Reviews of Sustainability and ESG Global Leaders' Insights

Reviews of Sustainability/ESG Global Leaders' Insights
Jun 022 Wed, 12:00 – 14:00 EST (US) / 17:00 – 19:00 BST (UK)
This webinar is intended to recap the previous
webinars that were organized/moderated in 2022 by
Alex G Lee to review the combined topics/agendas
Alex G. Lee to review the combined topics/agendas
holistically.

Live Session
S /
Speakers will talk about the review/additional
comments/recent trends/new insights/future
directions of their previous talk and other topics
directions of their previous talk and other topics.

Schedule
12:00 – 12:20 ET, Alex G. Lee
12:20 – 12:30 ET, Joe MacDonald
12:30 – 12:40 ET, Juliana Hess
12:40 – 12:50 ET, Manuel Vexler
12:50 – 13:00 ET, Mark Trexler
13:00 – 13:10 ET, Bee Hui Yeh
13:10 – 13:20 ET, Keith Plemmons
13:20 – 13:30 ET, Velipekka Kuoppala
13:30 – 13:40 ET, Peter Hajipieris
13 40 13 50 ET P l St k ll
13:40 – 13:50 ET, Paul Stockall

Previous Webinar Topics/Agendas/Speakers/Recordings
I. SDGs v. ESG:
is there a "better" measure of sustainability?
is there a better measure of sustainability?
1. What are the sustainability risks, opportunities,
impacts?
2. SDGs vs. ESG: what are the sustainability
KPIs?
3. What are the sustainability metrics to measure
sustainability performance?
sustainability performance?
4. How the sustainability metrics are related
among SDGs, GRI, SASB, WEF, and other
reporting frameworks?
5. What are the current issues and challenges in
sustainability measurement?
6. Is there any solution or better way for
Recording:
https://www.youtube.com/watch?v=SE0rd0sjgkk&
t 2
t=2s

ESG Management Consideration Core Factors
Impacts (Value Creation)
increase positive impact
limit negative impact
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Opportunities (Return) Risks (Cost)
universal risks
(e.g., climate change)
industry specific risks
b i ifi i k
market competitiveness
better placed to win investment
rise of company value
return on reputation business specific risks
ESG issue specific risks
(e.g., Environmental
physical/transition/liability
return on reputation
employees' better performance
regulation compliance
business resiliency
Source: Bradley, Brendan. ESG Investing For Dummies, Wiley (2021)
physical/transition/liability
risks)
circular business model

International Accounting Standards Board (IASB) issued exposure drafts of
global standards for climate and sustainability disclosures consolidating the
ESG/Sustainability Reporting Frameworks & Guidelines
global standards for climate and sustainability disclosures, consolidating the
work of SASB, the IIRC and the CDSB, as well as the TCFD and the WEF’ IBC.
Carbon Disclosure Project (CDP): www.cdp.net/en
Climate Disclosure Standards Board (CDSB): www.cdsb.net
Global Reporting Initiative (GRI): www.globalreporting.org
International Financial Reporting Standards (IFRS) Foundation https://www.ifrs.org/
International Integrated Reporting Council (IIRC): https://integratedreporting.org
Sustainability Accounting Standards Board (SASB): www sasb org
Sustainability Accounting Standards Board (SASB): www.sasb.org
Task Force on Climate-related Financial Disclosures (TCFD): www.fsb-tcfd.org
United Nations Sustainable Development Goals (SDGs): https://sdgs.un.org
United Nations System of Environmental Economic Accounting (UNSEEA): https://seea.un.org
World Business Council For Sustainable Development (WBCSD) ESG Disclosure Handbook
https://www.wbcsd.org
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World Economic Forum (WEF) ESG Reporting Metrics and Disclosure Standards https://www.weforum.org

SDG-SASB-GRI-WEF SDG/ESG Measurement Metrics Mapping

ESG Sustainability Management/Assessment Issues & Challenges &
Solutions

Many ESG measures already very effectively capture inputs, but they presume causality
— that adding women to top management teams, say, will produce better outcomes. But
Sustainability Measurement of What – Input/Outcome/Impact?
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measures that capture inputs (such as the numbers of women on those teams) don’t
capture outcomes (such as decision-making that reflects diverse perspectives) and
impacts (such as the social value created by such decisions).
Three ways that can widen a company’s focus to capture information not just about inputs but also about the
processes and systems governing outcomes and impacts.
1. Zoom in to develop insights on processes
To grasp underlying processes, companies should focus on deeply understanding a handful of issues most
germane to their core activities. Through this, they stand a greater chance of deeply understanding the causal
threads that enable improved impact, and ultimately directing sufficient resources to act on these.
2 Zoom out to see broader systems
2. Zoom out to see broader systems
Zooming out brings a longer term and broader perspective on issues that demand deep insight. Beginning with the
end state and soliciting diverse stakeholder inputs are two approaches to understanding systems and one’s role
within them.
3 V l i it d l i
3. Value curiosity and learning
Many people are calling for firms to articulate a purpose beyond profit maximization, so that they can better serve
societal values. But purpose is empty without the capacity to execute on it. Getting started with focused “doing” is
a more grounded — and potentially complementary — approach that can leverage existing capabilities and talent.
Source. HBR(https://hbr.org/2021/01/esg-impact-is-hard-to-measure-but-its-not-
impossible?fbclid=IwAR2PAJaIjEC9GNaX2ZUDclWZGa0rjbV7UE5NWyqj4b1vtPkUyTJW4krcLRM)

UN SDG IMPACT STANDARDS Enterprises: Integrating impact
management into Enterprises’ decision-making to optimize their
Sustainability Impacts Management
management into Enterprises decision making to optimize their
contribution to sustainable development and the SDGs
UN SDG IMPACT STANDARDS Private Equity Funds: Impact management
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for Private Equity, Debt and Venture Capital Funds committed to
contributing positively to sustainable development and achieving the
SDGs
UN SDG IMPACT STANDARDS Bond Issuers: Integrating impact
management into Bond Issuers’ decision-making to optimize their
t ib ti t t i bl d l
contribution to sustainable develop

II. Balancing Sustainability and Profitability
1. ESG/Sustainability Imperative v. Conundrum
2. Stakeholder Capitalism v. Purpose
3. Sustainable Economic Growth
4. Value Innovation for Sustainable Economic
Growth
5. Business Model Innovation for Profitable and
Sustainable Business
Sustainable Business
6. Sustainability Balanced Scorecard for TBL
7. Industry/Business Specific Cases
Recording:
https://www.youtube.com/watch?v=7IRdosKHdas
&t=3s

Balancing Sustainability and Profitability: Setting the Stage
ESG/Sustainability Imperative vs. Conundrum Profitable and Sustainable Business
CEOs usually tend to give weight to the shorter-term financial metrics
in trade-offs between financial and ESG/sustainability performance.
This may explain why it is challenging to fully integrate
ESG/sustainability considerations into business practices.
CEOs usually tend to give weight to the shorter-term financial metrics
in trade-offs between financial and ESG/sustainability performance.
This may explain why it is challenging to fully integrate
ESG/sustainability considerations into business practices.
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The Sustainable Business Handbook (Kogan Page) One Page Book Summary
Edited by Alex G. Lee (https://www.linkedin.com/in/alexgeunholee/)
Steps to becoming a purpose
Steps to becoming a purpose-
-led business:
led business:
Step 1: Review corporate assets (mission, vision) and history
Step 2: Engaging stakeholders internally and externally
Step 3: Craft the purpose statement
Step 4: Ensure core business strategy is aligned to the purpose
Steps to becoming a purpose
Steps to becoming a purpose-
-led business:
led business:
Materiality allows you to identify
and understand ESG issues
Materiality is a potent way to
engage stakeholders
engage stakeholders
Materiality analysis can help for
engage stakeholders
engage stakeholders
How to do it:
How to do it:
Step 1: Define board approach to
governance and to sustainability
How to do it:
How to do it:
A collaborative relationship
focused on sustainability
outcomes
outcomes
outcomes
outcomes
Advocacy is a
Advocacy is a
strategic part of
strategic part of
corporate
corporate
Advocacy is a
Advocacy is a
strategic part of
strategic part of
corporate
corporate
12. Partnering
12. Partnering
13. Advocacy
13. Advocacy
Corporate purpose is to produce ‘profitable solutions to the
problems of people and planet and not to profit from producing
problems for people or planet’
Step 5: Socialize and communicate the purpose
Step 6: Measure outcomes and impacts
stronger performance
Materiality can improve reporting
and disclosure
and disclosure
Materiality is a valuable input into
sustainability strategy
development
development
and disclosure
and disclosure
development
development
Materiality Analysis:
Materiality Analysis: business case for
business case for
business case for
business case for
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Step 2: Shift the board’s mindset
Step 3: Choose the most appropriate
governance model for the business
Step 4: Ensuring sustainability
expertise on the board
Step 5: Ensure board is truly diverse
Step 6: Ensure the rest of the
g y
g y
Stakeholder engagement is the
systematic identification,
l i l i d
l i l i d
l i l i d
l i l i d
It is about building belief and
recognition and momentum for
its sustainability leadership
p
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sustainability
sustainability
leadership
leadership
p
p
sustainability
sustainability
leadership
leadership
1. Purpose
1. Purpose
3. Business case
3. Business case
2. Materiality
2. Materiality 10. Engagement
10. Engagement
11. Communications
11. Communications
Step 1: Understand the operating
context to inform the process
Step 2: Engage your
Step 2: Engage your
stakeholders
stakeholders
Step 3: Define the dimensions of
your materiality matrix
prioritization.
prioritization.
Step 2: Engage your
Step 2: Engage your
stakeholders
stakeholders
prioritization.
prioritization.
business case for
business case for
sustainability means
addressing short
addressing short-
- and long
and long-
-
term risks and opportunities
in ways that minimize harm
and maximize social,
environmental and
environmental and
economic value
economic value
business case for
business case for
addressing short
addressing short-
- and long
and long-
-
environmental and
environmental and
economic value
economic value
Board is responsible for success of sustainability
management
management
management
management
How to do it:
How to do it:
Step 1: Clarify some basic
How to do it:
How to do it:
board’s structures and processes
reinforce the commitment to
sustainability
sustainability
Step 7: How the board can keep
S.C.O.R.E. on sustainability
sustainability
sustainability
analysis, planning and
implementation of actions
designed to allow a company to
interact effectively with
stakeholders
stakeholders
stakeholders
stakeholders
4. Strategy
4. Strategy
8. Reporting
8. Reporting
9. Governance
9. Governance
7. Leadership
7. Leadership
prioritization.
prioritization.
Step 4: Prioritize and plot the
issues
issues
Step 5: Socialize and validate
materiality
materiality
prioritization.
prioritization.
issues
issues
materiality
materiality
economic value
economic value
economic value
economic value
Reporting improves transparency
and visibility, support
development and helps satisfy
regulatory requirements
Business Case Development:
Step 1: Apply existing, external
data and evidence
data and evidence
data and evidence
data and evidence
Sustainability strategy is a
prioritized set of actions and
commitments designed to
manage ESG impacts, in
order to optimize value to the
business and to society by
Sustainability leadership
demands setting strategies and
reporting questions
reporting questions
Step 2: Study and choose
preferred options from among
the major reporting guidelines
and frameworks
and frameworks
Step 3: Collect the data
Step 4: Report and make full
f d t
f d t
reporting questions
reporting questions
and frameworks
and frameworks
f d t
f d t
5
5 Operationalizing
Operationalizing
6. Culture
6. Culture
How to do it:
How to do it:
Step 1: Increase internal alignment
Step 2: Reduce costs and eliminate waste
Step 3: Review the product and service portfolio
Step 4: Consider sustainability in competitive
benchmarking, risk identification, research and
How to do it:
How to do it:
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Putting sustainability strategy and
commitments into action throughout
the business and systematically
integrating sustainability thinking in
Dimensions of sustainable
culture:
culture:
Engaging and empowering
culture:
culture:
data and evidence
data and evidence
Examine company
Examine company-
-specific
specific
evidence and benchmark your
peers
peers
Step 3: Create cross
Step 3: Create cross-
-functional
functional
teams to provide relevant
business case data to different
stakeholders
stakeholders
data and evidence
data and evidence
Examine company
Examine company-
-specific
specific
peers
peers
Step 3: Create cross
Step 3: Create cross-
-functional
functional
stakeholders
stakeholders
minimizing negative impacts
and maximizing positive ones
delivering results that meet the
triple bottom line of
sustainability performance
How to build a sustainable leadership:
Step 1: Define the mindsets and
use of data
use of data
Step 5: Learn from process and
innovative further
innovative further
Step 6: Be prepare for more
reporting requirements
use of data
use of data
innovative further
innovative further
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development, and innovation processes
Step 5: Partner with suppliers
Step 6: Rethink business models
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Sustainability Strategy Development :
Phase I: Ideation
Phase I: Ideation
STEP 1: STOCKTAKE
STEP 1: STOCKTAKE –
– ASSESS WHAT THE BUSINESS IS DOING ALREADY
ASSESS WHAT THE BUSINESS IS DOING ALREADY
STEP 2: REALITY CHECK
STEP 2: REALITY CHECK –
– CONDUCT A GAP ANALYSIS BETWEEN CURRENT STATE AND SUSTAINABILITY
CONDUCT A GAP ANALYSIS BETWEEN CURRENT STATE AND SUSTAINABILITY
Phase II: Prioritization and refinement
STEP 3: BENCHMARK
STEP 3: BENCHMARK –
– MAP YOUR EMERGING STRATEGY AGAINST LEADING BUSINESSES AND ESTABLISHED
MAP YOUR EMERGING STRATEGY AGAINST LEADING BUSINESSES AND ESTABLISHED
SUSTAINABILITY FRAMEWORKS
Phase I: Ideation
Phase I: Ideation
STEP 1: STOCKTAKE
STEP 1: STOCKTAKE –
– ASSESS WHAT THE BUSINESS IS DOING ALREADY
ASSESS WHAT THE BUSINESS IS DOING ALREADY
STEP 2: REALITY CHECK
STEP 2: REALITY CHECK –
– CONDUCT A GAP ANALYSIS BETWEEN CURRENT STATE AND SUSTAINABILITY
CONDUCT A GAP ANALYSIS BETWEEN CURRENT STATE AND SUSTAINABILITY
STEP 3: BENCHMARK
STEP 3: BENCHMARK –
– MAP YOUR EMERGING STRATEGY AGAINST LEADING BUSINESSES AND ESTABLISHED
MAP YOUR EMERGING STRATEGY AGAINST LEADING BUSINESSES AND ESTABLISHED
how the organization is run
Responsible and ethical
Transparent and accountable
Open and innovative
Open and innovative
Open and innovative
Open and innovative
stakeholders
stakeholders
stakeholders
stakeholders
How to build a sustainable culture:
Step 1: Understand the current culture
St 2 D fi th d i d f t lt
leadership competencies required
Step 2: Audit current sustainability
leadership ability and the
sustainability content in existing
leadership development program
Step 3: Develop an action plan to
increase sustainability leadership
it
it
it
it
STEP 4: TEST
STEP 4: TEST –
– ENSURE PROPOSED SUSTAINABILITY STRATEGY IS RESILIENT AGAINST FUTURE SHOCKS
ENSURE PROPOSED SUSTAINABILITY STRATEGY IS RESILIENT AGAINST FUTURE SHOCKS
STEP 5: STRETCH
STEP 5: STRETCH –
– SET AMBITIOUS SUSTAINABILITY GOALS THAT THE BUSINESS CAN COALESCE AROUND
SET AMBITIOUS SUSTAINABILITY GOALS THAT THE BUSINESS CAN COALESCE AROUND
Phase III: Promotion
STEP 6: COMMUNICATE
STEP 6: COMMUNICATE –
– DEVELOP A COMPELLING NARRATIVE
DEVELOP A COMPELLING NARRATIVE
SREP 7; ADAPT AND MAINTAIN
SREP 7; ADAPT AND MAINTAIN-
-BE ALERT TO THE NEED FOR MID
BE ALERT TO THE NEED FOR MID-
-COURCE CORRECTIONS AND ENDURE
COURCE CORRECTIONS AND ENDURE
ALIGNMENT WITH OVERAL CORPORATE STRATEGY
STEP 4: TEST
STEP 4: TEST –
– ENSURE PROPOSED SUSTAINABILITY STRATEGY IS RESILIENT AGAINST FUTURE SHOCKS
ENSURE PROPOSED SUSTAINABILITY STRATEGY IS RESILIENT AGAINST FUTURE SHOCKS
STEP 5: STRETCH
STEP 5: STRETCH –
– SET AMBITIOUS SUSTAINABILITY GOALS THAT THE BUSINESS CAN COALESCE AROUND
SET AMBITIOUS SUSTAINABILITY GOALS THAT THE BUSINESS CAN COALESCE AROUND
STEP 6: COMMUNICATE
STEP 6: COMMUNICATE –
– DEVELOP A COMPELLING NARRATIVE
DEVELOP A COMPELLING NARRATIVE
SREP 7; ADAPT AND MAINTAIN
SREP 7; ADAPT AND MAINTAIN-
-BE ALERT TO THE NEED FOR MID
BE ALERT TO THE NEED FOR MID-
-COURCE CORRECTIONS AND ENDURE
COURCE CORRECTIONS AND ENDURE
Step 2: Define the desired future culture
Step 3: Map actual versus desired culture
and agree an action plan to achieve this
new culture
new culture
Step 4: Implement action plan
Step 5: Regularly review culture and adjust
as appropriate
as appropriate
new culture
new culture
as appropriate
as appropriate
capacity
capacity
Step 4: Review what further policies
and processes need to change to help
embed sustainability at all levels
Step 5: Consider what additional
initiatives could emphasize
sustainability leadership
capacity
capacity

ESG + Digital Transformation for Profitably Sustainable Business
ESG + Digital Transformation (ESGDX) Imperative
How to?
How to?
ESGDX Framework & Sustainability Digital Competency (SDCTM) Methodology
o to
o to
ESGDX framework for profitably
sustainable business
corresponds to the development
ESGDX framework for profitably
sustainable business
Sustainability Digital
Competency (SDCTM)
engineering
Sustainability Digital
Competency (SDCTM)
engineering
and execution of the components
of SDBM (Sustainable Digital
Business Model): Sustainable
digital value proposition,
S t i bl di it l l ti
and execution of the components
of SDBM (Sustainable Digital
Business Model): Sustainable
digital value proposition,
S t i bl di it l l ti
engineering
methodology enables
development,
implementation,
deployment, and
i ti f
engineering
methodology enables
development,
implementation,
deployment, and
i ti f
Sustainable digital value creation,
Sustainable digital operating
model, and Sustainable digital
value capture.
Sustainable digital value creation,
Sustainable digital operating
model, and Sustainable digital
value capture.
communication of
competitive SDBM for
profitably sustainable
business practice.
communication of
competitive SDBM for
profitably sustainable
business practice.

White Paper: ESG + Digital Transformation for Profitably Sustainable Business
Download link: https://www.vinculagroup.com/images/whitepaper.pdf

Kit Oung’s presentation coverd an introduction on the resource productivity
framework, i.e.: Why people, planet, profit, getting to the root case of the problem
and than a brief outline on how to address people planet profit (TBL) based on
and than a brief outline on how to address people, planet, profit (TBL) based on
my book: People, Planet, Profits: Environmentally and Socially Sustainable
Business Strategies (BEP, 2022)

Sustainability Balanced Scorecard (SBSC)
Balanced scorecard (BSC) is a performance measurement and management
system aiming at balancing financial and non-financial as well as short and
syste a g at ba a c g a c a a d o a c a as e as s o t a d
long-term measures. Modifications to the original BSC which explicitly consider
environmental and social or ethical issues are referred to as sustainability
balanced scorecards (SBSC).
Source. The Fifth Pillar of the Balanced Scorecard: Sustainability
https://www.sciencedirect.com/science/article/pii/S1877042816315610?via%3Dihub

Sustainability Balanced Scorecard (SBSC)
Reference link: https://www.youtube.com/playlist?list=PL25gmjrXWBsNjX2_46D6_OvQRmFQK9ZjQ

III. Climate Risk Management: is there a secret
sauce?
sauce?
1. What are the climate change risks and how to
mitigate them?
2. Can we quantify the climate change risks?
3. Top-down v. bottom-up: which one is better for
climate change management?
4 What are the climate change opportunities
4. What are the climate change opportunities
5. Carbon accounting standards and automation
solutions
6. Financial impact of climate change risks and
opportunities
7. Decarbonization/Net-zero strategy
Recording:
Recording:
https://www.youtube.com/watch?v=Q7NbWcsRM
Fw

Climate Change Risk Management Imperative

TCFD Climate Change Risk Management One Page Summary
The objective of the scenario analysis is to evaluate the impacts of climate change
The objective of the scenario analysis is to evaluate the impacts of climate change-
-related risks and
related risks and
opportunities on business and examine the resilience of current climate change
opportunities on business and examine the resilience of current climate change-
-related strategy.
related strategy.
The scenario analysis is used as an essential tool for organization’s strategic plans or risk management
processes
processes
The objective of the scenario analysis is to evaluate the impacts of climate change
The objective of the scenario analysis is to evaluate the impacts of climate change-
-related risks and
related risks and
opportunities on business and examine the resilience of current climate change
opportunities on business and examine the resilience of current climate change-
-related strategy.
related strategy.
processes
processes
The scope of analysis can
include value/supply chain
beyond direct operations, to
achieve a more comprehensive
The identified time frames are short (2030),
medium (2040) and long term (2050).
Edited by Alex G. Lee
(https://www.linkedin.com/in/alexgeunholee/)
•Identify core problem
(leadership/stakeholders)
•Define scope/boundary and level of
analysis
•Set time horizon
•Identify core problem
(leadership/stakeholders)
•Define scope/boundary and level of
analysis
•Set time horizon
processes.
processes.
processes.
processes.
understanding of the possible
indirect impacts of change
indirect impacts of change-
-
related risks and opportunities
on business. After familiar with
the qualitative scenario
analysis, a data
analysis, a data-
-driven
driven
quantitative analysis can be
indirect impacts of change
indirect impacts of change-
-
analysis, a data
analysis, a data-
-driven
driven
Acquire information to predict trends/uncertainties in
environmental and socio
environmental and socio-
-economic conditions such as changes
economic conditions such as changes
in policies/regulations, market/technology/investment shifts,
energy supply/demand, changes in population/ GDP.
environmental and socio
environmental and socio-
-economic conditions such as changes
economic conditions such as changes
Material risks include climate
Material risks include climate-
-related risks (transition and physical risks).
related risks (transition and physical risks).
Material risks include climate
Material risks include climate-
-related risks (transition and physical risks).
related risks (transition and physical risks).
Specify plan to decrease greenhouse gas
(GHG) emission (e.g., halve GHG
emissions by 2030 for Scope 1/2/3
1. GOAL AND
SCOPE
DEFINITION
2. ANALYZE
EXTERNAL
5 STRATEGIC
added to further develop the
possible pathways to the
scenarios. The scope of impact
can extend to the impact of a
company’s activities to climate
change (financial v. ES
materiality).
materiality).
materiality).
materiality). •Identify the key forces and uncertainties
•Identify the key forces and uncertainties
Specifically, transition risks include climate change
Specifically, transition risks include climate change-
-related policy and regulation,
related policy and regulation,
technology development, and reputation. Physical risks include chronic longer
technology development, and reputation. Physical risks include chronic longer-
-term
term
climate shifts, such as sustained higher temperatures, sea level rise and acute
event
event-
-driven extreme weather, such as heat waves, water stress, wild fires, floods,
driven extreme weather, such as heat waves, water stress, wild fires, floods,
drought, and hurricanes.
Specifically, transition risks include climate change
Specifically, transition risks include climate change-
-related policy and regulation,
related policy and regulation,
technology development, and reputation. Physical risks include chronic longer
technology development, and reputation. Physical risks include chronic longer-
-term
term
event
event-
-driven extreme weather, such as heat waves, water stress, wild fires, floods,
driven extreme weather, such as heat waves, water stress, wild fires, floods,
•Implement net-zero strategy
•Derive action plan
M it d l t
•Implement net-zero strategy
•Derive action plan
M it d l t
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emission) and implement the net zero
roadmap to achieve net zero by 2050.
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EXTERNAL
AND INTERNAL
ENVIRONMENT
5. STRATEGIC
RESPONSES
•Identify material risks
•Identify opportunities
•Identify material risks
•Identify opportunities
Climate change
Climate change-
-related opportunities include resource efficiency,
related opportunities include resource efficiency,
energy source, new products and services, markets, revenue
generation, and resilience.
Climate change
Climate change-
-related opportunities include resource efficiency,
related opportunities include resource efficiency,
Commonly used reference scenarios are the physical scenarios, such as the
•Monitor developments
•Sustainability reporting
•Monitor developments
•Sustainability reporting
3. SCENARIO
BUILDING
4.
ASSESSMENTS
Intergovernmental Panel on Climate Change (IPCC) scenarios and the transition
scenarios, such as the International Energy Agency (IEA) scenarios. Other
publicly available climate change scenarios include the International Renewable
Energy Agency (IRENA) scenarios and the Network for Greening the Financial
Systems’ (NGFS) Transition scenarios.
•Evaluate impacts of each
identified risk/opportunity on
business for each scenario
•Evaluate impacts of each
identified risk/opportunity on
•Select the right public scenarios
•Develop scenarios through internal modeling
under key uncertainties
•Select the right public scenarios
•Develop scenarios through internal modeling
under key uncertainties
per defined time flame
(scenario analysis outcomes)
per defined time flame
(scenario analysis outcomes)
To assess a risk/opportunity until a
time frame, a selection of relevant
external variables can be used to
i l t i Th i bl
i l t i Th i bl
i l t i Th i bl
i l t i Th i bl
Climate change scenarios are can be developed using
projections of what can happen by creating plausible,
coherent and internally consistent descriptions of possible
climate change pathways towards certain goals such as
the Paris Agreement targets of 2
the Paris Agreement targets of 2°
°C (or less) of global
C (or less) of global
temperature warming.
the Paris Agreement targets of 2
the Paris Agreement targets of 2°
°C (or less) of global
C (or less) of global
simulate a scenario. These variables
can include carbon pricing and
sectoral carbon intensities.
For example, for a policy transition
risk, carbon price of around 2$ per ton
by 2025 with low financial impacts
was expected.
was expected.
was expected.
was expected.

SBTi Net-Zero Standard Transition Target Setting Steps One Page Summary
Edited by Alex G. Lee (https://www.linkedin.com/in/alexgeunholee/)
Key elements of the Net
Key elements of the Net-
-Zero Standard
Zero Standard
Key elements of the Net
Key elements of the Net-
-Zero Standard
Zero Standard
• Scope 1, 2, and 3 emissions data should be accurate and verifiable.
• Base year emissions should be representative of a company’s typical GHG profile. Companies may use a multi
• Base year emissions should be representative of a company’s typical GHG profile. Companies may use a multi-
-year average base y
year average base year approach, as
ear approach, as
described in Chapter 5 of the Greenhouse Gas Protocol Corporate Standard
• The base year should be chosen such that targets have sufficient forward
• The base year should be chosen such that targets have sufficient forward-
-looking ambition.
looking ambition.
• Base year emissions should be representative of a company’s typical GHG profile. Companies may use a multi
• Base year emissions should be representative of a company’s typical GHG profile. Companies may use a multi-
-year average base y
year average base year approach, as
ear approach, as
• The base year should be chosen such that targets have sufficient forward
• The base year should be chosen such that targets have sufficient forward-
-looking ambition.
looking ambition.
Companies need to establish a base year to track emissions performance consistently
and meaningfully over the target period. Companies that have already set near-term
science-based targets must use the same base year for their long-term science-based
target.
Companies need to establish a base year to track emissions performance consistently
and meaningfully over the target period. Companies that have already set near-term
science-based targets must use the same base year for their long-term science-based
target.
• The base year must be no earlier than 2015.
• Ensure the target boundary is aligned with the GHG Inventory boundary
1. SELECT A
BASE YEAR
2. CALCULATE
YOUR
5 CALCULATE
Companies must set near-term targets with
Companies must set near-term targets with
• Determine how to treat subsidiaries
• Exclude the use of carbon credits
• Exclude avoided emissions
• Include all mandatory scope 3 emissions
• Determine how to treat indirect use
• Determine how to treat indirect use-
-phase emissions
phase emissions
• Review any sector
• Review any sector-
-specific guidance
specific guidance
• Determine how to treat indirect use
• Determine how to treat indirect use-
-phase emissions
phase emissions
• Review any sector
• Review any sector-
-specific guidance
specific guidance
Ambition ranges for target classification of
near
near-
-term science
term science-
-based targets
based targets
near
near-
-term science
term science-
-based targets
based targets
YOUR
COMPANY’S
EMISSIONS
5. CALCULATE
TARGETS Companies are required to have a thorough
emissions inventory that covers at least 95%
of company-wide scope 1 and 2 GHG
emissions and a complete scope 3 screening.
Companies are required to calculate
emissions that are reported separately from
the GHG inventory.
Companies are required to have a thorough
emissions inventory that covers at least 95%
of company-wide scope 1 and 2 GHG
emissions and a complete scope 3 screening.
Companies are required to calculate
emissions that are reported separately from
the GHG inventory.
a minimum ambition of 1.5°C for scopes 1
and 2 and a minimum ambition of well-below
2°C for scope 3. Long-term targets must
have a minimum ambition of 1.5°C across
scopes.
a minimum ambition of 1.5°C for scopes 1
and 2 and a minimum ambition of well-below
2°C for scope 3. Long-term targets must
have a minimum ambition of 1.5°C across
scopes.
Calculation Methods
Calculation Methods
Eligible for scopes 1+2 (both near
Eligible for scopes 1+2 (both near-
-term and long
term and long-
-term science
term science-
-based targets)
based targets)
Calculation Methods
Calculation Methods
-term and long
term and long-
-term science
term science-
-based targets)
based targets)
3. SET TARGET
BOUNDARIES
4. CHOOSE A
TARGET YEAR
Near-term science-based targets must cover at least
95% of company-wide scope 1 and 2 emissions.
Long-term science-based targets must cover at least
95% of company-wide scope 1 and 2 emissions and
90% of scope 3 emissions.
Consider additional required science-based target
coverage
Near-term science-based targets must cover at least
95% of company-wide scope 1 and 2 emissions.
Long-term science-based targets must cover at least
95% of company-wide scope 1 and 2 emissions and
90% of scope 3 emissions.
Consider additional required science-based target
coverage
-term and long
term and long-
-term science
term science-
-based targets)
based targets)
• Absolute contraction
• Physical intensity convergence
• Renewable electricity (scope 2 only)
Eligible for scope 3 (both near
Eligible for scope 3 (both near-
-term and long
term and long-
-term targets)
term targets)
• Physical intensity contraction
• Economic intensity
Eligible for near
Eligible for near-
-term scope 3 targets only
term scope 3 targets only
-term and long
term and long-
-term science
term science-
-based targets)
based targets)
Eligible for scope 3 (both near
Eligible for scope 3 (both near-
-term and long
term and long-
-term targets)
term targets)
Eligible for near
Eligible for near-
-term scope 3 targets only
term scope 3 targets only coverage.
Companies often set several targets that collectively
meet the boundary requirements.
coverage.
Companies often set several targets that collectively
meet the boundary requirements.
Near-term targets must have a target year 5-
10 years from the date of submission to the
SBTi, while long-term targets must have a
target year of 2050 or sooner (2040 for
i i th t )
Near-term targets must have a target year 5-
10 years from the date of submission to the
SBTi, while long-term targets must have a
target year of 2050 or sooner (2040 for
i i th t )
Eligible for near
Eligible for near term scope 3 targets only
• Engagement targets (scope 3 near
• Engagement targets (scope 3 near-
-term targets only)
term targets only)
Eligible for near
Eligible for near term scope 3 targets only
• Engagement targets (scope 3 near
• Engagement targets (scope 3 near-
-term targets only)
term targets only)
companies in the power sector).
Target methods are used to calculate near-
term and long-term targets based on a
mitigation pathway and company inputs.
Companies may choose from the following
science-based target methods to calculate
their targets.
companies in the power sector).
Target methods are used to calculate near-
term and long-term targets based on a
mitigation pathway and company inputs.
Companies may choose from the following
science-based target methods to calculate
their targets.

Digital Automation for Climate Risk & Net-Zero Management
Internal/External Environment Analysis:
AI/big data analytics can search, access, capture, process, transform, classify, extract context
AI/big data analytics can search, access, capture, process, transform, classify, extract context
automatically
Climate Scenario Building:
AI in collaboration with domain experts can help to generate diverse alternate (“what if”)
scenarios of the future
Ri k M t
Risk Management:
Business/financial digital twins can help for risk/opportunity quantification and financial impact
assessment/response (mitigation) automation
GHG Inventory Management:
AI can automate data integration and tracking, calculation of carbon footprint (metrics) based on
GHG Protocol standards within organization and across value/supply chain Blockchain can
GHG Protocol standards within organization and across value/supply chain. Blockchain can
provide transparent and secure data repository
Decarbonization/Net-Zero Transition Management:
g
Industrial digital twins can monitor, measure, control, and report for carbon emission/energy use
reduction

IV. ESG for Startups and Venture Capitals
1. ESG imperative for startups and VCs
2. Material ESG factors for startups
3. ESG strategy for startups
4. ESG performance measurement for startups
5. ESG based portfolio strategy for VCs.
6. ESG reporting strategy for startups and VCs.
7 Impact investing for startups
7. Impact investing for startups
Recording:
https://www.youtube.com/watch?v=NLr2xGddPQI
&t=36s

Startups that implement ESG business practices and mitigate (leverage) ESG
risks (opportunities) can:
Benefits of Startup ESG Implementation
risks (opportunities) can:
Attract more customer
Attract more investment
Earn more revenue
Reduce employee turnover
Get better reputation
(more trust and respect)
R i h d f l ti
Remain ahead of regulation
Source. What does ESG mean for Venture Capital?
https://www.ventureesg.com/academic-research

ESG Strategic Planning and Program Management

VCs that implement ESG consideration for portfolio investing can:
Benefits of VC ESG Implementation
Mitigate risks of portfolio at each stage of the investment cycle
Get more funds from impact/responsible investing LPs
Get more funds from impact/responsible investing LPs
Create more portfolio values through higher exit valuation
Remain ahead of potential regulation
Influence portfolio business practices positively

ESG Management Integration for VCs

V. Sustainability Business Case Secret Sauce
Development
Development
1. Sustainable Business Case - TBL (Triple
Bottom Line)
2. Measurement of Sustainability Business Case
3. Evaluation of Sustainability Business Case
Benefits
4 Framework for Sustainability Business Case
4. Framework for Sustainability Business Case
Development
5. Sustainability Business Case Best Practices
Recording:
https://www.youtube.com/watch?v=gbI8YtC5JdQ
&t=1s

Sustainability Business Case
A sustainability business case provides justification for undertaking a
A sustainability business case provides justification for undertaking a
sustainable business practice that can be fully embedded into every aspect of
the business.
the business.
A sustainability business case evaluates the benefits, opportunities, costs and
risks of alternative options (future potential scenario) and provides a rationale
risks of alternative options (future potential scenario) and provides a rationale
for the preferred sustainability business practice (e.g., financially measurable
for the preferred sustainability business practice (e.g., financially measurable
ROI using forward
ROI using forward-
-looking sustainability measurement metrics).
looking sustainability measurement metrics).
A sustainability business case can help to understand how a sustainable
A sustainability business case can help to understand how a sustainable
business practice affects a company’s core business strategy and a sustainable
business practice affects a company’s core business strategy and a sustainable
business practice’s comprehensiveness and impacts.
business practice’s comprehensiveness and impacts.
Drivers for creating a sustainability business case:
Drivers for creating a sustainability business case:
Lowering risk from risk management improvement
•
• Lowering risk from risk management improvement
•
• Cost savings from operation efficiency
Cost savings from operation efficiency
•
• Revenue growth from sustainable innovation
Revenue growth from sustainable innovation
•
• Building customer loyalty/Attracting talents from enhanced reputation
Building customer loyalty/Attracting talents from enhanced reputation

VI. Sustainable products in the Circular
Economy: will win Gen Z favor?
Economy: will win Gen‐Z favor?
1. What is/makes a sustainable product?
2. What are the sustainability attributes of
sustainable products?
3. How to measure the sustainability performance
of a sustainable product?
4 What is like the sustainable product life cycle
4. What is like the sustainable product life cycle
assessment (LCA)
5. How to develop a sustainable product? -
sustainable business model
6. Sustainable product best practices
7. How to develop a sustainable and circular
product? -sustainable circular business model
Recording:
https://www.youtube.com/watch?v=Qkmh-
o4x14A&t=4s

Sustainable products are those products that provide environmental, social and
economic benefits while protecting public health and environment over their
Sustainable Products
economic benefits while protecting public health and environment over their
whole life cycle, from the extraction of raw materials until the final disposal.
- Wikipedia
What makes a product sustainable? (linkedin.com)

VII. Sustainable Finance: A trade off?
1. Current status of the sustainable finance
2. Financial resilience of ESG-minded companies:
is there any strong evidence?
3. Will strong ESG performance leads to better risk-
adjusted financial performance (financial alpha)?
4. Role of sustainable finance in accelerating the
shift to a low carbon economy
shift to a low carbon economy
5. What are the investment-grade
ESG/Sustainability metrics?
6. Should sustainable finance be regulated more?
7. Does sustainable finance really need a unified
sustainability accounting standard (e.g.,
International Sustainability Standards Board (ISSB)
standard)?
standard)?
8. Investment through active ownership: will it
perform stakeholder capitalism?
R di
Recording:
https://www.youtube.com/watch?v=xz68Qq4wPzE

Sustainable finance refers to the process of taking ESG considerations into
account when making investment decisions in the financial sector leading to
Sustainable Finance
account when making investment decisions in the financial sector, leading to
more long-term investments in sustainable economic activities and projects.
- European Commission
Sustainable finance refers to the process of incorporating ESG factors into
financial decision-making.
- IOSCO (International Organization of Securities Commissions)
Sustainable finance is defined as investment decisions that take into account
ESG factors of an economic activity or project.
- Harvard University
Key Terms to Explore:
Investment
Investment
ESG factors/considerations
Financial decision-making

The Green FinTech Forum (GFTF) is intended to be a collaborative and active global community for anyone
involved or interested in projects and businesses that contribute to making not only the global financial
GREEN FINTECH FORUM
involved or interested in projects and businesses that contribute to making not only the global financial
system more inclusive but also the global economy greener.
Our mission is to help financial technology businesses transform the global economy into a sustainable
b f t i ll b ti b t ll f th i t ti l it ’ diff t t k h ld t
one, by fostering collaboration between all of the international community’s different stakeholders, to
reshape the global financial infrastructure.
The group aims to facilitate discussions between members on themes that may be of interest to them,
g p y ,
including, but not limited to:
Challenges and opportunities of climate change
ESG factors (definitions)
ESG factors (definitions)
ESG in project/ business valuation
Green funding options (angels, VCs, crowdfunding, etc)
Impact of crypto (good v bad)
Carbon debt, financial markets and tax
Corporate responsibility
Central Bank digital currencies
Role of regulators governments and SupraNational Bodies
Role of regulators, governments and SupraNational Bodies
Greenwashing

Metaverse NFT/DeFi Based Sustainable Financing
Green funds
Green funds are an investment funds for clean transportation systems (e.g.,
are an investment funds for clean transportation systems (e.g.,
electric vehicle) green buildings (e g energy
electric vehicle) green buildings (e g energy-
-efficient buildings) renewable
efficient buildings) renewable
electric vehicle), green buildings (e.g., energy
electric vehicle), green buildings (e.g., energy-
-efficient buildings), renewable
efficient buildings), renewable
energy systems (e.g., wind/solar power system), waste management system
energy systems (e.g., wind/solar power system), waste management system
(recycling system) to invest in sustainable design, reductions in energy
(recycling system) to invest in sustainable design, reductions in energy-
- and
and
water
water-
-use, greenhouse gas emissions reduction, air quality improvement, and
use, greenhouse gas emissions reduction, air quality improvement, and
water
water use, greenhouse gas emissions reduction, air quality improvement, and
use, greenhouse gas emissions reduction, air quality improvement, and
natural resource protection.
natural resource protection.
Metaverse NFT + DeFi for Sustainable Financing Method
Step 1. Tokenize assets (e.g., solar power plants, wind farms, carbon credit) or
projects (e.g., green infrastructure), as a Fungible (ERC20) Tokens or a Non-
Fungible-Token (NFT) (ERC721/ ERC1155 tokens)
Step 2. For fungible tokens, use them as collateral for some money market
DeFi liquidity pools to borrow money values or monetize through fund raising of
a specific project
a specific project
Step 3. For NFT, put it into a specific smart contract & anyone can buy the
shares in the ownership rights by sending collateral and receiving a fungible
shares in the ownership rights by sending collateral and receiving a fungible
(ERC20) bonded token.

EU Sustainable Finance Disclosure Regulation (SFDR) is the rules which aim
to make the sustainable investment funds more comparable and transparent to
Sustainable Finance Regulations
to make the sustainable investment funds more comparable and transparent to
investors of the funds by disclosure of the ESG outcomes of the investment
process based on the measurement/assessment of pre-defined metrics.

ESG Factors/Considerations
Source What is ESG Investing? https://bestpathforward com/what is esg investing/
Source. What is ESG Investing? https://bestpathforward.com/what-is-esg-investing/

Investing in ESG assets comes with certain trade-offs for investors, where on
one side are return on the sustainability value creations and on the other side
Financial Decision-Making: Trade-Off v. Balancing
one side are return on the sustainability value creations, and on the other side
are taking lower financial returns or higher risks.
*ESG Investing v. Impact Investing

VIII. SDG9: sustainable infrastructure, will we
meet the goal?
meet the goal?
1. What is a sustainable infrastructure?
2. What do we mean by "sustainable infrastructure
for climate change resilience"?
3. In what consists a "sustainable energy
infrastructure"?
4 How to secure the critical sustainable
4. How to secure the critical sustainable
infrastructure?
5. What is the process of digital transformation of
sustainable infrastructure?
6. How does financing sustainable infrastructure
work?
7. Are there best practices in sustainable
Recording:
https://www.youtube.com/watch?v=F7cLVKgZihc&t
=6s

References VIII
References VIII

Reviews of Sustainability and ESG Global Leaders' Insights

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