In this unique ESG Report, I welcome special guests, Daniel Banes and Mark Henderson. Daniel Banes is the President of Commercial Tech, and Mark Henderson is the Director of Solution Design Lead at Exiger, a company dedicated to altering the playing field related to fraud and financial crime. In this powerful episode, we discuss the effects of ESG in the energy industry and the role of the supply chain in ESG.

The Evolution of ESG in the See more +

In this unique ESG Report, I welcome special guests, Daniel Banes and Mark Henderson. Daniel Banes is the President of Commercial Tech, and Mark Henderson is the Director of Solution Design Lead at Exiger, a company dedicated to altering the playing field related to fraud and financial crime. In this powerful episode, we discuss the effects of ESG in the energy industry and the role of the supply chain in ESG.

The Evolution of ESG in the Energy Industry

I ask how ESG regulatory risk management has evolved within the energy industry. Mark explains that consumers, governments, and companies historically focused on the environmental issues in ESG, but recent global trends and regulations brought social issues to the forefront. Mark says that the Supply Chain Due Diligence Act that would come into effect in Germany on January 1st, 2023 is an example of social issues taking the front seat globally. This act would “require companies to identify, assess, prevent and remedy human rights risks, and impacts across their supply chains.” If companies do not comply with these laws, they are at risk of being fined and possibly excluded from earning contracts in Germany’s public sector for up to three years.

Climate Risk Management versus the Energy Industry

Recently, the SEC proposed new climate risk management disclosure rules, and I asked Daniel how he thinks it would affect energy companies. Dan responds that energy companies would now be held accountable; over the years, most companies proposed that they would be carbon neutral by a certain date, and it never materialized. “Having this disclosure rule gives the public insight – across the board for all public companies – into those targets that companies are committing to climate-related risks,” Mark says. He adds that financial statements would be audited, allowing for more accountability for these companies.

Managing Scope Three

I asked Daniel how he believes energy companies would manage Scope Three and how they could be connected to the proposed SEC rules about accountability and transparency. Mark explains, “Scope Three [is] about having data to look into your supply chain, understand emissions within your supply chain, and have those conversations with your suppliers.” Additionally, it allows a more wholesome relationship to flourish across your supply chains and for efficiencies to be detected before discussing environmental control and risk and emissions. See less -