EDITORIAL

When a news outlet such as The Economist writes that ESG is too complicated and that it is time to limit environmental issues to their greenhouse gas dimension… it’s a hard blow. It is indeed impossible to durably manage environmental issues without taking into account underpinning social and governance issues.
 
That said, the very reason behind The Economist’s headline is that ESG remains too complex for most. Worse, its impact on the real economy has yet to be demonstrated. After all, the IPCC estimates global greenhouse gas emissions to practically double in 30 years!

• For some – including the ISSB chairman – ESG metrics are only intended to inform investors. The key risk of not taking double materiality into account (i.e. for the company and for the planet) is to provide erroneous non-financial information on the combined effects of the E, S and G dimensions.
• For others – including journalists at The Economist – ESG analyses are intended to measure and connect overly complicated dimensions. And what is complicated is useless. We might as well simplify, at the risk of operating on simplistic assumptions.

1. Consideration of climate change is finally a matter of course – bearing in mind the United States’ recent mobilization. It is progressively being included in regulatory requirements across key European, Asian and North American markets;
2. The search for concrete solutions to link decarbonization and social considerations is centerstage for both investors and companies. The private sector as a whole is looking for credible, large-scale approaches aligned with the recommendations of the latest IPCC report;
3. This climate transition cannot be achieved at the expense of Human Rights violations (child labor, forced labor, modern slavery, gender-based exclusion in particular). This awareness increasingly underpins the ongoing solar, wind and battery electric revolutions in particular.

• We will conclude various consulting missions in banking and insurance, technology, construction, hotels, amongst others sectors. Together, we are developing Human Rights action plans, ambitious climate trajectories and asset transformation strategies around the world.
• In Paris and Amsterdam, we will have the opportunity to discuss our SUTTI approach in favor of large-scale regenerative agriculture, which combines climate action and smallholder capacity-building.
• We are launching a working group to align investors and industrialists on forced labor issues. Our common goal is to build an actionable toolkit and thus ensure the effective consideration of Human Rights in procuring for renewable parks and electric cars in particular.

 
Ksapa thus enters the second half of 2022 with a reaffirmed ambition as a global catalyst for concrete and innovative solutions for a fairer, more sustainable and faster transition.
 
We look forward to meeting you soon!
 
Farid Baddache,
Ksapa CEO