One of which is Rubicon Organics – the first Canadian cannabis company to issue an ESG report. The cannabis industry is uniquely connected to ESG issues because of the historical criminalization and stigma around the plant. The company cultivates, processes and sells organic and sustainably produced cannabis products, and as a result, is becoming a global brand leader. Their ESG report is certainly impressive as the first of its kind. It highlights many of the company’s achievements in 2020, such as 78% diversity across their employee base and the installation of LED lights throughout their facility, which are 60% more energy efficient that traditional greenhouse lights. Rubicon Organics has also set targets for 80% waste diversion by 2025 and joined Climate Smart to commit to reducing their carbon footprint in future years. The report is particularly refreshing because it opening addresses the challenges that the company is currently facing, such as COVID-19 and recycling packaging.

Jesse McConnel, CEO of Rubicon Organics, stated: “Not only does our ESG report highlight where we excel, it also serves as a roadmap for how we are going to strive to achieve the highest standards in operation as we set out to make the Best Cannabis on Earth and for the Earth”.

In its first quarter of 2021, Rubicon Organics earned $4.1 million of net revenue, an increase of $3.7 million from the first quarter of 2020. Since then, the company’s earnings have been consistent with industry trends – the shutting of stores due to ongoing lockdowns meant that they were limited to ‘click and collect’. Nevertheless, with a transparent and informative ESG report, Rubicon Organics is paving the way for a sustainable cannabis market in Canada.

Sticking to the theme of plants, another impressive report showcased on the ESG Foundation website is written by Scotts Miracle-Grow. The company is one of the world’s leading marketers of lawn and garden products. It also sells nutrients, lights and other equipment used in cannabis production.

The Scotts Miracle-Grow 2021 corporate responsibility report outlines how the organisation will deliver on its sustainability purpose called ‘GroMoreGood everywhere’. The previous year, the company underwent a formal materiality assessment to prioritize its most important ESG opportunities, and based on that assessment, certain areas were identified that could drive its sustainable business practices. These included community engagement, governance and transparency, and associate wellness. The report tackles some of these challenges directly. It promises to connect 10 million children to the benefits of green spaces and triple the amount of recycled content in plastic packaging by 2025.

Jim Hagedorn, CEO of Scotts Miracle-Gro, said: “Across our business, we are focused on our purpose, to GroMoreGood, for every person and every patch of the Earth. To us, that’s what sustainability is all about and that’s what our company has always been about. We have committed ourselves long term to our ESG priorities and to transparent reporting that enables our stakeholders to judge our values and sustainability for themselves.”

If the company keeps taking meaningful steps to further their ESG goals, in a collaborative and transparent fashion, it will continue to do better for communities, the planet and consumers. The US consumer sales are expected to increase by up to 9% by the end of this year, and the segment that sells cannabis products is predicted to grow sales by around 45%.

Vicente Sederberg LLP, a leading national cannabis law firm, announced very recently that it has formed an ESG practice aimed to help the industry become front-runners in sustainability and diversity. The Head of Impact and ESG team offers cannabis businesses several services, including ESG screening to address gaps, sustainable consulting and the preparation of community engagement plans. Last year, the firm supported legal training for attorneys working to promote social and racial equity in the cannabis industry.

Marc Ross, Head of Impact and ESG at Vicente Sederberg LLP, explained: “Because the cannabis industry is still in development and under the microscope of a wide range of stakeholders, businesses are under a lot of pressure to do better. By prioritizing ESG issues from the outset, the cannabis industry can get out in front on them. While other sectors get up to speed, the cannabis industry will already be positioned to lead the way.”

As cannabis is not yet legal in many developed countries, notably the United States and the United Kingdom, investor pools are often limited. But recently, it has been recognised that cannabis has the potential to bring about social justice and healthier communities through corporate responsibility and service-based measures. As the industry continues to grow, it is essential that cannabis companies, similar to the examples above, embrace the principles of ESG and report their actions accordingly.

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Therefore, it is unsurprising that there is a rising demand and expectation for effective sustainability reporting within companies. LUSH, the British cosmetics retailer, is well-known for displaying itself in the public eye as an environmental and ethical company through tireless campaigning and advertising. It publicly stands against animal testing and promises to use as little packaging and energy as possible. Yet, as a company that aims to set itself as the leader of sustainable cosmetics, it is discouraging that only a lack of clear evidence as to how LUSH is achieving their goals and a failure to provide quantifiable environmental targets for the future can be found online. The non-existent coherent report places the authenticity of the so-called ethical company immediately into question.

JD Sports has also failed to publish a substantiated sustainability report and recently the company has been interrogated regarding its principles. An article in the Sunday Times written by Oliver Shah stated: “JD Sports executive chairman Peter Cowgill has ‘’an instinctive knack for reading trends’’: and has built a global retail empire on the back of the ‘’athleisure’’ boom. He has, however, ‘’been unable or unwilling’’ to read the public mood during the pandemic. JD Sports has used the crisis to dump its Go Outdoors subsidiary into administration only to buy it back minus inflexible property leases. While telling the City JD’s finances were robust, he refused to pay rents, and took £86.1 million in furlough payments, £38 million in rates relief and £300 million of BoE emergency funding which was never used. Declaring profits of £324 million, Cowgill took bonuses of £4.3 million while JD paid £16.7 million in dividends. Cowgill feels no sense of obligation to the government that forced the closure of his non-essential stores. The ‘’self-interest and short-termism’’ displayed by Cowgill gainsays claims that the pandemic will re-write the social contract between business and the state: ‘’The FTSE’s more ruthless bosses will get back to doing what they’ve always done’’”. In the aftermath of the COVID crisis, people around the world are higher sensitised about society with 54% of consumers admitting to weighing purchase decisions on social purpose and honesty. It is therefore no surprise that businesses such as JD Sports will suffer in the long-term if they continue to overlook ethical values and do not take implementation of ESG initiatives seriously, because instead, customers will start to turn to organisations that dedicate themselves to tackling sensitive issues and strive to make a positive impact on the planet.

Brewdog is the craft beer company that is largely recognised for being a leader in terms of its green initiatives and in particular for being the world’s first carbon negative beer business. The company does have an easy-to-find sustainability report for 2020 which is well-written and eye-catching, however, there is little content relating to anything other than initiatives to reduce carbon use and strategies to decrease waste. Disappointingly, apart from these narrow environmental targets, no information is presented relating to Brewdog’s social values, the importance of the well-being of employees nor any diversity or inclusion objectives in place. Effectively, the report has completely ignored the social and corporate governance aspect of ESG.

Businesses, such as Brewdog, that focus heavily on the PR of environmental issues but do not generate an ESG report are left exposed to the potentially harsh criticism of greenwashing. Marcus Björksten, who manages one of Europe’s best-performing sustainable funds, said earlier this year that “greenwashing is a real problem” whereby companies promote ESG concerns as an advertising gimmick but are not as sustainable as they appear. Proper ESG reporting eliminates this possibility of this deceit. “The reporting will make it very difficult to have greenwashing” says Björksten, so why is the practise not more widespread?

Carlsberg’s 2020 sustainability report, which incorporates ESG disclosures throughout, is a great example of how to present transparent progress updates on achieving both environmental and social goals. It openly includes issues such as reducing carbon footprint, water waste, irresponsible drinking and accidents, allowing Carlsberg to appear authentic and trustworthy in their ambitious targets and recent campaign promoting its efforts to restore habitats in UK waters in partnership with WWF. Coincidently, Carlsberg’s shares are up 10% since the beginning of the year.

The ESG Foundation has constructed a showcase of sustainability reports, providing a tool for easy access to numerous published reports and permitting the contrast of frameworks and comparison of relevant reporting systems. One example listed is PepsiCo – the company won the best ESG reporting category at the Corporate Governance Awards last year and was praised for its innovative, interactive storytelling technique used to engage its audience. Furthermore, the extensive content clearly evidenced the fact that the business sought not only shareholders’ input, but external stakeholder’s perspectives on all of the six focus areas of the sustainability agenda.

The previous year, Microsoft won the same award. The company was commended for using a wide variety of platforms to communicate its actions on ESG issues, including an integrated CEO letter that provided insight into Microsoft’s business strategy, results, social purpose and corporate responsibility commitments.

Scotiabank’s ESG report is also posted on the Foundation’s Report Showcase which highlights the company’s ongoing commitment to building a more resilient, inclusive and sustainable world by highlighting its progress in diversity and inclusion, climate and sustainable finance. Additionally, Scotiabank’s Sustainable Finance group, launched in 2020, is assisting clients to identify opportunities of green financing by establishing methods of ESG reporting and data collection that will build robust ESG frameworks and governance structures.

Walmart has been condemned in the past for its massive carbon footprint, selling of assault-style rifles and low hourly minimum wage. The company’s huge workforce of over 2.2 million employees and 11,500 retail locations provides just one explanation for the scepticisms surrounding its recent sustainability efforts. Nevertheless, Walmart’s 140-page ESG report is helping to eliminate some of its previous stereotypes – namely a lack of consideration for people or the planet. The company has quietly rolled out ambitious environmental initiatives and introduced agendas to improve workplace equality and champion gun safety. As a result, Walmart has remained unquestionably resilient, with sales up 5.9% from the previous year, and has thrived throughout the entire pandemic whilst many traditional retailers have plummeted.

It is not only large companies that benefit from proper ESG reporting. In the past, small and medium sized enterprises (SMEs) may have viewed sustainability reporting not relevant to themselves, but now this could not be further from the truth. Millennials tend to turn to local brands with strong ideals and evidence shows that generation Z prioritise companies that reflect strong social justice, action against climate change and champion individuality. Furthermore, ESG reporting demonstrates to investors how a company mitigates risks and generates long-term financial returns. SMEs account for 90% of all businesses and so accumulatively have a momentous impact. It is therefore crucial that all companies, regardless of size, join the venture of incorporating sustainability and reporting their ESG practises effectively to achieve growth.

As emphasised in the Dasgupta Review, transformative change of the relationship between financial institutes and nature is essential for the future success of economies worldwide. For this to become a reality, businesses must measure their impacts on nature and provide full disclosure of their actions so that they can be held accountable if necessary and improve ensuing decision making.

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A proposed solution for the massacre of environmental defenders in Central America is the Regional Agreement on Access to Information, Public Participation and Justice in Environmental Matters in Latin America and the Caribbean, otherwise known as the Escazú Agreement. The treaty was adopted in March 2018 and came into force on the 22^nd of April 2021. It is the first environmental treaty to be adopted in Latin America and the Caribbean and is also the world’s only agreement to include provisions on human rights defenders in environmental matters.

Although the Escazú Agreement requires involved parties to investigate attacks against those who defend environmental rights and establishes guidelines on effective measures to ensure their safety, corruption has been named the predominant problem facing Latin America and therefore the practicality of the treaty could be questioned. For example, illegal logging scandals worth around $500 million in the Brazilian Amazon have been reported to involve top officials within the state environmental agency. Furthermore, the rich biodiversity in Latin America and the lack of global attention on the region compared to Africa and Asia makes it a prime target for thriving wildlife crime, allegedly involving bribed officials and even diplomats at various stages.

Between 10,000 and 12,000 turtles are hunted in Nicaragua each year for meat consumption and souvenirs crafted from the shells, despite the killings being prohibited by law. Local authorities in coastal towns are reluctant to forbid the sale of turtle meat in markets due to its high demand and lack of economic alternatives. This provides a typical example of a battle between tradition and conservation efforts alongside virtually no enforcement by local officials.

The key to provoking positive change is offering education and providing an economic alternative, for example, tourism income generated by marine turtles is three times the value of selling products derived from the reptiles.

A similar concept could be applied to the Escazú Agreement, whereby although the gap between the law and implementation may still exist and sadly activists might remain at risk, it acts as a step towards deeming environmental, social impact and corporate governance (ESG) as an increasing point of importance. Over 70% of the public in Latin American countries agree that climate change is of equal long-term concern as the COVID pandemic.

The treaty is significant because it shows the growing awareness and increased appeal surrounding environmental governance in the region and demonstrates the commitment to protect the people who speak out about these issues. Last year it was confirmed that companies with enhanced ESG show better returns and so the fact that Latin America is focussed on transparency, social justice and access to public information the treaty is a worthy contribution to laying the foundation for substantial future growth.

Teresa de Miguel, a multimedia journalist based in Mexico City with over ten years of experience investigating environmental issues, believes that the sense of overall international pressure is likely to have the most positive impact on Latin America: “Right now, the treaty is just a document that was signed… and you can see that in Mexico just last week, there were two more environmental defenders killed.”

“The treaty is a very important tool because it was created together with civil society,” and, “it also gives an opportunity for the international community, such as the European Union or the United States, to say to Mexico and other countries who signed have the treaty – you are not complying.”

The Escazú Agreement was opened for signature by the 33 countries of the Latin America and Caribbean region, and although 24 countries signed it, only twelve have ratified it. Colombia was very active at the conferences and notably had the highest reported number of murders of environmental leaders globally in 2019, however, disappointingly the country has not yet ratified. Perhaps the prospect of guaranteeing rights for people rather than for polluting industries that has caused the shying away of many countries from the environmental obligations that they helped to create.

Additional ratification is essential for the agreement to effectively function as a widely respected multi-lateral instrument and to continue promoting the idea of ESG across the region.

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