Every month we look across the sector, to identify resources and reports that assist in the application of the Future-Fit Business Benchmark.
In October we are taking a look at WRI’s paper on setting enterprise water targets, WBCSD’s report on renewable power purchase agreements, and UN PRI and Ellen MacArthur’s guidance for investors engaging on plastic waste. Keep reading to learn how Future-Fit complements existing initiatives and thought leadership.
Setting Enterprise Water Targets – WRI
This paper seeks to guide companies on where to focus their efforts on water. By setting enterprise water targets, companies can prioritise action in ways and places that have the most impact across their value chains – from sourcing to selling goods. Setting appropriate targets can be difficult because:
- Water is not an equally material issue across corporate value chains;
- There is a high variability in environmental, social, governance and economic conditions across water catchments; and
- Water risks are a function of a suite of different shared water challenges (e.g. quantity, quality, accessibility and governance).
Therefore, this report introduces a three-step process to help companies set water targets at an enterprise level to address their most material water-related risks.
- Step 1: Assess water materiality and prioritise sections of the value chain;
- Step 2: Assess water-related risks and prioritise locations; and
- Step 3: Set and disclose enterprise water targets.
The report provides some suggestions for strategic, outcome-based water targets. The Break-Even Goal BE02: Water use requires companies to eliminate consumption from water stressed regions. This is a quantitative target which actively addresses water context. Therefore, the guidance in the paper could be used to enhance a water strategy oriented around this Break-Even Goal.
The paper also addresses water-related impacts outside of a company’s direct operations, such as in the supply chain. A company may choose to place more emphasis on eliminating water hotspots in its supply chain if its own operations are not particularly water intensive. This would align with the paper’s focus on materiality and would ensure a company progresses on BE04: Procurement.
Pricing structures for corporate renewable PPAs – WBCSD
The interest in corporate renewable Power Purchase Agreements (PPAs) has grown astronomically over the last few years. They help companies to stabilise electricity prices, whilst making progress on carbon reduction goals.
This report aims to provide an outline of different pricing structures for PPAs whilst providing additional information on risk impacts, regional variations and settlement considerations to help corporate buyers. Pricing structures include:
- Fixed, escalation & indexation;
- Floating price, discount to market with caps and floors;
- Collar and reverse collar;
- Hybrid structures; and
The Future-Fit Business Benchmark has stringent requirements for renewable energy sourcing, most notably because it does not allow for the use of Renewable Energy Certificates (RECs) to increase the proportion of renewable energy used (see BE01: Energy use and BE06: Greenhouse gas emissions). However, it does encourage the use of PPAs. Therefore, this paper can provide practical guidance for companies wishing to source renewable energy in line with Future-Fit requirements.
For an introduction to corporate renewable PPAs, see the WBCSD Corporate Renewable Power Purchase Agreements: Scaling up globally report.
Engaging on plastic packaging – UN PRI and Ellen MacArthur Foundation
This set of resources aims to encourage investors to explicitly address plastic waste and pollution through their stewardship activities. The page outlines what risks investors are exposed to through plastics and why we as a society need to transition to a circular economy.
The resource states that investors should constructively engage with companies in the plastic packaging value chain to determine how they are managing risks and opportunities and to encourage them to take action by 2025. UN PRI and Ellen MacArthur have created tailored engagement guides for different sectors:
- Containers and packaging;
- Fast-moving consumer goods; and
- Waste management.
Each guide provides:
- A sector overview related to its use of plastics;
- Questions to ask focused on governance, risk management and reporting, performance and impact;
- A method to understand company progress on plastic waste and pollution; and
- Examples of company best practice.
These detailed and tailored guides can help a company to identify and address waste hotspots associated with its investments. This is a requirement for BE23: Financial assets.