Welcome back, and we hope you enjoyed a surprisingly calm weekend for a change. I remember fondly passing Saturday and Sunday without covering government interventions to save global banking. For the moment at least, we have some respite.
But there are still some big changes rippling through markets and the workplace, which is where we start today.
Less than a year ago, colleagues of ours instructed readers how to succeed in the art of quiet quitting (“do it discreetly”). Other colleagues advised how to stop your staff from quitting, “including innovative ‘stay’ interviews to find out what motivates team members and what their ambitions are”.
Now the tide has turned, and lay-offs are coming for tens of thousands of people. How will this affect corporate sustainability targets, and the ESG teams responsible for implementing them? In today’s newsletter, I have some insights into how things are playing out.
Tamami has a look at the growing problem of solar waste. Yes, as important as solar technology is for the energy transition, it is creating new and under-appreciated garbage problems too. (Patrick Temple-West)
So you think you know your supply chain? Don’t miss our new Moral Money Forum report, a deep dive into the role that global companies and investors can play in eliminating labour abuses.
ESG commitments put to the test as lay-offs loom
Over lunch recently, an executive at a global apparel company told me fashion houses were cutting costs and turning to their suppliers to do more for less. This cost cutting means apparel companies are struggling to afford their energy efficiency spending and plans for net zero carbon emissions.
Meta chief executive Mark Zuckerberg has already announced 2023 as the “year of efficiency”. The social media company this month announced another 10,000 job cuts on top of 11,000 announced last year.
Does this mean the strong demand for professionals in the ESG space is set to go into reverse?
There is one big factor that should help shield ESG teams from lay-offs: regulations. Europe’s Corporate Sustainability Reporting Directive comes into force for big companies in January 2024. Its reporting requirements have big banks freaking out, and it will soon be joined by climate reporting rules from the Securities and Exchange Commission that are expected to be unveiled next month.
Both regulations “have resulted in business as usual” for ESG jobs, Cheryl D’Cruz-Young, a senior client partner at recruitment firm Korn Ferry, told me.
“[The] firm continues to work with clients who are interested in continuing along their strategy of ensuring sustainable business,” she told me.
But there is more pain on the horizon. Just last week, Amazon announced another round of job cuts. Accenture, which has an ESG and sustainability consulting practice, said it would cut about 19,000 jobs over the next 18 months.
Amazon told me the company’s 2040 net zero target was “not affected by personnel changes”. And plans to use more sustainable building materials, reduce packaging and other environmental initiatives wouldn’t be hit either, she said.
Meta declined to comment about whether or not the lay-offs would affect ESG jobs.
The effects of a 2023 “green squeeze” could depend on where your business sits in the corporate food chain. Brand-name companies at the top of the pack might continue to fork out cash to preserve their ESG ratings and to please the regulators. Supplier businesses, based in emerging markets far from the US and EU regulators, might show a very different dynamic.
It is still early in the year, but global belt-tightening is shaping up to be a big theme for ESG in 2023. As always, we are keen to hear your thoughts about how this could play out in the months ahead. (Patrick Temple-West)
India takes aim at solar waste
The rapid growth momentum of the solar energy sector is a vital piece of good news in the fight against climate change. But there are real concerns about waste. Large quantities of used solar panels have been going straight to landfill, in the absence of a serious recycling system for the industry.
With a record volume of solar energy installation in recent years, India is now moving to tackle this waste problem.
Late last year, India’s Ministry of Environment, Forest and Climate Change announced new electronic waste management rules, which require solar manufacturers and producers, including importers and sellers, to store waste panels and cells appropriately until the 2034-35 fiscal year — when the recycling industry is expected to reach commercial scale. The new e-waste rules will take effect next month.
The rule change has been widely welcomed by environmental advocates, for sending a clear signal to the industry that solar energy expansion should happen sustainably. They will now look for strong enforcement of the new code. “[The] efficacy of these rules shall depend on the compliance and its periodic monitoring,” Akanksha Tyagi, programme associate at India-based research organisation the Council on Energy, Environment and Water, told me.
By setting out a dedicated regulatory framework for solar waste management, India has followed similar moves in the EU and UK. But while many efforts to develop efficient recycling technologies for solar modules are under way in India, Tyagi said, no commercial facility was yet operational.
Yet India has the potential to achieve commercial success in renewable waste recycling well before other developing counties, said Charles Worringham, a former Queensland University of Technology academic and guest contributor for the Institute for Energy Economics and Financial Analysis.
Worringham noted that India still generated nearly 70 per cent of its energy from coal-fired power plants, which produce waste streams of fly ash and airborne particulates that are far more diffuse, toxic and voluminous than any waste from the renewable sector. Renewable uptake will curtail these more harmful waste streams, Worringham argued — even while the solar industry’s recycling system remains in its infancy. (Tamami Shimizuishi, Nikkei)
After an explosive couple of weeks in the financial sector, “it is still unclear if more dominoes will fall”, warns the FT editorial board. Brace yourselves — this crisis “may not be over yet”.