Thought leaders, global decision-makers and policymakers will be convening in Dubai in late-November for the UN Climate Change Conference, or COP28, to assess and address the state of global affairs on the climate agenda.

In this episode of the EY Sustainability Matters podcast, host Bruno Sarda is joined in person by Amy Brachio, EY Global Vice Chair for Sustainability, and Matt Bell, EY Global Climate Change and Sustainability Services Leader. They explore COP28 and the importance of the first-ever Global Stocktake - a checkpoint discussion on the progress made since the Paris Agreement adoption in 2015.

With just seven years left to cut emissions by half and limit global warming by 1.5 degrees Celsius, the world has reached a pivotal moment in the fight against climate change. Amy and Matt share their views on the possible learnings from the Global Stocktake, as well as on the business and government perspective of COP28, and why it is so vital for those stakeholders to be represented there.

With a record number of people - 90,000 - set to attend the summit, the podcast looks at the progress since last year's COP. It also explains why, in these tumultuous times with one global crisis following another, more voices outside of governments must be part of the dialogue on climate change. The guests end on a hopeful note agreeing that the upcoming COP28 is likely to bring more positive outcomes and cross-sector collaborations.

• COP28 includes the first Global Stocktake to assess progress to address and adapt to climate change on a country-by-country level.
• The dialogue and collaboration between government and business across sectors are vital for meaningful progress.
• Recent extremes in climate have created more urgency for the transition to a low-carbon economy.
• New reporting standards are driving greater transparency and accountability.
• Global tensions, economic uncertainty and political landscapes impact progress, but businesses are still driving climate action through net-zero commitments.
• EY and other businesses attending COP28 are looking to have an authentic impact and play a role in driving meaningful action.

© 2023 Ernst & Young LLP

As businesses prepare to meet the growing demand for transparency in emissions reporting, the Science Based Targets initiative (SBTi) is leading the way in setting global standards for climate target setting. In a recent episode of the EY Sustainability Matters podcast, host Bruno Sarda is joined by Alberto Carrillo Pineda, cofounder and CTO of the SBTi, and the two members of the EY Climate Change and Sustainability Services, Rob Bradley, Managing Director, Ernst & Young LLP, and Miranda Nayyar, Manager, Ernst & Young LLP.

Setting, reporting and delivering on credible climate targets is becoming increasingly important as mandatory climate regulations come into effect. EY teams and the SBTi are collaborating in this area to support clients in committing to and setting science-based targets, and in developing decarbonization pathways to meet these goals. The EY organization and the SBTi recently co-authored research on the landscape of corporate measurement, reporting and verification related to science-based target setting, which is available to read (SBTi-EY-Landscape-Analysis-of-Measurement-and-Reporting-of-Science-Based-Targets.pdf (sciencebasedtargets.org)).

Pineda emphasizes that the SBTi's focus is on setting the global standard for science-based climate targets to promote accountability and transparency. The speakers address the challenges companies face in climate target setting, particularly in gathering robust data and achieving set targets.

The discussion also explores the impact of emerging climate disclosures, such as the Corporate Sustainability Reporting Directive (CSRD) and the U.S. Securities and Exchange commission (SEC), and how companies can prepare for these.

Looking to the future, Pineda is optimistic about the actual implementation, and notes that the SBTi standards will continue to evolve.

• The importance of setting climate targets has increased, and with more companies making public disclosures, issues of standardization have arisen.
• The SBTi is evolving standards to provide a globally standardized way to set climate targets and assess decarbonization progress.
• Setting of targets should go hand in hand with a robust decarbonization strategy to deliver on commitments.
• Key challenges are data collection and access to data across the value chain.
• The SBTi is moving toward a formal standard-setting structure and remains dedicated to continuously evolving and revising their standards to ensure alignment with the most up-to-date scientific research and evidence.

© 2023 Ernst & Young LLP

The necessary transition away from fossil fuels toward clean energy can be extremely disruptive for people and communities reliant on fossil fuel plants and mines for jobs. How can the power generators support these communities and achieve a just transition to a cleaner energy future?

In the latest episode of the Sustainability Matters podcast, host Bruno Sarda, Principal at Ernst & Young LLP and Shannon Roberts, CCaSS Power and Utilities Leader at Ernst & Young LLP, interview Sandy Nessing, Vice President and Chief Sustainability Officer at American Electric Power (AEP) about how the company is developing a new model for a just energy transition.

Nessing points out that the current economy is heavily fossil fuel-dependent, so the green energy transition has to be implemented thoughtfully to avoid severe social and economic risks. People reliant on the plants and communities built around them should be considered when driving the energy transition.

Nessing shares an example of AEP's Pirkey Plant in the US, in the process of being decommissioned. She gives listeners insights into how AEP created a transition task force and engaged with community leaders to help mitigate the impact on the local people.

Both Roberts and Nessing agree that power plants form their own unique social and economic ecosystems, and a proper, just transition requires thoughtful intention and may take a long time. Hence the importance of early planning, including engagement and collaboration with communities, and retaining and leveraging partnerships with stakeholders in the company's value chain.

• The transition to cleaner power generation should involve supporting communities dependent on the fossil fuel industry.
• Green energy transition impacts people not just in the industry itself, but also those in the supply chain and regional economy.
• Engaging with leaders from every area of the community is vital: from local politicians to school superintendents.
• The top priority of a just transition should be to keep people, taxes and jobs within the same region.
• Planning ahead is vital to allow time for a proper just transition in full collaboration with local communities.

© 2023 Ernst & Young LLP

Each year, the world produces 300 million tons of plastics, however, just 20% of it ends up back for recycling, with even less actually getting recycled. As plastics are an important part of improving the quality of life for a growing population and aren't going anywhere, how can we solve the plastics crisis with circular solutions? And how can major plastics companies play a leading role in the solution?

In the latest episode of the Sustainability Matters podcast, we look specifically at the case of Eastman Chemical Company's commitment and investment in circular solutions to help address the plastics crisis. Host, Bruno Sarda, and Velislava Ivanova, EY Americas Chief Sustainability Officer, and Climate Change and Sustainability Services Leader, are joined by Brad Lich, Executive Vice President and Chief Commercial Officer at Eastman, to discuss Eastman's innovative approach to closing the plastics value chain loop.

Lich begins the discussion by explaining why circularity is a core part of Eastman's business strategy and what it means to their business. He explains the importance of recycling in closing the loop in the value chain, focusing on molecular recycling and how it complements traditional mechanical recycling. Lich stresses that the innovation to solve the plastics and recycling problem isn't decades away, it is happening today through these circular and innovative solutions.

Lich and Ivanova discuss how no single company or industry can find solutions to the plastic pollution crisis on their own. The key for any industry wishing to move toward a circular model is to develop collaborations and partnerships.

• Adopting circular production is key to managing waste and tackling climate change.
• Innovation to make plastics truly circular isn't decades away, it is happening today.
• Demand for circular solutions in the plastics industry is rising, as customers push for greener products.
• Molecular recycling complements traditional mechanical recycling by addressing its shortcomings and avoiding end-of-life.
• New innovative recycling technologies lower greenhouse gas impact in comparison to traditional processes.
• Collaboration and co-innovation among companies, NGOs and regulators is essential to drive investments and find solutions. No company can do it alone.

© 2023 Ernst & Young LLP

There are various decarbonization frameworks designed for heavy industries, but what about the less obvious emitters like the service sector? How can they standardize emissions measurement and set out on the road to decarbonization?

In this episode of Sustainability Matters, we look specifically at the advertising and media sector and the challenges companies have faced in decarbonizing their supply chains. Host Bruno Sarda and EY CCaSS Senior Manager Charlotte Pugh are joined by Ollie Joyce and Alexandra McGee from marketing services leader WPP, which is at the forefront of efforts to establish an industry-wide carbon measurement framework.

Ollie and Alexandra explain how developing a standardized approach to measuring carbon emissions is a complex but necessary step for the media industry to achieve ambitious net-zero targets. They discuss how WPP's proposed global framework for measuring the ad-based carbon emissions and their media decarbonization coalition seek to create alignment with industry players.

Ollie and Alexandra discuss how media placement generates a significant carbon footprint and clients are questioning the emissions of the platforms they appear on. While emissions will never be the sole factor in media placement decision-making, the guests think that media investment will shift to publishers and platforms that decarbonize fastest. This has business advantages, as greater transparency may improve the media environment and deliver lower emissions.

Finally, Ollie and Alexandra talk about the lessons other industries that lack a standardized approach to decarbonization can learn from the media industry's experience, and how real change can be achieved from incremental gains.

• There is a new resolve within the advertising industry to reduce its carbon footprint.
• Existing GHG protocols can be difficult to interpret for the service sector and this complexity in measurement creates a roadblock for action.
• Industry-wide collaboration is key to establishing standardized emissions measurement in complex service sector value chains, such as the media sector.
• Emissions data is becoming an increasingly important factor in media placement decisions.
• Making carbon a factor in media decisions may reduce waste in the media supply chain and improve the media environment.
• Decarbonization efforts can correlate to business and workforce benefits.

© 2023 Ernst & Young LLP

The current global nonfinancial disclosures landscape is highly fragmented with a variety of different bodies evolving reporting frameworks. Will the new ISSB standards accelerate their convergence into mandatory globally accepted ESG reporting standards?

In the final episode of the miniseries on disclosures, host Bruno Sarda is joined by Terence Jeyararetnam, EY Asia-Pacific Leader and Partner, Climate Change and Sustainability Services at Ernst & Young (the Partnership), and a member of the ISSB's Technical Reference Group.

The discussion begins with the analysis of the different frameworks already in existence from the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) and others. Many businesses have already adopted these, but there is pressure from regulators, investors and other stakeholders for frameworks to be standardized and mandated. Voluntary reporting is not taking businesses far enough to reduce their impact on climate and nature.

The ISSB has an important role in accelerating this, and the hosts discuss whether the aggressive timeline for introducing the ISSB standards is realistic, what resistance is likely and what the prospects are for global acceptance. They also talk about how the new standards from the US SEC and the EU CSRD frameworks will fall into the picture.

Companies should prepare for a potential new reality, where ESG reporting could be as rigorous and mandated as financial reporting. Bruno and Terence discuss the need for culture change and the key role of the CFO in gathering and managing the ESG data.

© 2023 Ernst & Young LLP

In the second of our series-of-three Sustainability Matters podcasts dealing with environmental, social and governance (ESG) disclosures worldwide, our host Bruno Sarda focuses on biodiversity and the Taskforce on Nature-related Financial Disclosures (TNFD). He is joined by two members of the Taskforce: Marine de Bazelaire, Group Advisor on Natural Capital, HSBC, and Alexis Gazzo, Leader, Climate Change and Sustainability Services in France at EY & Associés

The discussion begins with the urgent need to tackle the loss of biodiversity that threatens global economy. The Kunming-Montreal Global Biodiversity Framework (GBF), which came out of the recent UN Biodiversity Conference, COP 15, aims to halt and reverse nature loss by 2030. As businesses and their stakeholders start to recognize biodiversity as a business priority, and begin to consider their impact and reliance on nature, there will be an increasing need for transparent natural capital disclosures to help achieve these global biodiversity targets. This is where the TNFD comes in.

Marine discusses the importance of addressing nature-related issues and halting nature loss to achieve a net-zero future. She also highlights how financial institutions are becoming more engaged piloting the TNFD beta framework and gives a fascinating insight into how HSBC is preparing for future nature-based disclosures.

Alexis talks about the TNFD and how it is seeking to address the challenges facing biodiversity, including how companies can begin to prepare for reporting. He discusses practical steps to take, and how EY teams can help companies identify areas of exposure to biodiversity-related risks.

© 2023 Ernst & Young LLP

In the first of a series of three Sustainability Matters podcasts dealing with ESG disclosures worldwide, we put the spotlight on Europe and the new Corporate Sustainability Reporting Directive (CSRD for short). Bruno Sarda is joined by Dr. Christian Orth, EY Global Solution Leader for Sustainability Reporting and Assurance, and Elodie Timmermans, EY Americas Nonfinancial Reporting Assurance and Advisory Leader, who looks at the implications for businesses in North America.

What is the CSRD and what is it trying to achieve? Christian guides us through the many acronyms involved and gives his insight into the evolution of ESG disclosures in Europe. The new directive is a vital component of the European Green Deal which seeks to make the EU the world's first carbon-neutral trading block. The guests discuss the huge increase in the number of businesses that will be affected and the compliance timelines.

The CSRD won't only affect European enterprise. Elodie outlines implications for non-EU businesses that have subsidiaries or operations in the EU. The guests also discuss how the CSRD aligns with other global initiatives such as the ISSB and SEC.

Businesses will need to prepare for a new age of sustainability disclosures. ESG reporting will not simply be the domain of the Chief Sustainability Officer, but the entire enterprise will need to become aligned to sustainability goals and disclosures. Implementation will have a major impact on operations and the time to set up steering committees and working groups is now.

Key takeaways

• The CSRD is an important part of delivering the European Green Deal - the journey to a carbon-neutral Europe.
• It encompasses not just climate change but broader Environmental, Social and Governance metrics.
• It will dramatically increase the number of businesses who are subject to mandatory ESG disclosures from 15,000 to over 50,000.
• CSRD will impact non-EU companies, called Third-country companies, that have substantial activity in the EU.
• Businesses should prepare now, aligning finance and sustainability teams and involve the C-suite.
• Successful reporting needs a holistic approach that involves the entire organization.

© 2023 Ernst & Young LLP

The COP27 climate conference in Egypt was billed as 'The African COP' with the promise that it would give a voice to the developing world as it wrestles with climate change. Did the conference succeed and has it found a way ahead that addresses the differing agendas of the world's developing nations?

Fresh from the conference, Clémence McNulty, Ernst & Young Advisory Services (Pty) Ltd, Africa Sustainability Lead, and Ricardo Assumpção, Ernst & Young Assessoria Empresarial Ltda, Latin America South ESG Leader, join Bruno Sarda to discuss the successes and shortcomings of the conference for their regions.

From an African perspective, Clemence discussed the importance of the private sector's participation but that the solutions need to be localized, with local municipalities and governments playing a key role.

For Latin America, Ricardo noted how COP27 was important in highlighting the unique assets Latin America has to create more value and the great potential of the carbon markets.

All agreed that the world is increasingly looking to the Global South to take a fuller part in the debate and play a more prominent role. Even with potentially imperfect outcomes, COP27 has further driven conversation and understanding of what needs to be achieved by all parties involved. Key takeaways

• The Loss and Damage Fund is an important step forward in addressing the disparity between northern and southern hemisphere resources.
• The private sector is likely to provide more and more financial and technological solutions. This was reflected in their presence at COP27.
• Blended finance from both the public and private sector is key for addressing the Just Transition and closing the funding gap.
• COP27 restated the connection between climate change and biodiversity, emphasizing the importance of the rainforest.

© 2022 Ernst & Young LLP

In a changing geopolitical environment, how can organizations stay true to their sustainability and environmental, social, and governance (ESG) goals? In this episode of Sustainability Matters, Bruno is joined by Matt Bell, EY Global Climate Change and Sustainability Services (CCaSS) Leader. Together, they explore the megatrends that will likely impact businesses over the next ten years, and the potential challenges businesses may face as they navigate the choppy waters of economic downturns, global conflict and forced regulations.

In particular, Bruno and Matt discuss the evolving role of the Chief Sustainability Officer (CSO), and the responsibility for CSOs to look beyond short-term objectives and lead the C-suite in staying true to sustainability ambitions.

As more businesses begin to explore how environmental impact goes hand in hand with impact on people, how can they look beyond nonfinancial disclosures to drive organizational change? Additionally, how can businesses not only adhere to compliance standards, but go beyond to embrace sustainability and ESG throughout their corporate culture?

Matt and Bruno discuss the practical steps that businesses can take, and some of the ongoing CCaSS initiatives that can help clients achieve their sustainability goals. Finally, Matt also shares his thoughts for people looking to make sustainability a career and how everyone, regardless of their job role, can contribute.

• CSOs and sustainability professionals should look beyond immediate performance to steer organizations on a long-term path to sustainability.
• Focusing on the social dimension of sustainability, and corporate impact on society as well as the environment delivers corporate value.
• Nonfinancial reporting is expected to achieve the same level of importance as financial reporting, which means that every area of the business should embed sustainability into their agenda.
• Global downturns, conflicts and financial crises are unlikely to interrupt ESG initiatives and can potentially accelerate them as organizations look at new business models and alternative energy sources.

For your convenience, full text transcript of this podcast is also available. Read the transcript.

© 2022 Ernst & Young Global Limited