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The ESG Disclosure Rules made by the London Stock Exchange Group (LSEG), represents a set of recommendations regarding Environmental, Social and Governance (ESG) reporting. Which means that in following years the investors will obtain conscious and responsible assets. It is a global guideline that helps companies create their own reports, to help investors in their decision making by providing strategic information they want to know.
This framework allows companies and investors to understand the performance of main ESG topics such as human rights, safety, health, pollution, tax transparency, water use, anti-corruption, labor standards, etc. Likewise, its creation relies on the importance of transitioning to a low-carbon economy. As LSEG is committed to provide issuers access to sustainable finance, with a specific task to raise finance for issuers looking to move towards greener, low-carbon operating models. Therefore it is becoming more and more important for companies to communicate with investors clearly and accurately on these aspects.
The content of the document is clear as well as the structure, which is divided into eight priorities based on sustainable initiatives and the United Nations Principles of Responsible Investment. Strategic relevance, investor materiality, investment grade data, global frameworks, reporting formats, regulation and investor communication, green revenue and debt finance.
With this guideline available for people around the world it is important to know the future and opportunities of the tool. The LSEG has determined to improve everything related to sustainable investment by adding new proposals each year. Finally, it must be recognized that the ESG disclosure rules work for bringing the theory into action by creating measurable value. Reporting is nowadays a way of dialogue between investors and companies that makes a business smarter for the green financial market.
The EcoBeautyScore Consortium is an initiative born in 2021, which has finalized this February 2022 its prototype to build a sustainable strategy for the cosmetics industry. Recently there are big brands such as L'Oreal, Unilever, LVMH, Henkel, Natura & Co working together to develop an industry-wide environmental impact system that will change the future of cosmetics. So far there are 60 members who aim to enable consumers to make more informed and sustainable choices.
The consortium's main goal is to create a scoring system for products. A prototype footprint and scoring system is planned for the end of 2023. It will be verified by independent parties and external experts, including scientists, academics and NGOs. To achieve four main objectives: to develop a common method for measuring the life-cycle environmental impact of beauty products, to create a collective database, to provide a tool accessible to all, and to establish harmonized scores worldwide. In addition, this remains voluntary for participants and stakeholders. The different categories will focus first and foremost on consumers of beauty products and will be as inclusive as possible.
Overall, the EcoBeautyScore Consortium was created to improve the consumer experience. It takes into account not only the product formula itself but also the packaging and usage. In order to achieve a much more complete result, which gives accurate information regarding sustainability and circularity. Open to all brands, companies and associations willing to complement their pre-existing strategies along with this one.
It is proven that the demand for cosmetics continues to grow so it is about providing transparent and comparable information to the public for decision making. People are now more often looking to consume only from brands that drive data transparency and ethical practices, so it is critical that these types of initiatives grow in the near future for all industries.
The American Hotel & Lodging Association (AHLA) announced in December the Responsible Stay. An industry-wide commitment to make meetings, events and guest experiences in hotels more environmentally and socially responsible. AHLA and its members aim to strengthen environmental programs to drive hotel services toward protecting communities and the future of the planet. Responsible Stay is based on four fundamental aspects, which will be the key to a greener and more sustainable transition for the members of this association.
First is energy efficiency, through which the optimization of energy use and the reduction of the carbon footprint is expected. This takes into account the participation of both workers and employees. For example, it determines strategies such as leaving lights off when leaving the room, unplugging chargers or other resources when not in use, even lowering their HVAC settings. It also talks about implementing smart-energy sensors that automatically turn off lights and regulate heating and air conditioning systems.
Second is about water conservation. Hotels can implement practices in strategic areas such as laundry, landscaping and shower. Responsible stay ranges from giving guests choices about how often their sheets and towels are washed to high-efficiency equipment like toilets, showerheads, and faucets. And not only internally but also externally by saving water in irrigation systems. All of this always with guests' comfort in mind.
Third is waste reduction, which ensures hotel alternatives to reduce waste from properties. Whether through recycling or reuse, hotels should invest effort and work to create an eco-friendly service where products such as plastic water bottles, cups, cutlery, straws, and toiletries can be replaced with more reusable and sustainable options. This step is carried out mainly in the kitchen and hygiene area, while maintaining the same quality of the hotel. An original proposal that is just being developed is the keyless room, which is the access of guests through virtual codes that can be managed on cell phones.
Finally, the fourth aspect is responsible sourcing. The hotel industry is responsible for promoting the reduction of environmental and social impact at every level of the supply chain. Hotel emissions are significant and this is due to the purchases of goods and services to support tourism. This part highlights the diversification of suppliers and collaborating with those that are also committed to environmental sustainability. There must be an obligation to transparency and traceability across the supply chain from their manufacturing, transportation, storage, usage, and disposal.
FOOD AND DRINK
The global food system is the single largest contributor to biodiversity loss, deforestation, drought, freshwater pollution and the degradation of oceanic environments. In the UK, domestic food production accounts for approximately 20% of our greenhouse gas emissions.
Therefore, the Imperial College of London has released a Sustainable Food & Drink Policy which is part of its 2021- 2026 sustainability strategy. The well-known catering is the crucial part of the shift of campuses to sustainable spaces. Published in September 2022 the policy focuses on all food services around the university. One of the most important regulations is the reduction of meat to 47%, all menus will be vegetarian from 2023 but there will still be fish and meat options at an additional cost. Also all non-dairy milks will be available at no additional charge and any fish that they serve will be Marine Stewardship Council (MSC) certified.
A deliveries system will be introduced with the objective of reducing the number to an absolute minimum by 2030. Also, there are pricing innovative plans that ensure that plant-based meals remain affordable and accessible for our community (given that usually such meals tend to be more expensive). And it will be introduced a revised reusable cup scheme, allowing customers to efficiently reuse and recycle their reusable cups, with a clear brand identity supporting this.
Although this is only a national action, it is certainly also an example that many more schools and universities can consider implementing. This is not only a benefit in the food area, but also a great change at the educational level. With this proposal, youth learn to be sustainable from an early age, until it becomes more of a habit and lifestyle than an obligation.
© Hightlicht Image: Cristian Escobar via Unsplash