistic plement ESG management actions in order to meet stakeholder expectations and align only; Under development with recognized global ESG frameworks. Specifically, we offer the following ESG services: Governance and policy support to integrate sustainability into corporate culture and busi- Source: EBJ 2021 Survey of ESG Advisory Services. ness operations; Environmental systems analysis; Health risk management assessment and

Strategic Information for a Changing Industry 15 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 McKinsey Model on Quantity of Negative Emissions Required Regulated & Voluntary to Reach 1.5-Degree Global Warming Target Carbon Markets Accelerate n regulated markets, 2021 marks a new Iphase for the EU ETS, focused on establishing larger reduction goals and adjusting the number of allowances available in the Market Stability Reserve. With long-term goals to reach net-zero carbon emissions by 2050, carbon prices will continue to rise and carbon allowances are being seen as an increasingly valuable investment.

The Ecosystem Marketplace (EM), a non-profit organization that publishes The State of Voluntary Carbon Markets, said that despite expectations that industries such as airlines would roll back their carbon offset purchases, overall, the corporate Source: McKinsey & Company, ‘A blueprint for scaling voluntary carbon markets to meet the climate chal- demand for carbon offsets is continuing lenge’; Derived from Global Carbon Project’s Global Carbon Budget 2018, IPCC and McKinsey analysis to increase. The final installment of their 2020 report released in May 2021 shows McKinsey & Company’s ‘Blueprint for scaling voluntary carbon markets to meet that 21% of the world’s largest 2,000 pub- the climate challenge’ report contends the emissions-reduction pathway to a 1.5-degree lic companies have set net-zero commit- warming target effectively requires “negative emissions,” which are achieved by removing ments. greenhouse gases from the atmosphere, many of which will be driven by offsets or carbon credits. The Taskforce on Scaling Voluntary Carbon Markets (TSVCM), sponsored by Carbon prices continue to vary widely the Institute of International Finance (IIF) with knowledge support from McKinsey and based on project type, project provider, others, estimates that demand for carbon credits could increase by a factor of 15 or more and project location. Because the volun- by 2030, and by a factor of up to 100 by 2050. Overall, the market for carbon credits tary carbon market varies only based on could be worth at least $50 billion in 2030. voluntary buyers and voluntary market credits cannot be used in compliance mar- Purchasing carbon credits is one way for a company to address emissions it is unable kets, prices in the voluntary market tend to eliminate. Carbon credits are certificates representing quantities of greenhouse gases to be cheaper overall. Carbon prices in the that have been kept out of the air or removed from it. While carbon credits have been in voluntary market have not changed much use for decades, the voluntary market for carbon credits has grown significantly in recent in 2020-2021, but they are expected to rise years. McKinsey estimates that in 2020, buyers retired carbon credits for some 95 million as demand increases. Most of the projects tons of carbon-dioxide equivalent (MtCO2e), which would be more than twice as much posted on the Gold Standard Marketplace as in 2017. are between $10 and $30 per tonne with a high of $47 per tonne. The cost of spe- As efforts to decarbonize the global economy increase, demand for voluntary carbon cific types of projects has changed, how- credits should continue to rise. Based on stated demand for carbon credits, demand pro- ever as forestry project carbon offsets has jections from experts surveyed by the TSVCM, and the volume of negative emissions increased 2-3% or more in price in 2021. needed to reduce emissions in line with the 1.5-degree warming goal. Annual global demand for carbon credits could reach up to 1.5 to 2.0 gigatons of carbon dioxide by 2030 EM notes that attention is being paid (1 GtCO2 is more than 10 times the 2020 credit demand of less than 100 megatons) and more to the quality of the projects and up to 7 to 13 GtCO2 by 2050. considering their qualifying attributes, such as standard, project type, project size, Depending on different price scenarios and their underlying drivers, the market size location, community involvement, and in 2030 could be between $5 billion and $30 billion at the low end and more than $50 other co-benefits. Participating corporate billion at the high end. Analysis indicates that 2030 demand could be matched by the buyers are increasingly interested in show- potential annual supply of carbon credits of 8 to 12 GtCO2 per year — some credits with casing the high quality and effectiveness of potential to represent ‘financable’ recurring revenue streams. Carbon credits are expected their project investments. Gold Standard to come from four main categories: avoided nature loss (including stopping deforesta- managers note that 2021 should see some tion); nature-based sequestration, such as reforestation, other ecosystems services or natu- major changes in the voluntary carbon ral infrastructure; avoidance or reduction of emissions such as methane from landfills; and market and potentially a more formal es- technology-based removal of carbon dioxide from the atmosphere.  tablishment of regulations. 

16 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

crease going forward. That is why sustainable, nature-based solutions like the salt- EMERGING OPPORTUNITIES IN THE CARBON marsh projects described above are critical ECONOMY ATTRACT CONSULTING FIRMS to meeting that demand and the world’s climate goals. EBJ: Would many project management companies have the risk tolerance to invest EBJ: Do you expect that the tech giants in carbon positive projects that could generate recurring economic value for years, and major brands in CPG, pharma, or as an example does Jacobs prefer to do this as a project a client? airlines and others will outsource their Jan Walstrom, Global Environmental Market Director, Jacobs: Jacobs currently has carbon neutrality function? With the two related projects where we’re partnering to develop scientific and revenue models and likely variety of services project design a certification scheme for UK projects wanting to attract private investment by selling & development to operation & main- companies the carbon benefits that will result from restoring saltmarshes. Coastal wetland tenance to offset buys to communica- habitats – through build-up of sediment and vegetation – trap and bury carbon at a greater tions, who is best positioned to do this rate, per area, than terrestrial habitats such as forests or peatlands. in an integrated fashion? EBJ: Do you offer acquisition services for power purchase agreements in renewables Walstrom: The carbon offsets market or carbon offsets in various forms, and how do you view the sustainability and sup- is full of complexity, as recent news shows ply of voluntary carbon offsets in order to achieve corporate or institutional carbon noting the work being done by the Task- neutrality goals? force on Scaling Voluntary Carbon Mar- kets. The finance community seems best Walstrom: We are advising clients on the acquisition of bundled or unbundled renew- positioned to do this in an integrated fash- able energy credits and carbon offsets, and in a few instances making the purchase on ion, and the big management consulting behalf of the client. On the question of supply and demand, there has been unprecedented firms are/will be providing advisory to the demand in 2021 for carbon offsets and all signals are that demand will continue to in- standard setting bodies and the various industry sectors.

Opportunity in Helping Clients Navigate the Carbon Economy With domain expertise across sectors, EBJ: There is a lot of work going on in planning and strategy, but not yet as the Environmental Industry must lean much in execution of the strategy related to ESG goals and carbon neutrality into an expanded role of working with our in particular. Emissions reduction and your renewable energy practice yes, but clients to set climate targets and decarbon- what about developing carbon positive projects or natural assets like forest pres- ization strategies AND work with carbon ervation or regeneration in order to create marketable carbon credits. Have you offset project developers on carbon cap- proposed this for any of your major clients seeking carbon neutrality? ture and storage strategies and initiatives. We’re already doing this, but need to ramp Chris Kline, Global Senior Principal for Sustainability and ESG, Cardno: We up capabilities to meet market demand. are seeing interest and opportunity helping clients navigate the evolving carbon market and economy. Some common attributes of these clients are: 1) they are responsible EBJ: What is your reaction to the recent for managing large amounts of land (tens of thousands of acres or more) for long headline ‘J.P. Morgan Asset Manage- amounts of time (decades or more); 2) they have the financial wherewithal to invest ment Acquires Campbell Global, a in longer term carbon mitigation projects providing there is an attractive ROI; 3) they Leading Player in Forest Management need sound science-based and economic advice they trust in order to make decisions. and Timberland Investing’. Cardno is responding to these needs with our excellent team of natural resource econ- Walstrom: I see this as a smart move omists coupled with our deep, global team of environmental scientists. By combining for J.P. Morgan from a carbon offsets per- these disciplines we are able to effectively provide solutions. This type of work is some spective. According to GreenBiz, “The cost of the most interesting and exciting work in which we are currently engaged. of offsetting corporate carbon emissions Additionally, Cardno’s team includes more than 200 team members broadly en- is expected to surge tenfold over the next gaged in restoration ecology. As just one example, every year this team plants hun- decade as growing numbers of businesses dreds of thousands of native plants, trees, and shrubs on behalf of our clients. The adopt net zero targets, with carbon credit carbon sequestered by this work is not inconsequential. We also operate one of the prices tipped to reach between $20 and largest native plant nurseries in the Midwest. In our 2020 Science and Environment $50 a metric ton of CO2 by 2030.” It also Division Sustainability Plan we calculated the amount of carbon sequestered as a re- burnishes their ESG brand and gets them sult 19 years of our nursery’s sales of native seed and live plant material. We estimate out front in the banking industry in regard this material is now sequestering more than 229,000 metric tons of carbon. We are to financing the transition to a low-carbon  proud of this positive contribution and look forward to many more years of “growth” economy. with our nursery!

Strategic Information for a Changing Industry 17 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

rithmic approach that combines big data and ESG metrics to assess the performance ANALYSTS AND EXECUTIVES AGREE THAT of over 8,000 companies worldwide. THE 2020s IS THE ‘DECADE OF ESG’ Sustainability transformation must be both technology-driven and linked The material below is adapted from multiple articles with permission from Environment to value to be successful. Creating share- Analyst Ltd., a UK-based market intelligence service specializing in the environmental consul- holder value, while also tackling some of tancy industry, or what EA is calling the E&S or environmental and sustainability consulting the world’s greatest challenges, requires industry. Environmental Business Journal collaborated with Environment Analyst on a May rewiring the global economy with new lev- 2021 session focused on the North American Market prior to the Environment Analyst Global els of data, insights and action, said Peter Business Summit 2021 in June, where ESG emerged as a major theme. Information on sub- Lacy, chief responsibility officer and global scriptions to EA material is available at environment-analyst.com. sustainability services lead at Accenture. S-Ray data products and services are used uring Environment Analyst’s Global Although EA contends that a ‘signifi- by financial institutions, investors, corpo- DBusiness Summit 2021, consensus on cant chunk of the current ESG advisory rations and consultants alike. Accenture key opportunities and challenges emerged work’ is being ‘mopped up’ by the Big 4 is drawing on Arabesque S-Ray›s big data that are likely to shape demand for envi- auditing and Big 3 management consul- and machine learning model capabilities ronmental and sustainability (E&S) con- tancies (Deloitte, KPMG, PwC and EY; that utilise more than four million ESG sulting and advisory services worldwide and McKinsey, Bain and BCG), environ- data points daily from over 30,000 sources. in the 2020s. EA says the resurgent envi- mental consultants need to assert them- ronmental agenda is providing the oper- selves in this space. The Accenture-Arabesque partnership ating landscape for a renaissance in E&S mirrors similar deals made by Boston consultancy, with global E&S revenue at Firms often seen as engineering, design, Consulting Group (BCG) and Bain & $39 billion and 5-6% growth in the fore- compliance and project management firms Company, and signals a growing trend in cast. E&S revenues saw growth of 5.5% need to be bold and highlight their deep the professional services sector to boost en- in 2019, falling to 0.6% in 2020 due to domain capabilities and industry knowl- vironmental, social and governance (ESG) COVID. EA says ESG and sustainability edge. The management consultancies’ of- credentials. will be key differentiators in winning work ten heavy commercial focus can be coun- going forward. ESG and sustainability also tered by environmental firms’ ability to In late 2020, BCG formed a collabora- offer critical differentiation for firms as demonstrate a more integrated approach tion with Italian utility Eni and Google employers to help retain and attract talent incorporating ESG metrics and connect- Cloud to launch a sustainability data from new generations of scientists, engi- ing to long-term goal and target achieve- platform specifically focused on helping neers and financiers. ment with project execution. companies on their journey of energy transition. Bain has made a strategic invest- EA sees long-term demand for ESG EA says that environmental firms can ment in the French-based sustainability and decarbonization services. The ESG be key in averting perceptions of green- ratings provider EcoVadis and plans to in- imperative is broad in scope allowing space washing, and that leading on sustainabil- tegrate the ratings in its corporate strategy, for different business models. Policy driv- ity-driven solutions is already a race, and supply chain and procurement offerings. ers in the EU, UK, US and globally are that “multi-functional agility may be what London-headquartered environmental & shining the spotlight on ESG, supported sets the winning service providers apart.” sustainability consultancy ERM has been by green investment funds, bonds and working with EcoVadis to provide guid- loans that are linked to tangible ESG per- MANAGEMENT CONSULTANTS ance and training to help companies man- formance measures. BOOST ESG CREDENTIALS age their sustainability risks and enhance In April 2021, Accenture was the lat- their ESG rating scores. (In May 2021 est professional services firm to invest in an KKR acquired a majority stake in ERM.) For nearly two decades, the Arabesque ESG data platform in deal with In March 2021, McKinsey & Co. add- S-Ray majority of companies have . Accenture said its strategic invested the ‘Greenness of stimulus’ index spe- ment in Arabesque S-Ray will strengthen viewed sustainability either cialist Vivid Economics to its portfolio, the technology and management consult- an acquisition that includes Vivid’s Planet- as a form of communications ing major’s sustainability and analytics ca- rics climate analytics suite. Moves such as or as a ‘check-the-box’ pabilities to enable clients to seek growth these indicate the changing nature of sus- from sustainability. Based in Germany, tainability within each consultancy’s client compliance exercise. Arabesque S-Ray is a global provider of en- businesses and also the growing crossover vironmental, social, and governance (ESG) between consulting and data analytics. data and insights, with a quantitative algo-

18 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

A BRIEF HISTORY OF SUSTAINABILITY McKinsey Acquires Sustainability Firm Vivid Economics n March 2021, underlining the growing importance and value of climate risk ana- For nearly two decades, the majority lytics capability, global professional services firmMcKinsey & Company bought of companies have viewed sustainability I Vivid Economics, a UK-headquartered, sustainability-focused, strategic economics either as a form of communications or as consultancy. The acquisition added 130 staff to McKinsey in the UK, the US and a ‘check-the-box’ compliance exercise. Sus- the Netherlands and incorporates Vivid Economics’ climate analytics suite Planet- tainability was a bolted on function that rics, which helps financial institutions to quantify, report, and manage the climate was tasked with making incremental per- and nature-related risks of their assets and to respond to critical structural changes. formance improvements. McKinsey says the addition of Vivid Economics and Planetrics accelerates its sustain- The 2020s is very different as an increas- ability, risk and resilience capabilities and helps its clients generate detailed company ing number of stakeholders, notably inves- and business models of the impacts of decarbonisation and responses to climate risk. tors, customers and regulators, are calling KPMG Makes Key ESG Appointment upon businesses to take the lead on addressing environmental and social issues by n June 2021, KPMG US appointed Rob Fisher as head of its ESG solutions ini- helping to achieve the outcomes of the UN Itiative, KPMG IMPACT. The initiative will integrate ESG into operations and Sustainable Development Goals (SDGs) investments so that they address climate change and social and governance objectives, and the Paris climate agreement. Together, and is designed to match with the UN’s SDGs and ESG metrics developed by the these two international frameworks have World Economic Forum. Fisher is a partner at KPMG, and has been with the firm established the regulatory agenda for busi- for more than 20 years. In addition to leading KPMG IMPACT, he will serve as ness that will only be intensified as a result service line leader for KPMG’s risk assurance practice. of the climate emergency movement, the BCG Launches Global Climate & Sustainability Center post-COVID recovery, COP26, and the Biden administration which has identified n March 2021, Boston Consulting Group (BCG) launched of the BCG Center climate change as a key priority. Ifor Climate & Sustainability, marking an expansion of the firm’s capabilities in partnering with businesses and governments to help them act on their sustainability Perhaps, serving as a dress rehearsal for commitments and decarbonization efforts. BCG’s Center for Climate Action brings a climate catastrophe, the global pandemic together 550 of the firm’s experts covering the full range of sustainability topics, is closing the door on business-as-usual ap- including biodiversity, circular economy, decarbonization, sustainable agriculture, proaches by exposing, to all, the vulner- transition financing, water management, and other ESG topics. The move follows abilities of global supply chains. Moreover, BCG’s launch of its own sustainability commitments in September 2020, including it has shifted investor focus towards ESG a goal to become climate neutral by 2030, and climate positive afterwards. BCG also data in decision making. Sustainability’s announced commitments of $400 million over ten years aimed at enabling its teams next frontier goes far beyond the com- to drive climate and environmental impact across governments, industries, NGOs, munication of carbon emissions reduction and coalitions in order to advance global progress toward the net-zero ambition. in cumbersome reports and demands the ‘operationalisation’ of sustainable strategies and purpose. For most businesses, this is a completely different proposition and de- DuPont Sustainable Solutions Acquires ESG Specialist KKS mands accurate data to better track, mea- n July 2021, DuPont Sustainable Solutions, a Swiss-headquartered global safe- sure, and act on an ever-increasing range Ity and risk management acquired UK ESG consultancy KKS Advisors. Davide of sustainability initiatives. Thus, by tak- Vassallo, chief executive of DSS, said that the move would combine his company’s ing steps to bolster their ESG credentials, heritage and expertise in risk, data analytics and digital technology with the insights, consulting firms can then help their clients knowledge, and strategy of KKS Advisors. In 2019, DSS was spun out from its for- move from a mindset of ambition to ac- mer parent firm, chemicals multinational DuPont, as an independent consulting tion.  business, having been bought out by the existing management and supported by Swiss private equity investor Gyrus Capital. KKS brings to DSS a team of experienced consultants, including leading ESG academic, George Serafeim, a professor of ESG goes beyond the business administration at Harvard Business School. Serafeim said: “KKS Advisors communication of carbon looks forward to working with DSS to help its clients find the value of incorporating ESG into their business models, to contribute to a more sustainable future.” KKS emissions reduction... it demands Advisors is a specialist in impact investing and sustainability strategy with offices in the ‘operationalisation’ of London, Boston and Athens. The addition of KKS’s consultants to DSS means it now has more than 1,000 full-service employees. KKS Advisors has retained its name sustainable strategy. and brand after the acquisition.

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by innovating and reinventing themselves around sustainable development will DELOITTE SAYS CLIMATE IS A ‘BUSINESS open new opportunities that enable them EMERGENCY’... BUT ALSO A BIG OPPORTUNITY to compete, grow and thrive in the ‘next normal’,” suggests Van Caeneghem. “We Adapted by EBJ from an article by Jonathan Ballantine of Environment Analyst Ltd. have helped companies to counteract climate risk by building actionable transition eloitte is a leading global provider of audit and assurance, consulting, financial advisory, strategies based on decarbonisation mod- Drisk advisory, and tax services. During its 175-year history, the London-headquartered els that exceed policy requirements now company has grown to become one of the leading professional services organisations in the world, and are resilient for a carbon-zero future,” currently employing around 330,000 people across more than 150 countries, with revenues in states Van Caeneghem. “We treat climate excess of $47 billion in 2020. challenge as a business opportunity to re- write the playbook and succeed.” Deloitte has launched the WorldClimate initiative - a commitment to be net zero by 2030; the WorldClass initiative - a global effort to improve 100 million people’s futures by 2030; and €1 BILLION BUSINESS MODEL the ALL IN strategy - a commitment to advancing diversity and inclusion. Recently appointed Van Caeneghem is extremely optimistic global climate & sustainability leader Marc Van Caeneghem, based in Paris, shared with En- about the future of the climate and sus- vironment Analyst how the practice area has evolved, and his insights on how the market will tainability practice area, and believes that play out during the coming decade of action. by 2025 it will be responsible for generat- Spearheading a growing 1,000-strong global team working as part of the Deloitte Climate ing revenues in excess of €1bn ($1.2bn). & Sustainability Network, Van Caeneghem’s role is to drive the continued elevation of these Currently, these services generate revenues services in all business areas and geographies and to further embed sustainability across the of over €100m ($122m), but Van Cae- wider organisation. Deloitte has been turning environmental, social and governance (ESG) neghem is adamant these investments and risks into competitive advantages for its clients for more than 20 years - from climate strategy, activities have a multiplier effect (of 3-4x) new business models, creating transparent and ethical supply chains, to performance measure- across the Deloitte group, resulting in total ment and assurance. revenues of up to €400m. He is positive about the outlook of the sustainability ad- The Oxford Word of the Year is a word “Our entire system needs to change visory market for a number of reasons, but or expression shown through usage to re- and no one knows exactly what to do but most notably due to the shifting nature flect the public mood. In 2019, the expres- that is exactly what happens when there is of sustainability consulting from exper- sion was ‘climate emergency’, a reflection an emergency. It forces you to find solu- tise to transformation. As Van Caeneghem of heightened public awareness of climate tions…you find a way for capital, for co- succinctly exclaims “sustainability is strat- change which led to governments around operation, for innovation. The pandemic egy... Business leadership and success will the world - including the UK, France and shows us how emergencies mobilise ac- be directly linked to the ability to build Japan - to make climate emergency decla- tion.” Just like the coronavirus crisis, the modern, responsible and resilient business rations. New York became the largest city climate emergency is real and poses major models. In short, responsible action is now in the world to declare as such, with the risks to business. In addition to experienc- at the core of competitiveness,” he says, cit- city’s website announcing a “resolution de- ing physical risks, companies will face risks ing a client case study, that of integrated claring a climate emergency and calling for related to extreme weather events and in- infrastructure services provider Downer in an immediate emergency mobilisation to creasing policy, legal, market and techno- Australia, which Deloitte has helped re- restore a safe climate”. We also saw various logical risks around carbon taxes, climate shape its core purpose with sustainability industry and business coalitions declaring law, export tariffs, and disruptive low-car- as a differentiator. climate and/or biodiversity emergencies. bon technologies. The climate and sustainability practice According to Van Caeneghem, post- “It is abundantly clear that questions is now seen internally as a strategic partner pandemic there is a need to take this con- like these are no longer the realm of the and is increasingly playing an active role cept a step further: “Today, it’s no longer EHS or CSR department; they belong in within Deloitte’s five key business areas. relevant to just speak of a climate emergen- the executive suite, because - as the pan- “This is now a two-way street - our col- cy, we have to talk of a business emergency, demic has shown - sustainability has be- leagues in tax, supply chain or IT need our we have to talk of a business emergency as come a business imperative for CEOs, expertise, and conversely we need theirs,” companies all around the world are already CFOs and functional heads,” Van Cae- said Van Caeneghem. “A perfect win-win, facing increasing damages and exponential neghem says. The pandemic offers a unique for us, for them, and most importantly for pressure for change, whether it’s from con- opportunity for the world to rebuild the our clients.” sumer activism, increasing regulation, the foundation of the economy, and pivot to- need for improved operational resiliency, wards a low-carbon, circular-based econo- However, Deloitte is not resting on or meeting climate targets. my. “Companies that embrace this priority their laurels and remains committed to

20 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

developing the capabilities of the core bank told me, “My stuff went from being sustainability team across all geographies, slotted into the last three minutes of the continuously improving internal relation- An ESG Learning Journey meeting to being agenda item No. 1…. It ships, and engaging in new forms of col- wasn’t a gradual shift.” laboration with a diverse ecosystem of ex- Adapted by EBJ from GreenBiz.com, by Grant Harrison, Green Finance & ESG ternal partners. This is the very backbone ESG in the family office: ESG tends Analyst, GreenBiz Group of the Big 4 firm’s client service offering.  to focus more on pension funds, insurance companies, endowments, sovereign wealth ou can’t help but be relatively new to This article was adapted by EBJ from part of EA’s funds and foundations, but don’t ignore ESG and sustainable finance. The field Insight series at environment-analyst.com Y the family office. For a sense of scale, the is dynamic, full of potential for massive 20 largest family offices in North America impact and exceedingly confusing for most own $750 billion of assets, a figure be- of the professionals in it. Mike Wallace, a Blackstone Acquires ESG Data tween the assets owned by China Invest- partner at the consultancy ERM, has spent Specialist Sphera ment Corporation and the National Pen- decades advising corporations, nonprofits sion Fund of South Korea, the third- and n July 2021, global investment man- and governments on the development and fourth-largest global asset owners. Iagement house Blackstone acquired implementation of environmental strat- Sphera a leading provider of environmen- egy, says shifting the power of the capital As Erika Karp, chief impact officer of tal, social and governance (ESG) software, markets toward sustainable outcomes takes Pathstone, explained, family offices’ rela- data, and consulting services, from Gen- persistence and patience. In Wallace’s ver- tionship to ESG is interesting for a num- star Capital for $1.4 billion. Founded in sion of “Groundhog Day” he said “I’m tell- ber of reasons, but largely because the de- 2016, Sphera (Chicago) has 1,000 experts ing the same story each day. But there’s al- cision-making process behind how those from around the world, working with or- ways a new audience, always someone new assets are managed is directly tied to the ganisations to help them “surface, manage, who finally gets it… The [California] De- values of an individual or family. They are and mitigate ESG risk” in the areas of EHS partment of General Services has been ana- driven by a much more relatable decision- & sustainability, operational risk manage- lyzing their footprint. Down the hall from making and engagement process than the ment and product stewardship. them are CalPERS and CalSTRS, buying massive, complex institutions entrusted shares of stock and walking the talk. The Sphera has more than 3,000 clients with 401(k) funds. Karp said “ESG is ev- people who buy vehicles, tires, asphalt ... in more than 100 countries. Eli Nagler, erything and nothing at the same time. they’re now thinking about carbon. It’s senior managing director at Blackstone, The problem with ESG is that the no- crazy what’s going to break open here. I’ve said: “The increasing importance of en- menclature is still not resolved. There is no never seen anything like this.” vironmental, social, governance issues to such thing as ESG investing, but there is of course such a thing as ESG analysis.” businesses globally is a key thematic in- Bob Eccles, visiting professor of man- vesting focus for Blackstone. Sphera has agement practice at Oxford University Karp suggests looking up the demo- established itself as a market leader in spent an illustrious career working to dis- graphic composition of the boards of the ESG software and solutions space, and mantle the entrenched myths that have trustees for some giant endowments and we’re excited to partner… and to accelerate been the bane of environmental profes- pension funds. Issues that involve humans their impressive growth trajectory.” sionals says the positive performance of are complex, but out of complexities, sim- ESG assets over this tumultuous year has Paul Marushka, president and CEO plicities can emerge. I think I got what the revealed the ideological and illogical roots of Sphera, said: “We are excited to part- exercise was meant to show, the implica- of these myths and just how deep they run. ner with Blackstone on this next stage of tion being that they do not reflect the full- “Situations like with [SEC commissioner] our journey as we drive our vision of in- ness of humanity. Diversification shouldn’t Hester Peirce… they’re locked into an ide- tegrated ESG cloud-based software, data be limited to one’s portfolio. ological position but then accuse people and services. With this significant invest- like me of being an ideologue. Asset man- The culture guiding the investment ment of new capital, Sphera will expand agers are spending all this money — and industry is certainly changing, and there the ESG digital solutions on its SaaS plat- it’s a highly regulated industry; they have are ample studies one could cite to dem- form with unique data sets and differenti- to earn returns — you think they’re all just onstrate that it’s not just the portfolio that ated consultative services throughout the trying to grow trees or something?” quantifiably benefits from diversification. world.” Blackstone is responsible for $650 The investment industry more broadly is billion in assets under management glob- Corporate sustainability leaders say they being upended, in no small part due to ally including those focused on private are encountering significantly increased ESG. In what many are calling the deci- equity, real estate, public debt and equity, scrutiny of their firms’ ESG performance sive decade for climate action, the bright life sciences, growth equity, opportunistic, by investors, but also that their knowledge spotlight on ESG is forcing us all to un- non-investment grade credit, real assets and experience is in unprecedented de- derstand that financial returns alone are no and secondary funds.  mand. As one head of sustainability at a longer the bottom line. 

Strategic Information for a Changing Industry 21 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

capital targeting longer-term opportunities of up to 15 years. KKR’s commitment KKR ACQUIRES MAJORITY POSITION IN ERM also includes Global Impact that identi- fies promising companies that measurably n May 2021 KKR, a leading global investment firm, acquired a majority position in contribute to solutions addressing critical IERM, described as the world’s largest pure-play sustainability consultancy. KKR ac- global challenges identified by the UN quired its position from OMERS Private Equity and Alberta Investment Management Sustainable Development Goals. Corporation (AIMCo), with ERM’s management team and a large number of Partners remaining as minority investors. Reports put the value the company at around $2.7 billion 7 ERM ACQUISITIONS IN 2021 including debt. In July 2021, ERM acquired UK- ERM has 5,500 consultants, including late 2005 to London-based buyout firm based Element Energy. Element identi- 580 partners, across 150 offices in over 40 Bridgepoint. In May 2011 Charterhouse fies transition opportunities and supports countries. ERM says it supports its clients Capital Partners acquired 65% of ERM the development, commercialization and in every part of their organizations, with in a deal which valued ERM at $950 mil- deployment of low-carbon technologies a focus on ‘operationalizing’ sustainability lion when net revenues were $483 million hydrogen, fuel cells, electrification, energy and implementing environmental, social and EBITDA was $76 million. In June storage and carbon capture use and stor- and governance (ESG) best practices. 2015 OMERS and AIMCo purchased its age. It was ERM’s seventh acquisition so majority stake in ERM from Charterhouse KKR partners lauded their deal say- far in 2021. Other 2021 ERM acquisitions Capital Partners for an enterprise value of Ar- ing “true expertise in sustainability and include renewable energy consultancy $1.7 billion after gross revenues of $940 cus environmental matters is more important , Dutch sustainability consulting firm million in 2014, with reports of a return of Sustainalize than ever.... as [ERM] continues to help , energy, sustainability strat- 2.4 times for Charterhouse. E4tech organizations implement ESG.” KKR has egy consultancy , and renewable enewables Con- been a long-standing client of ERM’s con- KKR made its investment in ERM energy advisory firm R sulting Group  sulting services. Since investing in ERM in through its $12.4-billion Core Investments (RCG). 2015, OMERS Private Equity and AIM- strategy launched in 2017, that represents Co have worked closely with the company and its management to support the business’ continued growth and development. JP Morgan Targets Carbon Markets with the Acquisition of This growth has been both organic and Forest & Timberland Investor Campbell Global M&A-driven, with ERM having acquired n June 2021, J.P. Morgan Asset Management acquired Campbell Global LLC, a 14 complementary businesses during Ileader in global timberland investment and natural resource management. Accord- OMERS and AIMCo’s investment period. ing to J.P. Morgan, the transaction shows it will directly participate in the low-carbon economy and become an active participant in carbon offset markets. A recent report OMERS director James Frankish em- from Fitch Ratings says increasing demand driven by corporate net zero commit- phasized ERM’s expansion “into new fo- ments and tightening climate policies will exceed supply within the next five years and cus sectors such as power, chemicals and carbon market analyst Sylvera forecasts a significant increase in the price of carbon as technology, and media and telecoms” since inventory of voluntary carbon credits drops. OMERS’ initial investment in the company, adding: “ERM has also reinforced its Campbell Global has over $5 billion in assets, and manages more than 1.7 million leadership position in corporate sustain- acres or forests in 15 U.S. states, New Zealand, Australia and Chile. John Gilleland, ability and climate change.” Chief Executive Officer of Campbell Global, said: “We made our first institutional investment in timberland 35 years ago, have since planted over 536 million trees, and ERM Ltd. was formed in 1987 through emerged as a leader in sustainable forestry.” All 150 Campbell Global employees will the merger of two companies: the UK-based be retained, and will remain headquartered in Portland. consultancy firm ERL, which was founded in 1971; and the USA-based consultancy Anton Pil, Global Head of J.P. Morgan Global Alternatives made the following firm ERM, which was founded in 1977. statement that seems to either mollify less progressive investors skeptical of carbon ERM’s structure, which has combined pri- markets or remind the business community of the historical nature of its revenues. vate equity backing with Partner owner- “Timber investing further enhances our asset class offerings in our alternatives busi- ship since 2001, means that ERM Partners ness... Our knowledge of real estate and transport markets, in particular, is expected both drive and share in the company’s suc- to provide opportunities to optimize the usage of timber and wood products more cess. In May 2001, 3i led a £200m ERM vertically.” Plotting the revenue share from carbon offsets compared to conventional management buy-out with senior debt and forest products over the next 20 years will be an interesting exercise, as well as seeing working capital provided by Bank of Scot- JP Morgan’s next move in terms of forest or climate change industry acquisitions. land. 3i invested $80 million and reported a 3X return when it sold its 52% stake in 22 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

EBJ: When did A&M developed its ESG Service Practice? Why did it make ALVAREZ & MARSAL ESG PRACTICE STARTS sense for a company like yours and in WITH RISK MITIGATION AND AIMS FOR which ways does it complement other services that you provide? MEASURABLE VALUE IN ESG TERMS A&M: We announced the start of our ompanies, investors and government entities around the world turn to Alvarez & comprehensive ESG Services practice on CMarsal (A&M) for leadership, action and results. Privately held since its founding in March 15, 2021. Prior to this, several of 1983, A&M is a leading global professional services firm that provides advisory, business A&M’s practice groups provided advisory performance improvement and turnaround management services. When conventional ap- services across a range of ESG related value proaches are not enough to create transformation and drive change, clients seek the com- indicators for companies and funds. To en- pany’s deep expertise and ability to deliver practical solutions to their unique problems. sure complete end-to-end ESG consulting With over 5,400 people across four continents in over 25 countries, A&M delivers tangi- advice, A&M’s ESG Services team builds ble results for corporates, boards, private equity firms, law firms and government agencies off these existing core practices to create facing complex challenges. Senior leaders, and their teams, leverage A&M’s restructuring maximum value enhancement for clients. heritage to help companies act decisively, catapult growth and accelerate results. A&M is ESG is a company’s license to operate. To has experienced operators, world-class consultants, former regulators and industry author- omit the impact of a company’s decision- ities with a shared commitment to telling clients what’s really needed for turning change making on its ESG profile either means into a strategic business asset, managing risk and unlocking value at every stage of growth. the company isn’t fully managing risk or is missing opportunity, something not ac- Julie Hertzberg, Managing Director/Practice Lead. Ms. Hertzberg has more than 20 ceptable to any client or its stakeholders. years of experience across sectors including global financial services, broadcasting, consumer services and energy, among others. She has performed extensive work with Board and C-Suite EBJ: Tell us about the ESG services that members across industries. She oversees A&M’s ESG Services and Case Management Services you offer and how are they unique? groups, where she leads a diverse team helping clients solve challenges and maximize value. Ms. Hertzberg also sits on the Executive Committee for the North American Restructuring Practice. A&M: Our approach to ESG goes far During her tenure at A&M, she has been a champion of the company’s diversity and inclusion beyond risk mitigation – we look to not initiatives and has been a forceful advocate with clients in emphasizing the unique opportunity only protect value but create it for the ben- that restructurings and turnarounds create in strengthening holistic stakeholder communica- efit of our clients and their stakeholders. tions and engagement. She serves as Immediate Past President of INSOL International, a We drive meaningful value by simplify- 10,000 member-driven global insolvency and restructuring organization in over 100 countries. ing the ESG landscape through targeted analysis, effective solutions and practical Rich Goode, Managing Director. Mr. Goode has over 25 years of business experience and integration for companies and organiza- over dozen years of experience supporting companies in creating ESG strategies, identifying and tions. A&M ESG Services brings together leveraging opportunities and mitigating ESG risk. He has extensive experience with greenhouse extensive corporate and consulting experi- gas emissions, regulatory compliance, ESG strategies, sustainable supply chain, new product ence to identify gaps and build opportu- launches, enterprise risk and startup management, and C-Suite relationships. He has served nities, while leveraging a global team of some of the world’s largest companies and financial services firms on a variety of sustainability specialized professionals across multiple and ESG issues. He previously served as Managing Director for Environmental, Social and disciplines to drive further execution and Governance and Climate Change Practice with EY. He helped build the practice and identi- achieve deep sustainable results. fied, hired and led a team that helped companies develop innovative strategies to create new op- EBJ: In which ways are companies in- portunities and reduce ESG risk using GRI, SASB, TCFD and the WEF frameworks. During tegrating ESG during the due diligence his time there, Verdantix ranked the practice #1 Sustainability Advisory stage of an acquisition? What should an Vic Svec, Managing Director. Mr. Svec has more than three decades of corporate experi- acquiring company look for? ence in Investor Relations, Social Responsibility/ESG and Corporate Communications with Fortune 500 companies and global category leaders in Energy, Consumer Products and Rec- A&M: Just 18 months ago, perform- reation. Hi assists clients on driving tangible improvements in ESG with companies operating ESG due diligence was the exception, ing within the Specialty Chemicals, Natural Resource and Infrastructure industries. His work not the rule, when considering an acqui- has brought significant recognition including: Measurably increasing company ESG ratings sition. Now the inverse is true. More im- by 60%; Number-one honors for Small/Mid-Cap Companies in the Metals/Mining Sector by portantly, the role of ESG in the diligence Institutional Investor Magazine in 2019; Chairing a global industry initiative to align lead- process has fundamentally changed in that ing companies around responsible ESG principles; and Directing social responsibility activities deals are now being stopped or multiples that were recognized by a first-in-sector social responsibility honors by Fortune’s Most Admired changed due to discoveries at this phase. Companies ranking in 2006 and the Platt’s Global Energy Awards in 2013. ESG due diligence is so important because it looks for both risks and opportunities

Strategic Information for a Changing Industry 23 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

that are not immediately obvious when simply performing what is called a “nega- instance, decides to sell off an out-of-ESG- conducting more traditional financial due tive screening” which means screening favor division, bring cash in the door, raise diligence. An example of this is when con- certain investments out based on the in- the multiple of the remaining company ducting ESG diligence of a metals compa- dustry, and other firms incorporate “posi- and invest in higher-growth opportunities. ny, the acquiring firm found that the target tive screening” where they actively look for Such ESG arbitrage opportunities are in- company had a culture of harassment, a companies to invest that may be involved creasingly being explored. toxic work environment and had numer- in developing low carbon solutions or pro- ous lawsuits pending. In addition, popular moting diversity and inclusion. For expanding access to capital mar- online employee forums rated the com- kets, companies are rightly viewing ESG as pany as one of the worst places to work Increasingly, leading PE firms are incor- a gating issue that didn’t exist a few years and cautioned minority employees against porating more than one tool when it comes ago. We recently worked with a small com- working there for their own safety. This to using ESG in their acquisition process – pany that was raising substantial funding information was taken into consideration like ESG due diligence, input from ESG to make more acquisitions. They realized by the acquiring company and it drasti- ratings agencies and custom investment they didn’t have an ESG presence but had cally reduced the selling price. This goes to criteria that appeals to their particular LPs. to be credible for the upcoming funding. show that looking at acquisitions through Finally, and most importantly, more and We worked with them to quickly articulate an ESG lens can uncover hidden risks or more private equity firms are assisting their what was a good set of policies and prac- opportunities that the traditional diligence portfolio companies improve their ESG tices that hadn’t been cogently stitched process may not reveal. presence. From simple statements around together, and they noted they were “10 climate, diversity and governance policies times better prepared” than they otherwise EBJ: Which type of private equity firms and codes of conduct all the way to full- would have been for the successful fund are investing in companies with higher fledged ESG reports, the bar for portfolio raise. ESG ratings? How are private equity companies keeps rising when it comes to EBJ: What regulations and initiatives firms looking at ESG and what other meeting market and investor expectations. ESG trends have you noticed within are affecting or influencing the ESG private equity? EBJ: How are companies using ESG to market in the United States? increase their overall company value A&M: Private equity firms are still when trying to sell the company or A&M: The most-watched ESG area seeking out the best value – however, ESG when trying to raise more capital? for U.S. regulations is through the Secu- diligence is helping private equity firms rities and Exchange Commission, which uncover value by looking for hidden risk A&M: Bank of America Merrill Lynch is evaluating enhanced disclosures around and opportunity that can potentially affect has noted that ESG leaders can sell for as ESG for publicly listed companies. Keep valuation multiples. In addition to ESG much as a 20% valuation premium over in mind that anything material to share- due diligence, leading private equity firms their laggard counterparts. And we’re find- holders is already required to be disclosed, are incorporating ESG criteria into their ing portfolio decisions increasingly being so these would be enhanced disclosures investment process. We see some firms made on behalf of ESG. Company A, for and are likely to center on major ESG focus areas such as climate change and diver- A&M ESG Services:A&M Service ESG Service Offerings Offerings sity, equity and inclusion.

Gap Analysis Ratings Improvement Materiality Assessments The other carefully watched area is in the Department of Labor’s definition of Conduct a comprehensive review Identify the highest-impact Evaluate ESG topics most material of industry benchmarking activities disclosures and performance metrics to a company and its key a fiduciary’s role in considering ESG con- to determine key areas of to improve ESG disclosures and scoring stakeholders and develop a tailored tangible risk and opportunity with raters and rankers materiality matrix siderations in, for example, pension investments. The prior Administration had Sustainability Strategy Investor Positioning Stakeholder Engagement ruled that fiduciaries must only take into

We simplify the complex ESG Leverage a company’s ESG position to We build ESG into your organizational account monetary considerations, while landscape to create value and meet create opportunities, improve valuation, narrative and create communications the needs of stakeholders such as expand access to capital and approaches to reach your most many observers believe that the current investors, employees and regulators garner proxy support important stakeholders Administration will be more expansive in allowing for broader ESG considerations Advancing Social Purpose Knowledge Hub Reporting Capabilities by pension fund managers. We help companies explain in clear As thought leaders, we share Advise on best practices in and compelling terms why their ESG fundamentals and keep our clients disclosure to align with reporting business, products and services are in apprised of meaningful news, frameworks and highlight priorities, Increased regulation in this area is like- the broad interest of society trends and updates performance and commitments ly, but will be evolving for many decades PE Fund Consulting “Virtual CSO” Perception Studies to come. Keep in mind that the first major environmental law – the Clean Air Act Working at both the PE and Portco Provide end-to-end ESG We customize interviews with level to evaluate hot spots, identify solutions as an outsourced stakeholders to assess company – turned 50 last year, and we continue to key ESG issues and assist with Chief Sustainability Officer and sentiment and gain insight into views refine what clean air means. potential target investments develop full suite of ESG program on approach and performance

24 1 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

EBJ: What type of data must be aggre- from climate-related impacts – both physi- tunities using the TCFD framework start- gated for ESG reporting and how can cal and market-related impacts. An exam- ing next year. The United States Securities companies set up a system to acquire ple of a market-related impact would be and Exchange Commission is currently ex- high quality data? the shift to electrification of vehicles or the amining whether and how publicly listed introduction of a carbon tax. If those risks companies should disclose climate related A&M: This question really targets some are indeed material to the company, then risks. Many companies are undertaking of the biggest challenges when evaluating they should be managed and reported to TCFD scenario analysis and proactively a company’s ESG profile. Data touching investors like any other risk and disclosed reporting on the results using the recom- upon a company’s environmental, social in the mainstream financial statements. mended framework not due to regulations, and governance footprint encompasses al- but simply due to investor demand. most all divisions within an organization The TCFD asks companies to under- – legal, supply chain, human resources, take a scenario analysis, examining the EBJ: In which ways are lenders utilizing etc and is entirely reliant on self-reporting range of potential impacts to their busi- ESG data to determine credit risks? what details a company may choose to ness strategy should different climate-re- disclose (or not disclose). Most frustrating lated outcomes occur. For example, what A&M: Lenders are laser-focused around to external constituents is the lack of one would happen to a steel company if a $30/ ESG, and incorporate many of the same standardized reporting framework or a way ton carbon tax were levied? Or what would filters that equity funds employ – nega- to fully validate the veracity of the infor- happen to an agricultural company if there tive screening to compensate for risk in mation being disclosed. were extreme, persistent drought in their certain industries, “best in breed” analyses growing region? This thoughtful exercise is to reward good performers. ESG leaders Companies exploring the most com- designed to both make executives aware of have been shown to enjoy a cost of debt as pelling way to promote transparency will the potential impacts that climate can have much as 200 basis points lower than ESG complete a gap assessment aligned against on their business and act now to ward off laggards. Green bonds for specific projects key elements across a variety of frame- the worst of those effects. or particularly strong ESG borrowers have works like TCFD, MSCI, and SASB and been receiving enormous fund inflows. use the output of this analysis to establish The TCFD also guides companies on And any company can work with its banks a starting point ESG disclosure. Within a useful disclosure framework which in- to establish sustainability-linked bonds or this process, it is critical a company build cludes reporting on these elements: loans that offer lower coupon rates so long an internal reporting infrastructure which as certain standards are met. ties each question to the data or document • Governance: In short, describe who EBJ: What about insurers? substantiating the response and to tie this in the organization has responsibility for to the individuals within the company re- identifying and managing climate risk. Ideally this is at very senior levels. A&M: Insurers are all about managing sponsible for providing the response. This risks, of course, and contrary to a short- can be accomplished within a SharePoint • Strategy: Disclose the actual and term-owning hedge fund, an insurer might data site or a more robust external report- potential impacts of climate related have a 20- or 30-year relationship with a ing program specifically geared toward risks (or opportunities – remember, not company. Black swan events are likely to ESG reporting as more and more technol- all risk is bad!) on the organization’s occur over these time frames. A company ogy offerings become available. Regard- business strategy. that is savvy on evaluating and managing less of which path is chose, transparency • Risk Management: its collection of ESG risks is likely to be and data integrity provide the foundation Detail how the company manages these newly identified more attractive to insurers. Interestingly, and credibility necessary for a company climate-related risks. Allianz research of more than 6,000 com- to maximize the benefit of its disclosures panies over 12 years demonstrated that across the entire stakeholder base. • Metrics and targets: Describe the ESG parameters were “significant early metrics and targets used to assess and EBJ: What are the main elements of a warning indicators” to identify firms that manage climate risks and opportunities. Climate-Related Financial Disclosure? pose excess risks.  Which governments, entities or inves- While this may seem daunting, it is tors are requiring them? actually a very useful exercise for all companies to undertake simply to better un- The role of ESG in the A&M: Several years ago, the Financial derstand whether there are hidden risks to diligence process has Stability Board, along with the Bank of manage or opportunities to exploit due to England and Bloomberg, rolled out what a changing climate and on the transition to fundamentally changed in that is called the Task Force for Climate-Relat- a low-carbon economy. deals are now being stopped ed Financial Disclosure (TCFD). The idea behind the TCFD is that investors have a The United Kingdom is the first G-20 or multiples changed due to right to know whether the companies they nation requiring publicly listed companies discoveries at this phase. invest in face undue risk or opportunities to disclose climate-related risks and oppor-

Strategic Information for a Changing Industry 25 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

August–September – Cardno’s Sustain- ability Task Force sponsored a virtual in- CARDNO ACCELERATES PURSUIT OF INTERNAL ternal “sustainability symposium” featur- ing various Cardno sustainability subject SDGs; BUILDS GLOBAL ESG PRACTICE FOR matter experts presenting on key ESG is- THE PRIVATE AND PUBLIC SECTOR sues.

ardno is a global infrastructure, environmental, and social development company October – Cardno’s Americas Region Coperating in more than 85 countries and powered by a talented 4,200-strong work- achieved a TSP score of 89%, recognizing force. Cardno is united by a shared purpose to deliver exceptional professional services to outstanding firm environmental standards establish or restore physical and social environments that make a difference to people’s lives and performance and a significant im- around the world. Cardno’s diverse team of talented technical experts and professionals provement over our previous score. builds on a 75-year track record of designing, developing, and delivering sustainable proj- December – Cardno’s Melbourne of- ects and community advancement programs. Cardno delivers infrastructure, health sci- fice became the fourth Cardno office to ences, environmental, and social solutions to our clients across a broad range of sectors, in- achieve ISO 14001 Environmental Man- cluding defense, energy, government, manufacturing industry, international development, agement Certification. land management, mining and resources, property and buildings, and transportation.

Chris Kline, Global Senior Principal for Sustainability and ESG. In this role, Mr. Kline We are very proud of the fact that leads Cardno’s corporate sustainability initiative and supports Cardno clients across a range of Cardno’s progress on sustainability is di- ESG disciplines. rectly attributable to the efforts of Card- no’s Sustainability Task Force, a diverse EBJ: What are some highlights of the management and increase diversity and group of more than 30 Cardno employees latest Cardno ESG and Sustainability inclusion at all levels across the company. representing all regions of our firm, and reports? all our progress is not due to a “corporate SDG 7 – Affordable and Clean Energy initiative,” but rather a deeply held com- Kline: At Cardno, we have been an – Pursue our goal of 100% of Cardno’s op- mon value. This outstanding group of col- ESG company for decades, having exten- erational electricity needs being generated leagues is committed to ensuring Cardno’s sive experience in environmental science, from renewable resources. sustainability efforts are not only words health assessment, sustainable infrastruc- but also deeds—not just talk, but action. ture design, and social- and economic- SDG 8 – Decent Work and Economic oriented international development. It is Growth – Take immediate and effective That said, it should be clear we have a part of our DNA, evident in how we have measures against the risk of forced labor, whole-hearted commitment to sustainabil- delivered services for communities around modern slavery, and human trafficking. ity from each of our board members and the world. We value sustainability and live our CEO and executive team, but progress SDG 8 – Decent Work and Economic by our purpose of “Making a Difference.” is made when good intentions move from Growth – Provide safe and secure working This purpose underpins our pursuit to the board to the frontline. environments for all staff. shape a better world for future generations. In addition to the Global Sustainabil- SDG 13 – Climate Action – Achieve Our Global Sustainability Policy trans- ity Policy and 2020 Global Sustainability science-based emissions reductions in line lates our commitment and intent to pro- Report, Cardno released two additional with a 1.5⁰C pathway by 2035. mote environmental equity and minimize reports in the spring of 2021 that further the environmental impact of our business SDG 16 – Peace, Justice, and Strong underscore our commitment to sustain- into measurable impacts. We have aligned Institutions – Operate with zero incidents ability and illustrate how we integrate ESG our sustainability goals with the United of bribery or corruption within our com- services into our clients’ work. Nations Sustainable Development Goals pany. (UN SDGs), a universal call to action to In February 2021, Cardno’s Interna- end poverty, protect the planet, and im- Some of our ESG accomplishments tional Development division released our prove the lives and prospects of everyone, during 2020 included: third Communication on Progress toward everywhere by 2030. the United Nations Global Compact’s 10 April – Cardno’s Americas Region im- Principles. This report affirms our commit- Based in part on our most recent ma- plemented a comprehensive greenhouse ment to the 10 Principles and provides a teriality assessment, we are focusing on six gas (GHG) tracking protocol. wealth of supporting information on our UN SDG benchmarks where we currently progress. In addition to data supporting can most meaningfully effect progress: August – Cardno released an updated our commitment to the 10 Principles, global Human Rights Policy and integrat- the report presents a sample of our global SDG 5 – Gender Equality – Achieve ed training for all staff. projects reflecting our work across all 17 of gender balance across all levels of Cardno the SDGs, as well as additional examples

26 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 of how we have pivoted in response to the well as investors who are seeking to better and methods to evaluate occupational, COVID-19 pandemic. Cardno’s intention understand ESG risk and opportunity in environmental, and community health during this upcoming year is to expand the their portfolios. In 2018, Morgan Stanley risks in the context of social, cultural, and UN commitment across our entire com- estimated that one in four dollars globally economic differences, allowing our team pany. is following some form of sustainable in- to offer pragmatic, real-world solutions vesting. We believe it very likely that this to clients across a wide range of markets, A second foundational document, re- figure has grown since then. There is a sig- governments, and industries around the leased in March 2021, is Cardno’s Mod- nificant need for science-based ESG sup- world. ern Slavery Act Statement, responding to port in the global investment community the requirements of the Australia Modern that Cardno is well positioned to provide We believe that as organizations strive Slavery Act of 2018. This document sup- based on our experience and capabilities. to operate more sustainably and grapple ports one of the key UN SDG goals and with complex problems such as climate documents the steps we are taking to ad- Cardno has technical depth across change and social injustice, consideration dress potential modern slavery risks in the several ESG disciplines. I would like to of health equity can help organizations operations or supply chains of the Cardno highlight one area in particular: our health reduce inequities (and the associated eco- Group and its subsidiaries. Our anti–mod- sciences practice, which we believe differ- nomic burdens) and better maintain busi- ern slavery model is replicable and can entiates Cardno’s ESG services from those ness continuity in the face of large-scale aid other corporations and organizations of most other firms. environmental and social disruptions. in their efforts to address modern slavery EBJ: What type of clients request your risks. Cardno’s approach focuses on steps As most EBJ readers will know, the ESG Services and why? and processes that are pertinent and mean- United Nations lists Good Health and Well-Being as an SDG and describes health ingful to individual business contexts and Kline: Cardno’s clients run the gamut as a precondition and outcome of the operating environments, instead of mere from global corporations to federal, state, three pillars of sustainable development check-the-box compliance with regulatory and local government agencies, as well as (environmental, social, and economic). requirements. local and regional businesses and a host of However, despite substantial growth and nongovernmental organizations. We ob- momentum in the movement toward sus- serve, evaluate, and respond to ESG needs tainability, health-focused sustainability Our anti–modern slavery across this spectrum. Large and small busi- performance targets today are quite nar- nesses and government agencies at all levels model is replicable and can rowly focused on workplace health and are grappling with ESG issues at an ever- safety. The COVID-19 pandemic has aid other corporations and increasing pace. uniquely and definitively demonstrated organizations in their efforts to that health risks within and beyond the International development organiza- address modern slavery risks. workplace can threaten sustainability ef- tions like the United States Agency for forts, challenge resilience strategies, and International Development (USAID), worsen social and economic disparities. Australia’s Department of Foreign Af- EBJ: When did Cardno develop its ESG fairs and Trade (DFAT), the Millennium To alleviate health-driven threats to Services Practice? How are you differen- Challenge Corporation (MCC), and oth- sustainability, Cardno believes ESG crite- tiating your ESG services? ers look to Cardno to support sustainable ria should comprehensively include mate- international development projects across Kline: At Cardno, we have been an rial health risks to companies and invest- the globe. Cardno is currently working in ESG company for decades, having exten- ments. Further, by incorporating health more than 85 countries on projects that in- sive experience in environmental science, in sustainability performance targets com- tegrate ESG into project deliverables. One health assessment, sustainable infrastruc- mensurate with the influence of health on example is Cardno’s efforts in Timor-Leste, ture design, and social- and economic-ori- our societies, economies, and institutions, where we have been working for over 10 ented international development. ESG is greater value creation can be achieved years on a range of projects in health, infra- part of our origin story. It is in our DNA, through sustainable and socially respon- structure, education, market development, evident in how we have delivered services sible investing. governance, and community development. for communities around the world. Cardno is well-positioned to help cli- Our work is locally focused and grounded In November 2020, we stood up an ents create this value. Our health sciences in the UN SDGs. ESG Advisory Services Practice, specifi- professionals have training and expertise Cardno has worked in the energy sector cally designed to aid companies and their in toxicology, industrial hygiene, epide- for decades, and we see the global growth investors in understanding and acting on miology, environmental health sciences, in renewable energy projects continuing the ESG challenges and opportunities be- medicine, computational modeling, and to strengthen for the foreseeable future. In fore them. This service is focused on com- risk assessment. Our staff are skilled in the the United States, we are currently working panies just beginning their ESG journey as practical application of scientific concepts for more than two dozen renewable energy Strategic Information for a Changing Industry 27 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 developers on utility-scale solar projects. largest and oldest such nurseries in the ager for Water and Environment and Our work focuses on helping developers Midwest, which supports these ecological vice-chair of the International Federation efficiently site and permit these large pow- restoration projects with native plants and of Consulting Engineers’ sustainability er facilities throughout the country. Our seed. The nursery produces over 300 spe- committee, recently reflected on the value team of environmental scientists, cultural cies of prairie, wetland, and aquatic plants of water and the connection to climate resource specialists, and project managers for commercial and municipal clients. In change. Ms. Muir’s reflection illustrates is deeply familiar with federal, state, and a typical year, our nursery produces more the type of thinking that informs Cardno local requirements and bring this expertise than one million plants and over 6 tons of scientists: to our clients daily. native seed. - Across society, water is valued very An area in the renewable sector that dif- differently—where water is scarce, it tends ferentiates Cardno from many other firms We are currently working to be more highly valued, conserved, and is our understanding of vegetation man- appreciated. Where water is more plenti- agement under and around solar facilities. for more than two dozen ful (or where it seems more plentiful), it is Vegetation operations and maintenance renewable energy developers often taken for granted, wasted, and even costs can have a significant impact on the hidden. Do our communities understand success of a utility-scale solar project. At on utility-scale solar projects.... the real value of water? the same time, the land conversion process helping developers efficiently where hundreds of thousands of acres of - We need to shift the paradigm to en- agricultural ground become power pro- site and permit these large sure it is valued and managed in a manner duction facilities presents an opportunity power facilities. that is sustainable, now and in the context to address other pressing environmental of increasing demand and increased cli- issues. One such issue is the significant mate variability. Value is one thing—cost drop in pollinator plant species across the EBJ: What type of climate change is another. The cost of treating and dis- country. To help address this challenging services did you provide before devel- tributing water and collecting and treat- issue, Cardno is currently teamed with two oping your ESG practice and in which ing wastewater is not insignificant. Goal Department of Energy national laborato- ways are you able to complement ESG 1 under the UN’s SDG6 sets the target: ries and two major research universities to services in that area? “by 2030, achieve universal and equitable better understand the economic and eco- access to safe and affordable drinking wa- logical issues around integrating pollinator Kline: As a company grounded in envi- ter for all.” This means that the necessary plantings on utility-scale solar sites. This ronmental science and engineering, we in- infrastructure needs to be provided at a 3-year, $1.8 million research project is be- tegrate climate change into all that we do, cost that is affordable to the people that ing carefully monitored by the solar indus- and have been doing so for decades. Both it serves. try and its stakeholders. Cardno’s role is to our public and private clients see the need - This cost is not always proportionate. lead the development of several tools to to respond to climate change risks, and we Those in regional and remote communi- help solar developers make better decisions expect their need to address climate-relat- ties, indigenous communities, and devel- regarding site vegetation practices. ed issues to continue growing in scope and urgency. Cardno’s work enhances climate oping nations have less capacity to pay Municipal and state clients turn to resiliency by increasing the adaptive ca- than their city counterparts, yet the chal- Cardno for a broad array of support relat- pacity of communities, organizations, and lenges of water security are often greater ing to ecological restoration and green in- agencies to threats associated with more and may require a higher investment to frastructure. Creating habitat and increas- frequent and intense storm events, wild- resolve. ing biodiversity while developing effective fires, droughts, landslides, floods, and sea A recent project completed by our In- stormwater and water infrastructure proj- level rise. ternational Development team in east ects enables these clients to achieve their Africa further illustrates one approach own ESG goals. For the past 5 years, Our international development special- where we integrated economic incentives Cardno has supported the City of Chicago ists, environmental scientists, engineers, with climate science. Cardno managed the Parks Department by managing approxi- health scientists, natural resource econo- Climate Information Prize (CIP), which mately 1,000 acres of natural areas within mists, and other experts work together to awarded innovators who used climate in- the city’s system. These natural areas pro- address the complex scenarios associated formation to generate new ideas and solu- vide Chicago residents with healthy recre- with climate change impacts on infrastruc- tions supporting vulnerable individuals, ation opportunities while also supporting ture, the environment, and people. These households, and communities in Kenya. the city’s stormwater mitigation and heat impacts can occur in the most vulner- Cardno led the implementation of the CIP island reduction efforts. able environments and locations, affecting communities and ecosystems. with robust governance, financial manage- Cardno is also differentiated by our ment, monitoring, and reporting proce- in-house Native Plant Nursery, one of the Natalie Muir, Cardno’s General Man- dures. Our team forged partnerships with

28 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 institutional and program networks across Kenya, the East Africa/Horn of Africa re- Technologies in Cardno’s Suite of ESG solutions gion and beyond, to promote the CIP and Environmental Systems Modeling – To quantify potential climate change–related build private sector investment. We also impacts, Cardno’s environmental specialists use Cardno’s Comprehensive Systems managed marketing workshops, events like Models in combination with other specialized analytical tools as an effective simula- award ceremonies, media campaigns, and tion platform for assessing and calculating ecological risks posed by environmental other communication channels to height- stressors. Additional climate change assessment methods and tools include quantita- en awareness and encourage participation tive modeling for coastal surge, floodplain, and inundation, geomorphology, hydrolo- from problem solvers. gy and hydraulics, habitat suitability, carbon, wildfire, relative sea level rise, and socio- economic effects. CASMclimate is a version of the Comprehensive Aquatic Systems Another project in Cambodia is cul- Model (CASM) designed to assess the implications of climate change for the structure tivating a positive future for small farm- and function of aquatic food webs and ecosystems. The inputs associated with cli- ers and illustrates our expertise in market mate change can be modeled individually or in combination. CASMclimate simulates systems and economic and agriculture de- changes in daily productivity and biomass (carbon) of populations of aquatic plants velopment. Cardno is leading the overall and animals in user-specified aquatic food webs. It also provides additional capabili- delivery of the Cambodian Agriculture ties to estimate carbon cycling and sequestration, nutrient assimilation, and changes Value Chain Program (CAVAC), which is in food web structure (biodiversity) in relation to modeled climate change scenarios. strengthening market systems and investing in irrigation infrastructure to increase Data Acquisition – Cardno’s global Data Acquisition Program offers end-to-end, the productivity and incomes of small- innovative digital data acquisition expertise, execution, analytics, management, and holder farmers and trade competitiveness delivery to our clients. Cardno’s data acquisition team includes multidisciplinary in milled rice and other crops in Cam- thought-leaders with deep knowledge in geographic information systems (GIS), pho- bodia. CAVAC is based on the “Making togrammetry, light detection and ranging (LiDAR) and laser scanning, data analytics, Markets Work for the Poor” principles. It land survey, remote sensing, unmanned aerial systems (UAS)/remotely piloted aircraft strengthens market connections, promotes systems (RPAS), BIM, asset management, machine learning, and program manage- greater investment, and adds value along ment. We seamlessly integrate data captured from satellites, aircrafts, field teams, and specific product value chains that link sup- remotely operated vehicles (ROVs) to improve the quality and efficiency of digital data pliers, farmers, and consumers. analytics and the delivery of actionable intelligence across a range of environments: EBJ: What are the biggest challenges water, land, air, and space. Our diverse analytics team provides geospatial support, that your clients face as they integrate image analysis, asset inspection, three-dimensional point clouds, photogrammetry/ sustainability into their culture and survey, project assessment, and other custom solutions. Cardno takes a holistic ap- business operations? And in which proach to the acquisition, rendering, and distribution of data and treats every project ways have you helped them solve these as a unique data problem, not simply a “drone” or technology problem. Put another problems? way, we work projects from the “data up” without preconceptions.

Kline: Cardno’s private sector clients in ITRCC is IFM Investors, a global pen- ESG decisions. Foreign and domestic di- know us for our health sciences, environ- sion fund manager with more than $70b rect investment will inevitably improve mental, and engineering expertise. Private investments in assets and a keen focus on and continue to grow during post-pan- sector investors, whether they be indi- ESG performance. IFM Investors expects demic recovery. This recovery phase pro- vidual stock owners or large private equity ITRCC to report on its GHG footprint vides an opportunity to “build back bet- investors, increasingly are demanding and to create a plan for reducing this foot- ter”—promoting and integrating ESG evidence of ESG progress from the com- print over time. ITRCC turned to Cardno principles into ongoing and future invest- panies in whom they invest. The recent for support. Together, we benchmarked ments—particularly in emerging markets. corporate board election at ExxonMobil ITRCC’s GHG footprint and set reduc- Even in the absence of local standards and is one very visible result of these expectation benchmarks accepted by the Science laws, investors adopting and applying a tions. It is now not just about the dollars, Based Targets Initiative (SBTi). With the minimum ESG threshold will be able to but about the carbon and social impacts of benchmark and goals established, Cardno maximize their investment while minimiz- these firms’ operations. Companies who worked with ITRCC to develop strategies ing negative impact. rely on Cardno for environmental support for achieving these reductions including are now turning to us for ESG support. electrifying the ITRCC fleet and powering Businesses that localize supply chains, this fleet with a combination of solar and offshore/outsource goods and services, and An example illustrates this trend. For storage technologies. We bring this type of expand to emerging economies can in- years, Cardno has supported the Indi- initiative and innovative ESG thinking to crease revenues and lower operating costs. ana Toll Road Concession Consortium all of our clients. While lucrative, companies that invest in (ITRCC) with environmental and storm- these markets will face different political water permitting support. A major investor Investors are driving many corporate and economic realities. Foreign investors

Strategic Information for a Changing Industry 29 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 need to be prepared for new and higher set portfolios and understanding what they (OECD’s) Blue Dot Network (BDN), risks, including issues relating to rule of need to do to assess and address these risks with Ms. Reisbord serving on the BDN law, corruption, financial/market insta- and take actions necessary to protect their Executive Consultation Group. The BDN bility, labor standards, and human rights. built assets and increase resilience. is a multilateral initiative launched by the Further due diligence and investigations governments of Australia, Japan, and the are necessary—not only in adoption of Putting the risk assessment processes United States to provide an internationally corporate policy, but in more proactive and management systems in place that recognized framework assisting in mobiliz- oversight to raise supply chain standards. will gather and maintain the lessons al- ing investment to maximize the positive ready learned. Such lessons learned would economic, social, environmental, gover- Beyond shareholders, other stakehold- include those gained from “tests” or drills nance, and development impact of infra- ers (e.g., consumers, media, government) based on scenarios as well as assessments structure. have become more socially conscious and of response actions during after-action active; application of ESG provides an analysis of actual disruptions of built infra- This voluntary, private-sector-focused, avenue to maintain brand integrity and structure, supply chains, and resource allo- and government-supported initiative will reduce domestic/international scrutiny. cation approaches. Organizations need to build on existing international standards Incorporating ESG principles as a “value- use the lessons learned and conduct testing to develop a global certification framework add” maximizes investment potential while to improve preventive and protective mea- for quality infrastructure projects. It repre- minimizing negative impact. This shared- sure and reduce disruptive event response sents an innovative solution for operation- value approach moves the needle beyond and recovery time. alizing international quality infrastructure standalone corporate social responsibility standards and best practices from the or philanthropic efforts, and instead builds Understanding and addressing these OECD and beyond, assisting investors in on sustainable and de-risked business prac- challenges in a systematic manner is what identifying projects with positive sustain- tices. By adopting ESG principles, invest- will help organizations increase their “re- ability features and thus representing low- ment in emerging markets can move away silience intelligence” and improve the re- er-risk investments over the full lifecycle of from “offshoring” scrutiny and rebrand silience of their built asset portfolios and an asset. as “impact investing”—promoting mea- supply chains. Cardno demonstrated this surable social and environmental impact, approach in a 5-year project we complet- We see a range of opportunities and coupled with financial returns. ed for the National Oceanic and Atmo- benefits with the BDN initiatives includ- spheric Administration (NOAA), who ing improvement in designs that incorpo- EBJ: What are tyhe key challenges when asked Cardno to conduct a three-phase rate more sustainable thinking; materials it comes to built asset resiliency? climate change threat and vulnerability to minimize human health and environ- risk analysis and adaptation planning and mental impacts; automation and digitiza- Kline: The built asset resilience chal- resilience improvement project. tion of infrastructure processes and data; lenges our clients face are many but we modular construction methods, distribut- believe the top three are: Cardno first developed a risk-based ed/micro infrastructure networks; and up- method to screen over 3,200 built-infra- Identifying the risks related to natu- skilling/training of the workforce to meet structure mission-critical properties to ral hazards that are not considered wor- new needs. identify the top 10 at highest risk from thy of assessment because even though climate change-related impacts from mean With the increase in public and private they may have highly severe consequenc- sea level rise and other climate change- infrastructure investment in the US and es, they are unlikely to occur. Frequently related severe weather events. Cardno globally, we believe efforts like those of the these low-likelihood, high-severity disrup- then developed an enterprise-wide climate BDN are critically important for sustain- tions have never been formally anticipated change asset risk analysis process, conduct- able development.  or incorporated into built asset manage- ed site-specific asset climate change vul- ment planning, preparation, protection, nerability and risk analyses, and developed response, and recovery actions. Obviously, facility-specific adaptation and resilience We are currently working the COVID-19 pandemic has brought improvement plans and projects with such “black swan” events to the forefront for more than two dozen ROM investment cost estimates. of every organization responsible for man- renewable energy developers aging built assets, all the way up to the EBJ: What additional infrastructure board and top leadership levels. trends does Cardno see as making on utility-scale solar projects.... meaningful contributions to global helping developers efficiently Identifying and understanding the sustainable development? risks associated with all the natural and site and permit these large human-caused disruptions that have Kline: Cardno senior leaders, includ- power facilities. affected built assets in the past several ing our CEO Susan Reisbord, are actively years. Many organizations have difficulty involved in the Organization for Eco- thinking holistically across their built as- nomic Cooperation and Development’s 30 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

to the well-being of all people and of our planet, and that enables all generations oc- JACOBS STANDS OUT IN ESG, PAIRING cupying our planet today and into the fu- STRATEGIC ADVISORY WITH DOWNSTREAM ture to believe in and live a resilient future focused on not just surviving and adapt- PLANNING, DESIGN AND DELIVERY SOLUTIONS ing, but truly being enabled to thrive.

acobs is challenging today to reinvent tomorrow. Jacobs is solving the world’s most This is core to what Jacobs is as a com- Jcritical problems for thriving cities, resilient environments, mission-critical outcomes, pany and is fully supported by the mar- operational advancement, scientific discovery and cutting-edge manufacturing, turning kets we are engaged in as a business. Our abstract ideas into realities that transform the world for good. With $14 billion in revenue differentiation lies in bringing holistic, and a talent force of approximately 55,000, Jacobs provides a full spectrum of professional technology-enabled solutions from across services including consulting, technical, scientific and project delivery for the government our markets, supporting our clients with and private sector. Jacobs’ footprint includes North America, Europe, the Middle East, the transition from fossil fuels to clean en- Asia-Pacific and Australia/New Zealand regions, serving national government, public and ergy; decarbonizing the transport sector private sector clients. and the manufacturing sector; addressing water scarcity and biodiversity loss; design- In March 2021, Jacobs accelerated its growth strategy as a leading technology-enabled ing out waste and pollution with circular solutions provider with a 65% stake in PA Consulting, a leading innovation and trans- economy principles; building long-term formation consulting firm. “This strategic partnership accelerates our strategy to become resilience into critical infrastructure as- a leader in bringing greater innovation and creativity to respond to current-day challenges sets; providing critical support in response such as climate change, cyber, urbanization and the ongoing healthcare crisis,” said Jacobs and recovery efforts after extreme weather Chair and CEO Steve Demetriou. Jacobs previously had enhanced its ESG position by and climate events; and improving the acquiring a 50% share in Simetrica and signing a strategic alliance with Biomimicry 3.8. wellbeing of individuals and communities Jan Walstrom is Jacobs’ Global Environmental Market Director and also serves as Senior through our work in the life sciences and Vice President, Strategy & Solutions for the company’s People & Places Solutions line of busi- health sectors. ness. She joined Jacobs in 2017, by way of CH2M, where she held progressive leadership posi- These issues and challenges are all in- tions for more than 25 years, including a seat on the company’s Board of Directors. Ms. Wal- tertwined, and as an industry leader across strom’s experience encompasses work with government and commercial clients throughout the sectors, as well the top global design firm world, such as the U.S. Environmental Protection Agency, U.S. Department of Energy, U.S. and the top program management/con- Department of Defense, industry-leading multinational corporations, and the London 2012 struction management firm as ranked Olympic Delivery Authority. by Engineering News-Record, Jacobs is uniquely positioned to help our clients EBJ: Where do you see ESG-related “system of systems” mindset to help public advance their ESG initiatives and mitigate growth opportunities? And how are and private clients address decarboniza- current and future risks on the path to the these opportunities different across tion across all sectors, accelerate the global net zero economy. various business lines? energy transition, advance adaptation and mitigation strategies, and implement natu- EBJ: Tell us about your ESG team. Walstrom: Climate change is the high- ral resources stewardship. est priority issue facing humanity and Walstrom: Our team is comprised of currently dominates the environmental, EBJ: When did Jacobs develop its ESG strategic advisors, economists, sociologists, social and governance (ESG) conversation Services Practice? How are you differen- technologists, environmental scientists, as a macro risk factor. According to S&P tiating your ESG services from the ones water scientists, data scientists/analysts, Global Market Intelligence, “80% of the provided by competitors? urban planners, sustainability experts, car- world’s largest companies are reporting bon/GHG experts, energy consultants, bi- Walstrom: As a long-standing environ- exposure to physical or market transition ologists/ecologists, waste management and mental industry leader, we see ESG as a risks associated with climate change.” This circular economy professionals, healthcare natural and complementary extension of impacts business continuity and resilience, and life sciences professionals, professional the sustainable solutions we’ve been pro- and ultimately brand, reputation, and li- engineers across all disciplines, ESG proj- viding our clients for decades. And we see cense to operate from a societal and inves- ect and program managers, and more. ESG ushering in a renaissance for the en- tor perspective. vironmental industry as we work in part- Additionally, Jacobs is empowering all To that end, Jacobs sees tremendous nership with international organizations, employees to be ESG/sustainability cham- growth opportunities in our global Envi- governments, private sector multinationals pions – further instilling the mindset that ronmental, Energy & Power, Water, Trans- and communities to shape solutions for creating sustainable solutions is everyone’s portation, Advanced Facilities, Health, a future that fosters social equity, incor- responsibility. A Climate Solutions Accel- and Cities & Places markets deploying a porates sustainable principles as essential erator Course has been developed to help Strategic Information for a Changing Industry 31 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 our global workforce learn how to take ac- and create a consistent approach. We very It’s important to note that govern- tion on the climate crisis. And in FY22, we much welcome this future state. mental bodies are already taking action. are offering an enterprise wide sustainabil- In November 2020, the UK Government ity upskilling training program. Case in point, the Task Force on announced that climate risk reporting will Climate-related Financial Disclosures become mandatory for large companies Jacobs has also developed strategic part- (TCFD) was developed to supply consis- and financial institutions, using guidelines nerships that provide specialization and tent climate-related financial risk disclo- from the TCFD. And the European Union enable us to bring new perspectives and sures for use by companies, banks, and has been establishing numerous new direc- ideas from across multiple organizations. investors in providing information to tives through its Green Deal, including These include PA Consulting, Simetrica- stakeholders. TheSustainability Account- on climate, human rights due diligence, Jacobs and Biomimicry 3.8. ing Standards Board (SASB) standards are and reporting and disclosure. In the U.S., designed for communication by companies the Securities and Exchange Commission PA Consulting brings strategic advi- to investors about how sustainability issues (SEC) recently concluded a public com- sory expertise across the energy and utili- impact long-term enterprise value. CDP ment period on expanding corporate cli- ties, financial services, government and (formerly the Carbon Disclosure Project) mate disclosures. It has also announced a public sector, healthcare, life sciences, and focuses investors, companies, and cities on Climate and ESG Task Force in the Divi- transport industries. Jacobs also acquired taking urgent action to build a truly sus- sion of Enforcement. a 50% share in Simetrica, a U.K.-based tainable economy by measuring and un- organization that specializes in social value derstanding their environmental impact. What’s clear is that our clients need help measurement and wellbeing analysis pro- TheClimate Disclosure Standards Board navigating these frameworks and evolving vides expertise to increase existing capabili- (CDSB) provides material information for regulatory requirements and there is an op- ties and offerings in the areas of socioeco- investors and financial markets through portunity for the environmental industry nomics, sustainability, and environmental the integration of climate change-related to step up and provide strategic consulting solutions. And our strategic alliance with information into mainstream financial re- around ESG management and reporting. Biomimicry 3.8, a global consulting and porting. TheGlobal Reporting Initiative innovation firm specializing in nature- (GRI) helps businesses, governments and based solutions and nature-inspired de- other organizations understand and com- We see ESG ushering signs, helps clients develop and integrate municate their impacts on issues such as in a renaissance for the regenerative best practices, thereby im- climate change, human rights and corrup- proving the health and wellbeing of eco- tion. And then you have the International environmental industry systems and the communities who depend Integrated Reporting Council (IIRC), on them. a global coalition of regulators, investors, companies, standard setters, the account- EBJ: In your opinion, which ESG Where Jacobs stands apart from the ing profession, academia and NGOs who frameworks are better and why? large management consulting firms rapidly share the view that communication about entering this space is our ability to provide Walstrom: Over the last two years we’ve value creation, preservation or erosion is upfront ESG strategic advisory, along with seen a rapid acceleration toward ESG met- the next step in the evolution of corporate downstream planning, design and delivery rics and reporting, with investors and asset reporting. solutions founded in our deep domain ex- managers emphasizing that sustainabil- pertise within and across all of our clients’ Recently, the IIRC and the SASB ity issues impact risk, return and value of industry sectors that drive environmental, consolidated their businesses to form the companies over the long term. social and governance initiatives for infra- Value Reporting Foundation, a merger With that said, the various frameworks structure and assets. intended to provide more consistent glob- have different focuses and the right solu- al standards for environmental, social, and EBJ: Please comment on the inconsis- tion will differ from one company to the governance (ESG) investing. Additionally, tency of data across ESG management next. In consultation with our stakehold- the expected launch of the International and reporting systems? And in which ers, Jacobs is reporting climate risk and Financial Reporting Standards (IFRS) ways are those gaps being eliminated? opportunities in line with the Task Force Foundation’s International Sustainability on Climate-related Financial Disclosures Walstrom: ESG reporting has been and Standard Board (ISSB) at COP26 in No- (TCFD) framework and we are reporting still is a rapidly evolving area for business. vember 2021 is another effort to harmo- our ESG disclosures in line with the Sus- There are over 600 different ESG reporting nize disclosure and establish a global sustainability Accounting Standards Board frameworks globally, each with their own tainability reporting framework. Building (SASB). BlackRock, in its annual letter to methodology for scoring. Keeping abreast on existing frameworks, the ISSB will be shareholders, endorsed SASB’s industry- of all of these frameworks and the ongo- tasked with developing and maintaining specific standards and TCFD’s climate- ing changes can be overwhelming, and it global sustainability-related financial re- specific framework as the benchmark is now recognized, across industries glob- porting standards that are relevant to en- frameworks for finance. ally, that action is overdue to consolidate terprise value. 32 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

Also, via U.S. Securities and Exchange Commission (SEC) requirements, we Jacobs Projects With Significant ESG Aspects have disclosed Human Capital reporting • SuedLink: integrating renewable sources into Germany’s electricity grid to and are preparing for likely future require- support 2050 target of 80% of power provided by clean energy. ments on climate data coming from the SEC. • King County Metro: new battery electric bus (BEB) facilities supporting the goal of a 100% zero-emissions fleet powered by renewable energy no later than 2040. Jacobs recently earned a place on the • Meridian Water, North London: £7bn sustainable mixed-use development; prestigious The Dow Jones Sustainability™ meeting UK’s highest health and building standards and targeting net zero carbon North America Index 2020 (DJSI), which by 2030. represents the top 20% of the largest 600 North American companies in the S&P • Western Digital: global energy and resource management program – energy, Global Broad Market Index (BMI). The water, waste and carbon reduction for manufacturing facilities. DJSI index, which recognizes public companies for outstanding performance across • Port of San Francisco: ortifying the 100-year-old Embarcadero Seawall for earthquake safety, flood protection, resilience, and sea level rise adaptation. economic, environmental, and social criteria, is used as a reference by shareholders • Transport Scotland, Dundee City Council, European Commission: hydrogen who consider sustainability when making fuel cell electric bus and refueling infrastructure. investment decisions. Only the most sustainable companies in each industry are • Tuas Water Reclamation Plant: securing Singapore’s water supply with largest considered each year for index member- membrane bioreactor (MBR) facility in the world; up to 85% of NEWater recovery ship. from domestic used water. EBJ: How is the ESG market in North • Dubai 2040 Master Plan: doubling public open space to promote wellbeing, America different from Europe? accessibility, active mobility, and biodiversity enhancement. • Washington Suburban Sanitary Commission: climate change vulnerability Walstrom: Currently, the U.S. and assessment, adaptation & mitigation plan for all water and wastewater assets. Europe are taking different paths toward sustainability reporting. Based on legal tra- • Green Finance: sustainability strategy for client covering ESG aspects over the ditions and the concept of materiality (the life of the proposed infrastructure scheme, to support investor engagement. US Supreme Court defined materiality as information that, if disclosed, “would have been viewed by the reasonable investor as the following: 100% renewable energy for tion Plan for Advancing Justice & Equal- having significantly altered the ‘total mix’ our operations in 2020; Net zero carbon ity, which builds on our existing inclusion for our operations and business travel in of information” made available), voluntary and diversity (I&D) strategy, TogetherBe- 2020.; and carbon negative for our opera- sustainability reporting in the U.S. is beyond™, and sets actionable initiatives and tions and business travel by 2030. ing driven by market demand. In contrast, measurable objectives in our continuing efforts to address embedded and systemic the European Union generally emphasizes We conducted a specific climate risk racial inequities. regulatory measures to enforce materiality and opportunities assessment in line with considerations. TCFD recommendations. An initial as- And we made progress with workforce sessment was undertaken to explore cli- As noted earlier, the U.S. may be mov- diversity and engagement. For the Execu- mate-related risks to which Jacobs is ex- ing toward regulatory measures with the tive Leadership Team under the CEO, we posed through the projects and programs SEC’s recent actions relating to climate went from 33% Female at the end of FY20 we deliver. The approach to the assessment and ESG reporting, including a public re- to 50% Female at the end of Calendar Year conformed with the international standard quest for information regarding potential 2020. Overall, the company is 29.5% Fe- on risk management, ISO 31000:2018 new climate disclosures. male. Additionally, Jacobs is involved in Risk management guidelines and follows various external organizations and initia- EBJ: Tell about Jacobs’ ESG report. methods that are used by Jacobs’ climate tives dedicated to advancing our ESG and What are highlights and the main ac- risk specialists in our work with our cli- sustainability priorities, including but not counting metrics that you use and why? ents. We sought to understand and assess limited to: our risks in the context of 4°C and 1.5°C Walstrom: Of particular note in Ja- scenarios in how the world responds to the • United Nations Global Compact cobs’ 2020 ESG Data Disclosures is our climate challenge. (Participant level) carbon accounting and reporting. Aggres- sive carbon emission commitments were We made significant progress in FY20 • United Nations Global Compact CFO Task Force for the Sustainable established in our Climate Action Plan in our social sustainability activities. We are Development Goals (Founding on April 22, 2020. Jacobs committed to proud to have launched of our global Ac- Member) Strategic Information for a Changing Industry 33 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

• World Economic Forum Climate Action (which incorporates No. 7 with an assessment of the climate-related Infrastructure and Urban Development Affordable and Clean Energy). With that risks and opportunities to Jacobs’ global Governors Committee said, Jacobs remains committed to con- markets. For the first time, we estimated tributing towards all 17 SDGs. the potential financial impact of these risks • World Economic Forum Alliance of and opportunities. CEO Climate Leaders ESG is a strategic risk and opportunity • Science Based Targets Initiative – for Jacobs with ESG performance increas- Jacobs is also joined partnerships to ad- Business Ambition for 1.5° ingly linked to long-term business resil- vance environmental action: ience and success. To that end, ESG has • USEPA Green Power Partnership been integrated into Jacobs’ Enterprise Signatory to the United Nations (UN) Risk Management. Our ESG Disclosures ‘Business Ambition for 1.5°C’ – an urgent • GreenBiz Report provides supplementary informa- request for action to set ambitious science- • Building Responsibly (Founding tion regarding our Environmental, Social, based emissions reduction targets aligned Member) and Governance (ESG) performance, or- with limiting global temperature rise to ganized according to the Sustainability Ac- 1.5°C above preindustrial levels. • Business in the Community UK Net counting Standards Board (SASB) frame- Zero Taskforce Member of the USEPA Green Power work. Partnership – a voluntary program that • World Environment Center supports the development of new renew- Environmental • BSR (Businesses for Social able generation capacity in the US and re- Responsibility) Jacobs was one of the first companies in quires annual use of green power at a level our industry to achieve carbon neutrality that meets or exceeds partnership bench- • Global Plastic Action Partnership and 100% renewable energy for its opera- mark requirements. tions as well as publish approved science- • Environmental Analyst – Sustainable based carbon reduction targets. All of these Member of the CDP Supply Chain Pro- Delivery Group commitments are published within our gram – a voluntary program to understand EBJ: In which ways is Jacobs well posi- Climate Action Plan. our supply chain by collecting relevant and tioned when it comes to ESG? comparable environmental data from our Our Science Based Targets were ap- key suppliers, using CDP’s market-leading Walstrom: Jacobs is well positioned be- proved in December 2020: carbon emissions disclosure system. cause we walk the talk and understand the journey our clients are taking with sustain- • Reduce absolute scope 1 and 2 GHG Member of the UN Global Compact ability, ESG reporting and risk mitigation. emissions 50% by 2030 from a 2019 CFO Taskforce for the Sustainable De- base year velopment Goals, which brings together Launched in 2019, PlanBeyond is Ja- a multi-sector group of corporate finance • Increase annual sourcing of renewable cobs’ sustainable business strategy. Aligned leaders to develop innovative strategies to electricity from 10% in 2019 to 100% with our purpose to create a more con- mobilize finance towards sustainable de- by 2020 and continue annually sourcing nected, sustainable world, it is fully inte- velopment. 100% renewable electricity through grated into our business model and com- 2030 pany strategy. PlanBeyond aligns with the Social United Nations Sustainable Development • Reduce absolute scope 3 GHG Jacobs has created a strong foundation Goals (SDGs) to clearly demonstrate how emissions from business travel and for Social excellence with: we are contributing to the delivery of sus- employee commuting 50% by 2030 tainable outcomes. All 17 of the SDGs are from a 2019 base year Inclusion & Diversity: TogetherBe- interconnected, and no progress can be • 65% of our suppliers by spend yond our approach to living inclusion ev- achieved in isolation of any one goal. covering purchased goods and services ery day and enabling diversity and equality globally. We put people at the heart of our Based on a robust materiality assess- (Scope 3), will have science-based targets business. We have an unparalleled focus on ment including engagement with stake- by 2025 inclusion, with a diverse team of visionar- holders throughout our value chain, we Our first global climate risk assessment ies, thinkers and doers. We embrace all have identified six core SDGs that are was completed in March 2020. We ap- perspectives, collaborating to make a posi- material to our business and where we plied the Task Force for Climate Related tive impact. can have the most influence and impact: Financial Disclosure (TCFD) framework No. 3 Global Health & Well-Being; No. to identify climate risks that are material Jacobs Employee Networks (JENs): 6 Clean Water and Sanitation; No. 9 In- to our business, including those arising Our eight JENs have nearly 23,000 mem- dustry, Innovation and Infrastructure; No. from both physical and transitional risks. bers among them and work to promote 10 Reduced Inequalities; No. 11 Sustain- We recently submitted our FY21 TCFD, inclusion and equality, not only within Ja- able Cities and Communities; and No. 13 cobs but with our clients, potential recruits 34 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 and with the communities we serve. The JENs are entirely employee-led and orga- nized, partnering with leadership to drive JACOBS MAKES STRATEGIC INVESTMENTS strategy and policy. IN THREE COMPANIES TO ADD TO Equality: In 2020, we launched a glob- ESG ADVISORY & DATA TOOLS al Action Plan for Advancing Justice and Equality, which builds on our existing To- PA Consulting a true ‘private equity style’ investment from Jacobs getherBeyond strategy and sets actionable initiatives and measurable objectives in the In November 2020, PA Consulting (PA, London, UK) announced that global techni- company’s continuing efforts to address cal and professional services leader Jacobs signed an agreement to invest in PA for a 65% embedded and systemic racial inequali- stake in the company. The transaction valued PA at £1.825 billion and sees the exit of The ties. And we joined The Business Coalition Carlyle Group, one of the world’s most prominent private equity firms. PA grew strongly supporting passage of the Equality Act in during the five-year Carlyle investment period through a combination of organic and the United States that would provide the M&A-led growth, leading to compound annual revenue growth of 12% since 2016 and a same basic protections to LGBTI+ people more than doubling of EBITDA. as those afforded to other protected groups PA employs more than 3,300 people globally, and has acquired seven specialist consul- under U.S. federal law. tancies and innovation firms since December 2017:Nyras , a UK-based international avia- Safety: BeyondZero® is our approach to tion consultancy; Sparkler, a London-based digital insight and strategy consultancy; Bos- the health, safety and security of our peo- ton, Massachusetts-based Essential Design, an innovation strategy and product design ple, the protection of the environment and business; London-based We Are Friday, a digital service design and engineering agency; the resilience of Jacobs. It is the foundation 4iNNo, an innovation company based in Cincinnati, Ohio; Astro Studios, a brand strat- of our company’s culture of caring and a egy and product design agency based in San Francisco California; and Cooper Perkins, a core part of our values and who we are technology development and engineering company with offices in Boston and San Fran- at Jacobs. Mental Health Matters: in col- cisco. laboration with global mental health pro- From inception in 1943, PA has worked with a wide range of clients and developed fessionals, Jacobs developed One Million world-leading innovations. Recent examples include: Virgin Hyperloop to reinvent trans- Lives – a free mental health check-in tool port; Ori Biotech to revolutionize cell and gene therapy manufacturing; iPredict an AI and to enhance users’ understanding of their machine learning system to predict failures in critical underground electricity distribution current state of mind and provide proac- assets. continued on facing page tive strategies for personal mental health development.

Global Giving and Volunteering: With a focus on the future, the board operations and business travel by 2030. Collectively™ is Jacobs approach to corpo- is formalizing the oversight of ESG; inte- We achieved net zero carbon in line with rate citizenship and philanthropic efforts. grating ESG into Jacobs’ corporate culture; global standard PAS 2060:2014. Alongside Uniting our 55,000 visionaries, dreamers and increasing disclosure and external en- achieving our 2020 targets, we developed and doers in a single platform for giving gagement on ESG initiatives and metrics. science-based carbon-reduction targets for and volunteering, Collectively allows us our direct and indirect emissions and these to amplify the positive impact we make in We have also introduced a dedicated have been approved by the Science- Based our communities every day. Board Committee for ESG & Risk. The Targets initiative. purpose of the ESG and Risk Committee Human Rights: we became a signatory is to provide oversight and receive regular In FY20, we saw a 33% reduction to the United Nations Global Compact reports on environmental, social and gov- FY20, we saw a 33% reduction in total, (UNGC), a voluntary initiative based on ernance (ESG) matters and corporate en- calculated carbon emissions (Scopes 1, company commitments to implement the terprise risk management (ERM). 2 and a portion of Scope 3) to 116,466 UNGC’s Ten Principles on human rights, tCO2e, as well as a 50% reduction in our EBJ: What are the key highlights of labor, environment, and anti-corruption. travel-related carbon emissions — both Jacobs’ ‘Climate Action Plan’? from an updated FY19 baseline. The ma- Governance Walstrom: In April of 2020, we pub- jority of these emissions reductions were a Under the leadership of Steve Demetri- lished our first company Climate Action direct result of changes in operations due ou, Board Chair and Chief Executive Of- Plan committing to 100% renewable en- to the pandemic. We also outlined how we ficer, Jacobs’ board composition and over- ergy for our operations in 2021, net zero will start to bring climate uncertainty into sight has changed with seven new directors carbon for our operations and business the mainstream as part of our enterprise in the last five years. The board is now 55 travel in 2020, and carbon negative for our level risk assessment process, in line with  percent female or ethnically diverse. recommendations made by the TCFD. Strategic Information for a Changing Industry 35 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

The new strategic partnership with Ja- will drive social change, spread prosperity applied at all stages of projects from win- cobs will enable PA to accelerate its growth and meet the growing challenges facing ning a project tender, to obtaining con- through geographic expansion, particu- communities.” Simetrica director Daniel sent, assessing multiple impacts, carrying larly in the US, and additional acquisi- Fujiwara said: “Over the past decade we out public consultation, construction and tions, as well as enhance its capabilities in have made significant contributions to the the project in use. innovation, design, digital and technology. methodology and uptake of social value The ‘private equity style’ investment from analysis in the UK and globally. With Simetrica founder Fujiwara is an aca- Jacobs will allow PA to retain its indepen- Jacobs’ investment and partnership, we demic by background with a London dence, culture, brand and values, says PA, can further our impact by employing our School of doctorate in economics and so- and continued share ownership by PA em- cutting-edge methods to a wider range of cial policy. In various government posts in ployees is a key feature of the transaction. sectors and clients to drive change across the UK and Tanzania he served as a senior priorities such as mobility, connectivity economist and contributed to internation- John Alexander, Chair of PA and for- and placemaking, increasing their social al guidelines on social value measurement mer CEO of ERM, said as the deal was impact and making them more sustain- and project evaluation. Fujiwara set up announced: “We have undertaken a thor- able.” Simetrica to provide research, consultancy ough process to screen and select potential and training on social impact measure- new external investors that align with PA’s Simetrica-Jacobs released a thought ment and policy evaluation, growing to a culture, independence and ambition. Ja- leadership paper titled Before & Beyond staff of 30 by the time that Jacobs acquired cobs stood out during the selection process the Build: A blueprint for creating social its 50% stake in it in 2019. because of the close affinity between our value through infrastructure investments. respective values and their reputation as The paper explores how infrastructure Biomimicry 3.8 one of the leading global providers of tech- investments can contribute to addressing In November 2020 Jacobs signed a stra- nical and professional services to clients critical societal issues and how infrastruc- tegic alliance teaming agreement with Bio- across the public and private sectors. We ture could be planned, delivered/built and mimicry 3.8, a consulting and innovation were hugely impressed with Jacobs’ com- operated to generate enduring social value firm specializing in nature-based solutions mitment to a PE style investment to sup- at scale and help overcome entrenched so- and nature-inspired designs. Biomimicry port our values and purpose and accelerate cial issues in our communities. is an innovation methodology informed our growth trajectory.’’ Jacobs’ investment by 3.8 billion years of natural evolution was completed in March 2021 following Simetrica-Jacobs has developed a range and provides a unique platform for the de- PA shareholders voting 99.9% in favour of of software products to help organisations velopment of sustainable and regenerative the transaction and a UK Court approval to measure social value. Its client list is designs. process. varied, ranging from museums and small charities, to premier league football clubs, Biomimicry 3.8 offers it signature pro- OECD governments and international Simetrica-Jacobs collaboration cess Positive Performance, an assessment organisations, with contracts running already producing results and innovation methodology created by well into six figures. Work is broadly split B3.8 to help corporate clients develop and In October 2019 Jacobs acquired a 50/50 between the public and private sec- integrate regenerative best practices, there- 50% share in UK-based social value and tors. Around 80% of activity is currently by improving the health and wellbeing of wellbeing measurement specialists Simet- in the UK. rica, with the companies already working ecosystems and the communities who de- together to develop new best practices and Jacobs’ CEO Steve Demetriou has stat- pend on them. ed that the 55,000 Jacobs would be focus- solutions related to social value and well- The methodology helps engineers, ar- ing on lines of business with higher growth being principles. The new partnership chitects, landscape architects and planners potential and margins including aerospace, comes in response to increasing client de- to understand, emulate and facilitate eco- nuclear, cyber, healthcare, infrastructure mand driven by the Public Services (Social system services such as air quality, carbon and sustainable solutions. Donald Mor- Value) Act in the UK, the Organisation sequestration, water cycle management, rison, Jacobs’ people and places solutions for Economic Co-operation and Develop- aesthetics, and renewable energy. Jacobs senior vice president, Europe and digital ment’s (OECD) Inclusive Growth Initia- and B3.8 reported initial projects with strategies with a 30-year career in civil en- tive, and the United Nations Sustainable Ford Motor Company and University of gineering and previously at Glasgow-based Development Goals (SDGs). California at Davis Healthcare. A source Babtie Group, a 2004 acquisition by Ja- listed 53 B3.8 employees as of 2020. Jacobs SVP Donald Morrison said: cobs, says that in the UK, social value is “Our partnership with Simetrica will enable us to help our clients understand how they can transform local, city and regional PA Consulting is a ‘private equity style’ investment from Jacobs... decision-making – identifying innova- and Jacobs acquired a 50% share in Simetrica. tive, inclusive and ethical investments that

36 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

Everyone wants an ESG ANTHESIS COMMITMENT TO SUSTAINABILITY strategy right now. BOLSTERS ECOSYSTEM APPROACH TO ESG; DIGITAL TOOLS A DIFFERENTIATOR EBJ: With that 60% growth in head- nthesis is the sustainability activator. Proud to be a B Corp, Anthesis seeks to make count that you mentioned, it’s clear that Aa significant contribution to a world which is more resilient and productive, doing Anthesis is investing in meeting market this by working with cities, companies, and other organizations to drive sustainable per- demand. How is the business ensuring formance. Anthesis develops financially driven sustainability strategies, underpinned by it is able to support this growth? Tell us deep technical expertise, and delivered by innovative, collaborative teams across our global about the vision that you have about business. The company combines the reach of big professional services groups with the growing your operations in North deep expertise of boutiques. With more than 1,000 clients, including 65 of the Fortune America. 500 and 26 of the FTSE 100, Anthesis North America has clients across all industry sec- Ludski: While we’re seeing tremendous tors, including corporate multinationals such as Cisco, PayPal, Gap, and Target, and also growth across Anthesis, the North Ameri- supports early-stage companies through Anthesis Ventures. can region is seen as the area with the big- Anthesis brings together 650+ experts operating in 40 countries around the world and gest growth potential in the foreseeable has offices in the US, Canada, the UK, Spain, Brazil, China, Colombia, Finland, France, future. The appointment of a new CFO Germany, Ireland, Italy, the Middle East, the Philippines, Portugal, Sweden and Andorra. Dean Reuben-Robinson specific to the In North America, Anthesis has 75+ experts and has continued to grow the team across North America region is evidence of our “the Covid year” and into 2021, to meet market demand. Organic revenue growth is commitment to meeting the ever-growing consistently in excess of 20%, year on year. Anthesis’ service areas include Strategy and market demand in this region. Dean’s Governance, Brand and Communications, Education and Culture, Supply Chain and strong track record in financial strategy Operations, Sustainable Products and Services, Transactions and Finance, Cities and En- and governance will support the ambi- vironments. tions and direction of the North America business and ensure we are well-equipped Chantelle Ludski, Chief Executive Officer, North America.A member of the Global to achieve our highest goal of activating Leadership Team, Ms. Ludski joined Anthesis in September 2020 as Chief Operating Officer sustainability in what we call the ‘Deci- for North America and Asia Pacific and became Chief Executive Officer of North America in sive Decade’. We’re also investing heavily January 2021. Before joining Anthesis, Ms. Ludski held the role of Chief Administrative Officer in our People infrastructure, both on the for the Americas at Renewable Energy Systems, Inc. and prior to that, she was Global Chief Risk people and systems front, to support our Officer at Arcadis N.V. in Amsterdam for three years. She moved to the Chief Risk Officer -posi growth, with investment in regional and tion from Arcadis UK, where she served as Director of Operations and Performance Excellence, global HR roles, as well in HR and learn- a role she took on following the merger between Hyder and Arcadis in 2014. In Hyder UK, she ing and development systems. was HR & Change Management Director and a member of the UK Regional Executive Team. EBJ: Why has Anthesis focused on Chantelle joined Hyder in 2012 as Operations Director for the UK Land Development, Build- sustainability services? ings & Environment sector, responsible for project and commercial performance of that business unit. Ms. Ludski started her career in her native South Africa as a Corporate & Commercial Ludski: In a recent interview, Anthesis lawyer in private practice, before moving to a General Counsel role with one of her firm’s clients Group CEO, Stuart McLachlan explains in the UK. She left legal practice and while studying for an MBA at London Business School, why he and the founding members estab- started a small organic coffee on campus, which she subsequently grew into the leading organic lished the company: chilled food- to-go business in the UK market. EBJ: What opportunities do you see for offering in the food and agriculture sector, “Anthesis was born out of frustration. Anthesis in the region? for example, leveraging our digital prod- Amid all the talk about sustainability, there ucts – the Cool Farm Tool and Activator was not enough action, and where there Ludski: The primary opportunity for Hubs. Our ability to develop digital tools was action the failure rate was really high. Anthesis in North America is continued in-house is one of our major differentiators So, whether you are driven by impact, or stellar organic growth, building on the and a key value proposition in our busi- business opportunity, there was a need to 60% growth in headcount that we’ve seen ness, as technology will play a crucial role create an organization that could respond over the last year. This growth is prompt- in enabling and accelerating sustainability differently to the market need, and there ing our addition of new services and so- progress. We’re also looking at strength- was a requirement to do something to ad- lutions, as well as entry into new sectors, ening our service offering around social dress the failure rate. We knew we could building on our market leadership in the impact to support our fast-growing ESG demonstrate there was alignment between tech, retail and finance sectors. We’re cur- strategy practice. And, of course, reviewing sustainability and commercial perfor- rently exploring our options to extend our acquisition opportunities. mance and sat down with a blank sheet of Strategic Information for a Changing Industry 37 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 paper and armed with the experience we EBJ: Anthesis has developed the Activa- Development of Net Zero Strategies had, assembled something new to address tor Approach, which is a methodology A challenge we often see our clients face both the market need and the planetary for delivering sustainable performance. in their net zero strategy is a focus on offset- need.” What are common problems that ting or carbon removals instead of avoiding companies experience at each stage of and reducing carbon activities from a time, As for what’s ahead for Anthesis, we’ve project evolution? recently completed a significant minority effort and investment standpoint. We also investment deal through the impact fund Understanding Climate Risk see companies getting caught in the scop- of Palatine Private Equity, a responsibly- ing and definition phase and perceived driven, mid-market private equity firm. The most common problem is that complexity of the science behind targets. The investment allows us to turbocharge companies think too narrowly about cli- We advise our clients that the science be- our focus across the decade’s most material mate risk. They may focus predominantly hind targets can actually be understood in global systems: net-zero impact; carbon on coastal flooding and extreme weather a more simplified way: the boiled-down remediation; product circularity; land use; events. Climate change impacts are, how- priority is to cut emissions in half by 2030, and inclusive economies. ever, more likely to be more subtle, though and to zero by 2040. We also help our equally impactful. Modest changes in clients navigate the additional complex- We’ve set ourselves ambitious targets temperature and precipitation patterns ity of a net zero strategy that should not through this investment, including work- can affect crop productivity, change pest be undertaken in isolation of water, waste ing with our clients to remove 3 gigatons prevalence, and affect infrastructure main- and other sustainability priorities. And fi- of CO2 by 2030, which is the equivalent tenance needs, such as the sizing and ef- nally, one of the biggest challenges compa- to half the emissions from the US in one fectiveness of chillers, as a single example. nies face is short-term thinking, driven by year. This comes on the back of achieving It’s key that a broad spectrum of internal short-term business planning cycles, versus B Corp accreditation, allowing us to move stakeholders are engaged on thinking the long term commitment required of a forward with the goal of being the employ- about how weather impacts the business meaningful Net Zero plan. er of choice for top talent, along with the and its value chain. Then climate change partner of choice for our clients. modeling can help to understand those Implementation of Value Chain specific impacts. Reductions To that end, this year the U.S. business received Great Place to Work certification Understanding Current & Future The efficient multi-tenant data -col – an award is based entirely on what cur- Footprint lection from suppliers is one of the most rent employees say about their experience daunting aspects of starting a carbon man- working at Anthesis. In survey responses Developing a footprint for company agement program. And then comes ac- from the U.S. team, 100% of employees operations (scope 1+2 emissions) is of- counting for changes to supplier emissions said they are proud to tell others they work ten relatively straightforward. For exam- at operational or product level, determin- for Anthesis, and 100% of employees said ple, building energy data are often readily ing the balance of responsibility, navigat- that their work has meaning and is not accessible and of sufficient accuracy to al- ing the funding and management of ini- “just a job”. low credible tracking of progress. Because tiatives with and through suppliers, and companies have been doing scope 1+2 foot- getting credit. Supply chains are complex, EBJ: Tell us about your sustainability prints for a couple of decades, the methods and very dynamic! Ecosystem thinking is practice. are generally well established. However, required, to make value chain reductions Ludski: Our mission is to drive sustain- developing a footprint for the extended work well, and this requires a move away able performance. We do this by support- value chain (scope 3 emissions) can be a from what has sometimes been more of ing our clients in all aspects of sustainabil- wholly different story. Companies often an adversarial relationship between buyer/ ity, including carbon management – net don’t have much visibility into their sup- seller. zero and science-based targets, all things ply chain, making it challenging to obtain circular economy, sustainable packaging actual data on suppliers’ emissions. Com- Balancing Carbon Budget panies with large or complicated business and products, ESG strategy and gover- Companies should be setting targets for structures may also not know what should nance – including providing support to reducing their emissions. Fortunately, ini- financial institutions as they navigate the be reported in their footprints. ESG pathways for themselves and with their portfolio companies, and supply chain solutions, which includes a fully Our ability to develop digital tools in-house is one of our managed service offering to support com- major differentiators and a key value proposition in our panies in managing complex supply chain business, as technology will play a crucial role in enabling compliance matters, provided through our Information Solutions team. and accelerating sustainability progress.

38 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 tiatives like the SBT initiative or RE100 made the financial services sector sit up the fire – witness the recent ruling by the (a global corporate renewable energy ini- and pay attention. Sustainability and ESG Dutch courts, which went the wrong way tiative bringing together 300+ businesses is no longer a ‘tick-the-box’ exercise; there’s for Shell, and ExxonMobil being called committed to 100% renewable electricity) increasing recognition that it drives main- out, recently. Below are some specific ano- provide objective benchmarks for what stream value. nymized examples from recent projects: those targets should look like. Attaining the ambition levels required can be chal- And, there’s tremendous focus on how • We are working with an apparel com- lenging. Driving reductions towards a to integrate sustainability reporting into pany in pre-IPO stage who had strong climate-safe future can mean significant financial reporting. This is an area where commitments to sustainability since their reductions have to happen over a relatively Europe has been leading the way and some inception but they are using sustainability short period of time. As with carbon foot- might say that the US is playing catch up. to enhance their brand and reputation to prints, many of the challenges rest with One might say that melting icebergs lifts make them more attractive to investors scope 3 — companies may influence but all boats! when they go public. do not own or control scope 3 sources, EBJ: What are the most innovative Net • We are working with several compa- and setting scope 3 targets has emerged Zero projects that you have conducted nies in the tech sector where talent attrac- as common practice only over the last 5 in the past couple of years? tion / retention is a significant business years. Companies typically have to focus risk, all of whom are using sustainability as on collaborations with value chain part- Ludski: Our work with Target Corpo- a differentiator that enhances their work- ners to enable scope 3 reductions. For ex- ration is an example of an ongoing rela- place culture. They know from employee ample, engaging and building the capacity tionship to support them in their net zero surveys and outside market studies that of suppliers to measure and manage their journey. We recently completed one phase employees factor in their employer’s com- own emissions. Many companies will be of work to help Target develop its first full mitment to addressing climate change, focusing on supplier engagement as a key Scope 3 emissions inventory, evaluate and social inequity and other significant chal- reduction strategy over the coming years. then set a science-based target (SBT) to lenges when choosing who to work for (or Beyond reducing scope 1+2+3 emissions, fulfill the requirements of its SBTi com- not). companies can also purchase offsets or mitment, building on its operational invest in technologies that help remove Scope 1-2 emissions reduction goals. An- • A client in the data center sector rec- carbon from the atmosphere. Offset prices thesis guided Target through this process ognizes that as more companies look to ex- have risen significantly over the past year leading to an industry leading 30% abso- tend their sustainability commitments and as market demand has picked up in line lute emissions reduction by 2030 and a initiatives through their supply chain, they with the broader business interest in sus- supplier engagement target. want and need to be seen as a preferred tainability. supplier. Each year they enhance their sus- Anthesis continues to partner with Tar- tainability disclosures broadly to enhance EBJ: What are the major trends within get through the implementation phase: their brand and reputation and they invest the Sustainability Industry? providing subject-matter expertise to di- in generating reports for their customers rect existing programs and launch new ini- Ludski: There’s a need to give manage- that demonstrate how using them as a data tiatives across its supply chain in key prod- ment the tools to implement and man- center partner reduces their energy use/ uct impact areas (apparel, grocery, home age the sustainability strategies that the carbon footprints due to their commit- & hard goods), program management of C-Suite is setting, and this is one of the ments to renewable energy etc. This makes Target’s initiatives and workstreams, and drivers for the explosion in the develop- them attractive to customers who are look- supporting the roll out of Target’s ambi- ment of digital tools to support supply ing for data and information to help them tious supplier engagement program to get chain management, carbon management tell their sustainability story. 80% of its suppliers by spend to set their and ESG activities. All this activity brings own science-based targets by 2024. EBJ: Where does your ESG practice fit is substantial investment into ‘green tech’ within your company and how do you EBJ: In which ways are your clients businesses, including startups. It’s an excit- distinguish it from competitors? ing time! using sustainability to improve their brand? Ludski: ESG is a mainstay of our of- Acquisitions are on the rise too, and fering within our strategy and governance some consolidation will follow, if previous Ludski: In a number of instances, cli- solution set. We provide services around market frothiness is any indicator of the ents are seeing sustainability as a value ESG strategy and everything that accom- future. If you can call it a trend, the big- driver. What’s increasingly clear is that panies that—materiality assessments, car- gest trend in 2021 is the level of demand greenwash doesn’t work, companies are bon footprinting, communications and re- for sustainability services. Historically, the having to come up with a strategy and porting, policy development, etc. We work major tech companies have taken a leading demonstrate that they are walking the with numerous financial institutions, in- role in setting the sustainability agenda. talk. Activist investors and activist groups cluding private equity asset managers and Larry Fink’s statement earlier this year has are holding companies’ proverbial feet to

Strategic Information for a Changing Industry 39 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 banks, to help them develop the strategies EBJ: What do you see as the major Naked Energy is a ‘Photo Voltaic and tools to identify and mitigate ESG- trends within the ESG Services Market? Thermal Tube’ technology that can pro- related risks in their investment portfolios duce both electricity and high grade heat and take advantage of ESG opportunities. Ludski: The biggest trend is the finan- through a photo voltaic panel situated We also have a very active private equity cial services sector starting to really step up. within a vacuum in a glass tube that can be practice, delivering portfolio company We are hearing from clients that investors easily installed on both a roof or the facade ESG assessments and ESG due diligence and Limited Partners have sharpened their of a building and creating a combination reports on the buy and sell side. focus on ESG, and it now sits among the of renewable energy (electricity and heat). most important topics for them when they On a typical commercial flat roof, far more EBJ: How are ESG Reporting Standards engage with companies. Larry Fink’s let- useful energy is captured compared to con- changing and how are standards differ- ter to CEOs reflects and further reinforces ventional PV panels which require up to ent in the various regions of the world this trend. More specifically, the ESG top- 50% more space to generate the same fi- in which you operate? ics that are most commonly at the top of nancial savings and up to 300% more to the list are climate and diversity & inclu- Ludski: We are seeing ESG reporting deliver the same carbon savings. sion, and investors are looking for more guidelines and frameworks move in the di- granular data and performance metrics. Remedi!ate is a unique solution that rection of consolidation and standardiza- In response to these trends, it seems that will take carbon dioxide and emissions tion, but regional variations will continue everyone wants an ESG strategy right now. from flue stacks associated with industrial to exist. processes including power stations, in- EBJ: Can you tell us about Anthesis dustrial process plants, cement works and Actions toward standardization contin- Ventures and which interesting projects convert these through a patented bio reac- ue to increase. In 2020 CDP, CDSB, GRI, / technologies that address sustainabil- tor into a high value protein algae that can IIRC, SASB issued a Statement of Intent, ity and ESG have come out in the last be utilised into animal feed or for human outlining a vision for a comprehensive cor- couple of years? porate reporting system, and their com- consumption and can support the dis- mitment to work together to achieve it. At Ludski: Anthesis Ventures was created placement of soy. or before the COP 26 event in November to support our global clients with access Signol is a digital behaviour change so- of this year, it is expected that the Inter- to unique and emerging technologies lution that can support with reduction in national Financial Reporting Standards that will have the potential for delivering carbon and emissions through truly under- Foundation (IFRS) will announce their significant positive impacts across many standing the impact of the decisions made intent to establish a new International facets of sustainability including Climate by airline pilots, ships captains, truck driv- Sustainability Standards Board (ISSB) Change and Net Zero Carbon. ers and during a pilot with Virgin Atlantic, to develop a global baseline of standards Signol was able to contribute to the saving for sustainability-related disclosures spe- We have created partnerships with a of circa $6 million in fuel and reduction of cifically to meet the information needs of number of diverse technology solutions 24,000 tons of C02 emissions over just 8 investors when assessing enterprise value. that we believe will have the potential to accelerate reductions in carbon in the deci- months.  However, ESG priorities that drive re- sive decade ahead of us. porting requirements are also affected by regional or local regulatory policy, which impact what information companies A challenge we often see our clients face in their net zero within each jurisdiction will be required to report (e.g. EU’s proposed Corporate strategy is a focus on offsetting or carbon removals instead of Sustainability Reporting Directive). The avoiding and reducing carbon activities from a time, effort and standardization efforts to assess enterprise value will likely not capture these varia- investment standpoint. ... Offset prices have risen significantly tions in regional priorities. over the past year as market demand has picked up in line We are seeing investor-driven report- with the broader business interest in sustainability. ing requirements affecting clients globally and are currently the single biggest driver for ESG disclosures in North America specifically. Europe and Asia experience an additional level of regulated ESG reporting requirements that, for the most part, have not yet been established in NA.

40 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

tion. “We are clear on our mission, values, vision, strategy, culture and our brand. If PALATINE ACQUIRES A SIGNIFICANT you don’t buy into these non-negotiables, then Anthesis is not for you... We say this MINORITY SHAREHOLDING IN GLOBAL to new recruits and we’ll say that to the SUSTAINABILITY SPECIALIST ANTHESIS vendors of businesses we are interested in buying. We have this point of unity, but 2021 deal underlines British private equity firm Palatine’s long-held commitment to beyond that we recognise there is a huge impact investing and the broader ESG agenda. amount of diversity, which is something that should be celebrated.... “The impor- n March 2021, Palatine Private Equity a deep cultural alignment between Palatine tance here, is having a clearly-defined and ILLP (Manchester UK) announced an and Anthesis....we’re looking forward to inspiring mission.” investment in Anthesis Group, underlin- deploying our expertise in value creation, ing a long-held commitment to deliver digital transformation and successful buy- Stuart says Anthesis must be alive to positive ESG outcomes and Palatine’s first- and-build strategies.” new disruptive technologies and ideas to mover status in mid-market impact in- help them deliver. “When we are looking vesting. Anthesis was established in 2013, In 2021, Anthesis was certified as a B at an acquisition, our primary reason is grew to 2019 turnover of £40 million, and Corp, recognising that it has the highest to fulfil a strategic need because they are is ranked in the Sunday Times Fast Track standards of verified social and environ- plugging a gap in the puzzle and they will 100 as one of the UK’s fastest-growing mental performance, public transparency, be able to help us deliver our mission. We private companies. Anthesis is headquar- and legal accountability to balance profit therefore must be close to the innovators tered in London, with a global workforce and purpose. In the transaction, Palatine and creators of new, disruptive technology. of 600 consultants across 17 countries, was advised by Gateley (legal), Clearwater Ultimately, being at the nexus of sustain- and supports leading companies, cities International (corporate finance and debt ability and digital is a powerful place to and organisations with financially driven advisory), RSM (Tax), Armstrong (Com- play,” he says. sustainability strategies, underpinned by mercial DD), Grant Thornton (FDD), technical expertise. Its clients include 25% Berkeley (Operational DD) and Cyberfort “There’s a lot of transformational of the FTSE 100, 65 of the Fortune 500, (Cybersecurity DD). Anthesis was advised change we need to help our clients navi- and world-leading brands such as Amazon, Jamieson (lead advisory) and Blake Mor- gate, so we need to have a global platform, Target, Kimberley-Clark, and Nestle. gan (legal). we need to use tech, we need to make sure we have the right expertise and plug the Palatine said the investment will en- Comments from Stuart McLachlan, right expertise gaps.... In terms of green- able Anthesis to scale at pace, organically Co-Founder and CEO of Anthesis washing, we were coming up against it up and acquisitively, across borders and dis- to about three years ago, when a lot of ac- “Anthesis was born out of frustration. ciplines, and accelerate its impact through tivity in the market place was, to be hon- Amid all the talk about sustainability, there digitisation, and will benefit from its pio- est, quite cosmetic. neering ESG framework, unique expertise was not enough action, and where there in returns-focused impact investing, and was action the failure rate was really high.” “Then something happened three years ago – was it Blue Planet? Was it the arrival M&A track record with more than 200 “So whether you are driven by impact, of Greta? Was it the investment commu- acquisitions. or business opportunity, there was a need nity recognising the importance of ESG? to create an organisation that could re- Anthesis has recorded underlying or- A lot of things came together, and at that spond differently to the market need, and ganic revenue growth in excess of 20% point what we do went from being con- there was a requirement to do something since 2017 and achieved double digit sidered mainly by CSR or Sustainability to address the failure rate. revenue growth in 2020, even with the departments to something that is main- challenges of the pandemic. Anthesis will “We knew we could demonstrate there stream in organisations. remain majority owned by its team and was alignment between sustainability and “Clients are now saying sustainability Palatine partners Beth Houghton and commercial performance and sat down is something potentially existential and Tristan Craddock are joining the board. with a blank sheet of paper and armed we have to change what we do, be it in with the experience we had, assembled Gary Tipper, Managing Partner at Pala- sourcing, in supply chain, manufacturing something new to address both the market tine Private Equity, said: “Having embed- or branding. At that point it went from a need and the planetary need.” ded pioneering ESG practices across our dark corner of an organisation into the C- buyout funds for more than a decade and Since 2013 Anthesis has made more suite, and Anthesis is there to deliver this been the first in our market to recognise than a dozen strategic bolt-on acquisi- transformational change.”  the potential for strong returns from im- tions, but the business been able to retain Adapted from palatinepe.com ‘Inside the Deal’. pact investment in the mid-market, we see its culture as a purpose-driven organisa-

Strategic Information for a Changing Industry 41 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

The publication highlighted WSP’s global Future Ready program, which en- WSP SECC & CRS PRACTICES EVOLVE TO courages and enables our staff to better ADDRESS CLIENT NEEDS IN ESG STRATEGY anticipate future conditions through a series of trends related to climate, society, AND EXECUTION; FOCUS ON INNOVATION technology and resources, plan for the future by integrating future trends into our WSP is a leading global professional services consultancy that brings together roughly work, and support our clients to develop 50,000 experts and last year generated just under $9 billion in revenue globally. WSP USA industry leading innovations. World Fi- is the U.S. operating company of WSP, with more than 12,000 employees in over 200 of- nance Magazine also noted WSP UK’s role fices across the U.S. The firm provides engineering and consulting services to private and in founding Pledge to Net Zero, which was public sector clients in the transportation and infrastructure, property and buildings, earth the first environmental services industry and environment, power and energy, resources and industry markets, as well as offering commitment in the UK requiring science- strategic advisory services. WSP’s talented professionals — comprising engineers, advisors, based targets from its signatories to tackle technicians, scientists, architects, planners, sustainability analysts, environmental special- Greenhouse Gas (GHG) emissions within ists and surveyors — are well positioned to deliver successful, sustainable, resilient, Future its organizations. Ready™ projects, wherever clients need us. EBJ: When did WSP develop its ESG Tom Lewis, Senior Executive in charge of Climate, Resilience & Sustainability at WSP Services Practice? How do you differen- USA. CRS also includes the professional consulting firm’s emergency management practice and tiating your ESG services, and what is Future Ready innovation program. Prior to its acquisition by WSP, Mr. Lewis served as presi- the make-up of your ESG team? dent and corporate board member of Louis Berger U.S., and earlier as its lead executive on environment, emergency management, sustainability and climate resilience, working across the WSP: WSP USA’s multidisciplinary U.S. and globally. Mr. Lewis has also served on a variety of boards and committees promoting sustainability, energy, climate change sustainable and resilient infrastructure, specifically including the International Coalition for and resilience teams have been providing Sustainable Infrastructure, Resilience First and the Zofnass Program’s Sustainable Infrastructure ESG-related services for two decades. In Advisory Board at the Harvard University Graduate School of Design. the past year, WSP established its Global ESG Committee under the leadership of Michael Mondshine is an internationally recognized sustainability expert with more than André-Martin Bouchard, WSP’s Global 25 years of experience in climate change mitigation and resilience strategies, from risk assess- Director, Environment & Resources Sec- ments to adaptive policy development to greenhouse gas accounting. In 2007 he was recognized tor and Global Corporate Director, ESG, by the United Nations’ Intergovernmental Panel on Climate Change for his contributions to from WSP corporate headquarters in their efforts that were awarded the 2007 Nobel Peace Prize. He leads WSP’s Sustainability, En- Montreal. As with counterparts from other ergy & Climate Change practice at WSP USA, and delivers strategic counsel to clients ranging global WSP regions, Tom Lewis serves on from Fortune 100 corporations to utilities, and from local municipalities to national govern- this committee as the U.S. representative ments. He facilitated the Climate Adaptation Implementation Committee for the California in his role as the U.S. Climate, Resilience High Speed Rail Authority and serves as Senior Advisor to WSP USA’s Future Ready Program. and Sustainability (CRS) National Busi- ness Line executive. Heather Unger is the Future Ready and Innovation Program Lead for WSP USA and a sustainability project director within its CRS business. Heather focuses on Environmental, So- In January 2021, WSP USA pulled cial and Governance (ESG) strategic planning, materiality assessments and public disclosure together existing specialists from across for clients as well as WSP. Ms. Unger serves on WSP’s Global ESG Committee and co-led the multiple parts of its organization to create development of WSP’s 2020 and 2019 GRI ‘In Accordance-Core’ annual ESG reports. As the and launch CRS. By doing so, we central- Future Ready Program Lead, Heather supports and guides staff across the organization to bet- ized a wide range of services within WSP ter anticipate future conditions, develop industry leading innovations, and plan for the future to provide best-in-class solutions in ESG, by integrating future trends into the firms work. Future Ready is WSP’s approach to thinking sustainability, community and infrastruc- beyond the conventional to design and deliver projects that are ready for the changes and chal- ture resilience, and emergency/disaster re- lenges that our world will face in the future. sponse, recovery, preparedness and mitigation. We know of no other firm that brings EBJ: Congratulations for winning the “Most Sustainable Company in the Engineer- all these capabilities with hard and soft ing Industry” award issued by the World Finance Magazine for the third consecutive skills synergistically together into one team year. What WSP accomplishments and internal initiatives were key the award? under one leader in a non-P&L organiza- WSP: World Finance Magazine has recognized WSP’s continued ESG leadership in- tional element. cluding alignment with the Paris Agreement and Science-Based Target Initiative (SBTi); This structure allows CRS to work col- commitment to implementing the recommendations of the Task Force on Climate-Relat- laboratively and seamlessly with all regions ed Financial Disclosures (TCFD), UN Global Compact and the Sustainable Development and all other business lines in a manner that Goals; and Global Reporting Initiative (GRI) disclosure.

42 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 addresses every mode and lifecycle stage of In April 2021, we raised the bar even replenishment, and, of course, net zero infrastructure across both the private and further on our climate action ambitions greenhouse gas emissions. Further on, we public sectors. The CRS team members by committing to achieve net zero emis- help our clients extend their sustainability have highly varied backgrounds and tech- sions across our value chain by 2040, sup- upstream to their supply chain and down- nical disciplines including but not limited ported by science based GHG emissions stream by performing life cycle analysis of to sustainability, resilience, financial re- reduction targets, approved by the SBTi. their products and services, assisting in the porting, planning, climate science, model- We also continued our TCFD journey by creation and marketing of low-carbon al- ing, risk analytics, hazard mitigation, en- conducting a qualitative assessment of cli- ternatives. We aid these clients in commu- gineering, emergency management, social mate-related risks and opportunities. nity engagement to ensure that values of equity and program/project management. equity and justice are integrated into their EBJ: What do you need to take into sustainability efforts early in the process EBJ: What is the importance of Accel- consideration when assisting clients to rather than as an afterthought. erating Climate Change Action within accelerate their own Climate Change a company’s ESG program? In which Action? How do these key factors vary Finally, we evaluate risks associated ways is WSP reducing its GHG emis- among industries? with the physical impacts of climate sions? change and a transition to a low carbon WSP: It is critical that we meet clients economy, leading to support for building WSP: The urgency of addressing cli- wherever they are in their climate change adaptive capacity and both infrastructure mate change through both mitigation and action journey. Early in the journey we and organizational resilience among our adaptation in an integrated fashion cannot help organizations complete inventories clients and the communities in which we be overstated. Every organization needs to or key environmental metrics including work. In these efforts we have the benefit understand its unique climate impacts and greenhouse gas emissions, energy con- of relying on technical experts across WSP, take action to address them. WSP has been sumption, water consumption and waste in our Sustainability, Energy & Climate helping clients on their sustainability jour- production. We then assist in the report- Change (SECC) practice, the broader ney for two decades and “walks the talk” it- ing and disclosures for this performance CRS, and other lines of business such as self. In 2020, WSP became the first profes- via such frameworks as CDP, GRI, SASB Property & Buildings (e.g., energy audit- sional services firm in the Americas to sign and TCFD. ing) and Power & Energy (e.g., renewable a sustainability-linked syndicated credit energy system design), in addition to those facility, which ties our borrowing costs to As our clients further progress in their in other WSP regions including Canada, meeting three sustainability performance journey, we help them set targets for im- UK, Sweden and Australia. targets: a reduction in global GHG emis- proved performance, including net zero energy and GHG emissions (helping with sions, an increase in Green Revenue (reve- Overall, we are supporting some 120 energy efficiency, feasibility assessment nue from services having a positive impact customers on approximately 150 proj- for on-site renewable and securing power on the environment), and an increase in ects annually at all stages of the sustain- purchase agreements), net zero waste (cir- the percentage of management positions ability journey. These customers are pre- cular economy), net zero water and water held by women. dominantly commercial entities, including Core Elements of Recommended Climate-Related Financial Disclosure by the TCFD

Sourse: WSP, Adapted from the Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures (June 2017).

Strategic Information for a Changing Industry 43 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 more than 40 in the Fortune 500. More the Discover phase inform the gap analy- velop a stand-alone TCFD report. Given recently, our public sector clients have also sis, provide information about Governance the alignment between the CDP and become more focused on their own cli- and are an opportunity to educate key TCFD frameworks, companies often find mate change action and ESG journey, so stakeholders on climate issues and TCFD. synergies between their CDP and TCFD this is a major new growth area for WSP. reporting. The result of the Discovery phase is a EBJ: How do you use TCFD? roadmap that guides the company toward Phase 4: Transform its desired level of alignment with the WSP: We have seen a strong surge in TCFD recommendations. In Phase 4, climate change planning is client interest in assessing and disclosing fully integrated into a company’s strategic, climate risks and opportunities due to in- Phase 2: Assess planning and operating processes. Systems creased investor pressure, regulatory and are put in place to monitor performance opportunity drivers, and present-day im- In Phase 2, WSP works with the com- against metrics and targets developed in pacts from extreme weather. pany to assess its climate-related physical Phase 3 to update the scenario analysis as and transition risks and opportunities. To WSP uses the TCFD guidance to as- needed, and to drive continual overall im- manage the uncertainty associated with provement in assessing and managing risks sist clients in identifying, managing and future climate change, WSP uses the sce- disclosing risks and opportunities from and taking advantage of opportunities. nario analysis approach recommended in Governance processes may be enhanced by climate change. Although there are a num- the TCFD guidance. A company that is at ber of other frameworks used for reporting tasking a Board committee with oversight an early stage in its TCFD journey typi- of climate issues, appointing Board mem- climate risks and opportunities, the TCFD cally begins with qualitative scenario anal- framework has emerged as a highly effec- bers with climate expertise, or appointing ysis and may later perform quantitative a Chief Resilience Officer. tive tool for developing disclosures used by scenario analysis of key identified risks and investors and other stakeholders. At their opportunities to understand its financial WSP uses the TCFD framework to June 2021 Summit, representatives of the and strategic impacts. For key assets with support companies as they develop the in- G7 countries expressed support for man- exposure to physical climate risks, an adap- stitutional knowledge and systems to assess datory climate-related financial disclosures tive capacity assessment helps to quantify and manage climate risks and benefit from using the TCFD framework. the true residual risks. climate-related opportunities. Using the TCFD framework helps companies deal The TCFD guidance recommends 11 The results of the scenario analysis can specific disclosures across four core ele- with the uncertainty and the long-range then inform future disclosures, business planning horizons associated with climate ments: Governance, Strategy, Risk Man- strategy development and risk manage- agement and Metrics and Targets. The change. WSP uses the TCFD framework ment. A critical component of Phase 2 is as a guide to enable companies to go from TCFD recognizes that it may take several working with key stakeholders to incor- years for a company to fully align with the the start of their TCFD journey to success- porate climate assessments into the com- fully addressing climate change alongside disclosure recommendations as it can re- pany’s existing risk management, strategy/ quire a great deal of effort for companies the many risks and opportunities that al- planning, and business continuity systems, ready successfully manage. to build the necessary knowledge base and to then disclose these enhanced gover- and institutional capacity and carry out nance processes. EBJ: How do you incorporate the the required analyses. WSP works with United Nations Sustainability Develop- companies at all stages of their journey Phase 3: Plan ment Goals (SDGs) into a company’s toward aligning with the TCFD recom- ESG plan/strategy? mendations, taking a phased approach to In Phase 3, WSP assists companies assisting companies with climate-related with setting goals, metrics and targets WSP: The UN SDGs are a set of 17 disclosures. that inform disclosures consistent with global goals and 169 targets that aim to the TCFD’s Metrics and Targets core ele- ensure a sustainable, equitable future for Phase 1: Discover ment. Companies typically set targets for all. The SDGs can be used both as input their greenhouse gas emissions, water use in ESG strategy development and mate- As companies begin work to align with and waste, and increasingly are developing riality assessments, as well as a framework the TCFD’s recommendations, WSP typi- metrics to monitor resilience. for reporting activities. Many companies cally performs a gap analysis and bench- align with the high-level SDGs, but fewer marking exercise to determine the compa- Developing and disclosing climate- go down to the target level. Some company’s current alignment, as well as that of its aware business strategies is a key element nies, including WSP, have started tracking peers. This analysis evaluates in detail how of Phase 3, which moves the company the percentage of revenues earned from well the company’s existing disclosures toward aligning with the TCFD Strategy services that have a positive impact on the meet the TCFD’s 11 disclosure require- core element. At this phase, a company environment and that are identifiable ac- ments across the four core elements. Inter- may disclose climate-related information cording to and in support of the SDGs. views with senior company leaders during through its CSR or ESG reporting or de-

44 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

EBJ: What are the main components of EBJ: What is the process and impor- responding to CDP’s annual question- an ESG report? tance of obtaining third-party ratings naires. from organizations? WSP: ESG reports vary in structure EBJ: What are the major trends within and content depending on which, if any, ESG Ratings the ESG Services Market and how are framework(s) they align with; the organi- these trends evolving? zation’s ESG strategy and material topics; ESG ratings are consulted by investors WSP: Four major trends we see in the and stakeholder interests and concerns. and other stakeholders to assess company ESG performance against peer and indus- ESG services market include: The GRI sustainability reporting stan- try benchmarks. Some widely used ESG Net zero commitments and science- dard has long been the gold standard for rating platforms include Sustainalytics based GHG emissions reduction targets: sustainability reporting. Some organiza- ESG Risk Rating, MSCI ESG Ratings As- The number of companies who have com- tions have moved to an integrated re- sessment, Vigeo Eiris ESG Scorecard, and mitted to or set science-based targets has porting approach that incorporates ESG Refinitiv ESG score. accelerated over the past few years, and reporting into the organization’s annual over 1,000 companies around the world financial report. In recent years, newer To develop these ratings, ESG rater now have SBTi-approved science-based frameworks such as SASB and TCFD have analysts aggregate publicly available in- targets. We expect this trend to continue been introduced to address specific stake- formation on ESG policies, practices and to accelerate as companies commit to take holder concerns, primarily from investors. performance. Thus, publishing an annual meaningful action to support the Paris Many companies choose to align with mul- ESG report is important to gaining recog- Agreement and nations increasingly man- tiple frameworks. In September 2020, five nition for ESG performance. Most ESG date disclosure of climate risk and GHG leading ESG frameworks and standard- raters allow organizations to review the emissions. For example, in May the Biden setting organizations (CDP, CDSB, GRI, scoring before it is finalized and recom- Administration expressed a desire for large IIRC and SASB) committed to working mend changes. However, changes are typi- federal suppliers to set science-based tar- together to align ESG disclosure require- cally only accepted if the organization can gets and publicly disclose GHG emissions ments and announced their shared vision provide backup documentation. and climate-related financial risk. Once for climate disclosure in late 2020. WSP’s annual ESG report includes a targets are set, the real work begins in de- ESG reports are often structured data extract, summarizing all key ESG veloping achievement plans. around material topics. The definition of metrics in one place for easy access by ana- Renewable Energy Strategies: Sourc- materiality can vary by framework, but lysts. WSP provides some additional infor- ing renewable energy is important to generally refers to ESG topics for which mation directly into ESG rater platforms achieving GHG emission reduction goals. the company has the biggest impact (posi- as needed, and periodically reviews ESG As more companies are committing to net tive or negative). The report defines the rater datasets and reports to ensure accu- zero and science-based targets, the cost of company’s material topics, explains how racy and correct any mischaracterizations. renewable energy credits is going to in- the topics are managed, and reports on Ratings are typically updated annually. crease. Leading companies are working qualitative and quantitative indicators. WSP is pleased to be recognized for our towards running entirely on renewable Some companies set specific targets that ESG efforts, with strong ratings on third- energy 24/7, avoiding the need to pur- they report on such as GHG emission re- party platforms like CDP Climate Change chase renewable energy credits, which is duction targets. Score CDP is a non-profit organization becoming possible through increased mar- A typical ESG report includes the fol- that provides a global disclosure system ket penetration of renewables and battery lowing high-level sections: for companies and cities across the globe technology. Equity and social justice are to manage and measure their environmen- also emerging as important considerations • Introduction/About our Business tal impact. In order to participate in CDP, in clean energy purchasing — looking for an organization must complete a detailed opportunities to invest in under-resourced • Operations questionnaire. WSP has responded to the communities that are often disproportion- • Clients/Customers CDP Climate Change questionnaire an- ally affected by environmental pollution nually since 2010 and received an A- score and without access to affordable clean en- • People/Communities on the most recent (2020) submission. ergy. • Appendices/Indices WSP is also a CDP accredited solu- Supply Chain Management: It is no Some organize the report around ESG tions provider, supporting clients across longer sufficient to simply reduce GHG elements rather than Operations, Clients/ the CDP lifecycle, including developing emissions and other environmental im- Customers and People/Communities. The strategies and programs, compiling inven- pacts within one’s own operations. For ESG reporting landscape continues to tory data, setting targets aligned with cli- many companies, scope 3 (upstream and evolve at a rapid pace. mate science, procuring renewable energy, downstream) emissions are significantly assessing climate risk and opportunity, and higher than scope 1 and 2 emissions. Strategic Information for a Changing Industry 45 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

Further, companies wishing to set SBTi- approved GHG emissions targets must ad- WSP On Top of the Decarbonization Business Opportunity dress scope 3. Reducing emissions within a EBJ: There is a lot of work going on in planning and strategy, but not yet as company’s supply chain is more challeng- much in execution of the strategy related to ESG goals and carbon neutrality ing as companies have less control over in particular. Emissions reduction and your renewable energy practice yes, but these emissions. We have seen an increased what about developing carbon positive projects or natural assets like forest request for support in understanding and preservation or regeneration in order to create marketable carbon credits. Have reducing supply chain emissions. you proposed this for any of your major clients seeking a pathway to carbon neutrality. Does a company of your scale have the resources to invest in carbon TCFD Alignment: As noted previously, positive projects that will continue to generate economic value? clients are increasingly interested in assessing and disclosing climate risks and op- WSP: Bringing to market new product and services is critical to enabling other portunities. In addition to pressure from organizations to meet their net zero footprint management commitments. As a pro- investors, governments have started to re- fessional services firm, the opportunity for WSP is to provide advisory/design services quire or indicate the intention to require to developers of carbon positive projects. disclosure of climate-related financial risk. Both governments and financial institu- The net zero gold standard is when WSP achieves its own net zero commitment tions have referenced using the TCFD rec- by sourcing environmental commodities from projects that WSP supported with ommendations as a guide for assessing and design/advisory services. We are advising several leading organizations with this ap- disclosing climate risk. proach given it ties the carbon positive impact narrative with a decarbonization business opportunity. With several recent announcements from the Biden Administration, includ- EBJ: Do you offer acquisition services for power purchase agreements in renew- ing the establishment of the Securities ables or carbon offsets in various forms? How do you view the sustainability Exchange Commission Climate and ESG and supply of voluntary carbon offsets in order to achieve corporate or institu- Task Force, and the Executive Order on tional carbon neutrality goals? Climate-Related Financial Risk, some WSP: We do indeed support clients with the procurement of renewable energy form of mandatory climate disclosure in and carbon offsets. One of our staff is a board member of Green-e, with an inside the U.S. that will be informed by TCFD is view to both environmental commodity markets. The supply in the renewables mar-  a real possibility. ket is constrained and growth in demand is outpacing new supply. Renewable energy is geographically/market dependent.

Our public sector clients have Carbon offset demand is narrowing to “removal” offsets where the majority of cur- also become more focused rent supply and pipeline are “avoidance” offsets. These trends compound the supply and demand imbalances and is creating nuanced sourcing decisions. on their own climate change Note: The Center for Resource Solutions’ Green-e® certification program is a trusted action and ESG journey, so this global leader in clean energy certification. Green-e aims to make it easy for businesses and is a major new growth area. individuals to purchase verified clean energy with confidence, and for consumers to choose sustainable products and services.

ESG Reporting Mandatory For Large EU Companies In April 2021 the European Commission adopted a package of sustainable finance measures including reporting requirements and advisers’ duties, strengthening the rules under the Non-Financial Reporting Directive (NFRD), requiring companies to disclose information on social and environmental challenges. Its proposal would extend NFRD sustainability reporting requirements to all large and listed companies, meaning nearly 50,000 companies in Europe. The EC is developing a separate set of comparable standards for small and medium-sized enterprises. The package includes rules requiring advisers to discuss clients’ sustainability preferences and changes to the EU Taxonomy Regulation – a classification system for sustainable investments, based on six objectives. It establishes technical screening criteria for the first two categories, climate change adaptation and climate change mitigation. Valdis Dombrovskis, executive VP of the European Commission for its ‘an economy that works for people’ initiative, said that the measures would enable investors to re-orientate their activities towards more sustainable technologies and businesses, in line with making Europe climate neutral by 2050. “Europe was a leader in reforming the financial system to support investments for climate change. Today, we are taking a leap forward with the first-ever climate taxonomy which will help companies and investors to know whether their investments and activities are really green... essential if we are to mobilise private investment in sustainable activities.”

46 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

EBJ: Tell us about your experience at ehsAI and how will you be incorporat- MATRIX SOLUTIONS IS WELL POSITIONED ing new technologies into Matrix? IN SUSTAINABILITY & ESG AS A MIDDLE Sutton: At ehsAI, we saw an opportu- MARKET CONSULTING FIRM IN CANADA nity to use artificial intelligence and machine learning to greatly reduce the time atrix Solutions is a 100% employee-owned pure play environment and engineering it takes practitioners to find and interpret Mconsulting firm of about 500 people based in Calgary, Alberta, Canada. For nearly relevant environmental, health, and safety 40 years, the company has developed innovative, pragmatic, and sustainable solutions for information applicable to their project or public and private sector clients operating across North America. Core markets range from operation. This is done using an advanced infrastructure and mining to renewable energy and oil and gas. Areas of deep-domain ex- algorithm to scan vast amounts of regula- pertise include: Assessment, remediation, and reclamation; Environmental planning and tory, permitting, standards, and proce- regulatory approvals; Integrated water resource management; Data management and pre- dural documents to efficiently extract the dictive modelling. relevant data and free up resources to focus on other work and services to complete Matthew Sutton is an environmental industry leader who joined Matrix Solutions in 2021 projects. as President and CEO, bringing more than 30 years of executive experience from the world’s top environmental and engineering consulting firms. Mr. Sutton has led CH2M’s Environment Matrix is already doing some industry and Nuclear Management Business as President; served as Chief Executive, Global Environ- leading work with data management and mental Engineering Services at AECOM; and directed Operations as Executive Vice President geomatics to visualize and decipher the at Arcadis. He has a passion for bringing innovative technologies to environmental challenges vast amounts of environmental field data and joined Matrix from ehsAI—an environmental compliance artificial intelligence start- that our teams collect and analyze provid- up—where he was a principal investor and Senior VP for Corporate Development. He remains ing clearer, more informed paths for proj- a member of the ehsAI board of directors. ect solutions.

EBJ: Congratulations on your new posi- leading environmental companies that can The company is also known for predic- tion at Matrix! Why were you interested have a positive impact to change and po- tive groundwater and surface water model- in becoming the CEO of a company sition the organization for the better and ling work. One of my priorities is to make like Matrix? Why do you believe is a for growth. I believe Matrix can be the sure we’re making the investments we need good match for you and the company? technical and client-centric gold-standard in technologies that will keep us ahead of of middle-market performers in the Cana- the pack and at the leading edge for sus- Sutton: Thank you, I’m really excited dian environmental industry and beyond. tainability. about this opportunity! I previously had EBJ: What are some highlights of your known Matrix from a competitor stand- EBJ: Tell us about Matrix’s culture? climate change practice? point and respected the company’s strong Sutton: I’m still getting to know every- technical pedigree, particularly in remedia- one, but it’s clear Matrix’s culture is shaped Sutton: When we think about help- tion and reclamation, environmental plan- by environmental scientists and engineers ing clients respond to climate change, we ning and permitting, and water resources whose technical desire and passion for think of it in the context of climate adap- – and its focus on sustainability. These are solving complex problems fuels an impres- tation. Our practice in this area applies to critical services for the integrated solutions sive level of deep domain expertise. Their two main dimensions: services to help our required for today’s environmental chal- dedication mirrors my passion for innova- clients evaluate and mitigate potential ef- lenges like climate adaptation and resil- tion and finding science-based sustainable fects of a changing climate on their opera- iency. solutions for the challenges facing commu- tions, and services to help our clients transition to a lower-carbon future. Matrix is an employee-owned middle- nities and industries. market company and in my experience The company is unique as a 100% Our evaluation and mitigation practice that size allows the best opportunity to re- employee-owned middle-market pure play deals with both greenhouse gas emissions ally get to know the people you work with environment and engineering firm. As and the resilience of natural systems and – which is an important part of having fun owners, employees are very collaborative infrastructure. Matrix has an integrated at work. So, for me this opportunity offers and committed to evolving our solutions team of air quality engineers, environmen- the best combination for professional and and team structures to optimally support tal and water resources engineers, geosci- personal satisfaction. client needs. It’s a very intelligent group entists, and ecologists with a unique ability to collaborate at the level required to ad- With a firm this size, there is also the that is also down-to-earth and commit- dress the complexities of climate adapta- opportunity to implement some of the ted to Matrix’s values – including putting tion holistically. things I’ve learned over the years from health and safety above all else.

Strategic Information for a Changing Industry 47 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

Our team is knowledgeable about addressing GHG emissions as well as audit- Matrix’s energy transition practice focuses on the planning, ing standards and practices needed to serve our clients. Our professionals dealing with permitting and assessment of new capital projects that support climate resilience synthesize information decarbonization, electrification and zero-carbon fuel development. from a myriad of global and regional climate models and translate those models into potential effects on our environment associated with the new infrastructure these metals is projected to increase signifi- and infrastructure using complex surface project, and to consider design alterna- cantly in the years ahead. water, groundwater, and ecologic models. tives that will result in more resilient in- Engineers and natural system designers frastructure. Climate evaluation and miti- Each new mining project developed to then translate the information gleaned gation services are certainly going to be in procure these metals will also need to be from these models into resilient designs for demand in mining, power, midstream and designed to align with a net-zero operating infrastructure and waterways. oil and gas sectors, as investors seek to bet- future, which will require the reimagin- ter understand the viability of these assets ing and reshaping of conventional mining Matrix’s energy transition practice fo- in a future where extreme weather events techniques. Matrix’s expertise in planning, cuses on the planning, permitting and as- are more frequent. permitting, assessment, and environmen- sessment of new capital projects that sup- tal monitoring will be in critical demand as port decarbonization, electrification and One market trend that is driving in- Canada increases its production of critical zero-carbon fuel development. vestment into decarbonization and en- metals. ergy transition is the establishment of a EBJ: Can you talk about the regulations Our teams have extensive experience nationwide carbon offset program. The that are shaping the climate adaptation working with clients to develop projects Government of Canada has committed to industry in Canada? using emerging and innovative technology reaching a net-zero greenhouse gas state that wasn’t contemplated by existing regu- by 2050, and its 2020 Strategic Assess- Sutton: When we think about climate lations. We effectively communicate comment of Climate Change dictates that any evaluation and mitigation, we really need plex scientific principles to help regulators, proposed project that will operate beyond to separate the industry into public and stakeholders and Indigenous communities 2050 needs to describe a credible plan that private sector clients. For the public sector, understand the potential impacts and ben- aligns with the net-zero target. In 2021, there is a clear need and movement to in- efits of these projects, which helps our cli- the generation of carbon offsets—through corporate climate resilience into the design ents to de-risk their investments. pathways such as carbon sequestration, re- and construction of Canada’s future infra- newable energy generation, or zero carbon As a middle-market company we dif- structure – to harden assets; and the regu- fuel production—appears to be the most ferentiate ourselves by having the capacity lations affecting infrastructure reflect this. viable approach. to execute complex work while still being As I mentioned earlier, the first example nimble enough to provide customized so- Another trend in the deregulated elec- facing the public sector is the Canadian lutions for each client. tricity market in Alberta is the emergence Federal Government’s Climate Lens assess- of virtual power purchase agreements (VP- Our systems are robust enough to ser- ment, which is required for most applica- PAs). Over the past three to five years, doz- vice multi-national companies like Shell tions for federal infrastructure funding. A ens of renewable energy projects have been and TC Energy, and our people have the Climate Lens assessment has two compo- permitted, but not constructed due to the entrepreneurial mindset that aligns well nents: the GHG mitigation assessment, lack of an appropriate commercial frame- with emerging companies like Greengate which measures the anticipated GHG work. The creation of VPPAs has resulted Power and E3 Metals. emissions impact of an infrastructure proj- in substantial capital investment from ect, and the resilience assessment, which EBJ: What are some market trends companies like Amazon, Labatt, Shell, employs a risk management approach to related to climate adaptation services and Pembina Pipelines, which has spurred anticipate, prevent, withstand, respond in Canada and how is Matrix meeting the construction of several large-scale re- to, recover, and adapt from climate related these challenges? newable projects that had been awaiting disruptions or impacts. sanction. Related to this continued trend Sutton: In the public sector, big drivers towards increased electrification is the in- When it comes to infrastructure, there include Infrastructure Canada’s Climate creased demand for batteries to help store are many new municipal and provincial Lens, as well as emerging requirements by and transfer electricity that is being pro- regulations that are influencing the way we provincial governments to include climate duced more commonly by intermittent design for climate resilience. Requirements change considerations within their envi- generation sources. The battery supply for Low Impact Development approaches ronmental assessment processes. In both chain includes several critical metals that for handling stormwater are common- cases, the ultimate objective is to estimate are present in Canada, including lithium, place, and Matrix has demonstrated a GHG emissions reductions (or increases) nickel, and cobalt, and the demand for unique ability to utilize advanced model- 48 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 ling capabilities to illustrate how our de- clean fuel standard, slated to come into ef- Matrix’s role on this project has includ- signed solutions can help maintain natural fect at the end of 2022. If this standard is ed constraints and siting analysis, baseline systems, including wetlands and streams, implemented as designed, it will require studies, and environmental evaluation, that will be resilient to changes in future ongoing reductions in the carbon content permitting, and regulatory engagement. climates. of all liquid fuels – such as gasoline, die- We are currently providing construction sel, and kerosene. This new standard could oversight with the expectation that the There are also developing regulatory spur further investment in zero-carbon fu- project will be in service by 2022, at which frameworks driving decarbonization at els such as hydrogen or ammonia, or could point Matrix aims to provide ongoing en- both the federal and provincial levels. The further advance the pace of electrification. vironmental monitoring support. federal Greenhouse Gas Pollution Pricing Act was introduced in 2018 to establish a Greater electrification may also be We now know the frequency and inten- national backstop approach to carbon pric- supported by new investments in small sity of major environmental events is going to maintain a minimum price across all modular nuclear reactors. The premiers of ing to continue increasing. My family and provinces. This federal framework has been Alberta, Saskatchewan, Ontario, and New I experienced this firsthand when we were upheld by the Supreme Court and further Brunswick have already signed a memo- forced to evacuate our home during the implementation is underway in each prov- randum of understanding to collaborate Lefthand Canyon fires near Boulder, CO ince. on small modular reactor technology that in October 2020. Matrix’s work in climate may displace fossil fuel-fired electricity and adaptation draws on all of our technical ca- The minimum carbon price is currently align with the federal clean fuel standard. pabilities to find solutions that help build $40/tonne, rising to $50/tonne by 2022, increased resiliency into assets. For ex- EBJ: What are the most outstanding and is projected to rise as high as $170/ ample, Canadian municipalities have been climate adaptation projects that Matrix tonne by 2030. As the price of carbon preparing for an increased frequency and has conducted recently? increases, the cost of ongoing oil and gas intensity of riverine and overland flooding. production will also increase. At the same Sutton: Matrix has completed numer- Matrix’s water resources engineers work time, various decarbonization approach- with local governments on flood mitiga- es—such as carbon sequestration from ex- ous Climate Lens assessments to support applications for federal funding of infra- tion studies that not only reduce the risk isting fossil fuel-fired facilities—will likely to the public from future flooding, but also become more commercially viable. structure projects. We recently completed an assessment for a major rapid transit reduce the risk of flooding in urban areas, The oil and gas sector will be heavily project in the Greater Toronto Area. Our which has the added benefit of unlocking impacted by changing carbon pricing and team developed a technique to evaluate the the value of real estate that has historically it has been one of the largest contributors climate risks to people, to the local econ- been undevelopable due to flood risks. omy, and to the environment. The process to both the Canadian economy and the Our Ontario team has been working allowed Matrix to recommend mitigation success of Matrix over the past 20 years. It with the City of Brampton, near Toronto, measures for all high-risk situations, and is undeniable that the Canadian oil and gas on its Riverwalk project, which is a strate- we are now working with the client to in- market must adapt to reduce GHG emis- gic planning effort to revitalize the City’s corporate those mitigation measures into sions. It is also apparent that Canadian oil downtown – an area that lies within a the engineering design process. and gas operators are keen to demonstrate floodplain. Government policies around the innovation and collaboration needed flood risk management restrict the type to meet this challenge. In terms of supporting energy transition, Matrix is proud to have worked with and amount of development that can oc- Canada’s oil and natural gas resources Greengate Power since 2016 on develop- cur there today. Our water resources en- are among the most responsibly produced ment of the Travers Solar Project located gineers have been working with the City energy sources on the planet, and Matrix southeast of Calgary. When complete, to engineer long-term solutions to the has played a key role in supporting the Travers will be the largest solar project in flood risk, which will unlock the potential responsible planning and development of Canada, with most of the power generated for urban growth and development. Our the resource, and the reclamation of oil contracted to Amazon through a virtual ecologists work with the engineers to put and gas well sites that are no longer in pro- power purchase agreement. the creek back at the heart of the down- duction. As an environmental service pro- town area. vider to Canada’s energy industry, Matrix is well-positioned to serve our clients as they continue to reduce the climate-related Alberta, Saskatchewan, Ontario, and New Brunswick have already risks to the industry. signed a memorandum of understanding to collaborate on small

One more key regulatory driver in modular reactor technology that may displace fossil fuel-fired Canada, where Matrix is well-positioned electricity and align with the federal clean fuel standard. to support, is the introduction of a federal

Strategic Information for a Changing Industry 49 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

EBJ: Where does Canada stand when it comes to ESG? IDC ESG ADVISORY PRACTICE BENEFITS Sutton: Canada is a natural resource- based economy in which ESG perfor- FROM CLIENT DEMAND FOR METRIC- mance is an increasingly important consid- DRIVEN APPROACHES TO SUSTAINABILITY eration in accessing capital. The country is proud to have some of the most stringent IDC is the premier global provider of market intelligence, advisory services, and events environmental and social standards regard- for the information technology, telecommunications, and consumer technology markets. ing environmental development; and is IDC helps IT professionals, business executives, and the investment community make aligned with international trends in reduc- fact-based decisions on technology purchases and business strategy. More than 1,100 IDC ing critical carbon emissions, waste genera- analysts provide global, regional, and local expertise on technology and industry oppor- tion, and water consumption. Regulatory tunities and trends in over 110 countries worldwide. For more than 50 years IDC has processes in Canada are designed to mini- provided strategic insights to help our clients achieve their key business objectives. IDC’s mize impacts to air, land, and water and Insights businesses provide industry-focused advice for IT buyers in the Financial, Gov- the federal government recently signed the ernment, Health, Retail, Manufacturing and Energy verticals. IDC is a subsidiary of IDG, UNDRIP Act, which commits Canada to the world’s leading technology media, research, and events company. align federal legislation with the principles included in the United Nations Declara- Bjoern Stengel, Senior Research Analyst, Worldwide Business Consulting & Sustainability/ tion on the Rights of Indigenous People. ESG Services. Mr. Stengel’s research focuses on the business consulting services market, analyzing key trends for strategy; supply chain and operations; finance and accounting; governance, At the same time, we recognize that risk, and compliance; and people and organization consulting services. He also leads IDC’s En- (like many parts of the world) Canadian vironmental, Social, and Governance (ESG) business services research, assessing how business companies still have a lot of room to im- services providers and their eco-system partners can leverage sustainability/ESG to help clients prove ESG performance. Many companies drive business outcomes by better understanding the needs of various stakeholders (e.g. investors, have work to do to ensure business leader- regulators, employees, customers, and the C-suite) and ESG materiality. ship better reflects the needs of a diverse population and to partner with Indigenous Laura Becker, Research Manager, Employee Experience & Sustainability/ESG Services.Ms. and non-Indigenous communities in on- Becker’s research focuses on Employee Experience (EX), employee engagement/listening (voice going resource development. of the employee); diversity, inclusion, equity and belonging; well-being (mental, physical, financial); recognition and rewards; digital EX; and other benefits that empower employees as Canada is looking to increase its par- key organizational stakeholders, and optimize business impact. She also co-leads IDC’s Envi- ticipation in producing and exporting ronmental, Social, and Governance (ESG) Business Services program, assessing how business global commodities and we know that the services providers and their ecosystem partners can leverage sustainability/ESG to help clients international community will continue to drive business outcomes by better understanding the needs of various stakeholders (e.g. investors, use ESG performance as a key metric in regulators, employees, customers, and the C-suite) and ESG materiality. allocating investment dollars. To that end, Canadian companies have been commit- EBJ: Could you tell us about the cur- Environmental, Social, and Gover- ting substantial human resources and capi- rent state of the ESG market? nance (ESG) approaches, which are more tal investment into improved ESG perfor- metric-driven approaches to sustainability mance. Environment and sustainability Surging Demand that take into consideration the impact of sustainability topics on the enterprise value professionals are in high demand in Can- The demand for sustainability profes- of an organization, allow them to become ada and we expect this trend to continue. sional services has changed significantly more strategic about their sustainability ef- over the last few years. With many con- Matrix is an integral part of Canada’s forts, which can help them improve opera- sidering sustainability to ultimately be em- ESG Performance improvement. We con- tional and financial performance, risk pro- bedded across the organization (much like tinue to grow our technical expertise to files, employee attraction and retention, digital transformations); many enterprises provide the services needed to help our brand value, and more. clients and communities meet their ESG are in the process of moving from a mainly goals. At the same time, we are reviewing philanthropically-focused approach to a Sustainability is becoming a strategic our internal policies and developing and more integrated, metrics-driven way of topic for enterprises across all industries. implementing plans to improve our own looking at sustainability, linking sustain- Non-financial value drivers have been ESG performance. We are confident that ability efforts to business outcomes. This gaining in importance, as macroeconomic this trend will continue and that invest- trend has been creating demand for a va- trends such as population growth, global- ment in the environment and our commu- riety of services, e.g., around strategy, risk ization, digital transformation, climate nities will lead to ongoing benefits and a management, reporting and disclosure, change, talent scarcity, etc., have direct more sustainable future.  audit, etc. effects on business performance and com-

50 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 panies’ enterprise values. Naturally, some on material and other important sustain- sustainability” to “how to develop a pur- industries are more mature than others, ability topics. pose-drive sustainable strategy” to “how to but we see a strong demand for sustain- report and disclose our ESG performance Leading with purpose provides compa- ability services regardless of industry. The and use metrics”. There are some industries nies with a compass for their sustainability- specific topics, however, that organizations that are more mature than others, includ- focused actions, which can be normatively want to tackle – greenhouse gas emissions, ing some financial services firms and tech- or materiality/business outcome driven. diversity and inclusion, data privacy, busi- nology firms, but there is a steep learning Organizations need to think about how ness ethics – can vary between industries. curve and consultants are meeting clients their purpose affects their strategy, opera- where they are at as a starting point with tions, employees, customers, and so forth Organizations are being held account- a first step as getting buy-in to the strategy (i.e., how it can not only help them do able by several different stakeholder groups from the Board and C-Suite. Opportuni- good but also create financial value). ESG – investors, employees, customers, etc. –, ties are boundless and include strategy, risk materiality assessments are a good first step which requires them to report on their consulting, supply chain management, hu- to figure out what industry-specific ESG sustainability performance in an objec- man capital management and more. tive and comparable fashion. As we have issues to focus on. Using ESG metrics, moved towards becoming a stakeholder companies can show their commitment to EBJ: Is ESG having an impact on economy, the demand for professional ser- their purpose and assess and benchmark consumer purchases? Which consumers vices in the area of sustainability has been their performance on the sustainability are purchasing products from compa- further magnified. topics that affect them the most. Compa- nies that have high ESG commitments? nies should make this process part of their What trends do you expect in the near Demand Drivers overall business value assessments, which future? ideally allows them to not only lower their There are many demand drivers at play risk profiles but also differentiate them- IDC: We definitely expect to see more given the various stakeholder groups in- selves in the marketplace. consumer pressure or organizations with cluding government-driven regulations regard to having ESG commitments. A re- (always a trigger for consulting demand) EBJ: Where do you see ESG-related cent IDC survey asked respondents which around both environmental and social is- growth opportunities? And how are topics will now be a standard part of the sues. For example, in the U.S. Nasdaq these opportunities different across terms and conditions that their organiza- traded companies will be required to have various business lines? tion requires from IT suppliers in their 2 women on their boards due in part to the contracts. IDC: The concept of ESG as an ap- awakening to diversity, equity and inclu- proach to corporate social responsibil- sion issues due to recent social unrest). The • 45% of respondents: “requirements ity began as an investor-driven attempt to EU’s regulation on sustainability‐related around securing data” identify sustainability-related topics and disclosures in the financial services sector, issues (non-financial value drivers) that • 43% of respondents: “diversity and Sustainable Finance Disclosure Regulation can ultimately affect corporate perfor- inclusion” requirements (SFDR) was adopted by the European Par- mance but that are not being accounted liament and European Council. The SF- • 32% of respondents: “accessibility for in traditional financial statements. DR’s goal is that asset financial institutions requirements” Investors increasingly saw that companies provide information about ESG matters with a strong ESG performance tended to • 26% of respondents: “ethical sourcing about their services, specifically around perform better financially. ESG’s founda- of materials guarantee” “sustainability risks”. This will affect global tion consists of the use of data and met- Source: COVID-19 IMPACT ON IT SPENDING, organizations in addition to more forth- rics to measure performance across the November 2020, N=619 (Worldwide)/101 (United coming U.S. legislation expected under States) three pillars, common ESG standards and the Biden Administration. frameworks to compare ESG performance, EBJ: Can you describe the main ESG Leading with Purpose a focus on ESG materiality, and an indus- products/offerings available today? try-specific set of relevant issues. ESG is Organizations who embrace a purpose- often synonymously used as a corporate IDC: From a professional services point driven, sustainable business strategy align approach to sustainability that includes a of view, we see offerings emerge across the an organization’s normative goals and ef- broader focus on corporate stakeholders entire services spectrum, including con- forts with its need for positive operational beyond investors, including employees, sulting, engineering, systems integration, and financial performance and risk man- customers, among others. and audit and assurance services. As sus- agement. While there exists no blueprint tainability is increasingly becoming a busi- for organizations to perfectly align their From a professional services perspec- ness imperative, end-users are in need to sustainability efforts with the best possible tive, consulting firms are seeing strong services that address their entire lifecycle financial outcomes, they need to make the demand from clients that span the matu- and every part of their business. On the best possible effort to prioritize their focus rity spectrum from “how do we approach business consulting side, for instance, we

Strategic Information for a Changing Industry 51 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 see a rapidly growing demand for sustain- and which are also based on the informa- Disclosure Standards Board, the Global able strategy consulting services focusing tion that companies disclose through their Reporting Initiative, the IIRC, and SASB on executing on sustainability targets, sup- sustainability reports. said that they would work more closely to- ply chain and operations consulting ser- gether to align standards and frameworks EBJ: Can you comment on the inconsis- vices to align operations and products with after being urged to do so by international tency of data across ESG management those targets, people, and organization securities regulators. The path toward and reporting systems? And in which consulting services to execute on diversity more aligned, unified standards continues ways are those gaps being eliminated? inclusion initiatives and increase employee to evolve and mature as investors and reg- engagement, etc. IDC: ESG approaches aim at making ulators ask for consistent, comprehensive, sustainability performance measurable and and verifiable data. We also see an increase in available soft- comparable. The current lack of a com- ware and other technology solutions that In late Q1 2021, the International mon, universally applied standard limits help organizations meet their sustainabil- Financial Reporting Standards (IFRS) the ability of organizations to meet inves- ity goals in terms of capturing, analyzing, Foundation announced an initiative to tor requirements. reporting, and disclosing ESG data. oversee the advancement of a standardized approach by setting up a working group EBJ: How are investors evaluating ESG Some of the most commonly used ESG to prepare for a potential international reports and utilizing the information to standards and frameworks include those sustainability standard board. Both WEF make investment decisions? issued by the Sustainability Accounting Standards Board (SASB), the Global Re- and SASB issued statements supporting, in IDC: Intangibles such as intellectual porting Initiative (GRI), and the newest principle, efforts to establish a globally ac- capital, customer relationships, and com- list of World Economic Forum (WEF) cepted system for corporate sustainability panies’ brand value vis-à-vis its employees reporting metrics and disclosure standards disclosures. The initiatives are endorsed by and consumers are increasingly affecting (developed in conjunction with the Big the International Organization of Securi- valuations, requiring companies to find Four accounting firms of Deloitte, EY, ties Commissions and the International appropriate ESG metrics for the sustain- KPMG, and PwC). In addition, there are Federation of Accountants. ability topics that matter to their business. frameworks such as the UN Sustainable Increased data availability and transpar- Development Goals (SDGs), Task Force ency in reporting will enable investors to The handling of ESG issues (greenhouse on Climate-related Financial Disclosures understand how new areas of safety, sus- gas emissions, water usage, diversity and (TCFD), and others that are helpful to tainability, and trust directly impact enter- inclusion, human rights, etc.) can affect organizations establishing specific business prise value. business performance in different ways, goals and initiatives. e.g., revenue growth (demand for products EBJ: In your opinion, which ESG and services), cost (operational efficiency), However, this is an incredibly quickly frameworks are better and why? assets and liabilities (valuation), or cost of evolving space and there is movement to- capital (operational risks). Investors are ward more accountability and standardiza- IDC: We do not think that there is looking for standardized, metrics-driven, tion. Companies are starting to combine one set of standards or a framework that is quantified sustainability information on different standards and frameworks (e.g., “better” per se. They all serve slightly dif- topics that can potentially become finan- SASB, which is investor-focused, and ferent purposes and address sustainability cially material for the organization that GRI, which focuses on a larger set of stake- through different lenses- in regard to the they invest in. holders). topics they address, the stakeholders they cater to, the ways in which they look at Material ESG issues are sustainability Consolidation efforts are also going corporate sustainability, etc. topics that investors need sufficient dis- on between the different issuing organi- closure on in order to assess a company’s zations. In November 2020, SASB and In the end, picking the most appropri- operational and financial performance and the International Report Council (IIRC) ate ones or finding the right blend of re- make an investment decision. Companies announced the intention to create a uni- ported information depends on the priori- need to decide which sustainability topics fied organization, the Value Reporting ties that an organization picks for itself in they consider material (and which non-fi- Foundation, by mid-2021. The impetus terms of satisfying the demand for infor- nancial information can become financial- for this action is to create an international, mation from its most relevant stakehold- ly material) as well as which metrics and integrated reporting framework for sus- ers. There are efforts under way to consoli- reporting standards they find most appro- tainability disclosure standards to enable date the fragmented landscape of reporting priate in order to satisfy the demand for enterprise value creation. standards and frameworks, which should disclosure from the ESG investing com- make it easier for companies to collect, munity. Investors often rely on ESG rat- In addition, the Big 4 accounting firms curate, and report data in a standardized ings that are issued by dedicated ESG rat- released metrics created with WEF just a way.  ings firms such as Sustainalytics and MSCI week after five ESG standard-setters — the Carbon Disclosure Project, the Climate 52 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

EBJ: What are the major trends within the ESG Services Market and how are SUSTAINABILITY STRATEGY CONSULTING these trends evolving?

FIRM KERAMIDA DEVELOPS INTEGRATED KERAMIDA: The major trend involves ESG PRACTICE; REMAINS CDP ACCREDITED relying on verifiable data for ESG reporting, and using Science-Based-Targets for ERAMIDA Inc. was established in 1988 and serves public and private sector entities setting GHG reduction goals. In addition, Kworldwide with strategy and implementation services in: Environmental and Health Life Cycle Assessments of GHG emissions & Safety Compliance, Sustainability, GHG, ISO Management Systems, Remediation, and Carbon Scenario Analysis (TCFD) are Due Diligence, Brownfields Redevelopment, Plant Decommissioning, Training, and Risk becoming desirable ESG services. Management. KERAMIDA’s experts provide ESG strategy services and training to Corpo- EBJ: Keramida is a CDP Accredited rate Boards, Executives and Investors. Many KERAMIDA principals have over 25 years of Provider. Can you tell us about this experience and are nationally known experts, lecturers, authors, patent holders, and expert particular accreditation and how does it witnesses. The firm’s associates possess certifications and registrations in over 30 differ- support your ESG Services? ent areas of expertise and hold MS and Ph.D. degrees. KERAMIDA is headquartered in Indianapolis and has offices and staff in Los Angeles, Sacramento, Pittsburgh, New York, KERAMIDA: We are one of a hand- Ohio, Kentucky, Virginia, Maryland, Massachusetts, and Washington State. KERAMIDA ful of CDP Accredited Providers. We also is a woman owned business enterprise (WBE), certified by Women’s Business Enterprise have been a scoring partner to CDP. As National Council (WBENC). such, we are uniquely qualified and expe- Vicky Keramida, CEO & Chief Technical Officer. Dr. Keramida is a nationally recognized rienced to provide CDP reporting services expert in sustainability strategies, remediation, waste and wastewater management, water to our clients, and help them improve their quality, and EHS compliance strategies. She has been a pioneer in sustainability for over 20 CDP score. years, practicing internationally on sustainability subjects and lecturing extensively on the mat- EBJ: Are there other accreditations for ter. She played a lead role in conceiving and developing KERAMIDA’s Sustainability Model, companies that perform ESG services? GreenStep™, a planning process and metrics rating system for Sustainable businesses and industry, enabling them to establish a sustainability foundation for their strategic and operational KERAMIDA: Accreditations for train- needs, which can reduce costs and risks, and meet the needs of investors and other stakeholders. ing under GRI, SASB, CDP and other reporting platforms are important, because Pamela Griesemer, Vice President of Sustainability. Ms. Griesemer is a qualified ISO 14001 they provide unique knowledge of their Lead Auditor, an Exemplar Global certified EMS Auditor, an Institute for Sustainable Infra- reporting requirements. KERAMIDA has structure ENVISION Sustainability Professional (ENV SP), and a GBCI certified LEED® all these and additional accreditations, so Green Associate. Ms. Griesemer earned Sustainability Accounting Standard Board’s (SASB’s) it can provide strategic advice to clients on Fundamentals of Sustainability Accounting (FSA) Level 1 and 2 credentials, secured KE- the various reporting platforms benefits RAMIDA’s status as a CDP (formerly, the Carbon Disclosure Project) USA Silver Education and challenges. and Training Partner and as a GRI (Global Reporting Initiative) Certified Training Partner. EBJ: When did Keramida develop its Albert Chung, Senior Project Manager. Dr. Chung has over 20 years of experience in en- ESG Services Practice? How are you dif- vironmental engineering and sustainability consulting. His focus is on air quality compliance, ferentiating your ESG services from the greenhouse gas emissions, Life Cycle Analysis of GHG, plant process analysis, air quality permit- ones provided by competitors? ting and analysis, and sustainability consulting for clients in various industries. KERAMIDA: With more than 20 years Becky Twohey, Senior Sustainability Analyst. Dr. Twohey has over twelve years of hands-on of sustainability experience, KERAMIDA applied experience advancing socially equitable, economically profitable, and environmentally is a powerhouse of ESG strategy, program sustainable solutions. She is specially qualified in climate change adaptation strategies, impact development, sustainability reporting, and assessments, innovating programs, and overseeing multiple groups in complex issue areas. training. We are a sustainability strategy consulting firm with a talented team of Jodie Crandell, M.S., Senior Project Manager. Ms. Crandell has over 30 years of experi- executive coaches, analysts, scientists, en- ence in environmental compliance and sustainability. She provides Environmental, Health gineers, and trainers who are dedicated and Safety Consulting, and Sustainability Auditing services to a wide variety of clients. Ms. to solving our clients’ most challenging Crandell is an Accredited Auditor for California Sustainability Winegrowing Alliance for the ESG needs. KERAMIDA advises indus- CERTIFIED SUSTAINABLE program. CERTIFIED SUSTAINABLE is a certification pro- try, corporations, and cities in the U.S. gram that provides verification by a third-party auditor that a winery or vineyard implements and abroad. We have partnered with GRI sustainable practices and continuous improvement policies. and CDP as a certified trainer and offer a certified GRI Standards training course, GRI SDG workshop, and CDP disclo-

Strategic Information for a Changing Industry 53 Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021 sure training. We have also created custom house of air management consulting for From teaching sustainable architecture les- training courses for SASB and TCFD to over 30 years. Incorporating GHG assess- sons to inner city children, to researching better serve our clients’ needs for sustain- ments and mitigation strategies in our ser- sustainable food production, and develop- ability services that incorporate the leading vices was a natural extension to our air ex- ment of contaminated properties for reuse, reporting standards. We support clients pertise. KERAMIDA has been providing ECO Crossroads® has touched many ele- from diverse sectors with ESG strategy and GHG consulting for over 20 years in EU ments of the Anthropocene. program development, from benchmark- and USA. We perform Scope 1, 2 and 3 EBJ: What about the CSWA Certified ing peers, facilitating materiality assess- GHG Assessments, we offer GHG Verifi- Sustainable Audit services that you ments, and program planning to program cation Services by certified GHG verifiers, provide for California Wineries? Please implementation, evaluation, reporting and advise clients on appropriate GHG re- describe the services that you provide to training and reporting. duction and mitigation strategies. them, why you have decided to get into Our unique, strategic and whole-sys- EBJ: Are there certain industries that this niche? What are the main sustain- tems approach to ESG and sustainabil- are more concerned about their ESG ability issues that these wineries face? ity involves deep knowledge of executive scores? And industries that are not con- KERAMIDA: We have several ac- needs, EHS compliance, best practices, cerned? What type of clients hire your credited auditors that provide services to and management systems, along with services and why? wineries and vineyards to be CERTIFIED manufacturing operations and business KERAMIDA: The sector most con- SUSTAINABLE under the California Sus- strategies, HR practices and external Social cerned about ESG is the publicly traded tainable Winegrowing Alliance (CSWA). challenges, and Governance goals. Our companies sector, due to investor de- Vineyards and Wineries complete a self- team’s combined expertise forms the stra- mands. Industries whose products are di- assessment, judging their sustainability tegic and technical foundation from which rectly used by consumers are also focused practices against 144 Vineyard Practices our professionals provide expert ESG and on ESH, due to customer demands. KE- and 105 Winery Practices. Our auditors sustainability consulting and training ser- RAMIDA’s clients come from all market evaluate the assessment using records, visu- vices. sectors. al observations, and verbal testimony from the staff of the winery or vineyard and KERAMIDA’s ESG advisors work with EBJ: What is the importance of Data produce a report that either does or does organizations to: Management & Analytics within ESG not recommend certification. In nearly all reporting? • Improve ESG ratings: cases, we help the organization to meet the required scores for initial and continued • GRI Reporting KERAMIDA: Data Management & Analytics are now recognized as being the certification. This work is an extension to • CDP Disclosure training, review & foundation of ESG. KERAMIDA had fo- the existing EHS compliance auditing that recommendations, score triage cused on Data Management & Analytics we perform for clients and was this was an as the cornerstone of sustainability report- exciting opportunity for KERAMIDA to • SASB industry determination & provide these types of sustainability ser- disclosure, custom disclosures ing, over 10 years ago, and has developed special Data Analytics tools which we ap- vices to a different type of market. • TCFD recommendations & ply to clients’ data. reporting, including climate scenario The biggest challenge facing California analysis EBJ: KERAMIDA has experience agriculture in general is water availability. performing ESG reports for European Wineries use water in winemaking, and • Identify metrics and indicators for and American companies. How do ESG mostly for cleaning and washing tanks, their facilities. practices vary among the European lines, and barrels. Vineyards need water Union and the United States? for growing their grapes. Severe restric- • Drive outcomes toward process tions that are typical only during drought efficiency, continual improvement, risk KERAMIDA: A major difference is years are becoming the norm. reduction and value creation that EU has had regulatory requirements • Develop and implement a to reduce GHG, which the US does not Climate change is causing changes in sustainability strategy that adds value have. microclimates, making conditions unfa- vorable for some varietals where they used and benefits the organization as well as EBJ: Tell us about ECO Crossroads®? its stakeholders. to flourish. Pest management, vineyard What are the main accomplishments water management, and soil management EBJ: Can you tell us about the Green- that have been achieved through it? are the top 3 categories of sustainability house Gas Inventory and GHG Emis- KERAMIDA: ECO Crossroads® has fo- practices that most vineyards spend their sion Reduction Strategy services that time on.  you provide? cused on education and research on issues affecting “good life” in a sustainable plant. KERAMIDA: We have been a power-

54 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXXIV, Numbers 7/8, 2021

• Increase managers’ involvement in achieving Sustainability goals, reducing ESGeo LEADS WITH INTEGRATED SOFTWARE the risk of ESG controversies. APPLICATION FOR END-TO-END PROCESS • Turn non-financial corporate OF CORPORATE SUSTAINABILITY objectives into an opportunity involving all stakeholders - such as employees, ESGeo is a startup created in 2019 providing services and tools dedicated to non- investors, rating agencies and local financial data. The cloud platform is an integrated software application, able to cover communities. the process of corporate sustainability from end-to-end, from data collection, through • Identify and measure material ESG workflows, to report production and Portfolio KPIs analytics. The company has been co- issues, comparing your ESG positioning founded by the Techedge Group S.p.a and Fabrizio Fiocchi. In less of two years, ESGeo with peers (by rating agencies, pension became a reference in the market of non-financial reporting in Italy, with more than 30 funds, asset managers, etc.). clients including several banks, large corporations like Prysmian Group, Cementir, ENI, EBJ: What type of data must be aggre- ENEL, Ferrovie dello Stato, Salvatore Ferragamo, Banco BPM, etc. gated for ESG reporting and how can ESGeo started its development of foreign markets in 2021 with a presence in North companies set up a system to acquire Europe, Spain, US and LATAM. In 2019 ESGeo had total revenues of 360,000 euros, and high quality data? the first half of 2021 ESGeo registered total revenues of 460,000 euros and positive EBT- ESGeo: We are supporting large corpo- DA Net Income. ESGeo has 6 ESG analysts in team. The development of the software was rations to manage their sustainability data made by the parent company Techedge. ESGeo has clients in Italy, Spain, Switzerland and in a traceable and auditable process. We UK. ESGeo has been certified by GRI Standard and SASB in side. are not info provider. With ESGeo, clients Francesco Rutigliani, Partner and the Director of the Financial consolidation Practice. He can define their ESG scoring models to as- brings more than 20 years of experience in Finance and Accounting Management. Prior to sess holdings or suppliers. joining Techedge in 2013, Mr. Rutigliani held different positions in consulting firms, always EBJ: What are some of the studies and focusing on financial management. models that ESGeo has created on ESG Fabrizio Fiocchi, Founder and Chief Executive Officer. Mr. Fiocchi has more than 25 years Digital Governance, Supply Environ- of experience in Finance, with a focus on quantitative asset management and investment bank- mental Proprietary Scoring Models, ing. Prior to founding ESGeo in 2019, Fabrizio was a member of the Management Committee Materiality Index, etc? and an Executive Director of Eurizon, Intesa Sanpaolo Asset management company. ESGeo: We define with our clients their EBJ: ESGeo is a European company. EBJ: And are there other regulations or own ESG proprietary model based on Dy- Can you provide an overview of the initiatives that are affecting or influenc- namic Materiality. ESG market in Europe? ing the ESG market in Europe? We developed the materiality model for ENEL and platform OPEN ES of ENI, ESGeo: The number of companies ESGeo: The new regulation 852/2020 BCG e Google Cloud. making new non-financial disclosures and will introduce due diligence on non-finan- investing in tools to manage non-financial cial data, including due diligence on the EBJ: What client types or sectors are data is largely increasing. The new EU supply chain. requesting your products the most and Taxonomy will extend the duty of disclo- why? EBJ: Tell us about the ESG solutions sure to all companies with more than 250 that you offer and how are they unique? employees, even if they are not listed. This ESGeo: We have several sectors, however, financial institutions, fashion, energy will increase the number of corporations ESGeo: We have an integrated software and utilities are the major ones. requiring ESG Digital governance tools. application, able to cover the end-to-end EBJ: Can you tell us about the Sustain- process of corporate sustainability, from EBJ: How have ESG technologies able Finance Package that the European data collection, included workflows, to evolved over the past couple of years Commission adopted on April of 2021? report production and Portfolio KPIs ana- and what should we expect in the near lytics. future? ESGeo: Complexity will increase as well as the number of corporations disclos- ESGeo is able to: ESGeo: The use of block chain, artificial intelligence and big data will be used ing non-financial data. • Optimize data collection and easily to forecast ESG risk.  generate any sustainability report, including annual balance report.

Strategic Information for a Changing Industry 55 Vol. XXXIV, No. 7/8 ENVIRONMENTAL BUSINESS JOURNAL® Q3 2021

COMPANY INDEX Environmental Industry Summits in 2022 3i 22 Jacobs 31 Accenture 18 J.P. Morgan Asset Management 22 Environmental Industry Summit XVIII, Aegis Engineering Management KERAMIDA Inc. 53 March 16-18, 2022 , Coronado Island Allianz 25 KKR 22 Marriott Resort, Coronado CA Alvarez & Marsal 23 KKS Advisors 19 Anthesis 37, 41 KPMG US 19 Texas Environmental Industry Summit Arabesque S-Ray 18 lberta Investment Management Corporation 22 II, May 2022 Arcus 22 Matrix Solutions 47 Pacific Northwest Environmental Babtie Group 36 McKinsey & Company 16, 19 Bain & Company 18 Millennium Challenge Corporation 27 Industry Summit VI, July 2022 Bank of Scotland 22 MSCI, Morgan Stanley 9 Washington DC Politics & Policy Biomimicry 3.8 32 Naked Energy 40 Summit VIII, November 2022 Blackstone 21 National Oceanic and Atmospheric Admin. 30 Blue Dot Network 30 Nyras 35 New England Environmental Industry Boston Consulting Group 18, 19 OMERS Private Equity 22 Summit V, December 2022 Campbell Global LLC 22 Org. for Economic Cooperation and Development 30 Cardno 26 Oxford University 21 EBI Webinar & Broadcast CDP 32 PA Consulting 32, 35 Series in 2021 Charterhouse Capital Partners 22 Palatine Private Equity 38, 41 Climate Disclosure Standards Board 32 Pathstone 21 Webinars 3rd Friday of every month: Deloitte 7 Remedi!ate 40 $195 per company registration or Department of Foreign Affairs and Trade 27 Renewables Consulting Group 22 $1,250 for annual subscription DuPont Sustainable Solutions 19 Signol 40 Environmental & Climate E4tech 22 Simetrica 32, 36 Change DataPacks EcoVadis 18 Sparkler 35 Element Energy. 22 Sphera 21 EBI DataPacks are comprehensive Environment Analyst Ltd. 20 Sustainability Accounting Standards Board 32, 52 business planning data sets focused ERM 21, 22 Sustainalize 22 on each segment of the environmental ESGeo 55 Task Force on Climate-related Financial Disclosures industry. Essential Design 35 32 EY 23 Taskforce on Scaling Voluntary Carbon Markets 16 Environmental Consulting & Genstar Capital 21 The Carlyle Group 35 Engineering Market Datapack Global Reporting Initiative 32, 52 United Nations Global Compact 35 Global Sustainable Investment Alliance 5, 7 United States AIDt 27 Global Environmental Market GreenBiz Group 21 U.S. Forum for Sustainable and Responsible Invest- Datapack Green-e 46 ment 2 U.S. Securities and Exchange Commission 33 Remediation & Industrial Services Gyrus Capital 19 IFM Investors 29 Value Reporting Foundation 32, 52 Market Datapack Indiana Toll Road Concession Consortium 29 Vivid Economics 18, 19 Wildermuth Environmental Inc. U.S. Environmental Industry Datapack Institute of International Finance 16 International Financial Reporting Standards 32, 40 World Economic Forum 52 Solid Waste Market Datapack International Integrated Reporting Council 32 World Finance Magazine 42 International Sustainability Standards Board 40 WSP USA 42 Hazardous Waste Market Datapack

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