Ripple Effect of ESG in Agriculture – Matt Gardiner, CPA, CFE

As the world strives toward carbon neutrality, equity and inclusion, and responsible governance through the  pursuit of Environment, Social, & Governance (ESG) initiatives, it’s not just global corporations who will be taking on these challenges. A significant effort will come from small and mid-size organizations embracing this process, including the up- and down-stream supply lines and their impact on the environment, society, and business practices.

For example, in pursuing its goals in ESG, General Motors asked its supply chain to commit to an ESG goal which included not only a commitment to carbon neutrality, but also ESG targets around governance and human rights. 

Carbon emissions are a significant target for reduction through ESG initiatives. The Greenhouse Gas Protocol sees emissions through three lenses:

+ Scope 1: Direct emissions from operations of your organization.

+ Scope 2: Indirect emissions from energy required to run your organization.

+ Scope 3: Indirect emissions from down- and up-stream producers and consumers utilizing your products. 

Scopes 1 and 2 are largely within an organization’s control, whereas reducing scope 3 emissions requires a thorough understanding of the supply chain and encouraging the supply chain producers and consumers to align with your organization’s goals, or looking for alternatives within that supply chain who do.

As multinational organizations begin to focus on ESG, it’s increasingly likely that small and mid-sized organizations could be asked about their carbon footprint, commitment to diversity, equity, and inclusion in the workplace, and their governance and compliance.

Is your organization considering ESG and how it may be impacted in the future? Setting and pursuing ESG goals can be a significant way to set your organization apart from your competitors. Gardiner + Co has put together an internal team in order to stay updated on how this will impact our clients – so expect to hear more from us on this going forward and please feel free to reach out if you have any questions.