Net Zero and Environmental Social Governance (ESG)
Net Zero & ESG
What is Net Carbon Zero?
Net Carbon Zero refers to achieving a balance between the carbon emissions produced and the amount of carbon removed from the atmosphere. To achieve Net Zero, the UK is committed to substantial reductions in emissions across various sectors, enforced by legally binding targets set in the Climate Change Act. These reductions involve transitioning to cleaner energy sources, improving energy efficiency, and adopting greener transportation methods.
How to achieve Net Carbon Zero
Step 1: Reduce Energy Consumption
The first step in achieving Net Carbon Zero is to reduce your energy consumption. This can be done by implementing new business practises such as using energy-efficient appliances, turning off lights and electronics, and using electric vehicles.
By reducing your energy consumption in the first stage, you decrease the amount of energy you need to generate through Solar PV.
Step 2: Install Solar PV
Once you have reduced your energy consumption, the next step is to install Solar PV. It’s important to consider factors such as orientation, shading, and the type of solar panel being used. Working with a qualified installer will ensure that your solar panels are installed correctly.
Step 3: Carbon Offsetting
Even with energy reduction and a Solar PV system in place, it may still be difficult to achieve Net Carbon Zero. Carbon offsetting involves supporting projects that reduce or remove carbon emissions from the atmosphere such as reforestation, renewable energy projects, and energy efficiency projects.
Environmental Social Governance (ESG)
ESG refers to the three central factors that are used to measure the sustainability and ethical impact of an investment in a company. ESG is becoming an increasingly important consideration for investors who are looking to invest their money in companies that are sustainable and socially responsible.
Environmental
“E” refers to environmental factors. These factors include a company’s impact on the environment, including its carbon footprint, water usage, waste management, and pollution.
Social
“S” refers to social factors. These factors include a company’s impact on society, including its treatment of employees, customers, suppliers, and the wider community.
Governance
“G” refers to governance factors. These factors include a company’s leadership, structure, and internal controls. Companies that have strong governance structures are more likely to be well-managed and transparent, which can make them more attractive to investors.
Why is ESG important?
ESG holds significant importance for a multitude of reasons. Firstly, it serves as a platform for companies to showcase their dedication to sustainability and social responsibility, thereby attracting investors with aligned values. Crucially, prioritising ESG contributes to enhanced long-term financial performance, as studies demonstrate that ESG-focused companies tend to outperform their counterparts over extended periods.