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Rimm Sustainability and Zeroboard have joined hands to democratize sustainability through tech and automation, read our press release below to find out more.

Rimm Japan (Shibuya-ku, Tokyo; Chairman & CEO: Masashi Yamashita) and Rimm Sustainability Pte Ltd. (Singapore; CEO: Ravi Chidambaram; hereinafter “Rimm”) announced today that they will collaborate with Zeroboard Inc. (Minato-ku, Tokyo; CEO: Michitaka Toketsugu; hereinafter “Zeroboard”), a solution that supports the calculation, disclosure, and reduction of GHG (greenhouse gas) emissions, on February 24, 2023, to consider providing services that contribute to Rimm’s ESG assessment. We aim to integrate the functions of both companies’ solutions by the end of FY2011.

The announcement was made at the MOU signing ceremony of the Asian Zero Emission Community (AZEC) Public-Private Investment Forum hosted by the Ministry of Economy, Trade and Industry on March 3, 2012.

Rimm Japan Company Profile

Rimm Japan was jointly established by Rimm Sustainability Pte Ltd. of Singapore and SDG Impact Japan K.K. (co-presidents: Mari Ogiso and Bradley Busetto) to develop myCSO, a sustainability management assessment platform in Japan for the purpose of assessment improvement (co-presidents: Mari Ogiso and Bradley Busetto) to develop “myCSO,” a sustainability management assessment platform for the purpose of improving sustainability management in Japan.

About myCSO

Rimm, with its vision of “Sustainability for All”, provides a SaaS-type sustainability management platform based in Singapore that enables companies to conduct ESG assessments.

In recent years, an increasing number of companies have been implementing sustainability initiatives such as SDGs/ESG environmental management. In addition, with the growing interest in ESG investments, financial institutions, investment firms, and other investors in companies are also becoming more active in making investments and loans based around ESG contributions, such as green loans and positive impact financing.

However, these companies are currently forced to rely on costly consulting services by external experts, and rating and research firms to assess their ESG performance. The cost of such evaluations, especially for small and medium enterprises (SMEs), is a bottleneck that restricts their ability in improving their sustainability performance.

Rimm’s platform enables companies to visualize the progress in which they have achieved their sustainability initiatives and to evaluate and score their sustainability efforts using AI. We aim to improve the sustainability of society as a whole.

Rimm Japan has also been selected as a recipient of the Tokyo Metropolitan Government’s “Green Finance Foreign Business Start-up Support Program,” which supports foreign financial companies involved in green finance to establish operations in Tokyo.

Quotes from the involved parties:

Zero Board Corporation / Representative Director Michitaka Watakeiji

We are very pleased to have entered into a business partnership with Rimm, a Singapore-based developer of a sustainability management assessment and scoring platform. We are in a position to support companies in their decarbonization management by providing them with solutions specialized in the E (environment) of ESG, and we are in a good complementary relationship with Rimm, which is in a position to evaluate these solutions, both functionally and in terms of the geographic area of operation. We look forward to working with both companies to support decarbonization management aimed at increasing corporate value, as well as to promote initiatives that contribute to the realization of carbon neutrality on a global scale.

Rimm Sustainability Pte Ltd. / CEO Ravi Chidambaram

We are pleased to have signed an MOU with Zeroboard, a leader in decarbonization in Japan, for a business alliance. We are confident that the combination of Rimm’s rating systems in all ESG areas and the Zeroboard’s capabilities will help more companies in their sustainability efforts. We will also support the company’s overseas expansion by providing our accumulated data and knowledge.

Rimm Japan / Chairman of the Board Masashi Yamashita

We welcome the signing of a Memorandum of Understanding (MOU) for business cooperation with Zero Board. ESG initiatives, including decarbonization management, are an urgent issue in Japan. By organically combining the functions of Zero Board with those of myCSO, we believe we can assist companies at all levels in their sustainability management.

Read the Japanese press release here.

About Rimm Sustainability

myCSO is an accessible, end-to-end suite of sustainability solutions to address the sustainability needs of companies, as a Chief Sustainability Officer would. Developed by Rimm (Real Impact Matters Most) it helps small businesses measure, record, implement and assess actions which aid the delivery of greener business operations. The company leverages science, technology and data to make sustainability accessible and actionable for all, providing SMEs with the tools to advance on their sustainability journey.

Founded in 2020, Rimm is a SaaS company offering full sustainability management solutions to SMEs. The team is made up of sustainability, tech, ESG and data science professionals across three offices in London, Singapore and Tokyo.

For further information, please visit https://www.rimm.io/

Join us in celebrating and recognizing the achievements of women and explore how they are leading the charge towards a more sustainable future!

Happy International Women’s Day! This year, the theme is “Embrace Equity,” highlighting equity as a must-have in today’s society.

Women are taking the traditionally male-dominated tech and sustainability industries by storm, and studies have shown that companies with greater gender diversity at the top perform better financially and are more likely to prioritize sustainability in their operations. We also find many women at the forefront of social impact initiatives, whether it’s through philanthropy, community organizing or social entrepreneurship.

Gender equality and diversity and inclusion (D&I) have become crucial performance indicators in almost all forms of ESG assessments and reports because, after all, ESG is not just about the E. There is a growing consensus among investors, regulators, policymakers and corporations in favor of greater representation of women in leadership, gender-balanced workforces, and equal opportunity and empowerment for women.

By prioritizing gender-inclusive data and reporting, we stand to gain a more comprehensive understanding of sustainability and ESG issues and develop more effective solutions. Through a data-driven approach, organizations can identify risk areas and industry benchmarks for D&I so that they may take appropriate action as quickly as possible.

At Rimm, we commit to having gender-balanced teams and creating an inclusive and supportive work environment where all our employees can thrive. We recognize that gender equality is not just a moral imperative, but also a business imperative, and we strive to promote gender diversity and inclusion in everything we do. Hear from our team, below, as they share what embracing equity in the workplace means to them.

This International Women’s Day, we reaffirm our commitment to promoting gender equality and empowering women in pursuit of sustainability. We recognize that our work is not complete until all women are able to participate fully in creating a more just and sustainable world, and we pledge to continue working towards that vision.

To see how your company compares to its peers when it comes to D&I, you can complete a short assessment on myCSO.

Click here to learn more about myCSO.

Confused about which ESG issues matter the most for your business? Use a materiality map to identify the material issues you should address first.

Carbon emissions, stakeholder engagement, product safety, data security, occupational health and safety, human rights, ethical governance… The list of environmental, social and governance (ESG) issues to report on and track your business’s performance is endless. Knowing where to focus is key, and that’s where materiality comes in handy.

What is materiality?

Materiality refers to the relevance or importance of an ESG issue to your company. In simple terms, it means to identify the issues that matter the most to your business and stakeholders. 

According to the Global Reporting Initiative, material topics are “topics that represent the organization’s most significant impacts on the economy, environment, and people, including impacts on their human rights.”

In reality, not all ESG issues carry the same importance across industries, and not all ESG metrics may be relevant for your organization. Understanding materiality will help your organization conduct ESG assessments and reporting in an efficient and effective way. It can guide your ESG reporting processes, help you devise your sustainability strategies on key areas your business needs to prioritize and improve your engagement with stakeholders.

One way to quickly identify the material topics for your business is through a materiality map.

What is a materiality map?

An ESG materiality map is a visual representation of the most significant ESG issues faced by your organization. It is generated through a process that involves analyzing company data, benchmarking against peers and industry best practices, and engaging with stakeholders to understand their perspectives on relevant ESG topics.

By identifying the topics that have the highest potential to impact your financial performance, reputation and long-term sustainability, materiality maps can help your organization strategically plan its business operations. Insights gleaned from a materiality map can better inform decision-making around resource allocation and goal-setting, as well as position you to perform better in ESG.

How do I interpret a materiality map?

Materiality maps come in different shapes and sizes, but each one has two key components in common: a set of material issues and their relative materiality. Determinants of materiality can differ map to map, so keep a lookout for what methodology a map is using to determine the material issues.

Here’s an example below of a materiality map that shows a set of ESG topics ranked from highest to lowest materiality. The vertical axis represents the frequency of topics mentioned in mainstream media, and the horizontal axis indicates the frequency of topics mentioned by industry peers in their publicly disclosed sustainability and annual reports. The size of the bubble indicates the frequency of topics flagged as material across various global sustainability standards, such as GRI, SASB and MSCI. Hence, larger bubbles in the top-right show topics that are highly material based on industry and media data, and come up frequently in global sustainability standards.

Materiality maps are a crucial part of ESG and sustainability reporting. Once you have identified your organization’s material topics, you can focus on directing your resources towards understanding the key ESG risks and opportunities your organization faces and work towards improving your performance.

Want to find out more about the material topics to your organization?

Generate your own materiality map in just a few clicks with myCSO!

Learn more about some of the most important developments in recent years accompanying the UK ESG regulatory landscape and how you can be better prepared.

As organizations across the globe ramp up their focus and strategies on ESG and sustainability, the need for consistent and transparent reporting has increased. The United Kingdom (UK) is already leading the way by establishing a range of ESG regulatory requirements for public companies. These reflect the need to facilitate disclosure and promote the management of climate-related financial risk and opportunities across the British economy, particularly for financial institutions and asset managers. Furthermore, with the British leadership announcing its intention for the UK to be the world’s “first net zero-aligned financial centre”, a common feature underpinning these developments is how ESG regulations and requirements are designed to strengthen disclosure and facilitate management of climate risk.

Recent and upcoming developments

The shift towards mandatory corporate responsibility for ESG issues in the UK is gaining traction. For instance, companies and limited liability partnerships (LLPs) “with the greatest economic and environmental impact” are now subject to new laws and regulations which include the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022, as well as the Limited Liability Partnerships (LLPs) (Climate-related Financial Disclosure) Regulations 2022, which took effect on 6th April 2022. These new regulations stipulate a legal requirement for affected companies to assess climate risks and disclose climate-related financial information of their companies and to climate-related disclosures in their annual strategic report. Furthermore, the regulations require certain LLPs to provide a similar sustainability information statement on climate-related disclosures in their annual strategic report or their energy and carbon report.

The UK’s Financial Conduct Authority (FCA) is also the first securities regulator to mandate the Task Force on Climate-related Financial Disclosure – TCFD-aligned disclosure requirements for asset managers and asset owners. In December 2021, asset managers and certain asset owners, including life insurers and pension providers are required to make climate-related disclosures aligned with TCFD recommendations by 30th June 2024 – with a reporting period commencing on 1st January 2023.

In addition to asset managers and asset owners, the FCA has made the annual TCFD reporting mandatory for over 1,300 of the country’s largest UK-registered companies and financial institutions with effect from 6th April 2022. This will affect most of the UK’s largest publicly-traded companies, banks and insurers, as well as private companies with over 500 employees and £500 million in turnover.

Furthermore, the UK’s Sustainable Disclosure Requirements (SDR), which is currently underway, will be a key development in the UK’s trajectory of strengthening disclosure requirements and combating greenwashing. The SDR will encompass a set of measures and modifications, including sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms in product naming and marketing with the objective of clamping down on greenwashing.

The emergence of these developments indicate the UK’s heightened focus and commitment to increase transparency and accelerate the management of climate-related risks and opportunities across UK corporations. These are also designed to enhance competition and risk management while protecting consumers from unsuitable products and greenwashing, as well as bolster investment and the mobilization of capital towards sustainable projects and activities.

What do these ESG developments mean for businesses?

Developments in the regulatory regimes in the UK highlight the burgeoning pressure on companies to manage ESG related risks effectively across their corporate groups and supply chains. With increased levels of scrutiny on corporates who are increasingly questioned on their sustainability claims and levels of action by consumers, investors and shareholders, a failure to mitigate these risks and ramp up accountability could result in legal liabilities and even the possibility of being subject to litigation for companies.

While most of the recent regulatory developments affect major companies, asset managers and financial institutions, the emergence of these mandatory requirements and disclosure rules have implications for thousands of businesses connected with affected UK companies through their extensive supply chain networks and portfolios. This makes it increasingly critical for companies of all sizes and industries to be prepared for changes in the regulatory landscape especially since in light of rigorous disclosure requirements and growing stakeholder and investor pressure which indicates how ESG reporting and companies is becoming a key business priority.

It is critical for companies to embark on actionable steps to navigate the complexities in the ESG reporting landscape and ensure compliance.

3 Actionable Steps for Companies to Navigate ESG Compliance

Adopt quality control systems across ESG: Implementing quality controls and governance mechanisms are critical to ensure that companies adhere to their human rights and environmental due diligence and/or disclosure obligations, as well as any ESG related standards or targets.

Ramp up engagement with supply chain partners on disclosure: ESG-related reporting obligations should extend to relationships with a companies’ supply chain partners and there should be strategies in place to communicate on a companies’ reporting obligations and the management of supply chain risks.

In-depth understanding on rules and requirements: Firms, whether directly or indirectly affected, should familiarize themselves with the details of the rules and guidance in the industries and jurisdictions they are based in, and consider how they would be impacted to ensure that they are able to meet the requirements.

→ Download our guide to find out what are some of the latest ESG regulations in the UK, when they have taken effect and affected stakeholders

The upcoming UK’s Sustainability Disclosure Requirements (SDR) will be a key development in 2023. Find out what the SDR will entail, the affected stakeholders and requirements in the UK’s ESG reporting landscape.

As the world ramps up its focus on sustainability disclosure and risk management, the UK’s ESG regulatory regime is no exception to this trend. In recent years, proposals as well as new statutory instruments and regulatory requirements that are currently underway reflect the need to strengthen disclosure and promote the management of climate-related financial risk and opportunities across the British economy, particularly for financial institutions and asset managers. This is also in light of heightened concern that companies resort to misleading or unsubstantiated sustainability-related claims about their products, or ‘greenwashing’. Given the need to protect consumers as they navigate an increasingly complex investment landscape and strengthen trust, the UK’s Financial Conduct Authority (FCA) had recently issued a consultation paper (“CP 22/20”) on its proposed regime of the Sustainability Disclosure Requirements (SDR). The upcoming SDRs are intended to create an integrated and streamlined framework for corporates and financial institutions to comply with all sustainability-related reporting requirements.

Following the UK Government’s Roadmap to Sustainable Investing published in October 2021, the FCA’s CP 22/20 builds on responses to the discussion paper on sustainability disclosure requirements and investment labels which is critical in advancing the FCA’s anti-greenwashing initiatives. With increased scrutiny from investors and a demand for wider sustainability-related measures to be considered, the proposal is aimed at increasing transparency regarding the sustainability of investment products and facilitating like-for-like comparisons, particularly for retail investors.

The proposals outlined by the FCA in the consultation paper introduce a range of measures and modifications which include sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms in product naming and marketing with the objective of clamping down on greenwashing.

Among some of the key proposals of the SDR is the introduction of sustainable investment labels (SIL) designed to facilitate the provision of accurate information for investors on how the funds impact social or environmental sustainability, and how this is measured and reported. Under SDR, financial products will be labeled based on intentionality and their actual contribution to positive sustainable outcomes. If a product does not meet the criteria for a label, certain restrictions apply regarding the use of sustainability-related language; and its marketing may not include words such as ‘sustainability’, ‘responsible’, ‘green’ and much more.

What will the SDR mean for companies in the UK?

While some requirements are expected to be implemented via a phased approach, others are likely to be enforced soon. The SDRs are currently in the midst of legislative approval and feedback from stakeholders. The current proposals apply to certain FCA-regulated firms and the rules are expected to be finalized by the end of Q2 2023, with disclosure rules applying from 2024 and reporting commencing in 2025. Firms that manage investment products for retail investors and their products are expected to be subject to the product labeling and disclosure rules which include wealth, fund and asset managers.

How can firms be better prepared?

In light of the upcoming requirements, it is critical for firms to embark on concrete steps to understand the nature of their products in the context of the SDR and determine which disclosure requirements their investment products would be eventually subject to. To ensure appropriate labelling of investment products, conducting a detailed scoping and product classification exercise to determine the extent of alignment with the proposed labels is essential.

For existing products tied to sustainability objectives, these objectives should be specific and measurable. In addition, when investment policy and strategy are aligned to sustainability outcomes, the disclosures should be adequately explained in terms of how the outcomes are measured and the appropriate key performance indicators (KPIs) that are linked to the disclosure. Given the evolving nature of ESG regimes, the asset management industry, particularly those with asset management businesses on a global scale will have to be cognizant on how the upcoming SDR regulation will align with global frameworks and ESG regimes outside the UK.

In essence, while the SDRs provide asset owners with critical insight into the environmental and social impacts of companies in their portfolios, it also means that they would have to be adequately prepared for changes in the landscape and their exposure to increased regulatory risk as a result of misleading representations on the sustainability-related features of investment products or services. The more an entity associates itself with sustainability, the more it will run the risk of exposing itself to regulatory investigations and even litigation. It is thus critical for companies to regularly review their sustainability communications and marketing materials to ensure compliance with the anti-greenwashing rule.

Explore the increased scrutiny on corporate greenwashing and what it entails for corporates in an era where climate litigation has rapidly risen.

In the current era of heightened environmental awareness, sustainability has become a critical consideration for both consumers, governments and businesses. As a result, an increasing number of companies have embarked on strategies to trumpet their sustainability credentials by marketing their products and services as “green,” “eco-friendly,” and “sustainable” through advertisements, pledges and social media campaigns. However, this phenomenon has led to the rise of greenwashing, a practice in which companies use misleading advertising and promotional materials to market themselves as environmentally responsible than what they truly are.

Lawyers have warned about the increased pressure on companies to “walk the talk” especially with their claims on sustainability commitments and investing which are now viewed through the prism of ESG. Globally, we are also witnessing a range of measures put in place by regulators and governments to curb greenwashing. These include the UK Financial Conduct Authority (FCA)’s proposal of the Sustainability Disclosure Requirements (SDR) in 2022 to help investors navigate the investment product landscape and identify sustainable investment products. In its consultation paper which was published, the FCA’s proposals include new sustainable fund labels as part of its broader anti-greenwashing rule which is to be applied to all regulated firms. In early February 2023, the FCA had also informed via a letter to asset managers that it will be testing claims on ESG and sustainable investing that are communicated with investors. In the US, scrutiny of claims about sustainability and ESG is already underway, as observed by the U.S. Securities and Exchange Commission’s (SEC) announcement on the establishment of a Climate and ESG Task Force in the Division of Enforcement, stating that it would “proactively identify ESG-related misconduct.”

Recent examples of companies scrutinized for greenwashing & climate litigation

As pressures grow for firms to be sustainable to align with regulatory and customer expectations, there is a risk that more companies will resort to embellishing their sustainability efforts. Recent examples of companies called out for their exaggerated claims include DWS, a leading investment firm accused of misrepresenting the environmental impact of its funds by promoting them as sustainable despite their lack of sustainability credentials. Similarly, Shell and ExxonMobil, two major players in the oil and gas industry, have been criticized for promoting their investments in renewable energy while continuing to extract and sell fossil fuels. These companies are part of a growing list of companies in the corporate world such as Goldman Sachs, Exxon Mobil Corp., BNY Mellon, H&M making headlines after being targeted for alleged deceptions in the climate aspects of their business practices.

Notably, an increasing number of litigation cases associated with greenwashing undertaken by environmental groups, activists, research agencies and investors is rapidly evolving across the globe, with the most recent case of BNP Paribas being the latest firm taken to court over its climate credentials. The Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy which published a report in 2022 analyzing trends in climate change litigation captures key developments. Based on the report, it highlighted how climate-related greenwashing litigation or ‘climate-washing’ litigation is gaining pace, “with the aim of holding companies or states to account for various forms of climate misinformation before domestic courts and other bodies.” The report also envisaged that the volume of case numbers of litigation will continue to grow given the urgency of clamping down on entities that “act inconsistently with commitments and targets”, or engage in tactics that “mislead the public and interested parties about their products and actions”.

The repercussions of greenwashing can be severe, evident from the increased scrutiny on organizations that engage in such practices. Being subject to such scrutiny can undermine a company’s credibility and reputation, and it can lead to legal action, consumer backlash, and financial losses.

How can corporates avoid greenwashing?

To avoid the pitfalls of greenwashing, companies must be vigilant and proactive in their approach to sustainability in a responsible, genuine and constructive manner.

In conclusion, greenwashing is a practice that can severely damage a company’s reputation, credibility, and financial well-being. It is critical that companies be transparent about their environmental social practices, make genuine efforts to improve their sustainability, and work with independent organizations to verify their claims. Looking ahead, with the increased levels of scrutiny by various stakeholder groups, rigorous disclosure requirements as well as growing stakeholder and investor pressure, this means that corporations must be cognizant about the implications as well as expectations of their sustainability claims and ensure that they are adequately substantiated and verified.

At Rimm, we strive to encourage our clients to ensure the proper disclosure of information reported. By doing so, we enable companies to demonstrate their commitment to environmental and social responsibility and position themselves as credible and trustworthy leaders in the pursuit of sustainability through strong compliance in ESG.

Ravi Chidambaram (Founder and CEO, Rimm) collaborates with WMI and NTU to deliver certified ‘ESG for Asset Managers’ course. Read on to learn more about the experience.

In today’s world, as investors and consumers are increasingly looking for companies that prioritize sustainability, ESG has become a key consideration for asset managers. Incorporating ESG in the investment processes can not only help asset managers assess the social and environmental impact of their investments, but also prepare against physical and transition climate risks and improve returns in the long term. By prioritizing ESG, asset managers can identify opportunities for positive impact and sustainable growth and help build a better world.

To support asset managers and wealth management practitioners in navigating the changing investment landscape, Rimm’s Founder and CEO, Ravi, held his first certified course on ‘ESG for Asset Managers’ in collaboration with Wealth Management Institute (WMI) of Singapore, a leading center for wealth and asset management education and research. The course was part of a broader ‘MSc Asset and Wealth Management’ program by Nanyang Technological University (NTU) and draws on Ravi’s ESG analytics and investment banking expertise, WMI’s extensive experience in running and certifying programs for asset management, and NTU’s establishment as a leading tertiary, academic institution.

Taught over a span of two days with a total intake of 44 students comprising wealth management professionals and finance practitioners, the course focuses on the application of ESG and sustainability frameworks, standards and approaches for investors. Our team at Rimm was also extensively involved in supporting Ravi in the preparation for various components of the course and was consulted on providing a range of learning opportunities, including interactive lectures with Rimm’s extensive network of esteemed thought leaders and academics in the ESG space, case studies, as well as highly collaborative and immersive group projects.

Ravi, who is also an adjunct professor at Yale-NUS College, covered a range of topics through a strategic investment and compliance lens, including public equity ESG investing, private equity ESG engagement strategies, and impact investing. Rimm’s Chief Research Officer (CRO) Dr. Geraldine Bouveret, was also invited to lead a comprehensive module on climate risks, with an in-depth exploration of physical and transition risks that companies need to be increasingly cognizant of in light of climate change.

As part of the modules, Rimm’s Education team also supported in guiding students through highly engaging in-class activities and collaborative data exercises inspired by the methodologies behind the Rimm platform. These include the ESG materiality and benchmarking exercise, as well as the SDG impact measurement exercise which were facilitated to encourage students to think critically about the methodologies used to measure ESG performance and share their perspectives on their findings.

In addition to our core team, the students also had the opportunity to hear from distinguished guest speakers in the sustainability field who were invited to cover different modules pertaining to ESG investing. Professor Kim Schumacher, renowned for his expertise in sustainable finance, addressed the topic of greenwashing, including competence greenwashing and its implications for companies. Sasja Beslik, Chief Investment Strategy Officer at SDG Impact Japan and is known for his extensive work in catalyzing the rise of ESG investing globally, particularly in Europe and the world, and is a recognized thought leader and practitioner in this space, was also invited to conclude the course on working towards better ESG investing.

The course was an excellent opportunity for the Rimm team to collaborate with various practitioners in the finance and investment space with a keen interest in ESG and to exchange meaningful perspectives on the topics discussed.

Learn more about the importance of Scopes 1, 2 and 3 emissions in sustainability reporting and how your organization can measure and report your carbon footprint.

In the world of sustainability reporting and ESG analysis today, carbon emissions are particularly significant. They can be quite complex to calculate, but contribute greatly towards your organization’s sustainability agenda. If you have already decided to be a more sustainable business and have taken the first steps towards that goal, consider tracking and reducing your carbon footprint. This starts with tracking your Scope 1, 2 and 3 emissions. 

The Greenhouse Gas Protocol (GHG) is the world’s leading organization that sets the standards for carbon emissions reporting. It introduced the concept of “scopes” to help classify direct and indirect emissions, improve transparency and simplify emissions reporting for different types of businesses and organizations. These “scopes” are carefully defined to prevent the double-counting of emissions from one company’s emissions sources when calculating its carbon footprint.

Scope 1

Defined by the GHG Protocol as “direct GHG emissions occur from sources that are owned or controlled by the company,” scope 1 emissions can be divided into key categories:

1. Static Combustion: Static or stationary combustion refers to combustion of fuels in stationary equipment at facilities, such as boilers, furnaces, burners, turbines, heaters, incinerators, engines, flares, etc. Examples of fuels include coal, crude oil, diesel, liquefied petroleum gases (LPGs), natural gas and propane gas.
2. Refrigerant: A refrigerant is a compound typically found in either a fluid or gaseous state used in the refrigeration cycle of air conditioning systems and heat pumps. In most cases, refrigerants undergo a repeated phase transition from a liquid to a gas and back again. 
3. Mobile Combustion: These are all vehicles owned or leased by your organization that burn fuels producing greenhouse gasses. It encompasses the combustion of fuels in transportation devices such as automobiles, trucks, buses, trains, airplanes, boats, ships, barges, vessels, etc.

Scope 2

Scope 2 emissions are defined as the “GHG emissions from the generation of purchased electricity consumed by the company.”  These are all indirect, owned GHG emissions released in the atmosphere, from the consumption of purchased electricity, steam, heat and cooling and they physically occur at the facility where electricity is generated. Some key categories include:

1. Purchased heat and steam: These account for heat and steam purchased by the utility from an independent generation facility.
2. Purchased electricity: This refers to the extraction, production, and transportation of fuels consumed in the generation of electricity, steam, heating and cooling consumed by the reporting company.

Scope 3

Scope 3 includes all indirect, unowned emissions that occur in the value chain of a reporting company and are not included in Scopes 1 and 2. Examples include purchased goods and services, business travel, employee commute, waste disposals, leased assets, franchises, etc.

Although scope 3 emissions may not fully be in your company’s control, they likely represent the biggest portion of your emissions inventory. This is the broadest emissions category, where the majority of an organization’s emissions come from and are also the most challenging to track. 

But they can also offer big opportunities for carbon footprint reduction. Some of these benefits include:

• Cost reduction and energy efficiency improvements in your supply chain
• Clarity on which suppliers are leaders in sustainability performance and on how to develop initiatives to help improve the others
• Product energy efficiency improvements

A good way to go about measuring Scope 3 emissions is to use the GHG Protocol’s Scope 3 Standard that details the requirements and practical guidance for Scope 3 reporting. This guide will help assess your organization’s Scope 3 emissions inventories comprehensively and allow you to start devising emissions reduction plans.

All in all, reporting carbon emissions is not an easy task. It’s a time consuming and meticulous process that demands close expertise. However, as regulations become increasingly stringent and stakeholders increasingly push for a net-zero economy, the benefits of calculating and cutting emissions across all Scopes are beneficial, for your business as well as the environment.

Rimm’s Carbon Calculator, which is a feature in myCSO Essential, is making this process easier. By estimating carbon emissions for organizations using advanced machine learning algorithms, it’s one step in the emissions reduction journey for your organization.

Learn more about myCSO and get access to the carbon calculator today!

A sustainability report is an effective way to communicate your company’s commitment to sustainability. Find out about the essential components of a sustainability report below!

Publishing a sustainability report is a great way for companies to disclose their ESG practices. 

Sustainability reporting in the corporate setting is an important factor to improve a company’s green initiatives and its relationship with investors and clients in building trust, in line with stakeholders’ demand for transparency and accountability.

With this increase in demand, many organizations can benefit from sustainability reporting, which helps make organizations’ decision-making processes more efficient and, in turn, enables them to reduce risk.

Whether you’re just beginning your own journey with sustainability or looking to improve your sustainability report, it definitely helps to know what the main components are.

Let’s dive into what each of these components entail!

Navigating through the report… 

1. Contents
   A sustainability report covers a wide range of topics. The length and contents of the report will vary depending largely on the company size and industry. Having a clear contents page that highlights the main topics and sub-topics is a great way to provide readers with an overview of the scope of your sustainability report. 

What is your report about? 

2. About This Report
   This section of the report serves as the introduction, where companies can outline their company background, chairman’s/CEO’s statement and the framework(s) with which the report was generated. The chairman’s statement is vital as it communicates your company’s mission, purpose and commitment to sustainability. Stating your chosen sustainability framework and/or standard here clarifies from the beginning which guidelines your disclosures are in alignment with. Be sure to also state the reporting period as not all companies report within the same timeframe.

What are the relevant topics under sustainability to your company? 

3. Sustainability approach and materiality assessment
   This next section should summarize your company’s main strategy and focus in terms of environment, social and governance (ESG). To ensure that your company reports on the most important sustainability topics relevant to your company and industry, include a materiality map, which you can obtain from conducting a materiality assessment. The results should rank the topics by significance, showing your stakeholders that you are focusing on issues that matter to them, which can also improve overall engagement.

How is progress measured, how is your company performing and what next? 

4. Metrics, progress tracking and targets
   After identifying the material topics, the subsequent sections of the report should detail how well your company performed in these areas. Highlight your company’s progress and targets using the appropriate metrics and outline any policies and management approaches your company has in the reporting period. This is where you can also highlight any successful projects and initiatives related to any of your material topics that have made a positive impact on society. Try to be as detailed as possible to provide readers transparency and minimize any ambiguity that may give way to greenwashing!
   
5. Risk assessments
   Taking it a step further, your performance evaluation should also include any risk assessments conducted by your company in the material topic areas. This encompasses the identification of climate risks, strategies to address these risks, and opportunities involved that could potentially affect your company in the short, medium and long term. Providing more context to your company’s preparedness for the future, helps to highlight your adaptability and resilience to stakeholders.

Has your report been verified?

6. Third-party assurance or auditing
   Once the above components are ready, you may wish to audit your report to boost your credibility. If your company has gone through an external review or validation process, include an assurance statement to provide verification on the accuracy and reliability of your sustainability report.

One last thing…

7. Appendix
   Finally, your report should include an appendix. In this section, be sure to include an index that clearly maps out each material topic disclosure to its topic disclosure reference in your chosen sustainability framework(s). This will help readers easily see how your reporting aligns with the chosen framework(s) and where the overlaps are. In addition, you may also choose to include any supplementary information on your report in the appendix, such as your materiality and benchmarking methodologies.

Want to know more about the benefits of good ESG Reporting?

Read our previous post on the ‘5 Key Benefits for Corporates Practicing Good ESG Reporting.’

Understand the difference between sustainability, ESG and CSR reporting. We’ve made it simple with our basic guide!

Today’s alphabet soup of sustainability jargon and buzzwords is a challenge to navigate. ‘Sustainability,’ ‘ESG’ and ‘CSR’ are often confused and used interchangeably despite having different contextual implications. While there is a considerable overlap in definitions and scopes, replacing one of these key terms with another is inaccurate and misleading.

Let’s unpack these terms…

Sustainability: officially defined in the 1987 United Nations (UN) Brundtland Commission as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” This is the most widely recognized definition of sustainability but can be defined differently depending on context.

Within the business context, sustainability refers to the act of balancing three interconnected pillars: environmental, social and economic. Considering these three pillars, a key endeavor in corporate sustainability is to manage an enterprise in the long term without causing extensive damage to the environment or adopting socially harmful practices.

• The environmental pillar encompasses practices and actions that aim to minimize negative impact on natural ecosystems, support biodiversity and maintain or restore natural resources and climatic cycles.
• The social pillar includes meeting the needs of, supporting and engaging with stakeholders, including communities, employees and consumers.
• The economic pillar seeks to meet the needs of the company by managing risks, maintaining profitability and enhancing resilience.

ESG: a framework that helps measure a company’s sustainability and societal impact, using metrics that matter to stakeholders, particularly investors. It encompasses environmental, social and governance factors that help evaluate a company’s risk exposure with the aim of improving investment decisions.

ESG is typically underpinned by a financial motivation by corporates and investors as they seek to improve the valuation of the business.

Incorporating ESG is critical for sustainability reporting and facilitates a structured process that involves conducting a materiality assessment, collecting insights from stakeholders, developing a measurable roadmap and set of key performance indicators (KPIs), setting goals and tracking progress.

CSR: a self-regulating business model promoting companies’ social accountability and engagement in volunteering or ethically-oriented practices. By practicing corporate social responsibility (CSR), companies can be more conscious of their impact on society.

To incorporate good CSR practices, businesses can consider improving its company culture, impact on the environment and relationship with the local community. They can then motivate their employees to be more engaged and become part of the solution.

According to the Corporate Governance Institute, what makes CSR distinct from ESG is its focus on informing stakeholders about the values and goals of the business, including corporate volunteering, reducing carbon footprint and engaging with charities. 

Both CSR and ESG can be used by a company simultaneously. CSR provides a framework for the company to communicate internally with employees, while ESG provides measurable goals.