ESG Archives

ESG, Taxonomy, Vendor Risk Management

Complying With EU Taxonomy Regulations to Enhance Risk Management

Posted on July 26, 2023July 27, 2023 by Or Kadosh

Findings.co discusses how to comply and leverage the eu taxonomy to enhance risk management efforts

26
Jul

In today’s fast-paced regulatory landscape, businesses face the daunting task of complying with new regulations all the time. Recently, organizations have been faced with dealing with the EU Taxonomy regulations. With an increasing demand for sustainable practices and transparent reporting, organizations need to learn and adapt quickly to avoid falling behind their competitors. Leveraging the EU Taxonomy in risk management can drive data-driven decision making by providing a structured framework to assess and manage sustainability-related risks and opportunities.

The constantly evolving regulatory environment has made Taxonomy compliance a critical challenge for businesses. To meet investor expectations, consumer preferences, and regulatory requirements, organizations must navigate through complex sustainability criteria and efficiently report their compliance efforts. Make sure to read on to see how Findings can help – especially when it comes to staying compliant with the EU Taxonomy Regulation.

Understanding the Regulatory Demands

The EU Taxonomy sets guidelines and criteria for determining the environmental sustainability of economic activities. Compliance with this regulation is critical for many businesses operating within the European Union, aiming to foster a greener and more sustainable economy. These significant updates and changes will impact the way businesses assess and report their sustainability practices. It is crucial for organizations to understand these updates, ensuring compliance while mitigating the risk of penalties and reputational harm.

Leveraging Risk Management for Data Driven Decision Making

By implementing a robust risk management framework revolving around taxonomy, organizations can stay ahead and ensure compliance. Leveraging the EU Taxonomy in risk management drives data-driven decision making by providing a standardized and science-based framework to assess sustainability risks and opportunities. By integrating financial and sustainability data, companies can make informed choices that align with the EU’s environmental objectives, attract green investments, and proactively respond to changing regulatory landscapes.

Here are some of the key ways taxonomy can influence data driven decision making:

Identifying Taxonomy-Eligible Activities: The first step in using Taxonomy for risk management is to identify the company’s Taxonomy-eligible activities. By mapping all activities against the Taxonomy’s criteria, businesses can determine which of their operations contribute to environmental sustainability. This helps in recognizing areas where the company aligns with the EU’s sustainability goals and where there may be potential risks due to misalignment.

Environmental Risk Assessment: With the Taxonomy’s defined criteria for environmental sustainability, businesses can conduct a more rigorous environmental risk assessment. This assessment will go beyond traditional financial risks to include the evaluation of ecological impacts. It allows companies to identify areas where they might face future regulatory or reputational risks due to non-compliance or unsustainable practices.

Data-Driven Eligibility and Alignment Scoring: The Taxonomy requires companies to link their financial data to sustainability assessments. This means companies need to gather data on their operations and expenditures related to Taxonomy-eligible activities. By collecting and analyzing this data, businesses can score their eligibility and alignment with the Taxonomy’s environmental objectives. Data-driven scoring provides a more objective and transparent view of a company’s sustainability performance.

Risk Mitigation Strategies: Armed with data on eligibility and alignment, companies can develop risk mitigation strategies. For instance, they can focus on increasing investments and efforts in Taxonomy-aligned activities, which not only contribute to sustainability but also enhance their attractiveness to green investors. Simultaneously, they can work on transitioning away from activities that are not aligned with the Taxonomy to reduce exposure to future risks.

Regulatory Compliance: The EU Taxonomy is likely to expand to cover more sectors and objectives in the future. By leveraging the Taxonomy in risk management, companies can proactively prepare for upcoming regulatory changes. They can stay ahead of the curve by identifying potential future Taxonomy-eligible activities and aligning their strategies accordingly. Findings recently announced two features, Assessment AI and Audit AI, which revolutionize the labor-intensive compliance landscape by enhancing efficiency and responsiveness for all stakeholders worldwide. For more in-depth information that’s easy to digest, check out the linked videos.

Reporting and Transparency: Using the Taxonomy for risk management facilitates better reporting and transparency. Companies can disclose their Taxonomy-aligned activities, eligibility scores, and risk mitigation strategies in their sustainability reports. This enhances credibility and helps investors and stakeholders make informed decisions based on reliable data

Continuous Improvement: The data-driven approach to Taxonomy integration allows companies to track their progress over time. By regularly assessing their eligibility and alignment, businesses can set benchmarks, monitor improvements, and continuously optimize their sustainability efforts.

By implementing a comprehensive Taxonomy risk management framework and leveraging Findings, organizations can proactively address the challenges posed by the EU Taxonomy regulation. This approach ensures compliance, mitigates risks, and unlocks opportunities for sustainable growth and competitive advantage. With automated risk identification and mitigation features, organizations can confidently make data-driven decisions while navigating the complex regulatory landscape, reinforcing their commitment to sustainability. Stay ahead, embrace Taxonomy risk management, and shape a sustainable future for your organization.

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ESG, Taxonomy

A Cheat Sheet of EU Sustainability Regulations

Posted on July 20, 2023July 20, 2023 by Or Kadosh

Findings.co cheat sheet of EU Sustainability Regulations

20
Jul

Staying Compliant in 2023

Sustainability reporting regulations have become increasingly important for businesses worldwide. The European Union (EU) is at the forefront of this movement, implementing regulations to enhance the consistency, accuracy, and transparency of sustainability reporting. Below, I will provide a comprehensive overview of some of the most critical EU sustainability regulations to keep in mind in 2023. Sustainability measures have become an integral part of business operations, irrespective of the size of the company. Companies can no longer ignore the growing number of sustainability reporting laws and regulations emerging globally. Navigating this complex landscape can be daunting, with terms like SFDR, CSDR, and NFRD, among others. To help you stay informed, I will highlight key EU sustainability regulations that are important to note in 2023.

EU Taxonomy

The EU Taxonomy is a classification system that establishes a list of economic activities considered sustainable. It aims to combat greenwashing and assist investors in selecting environmentally conscious investments. The EU Taxonomy evaluates investments based on their contribution to climate change mitigation and adaptation, alignment with circular economy principles, impact on pollution, and effect on water and biodiversity. Large companies began reporting their alignment with the EU Taxonomy on January 1, 2023. For a more in depth explanation of EU taxonomy, check out our free eGuide below!

Sustainability Disclosure Requirements (SDR)

Originating from the UK Financial Conduct Authority (FCA), the Sustainability Disclosure Requirements (SDR) regulation aims to address concerns about greenwashing, where firms make exaggerated or misleading sustainability claims about their investment products, leading to potential consumer harm and reduced trust in sustainable investments. The proposals focus on building transparency and trust by introducing labels to help consumers navigate the market and ensure that sustainability-related terms in product naming and marketing are accurate and proportional to the product’s sustainability profile. The consultation targets FCA-regulated firms, industry groups, consumer groups, policymakers, academics, and other stakeholders. This initiative is part of the FCA’s commitment to promote trust and integrity in ESG-labeled instruments and products as outlined in the ESG Strategy and Business Plan, contributing to the Government’s Roadmap to Sustainable Investing.

EU Sustainable Finance Disclosure Regulation (SFDR)

The Sustainable Finance Disclosure Regulation (SFDR), implemented by the European Parliament, focuses on enhancing transparency in the sustainable investment market. It aims to prevent misleading environmental claims (greenwashing) and increase investment in sustainable products for a transition to a low-carbon economy. The SFDR categorizes investment products into three groups based on their degree of sustainability. It requires asset managers and investment advisers to disclose how they address Sustainability Risks and Principal Adverse Impacts and the three categories of products go into “Article 6,” “Article 8,” and “Article 9” based on their sustainability considerations. The regulation rolled out in two phases, with core disclosures effective in March 2021 and enhanced disclosures in January 2023. Regulators continue to provide guidance on these disclosures as industry understanding evolves.

Corporate Sustainability Reporting Directive (CSRD)

The Corporate Sustainability Reporting Directive (CSRD) expands on the existing Non-Financial Reporting Directive (NFRD) to address structural weaknesses in current ESG regulations. CSRD came into force on January 5, 2023, requiring approximately 50,000 companies to report on sustainability, including a broader set of large companies and listed SMEs. The new rules aim to provide investors and stakeholders with the necessary information to assess investment risks related to climate change and sustainability issues.

Companies subject to the CSRD will have to report according to European Sustainability Reporting Standards (ESRS), which will be developed by the EFRAG and tailored to EU policies while aligning with international standardization initiatives. The directive also mandates companies to have their sustainability information audited and introduces digitalization of sustainability information.

The CSRD will be implemented in the 2024 financial year, and companies will need to comply with the new reporting requirements for reports published in 2025. The European Commission has also opened a public feedback period on draft sustainability reporting standards, considering feedback received before finalizing the standards for scrutiny by the European Parliament and Council. These new regulations represent a significant step towards promoting sustainability and responsible business practices within the EU corporate landscape.

Corporate Sustainability Due Diligence Directive (CSDDD)

The Corporate Sustainability Due Diligence Directive (CSDDD) is a pending EU proposal that will require large EU companies and non-EU companies with large EU undertakings to exercise due diligence across their business lines and value chains. It aims to prevent human rights and environmental violations. The draft proposal was approved by the EU Parliament on June 1, 2023, and negotiations with member states will follow. Due diligence obligations may come into effect as early as 2025.

The rules will apply to specific categories of companies. Firstly, large EU limited liability companies will be affected, categorized into two groups. Group 1 includes approximately 9,400 companies with 500 or more employees and a net turnover of over EUR 150 million worldwide. Group 2 comprises about 3,400 companies operating in high-impact sectors, such as textiles, agriculture, and mineral extraction, with at least 250 employees and a net turnover of over EUR 40 million worldwide. For Group 2, the rules will be applicable two years later than for Group 1. Additionally, non-EU companies will also come under scrutiny. Approximately 2,600 companies in Group 1 and 1,400 in Group 2, active within the EU and generating turnover thresholds aligned with the mentioned criteria, will be subject to the new rules. It’s important to note that micro companies and SMEs will not be directly affected by these proposed rules. However, supporting measures for SMEs will be provided, which may have indirect effects on them.

Streamlined Energy and Carbon Reporting (SECR)

The Streamlined Energy and Carbon Reporting (SECR) policy, introduced by the UK Government, requires organizations to include energy consumption and carbon emission data in their annual reports. It aims to expand reporting to a broader range of companies and promote energy efficiency initiatives to reduce carbon footprints. The SECR applies to large UK companies, including quoted and unquoted companies, as well as limited liability partnerships. The reports must include information on energy use, greenhouse gas emissions, and energy efficiency measures undertaken.

Circular Economy Action Plan

The Circular Economy Action Plan is an initiative by the European Commission to promote a circular economy, reducing pressure on natural resources, and achieving climate neutrality and biodiversity conservation by 2050. Really, the goal is to make sustainability a norm. The plan aims to strengthen the eco-design of products, increase recycling rates, reduce landfilling, and promote sustainable consumption and production practices. It includes measures such as extended producer responsibility, eco-design requirements, and waste reduction targets. The plan was published in March 2020 and will be implemented gradually over the coming years. To achieve these objectives, the European Commission plans to implement all 35 actions listed in the plan. Additionally, a monitoring framework has been established to assess progress towards a circular economy and its benefits. This framework includes indicators to monitor material efficiency, consumption within planetary boundaries, and support the European Green Deal’s climate neutrality goals.

EU Emissions Trading System (EU ETS)

The EU Emissions Trading System (EU ETS) is a key policy instrument in the EU’s efforts to combat climate change. It is a cap and trade system operating in EU countries, Iceland, Liechtenstein, and Norway. It aims to limit greenhouse gas emissions from various sectors, including the energy industry, manufacturing, aviation, and maritime transport. The system covers approximately 40% of the EU’s total greenhouse gas emissions and is set to include emissions from maritime transport starting in 2024. Under the cap and trade principle, a cap is placed on the total amount of greenhouse gasses that covered operators can emit. This cap is reduced over time to ensure overall emissions decrease. Operators buy or receive emissions allowances within the cap, and they can trade these allowances with others. This creates a market for emissions allowances, encouraging emission reductions and investments in low-carbon technologies. Operators must surrender enough allowances to cover their emissions annually, and failure to do so results in heavy fines. If an operator reduces its emissions, it can keep the extra allowances for future use or sell them to others needing more allowances.

The EU ETS covers various sectors, including electricity and heat generation, energy-intensive industries like steel and cement production, aviation within the European Economic Area, and maritime transport. Participation is mandatory for certain-sized companies in these sectors, with exceptions for some small installations under certain conditions.

Stay Compliant!

For businesses operating within the European Union, adhering to these sustainability regulations is not only a legal obligation in many cases, but also an opportunity to play a crucial role in building a sustainable and resilient future. Compliance with these regulations is essential to demonstrate a commitment to environmental responsibility, social well-being, and corporate governance best practices. As companies strive to meet these regulatory requirements, it is vital to establish robust systems and processes for accurate and transparent sustainability reporting. By doing so, businesses can effectively manage risks associated with non-compliance, foster trust with stakeholders, and seize the potential advantages of sustainable practices, including increased attractiveness to environmentally conscious investors and consumers.

The regulations discussed in this cheat sheet, including SDR, SFDR, EU Taxonomy, CSRD, CSDDD, SECR, Circular Economy Action Plan, and EU ETS, cover a wide range of environmental, social, and governance aspects. It is important for companies to familiarize themselves with these regulations, and monitor updates. embracing sustainability and staying compliant with the EU’s evolving sustainability regulations is not merely a box-ticking exercise but an ongoing commitment to creating a positive impact on the planet and society.

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ESG, Taxonomy

An Introduction to the EU Taxonomy Regulation

Posted on July 7, 2023July 12, 2023 by Or Kadosh

An explanation of what is the eu taxonomy regulation?

07
Jul

In Brief:

The EU Commission introduced the Action Plan on Sustainable Finance in 2018 to guide investments towards sustainable projects and fulfill climate and energy targets.
The EU Taxonomy Regulation was implemented as part of the Action Plan to establish a universal terminology and classification system for sustainable economic activities.
The Taxonomy Regulation defines six environmental objectives, including climate change mitigation, circular economy transition, and biodiversity protection.
The Taxonomy Regulation imposes reporting obligations on certain entities, amending the Non-Financial Reporting Directive and the Sustainable Finance Disclosure Regulation.

In March 2018, the EU Commission introduced the “Action Plan on Sustainable Finance” with the objective of guiding investments towards sustainable projects and endeavors. One of its main purposes The goal is to reach a climate-neutral economy in the EU by 2050, with a reduction of 55% already implemented in 2030.was to fulfill the goals outlined in the European Green Deal. The initial key step of this plan involved establishing a universal terminology and precise definition for activities that can be deemed “sustainable” in the economic realm. In pursuit of this objective, the EU Commission implemented a classification system known as the “Taxonomy Regulation” or “EU Taxonomy.” This system provides a comprehensive list of economically sustainable activities that align with the six environmental objectives specified by the Commission: climate change mitigation, climate change adaptation, preservation and responsible use of water and marine resources, transition to a circular economy, prevention and control of pollution, and protection and restoration of biodiversity.

Simplifying the EU Taxonomy

With its extensive document spanning hundreds of pages, the EU Taxonomy Regulation might appear intimidating at first glance. However, understanding its core concepts is essential. At its core, the Taxonomy serves as a classification system for economic activities, defining which activities are considered environmentally sustainable. It addresses the issue of greenwashing by enabling market participants to confidently identify and invest in sustainable assets. Additionally, the regulation introduces new disclosure obligations related to the Taxonomy for companies and financial market participants. Central to the Taxonomy Regulation is the definition of a sustainable economic activity. To qualify as sustainable, an activity must meet two criteria: contribute to at least one of the six environmental objectives outlined in the Taxonomy and avoid significant harm to any other objectives, while respecting human rights and labor standards.

The Six Taxonomy Objectives:

Taxonomy Reporting Requirements

While primarily serving as a classification tool, the Taxonomy Regulation imposes reporting obligations on certain entities. It amends the disclosure requirements in the EU’s Non-Financial Reporting Directive (NFRD) and the Sustainable Finance Disclosure Regulation (SFDR).

Under the NFRD, non-financial undertakings must disclose the proportion of turnover derived from Taxonomy activities, as well as the proportion of their capital and operating expenditure associated with these activities (Article 8 disclosure). The proposed Corporate Sustainability Reporting Directive (CSRD) will expand this requirement to a broader list of entities.

The SFDR requires entities falling under its scope to disclose information on the alignment of their products with the Taxonomy. This includes products with sustainable investment objectives (Article 9 SFDR) and those with environmental or social characteristics (Article 8 SFDR). Entities that do not consider the EU criteria for environmentally sustainable activities must make a statement to that effect (Article 7 SFDR).

Strategic Preparation for a Greener Future

The EU Taxonomy Regulation is a vital tool in driving the transition to a sustainable economy and achieving climate neutrality. By providing clarity on sustainable economic activities, it helps combat greenwashing and encourages investments in environmentally friendly assets. As the Taxonomy evolves and becomes integrated into various policy measures, its impact on financial markets and corporate practices will likely expand. Staying informed about the Taxonomy and its reporting requirements will be crucial for businesses and investors seeking to align with sustainable objectives and contribute to a low-carbon future.

As companies prepare to meet the EU Taxonomy requirements, they can benefit from early preparation, including eligibility assessments, alignment analyses, and designing data collection processes. By embracing these measures, companies can position themselves as drivers of sustainable change and contribute substantially to the EU’s environmental objectives.

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ESG

Unveiling the Power of ESG Stakeholders

Posted on June 28, 2023July 11, 2023 by Or Kadosh

Who are the stakeholders influencing ESG investing?

28
Jun

Overview

ESG stakeholders, including investors, nonprofits, governments, customers, and employees, collectively drive and shape ESG metrics, promoting sustainability and responsible business practices.
Investors play a significant role by utilizing ESG criteria and ratings to identify companies that prioritize environmental and social responsibility, while nonprofits and NGOs advocate for ESG regulations and reporting frameworks.
Government regulations worldwide, such as those implemented by the EU, encourage companies to embrace sustainability and accurately report their ESG performance. Additionally, customer demand for ethical brands and employee expectations for purpose-driven work further push companies to adopt ESG values.

The Influence of ESG Stakeholders in Driving ESG Metrics

As the importance of environmental, social, and governance (ESG) factors continues to gain traction in the business world, a wide range of stakeholders is playing a crucial role in shaping and driving ESG metrics. From investors and nonprofit organizations to governments and employees, these stakeholders are collectively pushing for a more sustainable and responsible approach to business. This blog post, I will explore the different groups of ESG stakeholders and how they are influencing the implementation and reporting of ESG programs.

Investors and ESG Ratings

There’s a growing question of “are ESG investors underperforming?” With a prevalence of ESG in private markets increasing, a significant rise in the number of private equity firms signing the Principles for Responsible Investment (PRI) and raising $2.5 trillion in capital has also increased. However, there is limited data on ESG fund performance, and analysis shows no significant performance differences between PRI signatories and non-signatories. Bloomberg Intelligence predicts that the market size of ESG investments will reach $50 trillion by 2025, nearly three times the level in 2014. And with this in mind, investors are playing a significant role in driving ESG metrics. After all, many do utilize ESG criteria and ratings to identify companies that prioritize environmental and social responsibility. Raters and score providers are also amplifying the impact of ESG leaders by spotlighting purpose-driven companies through their sustainability rankings and reports.

Nonprofits and NGOs as Catalysts

Nonprofit organizations and non-governmental organizations (NGOs) are at the forefront of advocating for ESG regulations, standards, and reporting frameworks. Organizations like the International Financial Reporting Standards (IFRS), Carbon Disclosure Project (CDP), Sustainability Accounting Standards Board (SASB), and Global Reporting Initiative (GRI) are working towards establishing consistent and transparent ESG guidelines. Through their research, advocacy efforts, and collaborations, nonprofits and NGOs are shaping the ESG landscape and encouraging businesses to adopt sustainable practices.

Government Regulations

Governments worldwide are recognizing the need for ESG regulations to protect human rights and the environment. Countries such as Germany, the United States, the United Kingdom, Canada, and the European Union (EU) have introduced new ESG disclosure requirements and due diligence standards. The EU, in particular, has taken significant steps by implementing various regulations, including the General Data Protection Regulation (GDPR), Directive on Corporate Sustainability Due Diligence, EU Taxonomy, Corporate Sustainability Reporting Directive (CSRD) and European Single Electronic Format (ESEF) reporting, and Sustainable Finance Disclosure Regulation (SFDR). These regulations create a legal framework that drives companies to embrace sustainability and report their ESG performance accurately.

Customer Demand for Ethical Brands

Consumers are increasingly drawn to ethical brands, placing pressure on businesses to prioritize ESG practices. According to surveys, 74% of customers consider ethical corporate practices and values as a crucial factor when choosing a brand. Furthermore, a significant percentage (66%) of consumers plan to make more sustainable or ethical purchases in the coming months. To cater to this demand, companies are adopting sustainability initiatives, including carbon-labeling on products, to provide transparency and facilitate informed consumer choices.

Employee Expectations and Social Impact

Employees have become increasingly conscious of the impact their organizations have on society and the environment. They want to work for companies that align with their values and contribute positively to the world. A survey revealed that 93% of employees believe that companies must lead with purpose, while 65% feel that organizations should aim to leave their people “net better off” through work. Businesses that prioritize ESG values and make a positive impact on people and the planet are likely to see higher levels of employee satisfaction and attract top talent. Moreover, social impact has become an essential aspect of corporate philanthropy, with companies increasing community investments and providing opportunities for employees to engage in social initiatives.

ESG Stakeholders Pave the Way for a Sustainable Future

In short, ESG stakeholders, including investors, nonprofits, governments, customers, and employees, collectively drive and shape ESG metrics. The growing interest in ESG investing, the influence of ESG rating agencies, and the demand for ethical brands from customers all contribute to the momentum behind sustainable business practices. Additionally, nonprofits and NGOs drive the establishment of ESG regulations and reporting frameworks, while governments are implementing legal requirements to ensure corporate accountability. As employees prioritize purpose-driven work and communities expect businesses to give back, organizations are compelled to integrate ESG considerations into their operations. By recognizing and responding to the diverse interests of ESG stakeholders, businesses can thrive in a changing landscape and contribute positively to the world.

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ESG

The Social and Environmental Impacts of Carbon Footprints

Posted on April 6, 2023April 6, 2023 by Yogev Kimor

findings discusses the impacts of carbon footprints

06
Apr

The impact of carbon footprints, or the quantity of greenhouse gasses emitted into the atmosphere due to human activity, extends far beyond the environmental realm and has significant social and ecological consequences. Carbon footprints are a direct result of everyday actions like driving cars, using electricity, and consuming animal products. These actions release harmful greenhouse gasses, such as carbon dioxide and methane, which trap heat and exacerbate global warming and climate change. The detrimental effects of carbon footprints are manifold: they are the primary cause of human-induced climate change, contribute to urban air pollution, generate toxic acid rain, contribute acid rain and to coastal and ocean acidification, and accelerate the melting of glaciers and polar ice.

Further, climate change is causing shifts in global precipitation patterns, leading to more frequent and severe droughts and floods in certain regions. This has significant impacts on agriculture, food security, and water availability. In addition, carbon dioxide released into the atmosphere is also absorbed by the ocean, causing it to become more acidic. This can harm marine life and disrupt the ocean’s delicate ecosystem. It’s important to note that acid rain, caused by humans burning fossil fuels, is released into the atmosphere, also damages forests, especially those at higher elevations. The acid deposits rob the soil of essential nutrients such as calcium and cause aluminum to be released in the soil, which makes it hard for trees to take up water. Trees’ leaves and needles are also harmed by acids. As long as fossil fuels continue to be used, the issue of acid rain will persist. Several countries, including China, which have extensively depended on coal for the generation of electricity and production of steel, are currently experiencing the adverse impacts of acid rain. Climate change is causing changes in ecosystems and habitats, which in turn is leading to the loss of species and biodiversity. This has significant implications for human health, food security, and ecological stability.

On the social side, carbon footprints can exacerbate existing inequalities. For example, individuals and communities who do not have access to clean energy sources or who live in areas affected by climate change are disproportionately impacted by the negative effects of carbon emissions. Climate change has resulted in an increase in the frequency and intensity of extreme weather events such as hurricanes, droughts, floods, and wildfires. These events can lead to loss of life, displacement, and economic damage. The communities in these areas are often more vulnerable to extreme weather events, such as floods and droughts, which can lead to displacement, food and water insecurity, and other negative outcomes. Additionally, workers in industries that emit high levels of greenhouse gases may be exposed to health risks and poor working conditions. For example, workers in coal mines or oil refineries may be exposed to hazardous chemicals and gases that can lead to respiratory problems and other health issues.

From an environmental perspective, carbon footprints contribute to global warming and climate change, which can lead to a variety of negative effects. One major impact of climate change is rising sea levels, which can lead to flooding and displacement of coastal communities. Climate change can also lead to more frequent and severe weather events, such as hurricanes, droughts, and wildfires, which can have devastating impacts on communities and ecosystems. Additionally, climate change can lead to loss of biodiversity, as species struggle to adapt to changing temperatures and weather patterns.

It is important to take steps to reduce our carbon footprints in order to mitigate these negative impacts. This can include individual actions such as reducing energy consumption, using public transportation, and eating a plant-based diet, as well as larger-scale systemic changes such as transitioning to renewable energy sources and implementing policies to reduce greenhouse gas emissions.In response to all of this, regulations and agreements are being created to combat carbon footprints.

The Paris Agreement: The Paris Agreement is a global climate treaty signed by 197 countries, which aims to limit global warming to below 2 degrees Celsius above pre-industrial levels. Signatory countries are required to develop and communicate nationally determined contributions (NDCs) to mitigate their carbon emissions. Companies operating in these countries may also be required to report their carbon emissions and take steps to reduce them.
The European Union Emissions Trading System (EU ETS): The EU ETS is a cap-and-trade system designed to reduce greenhouse gas emissions from the power and industrial sectors. Companies that operate in the EU and exceed certain emission thresholds are required to participate in the system and purchase allowances for their carbon emissions.
The California Cap-and-Trade Program: California’s cap-and-trade program is a state-level program that sets a cap on carbon emissions from the power and industrial sectors. Companies that exceed certain emission thresholds are required to participate in the program and purchase allowances for their carbon emissions.

Companies need to be compliant with regulations regarding carbon footprints for several reasons:

Legal compliance: In many countries, there are laws and regulations in place that require companies to report their carbon emissions and take steps to reduce them. Failure to comply with these regulations can result in fines, legal action, and damage to the company’s reputation.
Stakeholder pressure: Investors, customers, and other stakeholders are increasingly demanding that companies take action to address their carbon footprints. Failure to do so can result in negative publicity and damage to the company’s brand.
Competitive advantage: Companies that are able to demonstrate their commitment to sustainability and carbon reduction may have a competitive advantage over those that do not. This can be particularly important in industries where environmental concerns are a key factor in consumer purchasing decisions.
Cost savings: Reducing carbon emissions can also result in cost savings for companies. For example, switching to renewable energy sources can reduce energy costs over time, while reducing waste can lead to cost savings in the long run.
Environmental benefits: Finally, reducing carbon emissions has significant environmental benefits, including mitigating the impacts of climate change, protecting natural resources, and promoting sustainable development. By complying with regulations regarding carbon footprints, companies can play a critical role in addressing these global challenges.

By reducing our carbon footprints, we can help to slow the rate of global warming and mitigate the negative impacts of climate change. However, reducing our carbon footprints is not enough. We must also work to address the underlying social inequalities that contribute to and are exacerbated by climate change. This includes addressing issues such as poverty, lack of access to clean energy, and systemic racism and discrimination. By working towards a more just and equitable society, we can create a more sustainable future for all.

In conclusion, by understanding the social and environmental impacts of carbon footprints, we can work towards creating a more sustainable and equitable future for all. By taking action to reduce our carbon footprints and address social inequalities, we can help to mitigate the negative impacts of climate change and create a better world for ourselves and future generations.

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ESG, Uncategorized

How the UN’s Sustainable Development Goals Will Impact the Business Landscape

Posted on March 28, 2023March 28, 2023 by Sharon Amor

findings.co discusses the 17 sdg goals that the un has implemented.

28
Mar

How will the UN’s Sustainable Development Goals Affect the Future of Companies?

In 2015, the United Nations (UN) established 17 Sustainable Development Goals (SDGs) aimed at creating a prosperous and thriving future for all communities, countries, and their people by 2030. Central to achieving these goals is the need for industries, companies, and organizations to adhere to environmental, social, and governance (ESG) frameworks and regulations.

Several of the SDGs, including goal 8 (Decent Work and Economic Growth), goal 9 (Industry, Innovation and Infrastructure), goal 10 (Reduced Inequalities), and goal 11 (Sustainable Cities and Communities), have a profound impact on businesses’ decision-making processes and investment strategies.

Now, let’s take a deep dive into these four goals and explore how they may shape the future of businesses.

Goal 8: Decent Work and and Economic Growth

One of the five factors identified by the UN that halt the advancement of SDGs is supply chain disruption caused by various events such as pandemics, natural disasters, conflicts, or economic barriers. Companies can take measures to prevent such events from drastically impairing their businesses, such as by administering risk management assessments to their suppliers, diversifying their suppliers, and setting a concrete communication network between their suppliers and product managers.

Failing to take appropriate action can lead to detrimental consequences that can affect businesses, such as quality reduction, product delays, and ultimately profit loss.

Goal 9: Industry, Innovation and Infrastructure

It is no secret that technology has significantly enhanced people’s lives worldwide and accelerated the growth of industries. The objective of this SDG is to promote sustainable and inclusive industrialization.

According to the United Nations Environment Program (UNEP), “the number of people employed in renewable energy sectors is presently around 2.3 million.” To ensure sustainable and environmentally-friendly practices, it is crucial to adopt technology that enhances the wellbeing of employees while minimizing harm to the environment, especially given that technology has created job opportunities in this field.

Goal 10: Reduced Inequalities

The COVID-19 pandemic has exacerbated an already significant problem in many developing countries, where rural communities are experiencing a massive economic downturn. As a result, a large number of people are leaving these areas in search of refuge and economic opportunities elsewhere. The number of refugees across the world has reached an all time high. Rather than solely relying on governments and non-profit organizations, the private sector can play a significant role in reducing inequality and improving the current situation. Large corporations hold substantial sway in decision-making processes and can create business models that enhance working conditions, wages, and the lives of their employees, particularly those in developing countries.

While profitability remains the ultimate measure of success for businesses, investors are no longer solely interested in financially successful ventures. They are increasingly seeking to invest in companies that prioritize providing fair and humane working conditions for their employees and have a positive impact on the communities where they operate.

Goal 11: Sustainable Cities and Communities

Cities, neighborhoods, and industrial areas are being built to work with the environment as opposed to cause a disruption. New start-ups and companies have emerged and use AI technology to plan transportation paths, and reduce costs and stress in crowded cities and areas, such as Optibus, a start-up based in Tel Aviv, Israel. Similarly, Nordnese, another company, “develops waste management solutions to provide ‘greener; cleaner, and smarter; waste collection’.”

Moreover, Olleco, located in the United Kingdom, has developed technology that can convert waste and leftover oil into renewable, reusable energy to fuel cities and promote a circular economy. Essentially, they are taking something that was meant to go to waste and are putting it back into the economic cycle.

Improving the lives of human beings and the planet is one of the biggest challenges of the 21st century. Moving from the industrial era into one where new challenges no longer are defined by improving the lives of people has demanded the world change its strategy when it comes to how we do business. Technology, sustainable procedures, and healthy supply chain management are crucial to growing businesses.

How Findings Contributes to the UN’s SDGs:

Findings has contributed to these goals by providing businesses with a centralized platform for automating their risk management and supply chain compliance. Living up to these new standards can be challenging for companies whether they be small or large.

With Findings, customers can use our ESG assessments cost-effectively to monitor their suppliers’ carbon footprints to help achieve the UN’s SDGs. With one less thing to worry about, companies can focus on improving and growing their future for the sake of their success, their surrounding environment, and the planet.

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Cyber Attacks, ESG, Supply Chain Security

Is Chat-GPT a real cybersecurity threat? Here are 7 potential cybersecurity risks in using AIs

Posted on March 13, 2023March 13, 2023 by Yogev Kimor

7 Potential cybersecurity risks in using AIs | Findings.co

13
Mar

AI is everywhere, from Chat-GPT to Midjourney – But have you thought about the potential cyber risk in using it?

I recently sat with Jonathan Perry, CTO and Co-Founder of Findings.co to hear a PRO point-of-view. So here are 7 potential cyber risks in using AIs, such as ChatGPT:

WATCH THE VIDEO:

ChatGPT and cyber security – Is there a real, actual threat in there or is it just a big fuss that everyone talks about?

I think with regard to Chat GPT, it’s important to remember that the knowledge that ChatGPT gives is based on the sum of all available knowledge and data across the entire web.

And relying blindly on such information can create real security hazards.

So, security experts, and security engineers should not rely on such tools blindly. It’s only an advisory tool. And I think there Is a real threat of ChatGPT and similars.

It’s interesting to mention it because in marketing, we experienced more and more people saying that this is just a tool that is meant to help us create something and not something that’s supposed to be, instead of a marketer of any kind.

Would you agree on the same?

Definitely.

I think it’s really easy to fall into the charm of a chatbot just presenting you on a golden plate whatever you need to do and just follow it,

But that encompasses a real threat.

You don’t know if the output of the data you see is relevant, you don’t know if it’s secure enough.

It’s extremely important not to rely on it blindly.

Can anyone even ensure that ChatGPT is secure? Against these threats or secure at all?

I mean, once you enter something into Chat GPT and ask him to create something, can we even know that this data that you entered is secure enough, in your opinion?

Definitely NOT.. And the reason is it’s an extremely complex data set, unrealistic to think that humans can verify and make sure that the output you see is secure enough, it’s even fit for your purpose.

You don’t know if it even answered the question that you asked him at the first place. So I think common sense and just having the right experience are probably the best answer.

Any Cybersecurity attacks so for, using ChatGPT?

So we haven’t seen any real attack using Chat GPT so far, and I guess the reason is because it’s quite new, but I personally would believe that we will see complex attacks, uses and utilize AI technologies in general, not only ChatGPT, smart attack against industries and corporations. So, yeah, definitely.

How do you see ChatGPT affecting supply chain security?

It’s a good question. So we thought about it a lot here at Findings and I think we will eventually see organizations, companies and others utilizing Chat- GPT and AI in general to address supply chain supply chain questionnaires and to assess their vendors as well.

How do you protect against the risk of supply chain attacks using Chat- GPT or any AI available out there?

Not a specific checklist that you need to do in order to protect against such things; I think the general rule of thumb is just to take precautions, don’t rely on everything that you see and do.

It’s a good rule of thumb to life in general, but I think it definitely applies here in this topic as well.

And last question, out of your extensive experience in cybersecurity,

How do you keep informed? How do you know about new trends? What would be your best tip?

So, blog posts, and articles are a good thing, but I think the best tip I can give regarding staying informed is to have good connections and good networks because the best know-how and the best tips I’ve got, I’ve gotten from good friends from the industry.

I think having a good social and professional network is the best way to stay current.

All right, thank you so much for your time. Thank you. Thank you for watching.

Thank you for watching. And I’ll see you soon on our next video.

ESG

ESG’s Impact on ETFs

Posted on March 9, 2023March 9, 2023 by Or Kadosh

09
Mar

ETFs, or exchange-traded funds, are a type of investment vehicle that have been growing in popularity in recent years. As a passive investment, they allow investors to buy and sell a basket of securities that trade on an exchange, similar to how stocks are traded. This means that investors can gain exposure to a diversified portfolio of assets, such as stocks or bonds, without having to buy each security individually. ETFs also offer the flexibility of trading throughout the day, unlike mutual funds which can only be bought or sold at the end of the trading day. Additionally, many ETFs have lower expense ratios compared to mutual funds, making them an attractive option for cost-conscious investors.

Environmental, social, and governance (ESG) investing has become increasingly popular in recent years as well, as investors look to align their portfolios with their values. One area where this trend is particularly evident is in the growth of exchange-traded funds that incorporate ESG criteria.

And so: the rise of ESG ETFs came to play. These are designed to track the performance of companies that meet certain ESG criteria, such as having a low carbon footprint or strong labor practices. These ETFs may exclude companies that engage in activities such as fossil fuel production, tobacco, or weapons, and include companies that have strong records on issues such as gender diversity, labor practices, and environmental sustainability.

One of the primary benefits of ESG ETFs is that they allow investors to invest in companies that are aligned with their values without having to sacrifice returns. In fact, some studies have shown that ESG ETFs can outperform traditional ETFs over the long term. This is because companies that meet certain ESG criteria may be better positioned to manage risks and capitalize on opportunities that arise from trends such as climate change and evolving consumer preferences.

Another benefit of ESG ETFs is that they can help investors diversify their portfolios. By investing in a basket of companies that meet certain ESG criteria, investors can reduce their exposure to companies that may be more vulnerable to ESG-related risks. For example, companies with poor environmental practices may face increased regulatory scrutiny and reputational risks that could impact their financial performance.

Despite the benefits of ESG ETFs, there are some challenges to consider. For example, there is still debate around what criteria should be used to evaluate a company’s ESG performance, and there is a lack of standardization in the ESG ratings landscape. Additionally, because ESG ETFs are still a relatively new investment product, there is limited historical data available to evaluate their performance.

That being said, the growth of ESG ETFs is a positive development in the world of sustainable investing. As more investors look to align their portfolios with their values, we can expect to see continued growth in this area. In fact, some estimates suggest that the global market for ESG investments could reach $1 trillion by 2030.

Investing in a sustainable manner can lead to more resilient portfolios. Sustainable investing can reveal potential risks and opportunities that might otherwise go unnoticed and can result in improved performance. Traditional financial analysis might overlook risks such as climate change and data security breaches, which are becoming increasingly material risk factors with direct financial impacts on companies. By incorporating ESG factors into the investment process, investors can better evaluate a company’s long-term risks and returns, potentially improving the risk-adjusted returns of their portfolios.

Investors who are interested in incorporating ESG ETFs into their portfolios should do their due diligence to ensure they are investing in products that align with their values and meet their financial goals. This may involve evaluating the criteria used to select companies for the ETF and considering factors such as expense ratios and liquidity.

Overall, ESG ETFs are an exciting development in the world of sustainable investing. They have the potential to drive positive change while also delivering strong financial returns. Investors now have more options to align their investments with their values, and companies are now incentivized to improve their ESG practices to attract ESG-focused investors.

Learn More About Findings’ ESG Solutions

ESG

Importance of ESG in the Finance Sector

Posted on February 3, 2023July 11, 2023 by Yogev Kimor

findings.co talks about ESG in the finance sector

03
Feb

ESG is now a business reality

Environmental, social, and governance (ESG) is no longer just a buzzword floating around in today’s corporate realm. Issues around these three heads have become the top concern of business management and boards, and there are good reasons for the same.

As climate change is looming as a potential threat to humanity, it’s needless to say that effort has to be made by pretty much all entities of society to create a sustainable world. For the corporate enterprises, ESG is starting to form the foundation of a business framework that helps them achieve their financial and sustainability goals.

The importance of ESG is emphasized in the context of both SMEs and large organizations, especially amidst post-pandemic concerns and climate crises. After all, a conscious society is not solely dependent on government initiatives but also on socially responsible businesses capable of meeting its needs. It can foster equitable growth, employment creation, conservation of natural resources, and protection of consumers’ interests, to name a few.

A high ESG rating lowers the risk profile of enterprises in all industries by facilitating their top-line growth and reducing regulatory and operational hurdles. Many investors seek intelligent investing options in enterprises that adhere to high ESG standards. As such, those small and medium enterprises (SMEs) with a strong focus on ESG will be better positioned to attract investor interest.

What about the finance sector?

While ESG standards are crucial to all industries, the finance sector deserves a stronger ESG focus. Financial institutions across the globe are increasingly confronting risks due to reporting and regulatory requirements that revolve around the impacts of their business operations on ESG. As such, it’s of the utmost importance that financial institutions, which deal in billions of dollars on any given day, devise a robust ESG strategy to achieve long-term competitive success and avoid regulatory complications.

As a part of ESG compliance, the performance of finance companies and financial institutions is steadily shaping lending criteria, investment-related decision-making, and insurance factors. So, it becomes clear that the finance companies that are unable to create and implement an ESG strategy are at a higher risk of losing resilience and the long-term feasibility of their business.

For financial institutions, a primary environmental concern has been the shift to green or sustainable financing, a vital determinant of an organization’s reputation and a regulatory mandate. The governance concerns of financial institutions revolve around board structure, particularly board diversity, transparency and audit quality, and issues around remuneration of professionals, for example, executive pay. Labor management policies, well-being, safety, health commitments, and other labor standards are some social concerns facing financial institutions and social equality, customer privacy, and diversity and inclusion policies.

Conclusion

Financial institutions vary significantly in readiness for the shift to sustainability. As ESG concerns are getting global attention, the need for financial institutions to take action will increase. The agility of organizations to respond to changes in laws, regulations, and market expectations will be critical to success. Companies adopting a systematic and proactive approach to ESG will have greater resilience.

Cyber Attacks, ESG

Why The Energy Sector Is Especially Vulnerable to Cyber Threats

Posted on January 30, 2023January 30, 2023 by Or Kadosh

Findings.co explains why the energy sector is vulnerable to cyber threats

30
Jan

The energy sector is attractive to hackers for a number of reasons. While there are few documented attacks on energy infrastructure, the inherent nature of the sector makes it vulnerable to hackers. Cybersecurity compliance in this sector is critical simply because of the wide-ranging impact that a successful attack can have. The hackers that targeted the Colonial Pipeline network in early 2021 not only managed to extract a $4.4 million ransom but also pushed per gallon price by six cents in affected areas and gasoline futures to their highest level in three years.

What makes energy companies easy prey for cybercriminals?

1. Highly interconnected

The energy ecosystem is complex, consisting of physical and cyber infrastructure assets distributed across regions or countries. This creates a large surface area for attack. Moreover, the operational technology of grid distribution systems is increasingly allowing remote access to business networks, allowing hackers further opportunity to create inroads to company data.

The energy sector has historically been late to adopt technology and innovate. A lack of cybersecurity expertise means energy companies have to be more proactive in managing risks.

2. More to exploit

Cybercriminals have the chance to exploit vulnerabilities in energy companies’ IT system and operational technologies. IT systems include software, hardware and technologies to run business. Operational technologies include software, hardware and technologies to control motors, pumps and valves, among other devices and equipment.

Energy companies rely on different types of hardware, software and services from third-party vendors worldwide. Attackers can access a company’s network through a third-party vendor or supplier.

3. Always on infrastructure

The energy and utilities sector is increasingly using cloud services, driven by the need for improved flexibility and operational efficiency, and reduced capital expenditure costs. This digital infrastructure supporting the energy sector works 24/7.

4. Wide-ranging disruption

The prospect of severe damage is also an attraction for cybercriminals. A single attack on a network or system in the energy infrastructure can impact a number of entities. For example, a blackout of 6-7 hours from a cyberattack on the energy grid can cause financial loss, affect social-economic life and retard daily life activities.

5. Various motivations

Reliable electricity is a convenience of modern life, and also crucial to the nation’s security and economy. The electricity grid is a prime target for cyberattacks perpetrated by hostile countries. Financial motivation (ransom) and hactivism (to promote an agenda against the oil and gas industry, for example) are prime reasons for cyberattacks in this sector.

Actions to take

Businesses in the energy sector need a multi-pronged risk management strategy to stay compliant with industry standards and government regulations on cybersecurity. Active management of supply chain risk is crucial. Hybrid identity and access management solutions combining cloud and on-premise components can help bridge the gap between IT and OT architectures.

A strong incident response plan will minimize the impact of ransomware attacks while employee training on identifying phishing and other social engineering attacks will be essential to maintaining a robust compliance posture. Last but not the least, ensuring that the company’s cloud-based infrastructure is being monitored, or effective cloud monitoring, can help eliminate potential data breaches.

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An Introduction to the EU Taxonomy Regulation

ESG

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ESG

The Social and Environmental Impacts of Carbon Footprints

ESG, Uncategorized

How the UN’s Sustainable Development Goals Will Impact the Business Landscape

Cyber Attacks, ESG, Supply Chain Security

Is Chat-GPT a real cybersecurity threat? Here are 7 potential cybersecurity risks in using AIs

WATCH THE VIDEO:

ChatGPT and cyber security – Is there a real, actual threat in there or is it just a big fuss that everyone talks about?

Would you agree on the same?

Can anyone even ensure that ChatGPT is secure? Against these threats or secure at all?

Any Cybersecurity attacks so for, using ChatGPT?

How do you see ChatGPT affecting supply chain security?

How do you protect against the risk of supply chain attacks using Chat- GPT or any AI available out there?

How do you keep informed? How do you know about new trends? What would be your best tip?

ESG

ESG’s Impact on ETFs

ESG

Importance of ESG in the Finance Sector

Cyber Attacks, ESG

Why The Energy Sector Is Especially Vulnerable to Cyber Threats

What makes energy companies easy prey for cybercriminals?

1. Highly interconnected

2. More to exploit

3. Always on infrastructure

4. Wide-ranging disruption

5. Various motivations

Actions to take

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