Despite Environmental, Social, Governance (ESG) as a term only being coined in 2004 with the commissioning of the UN’s ‘Who Cares Wins’ report, seeking to connect financial performance to sustainable development, the concept has been catapulted into mainstream rhetoric post-pandemic. According to PwC’s Asset and Wealth Management Revolution report (2022), ESG-related assets under management are expected to surge with an annual growth rate of 12.9% up to $33.9 trillion by 2026. With prospects of ESG investing widely appreciated to yield higher returns, the flexibility offered by the strategy, inclusive of any real change that seeks social and environmental change, has exacerbated critics’ claims to denounce ESG reporting and investment as attempts to greenwash credentials.
Due to the ambiguity of a diverse range of topics across complex global-value chains and stakeholders, the path towards ESG reporting which is paved with high-quality data is long and winding. To manage this, the role of governance is prominent. However, it is often a crucially understated component of ESG.
Governance ensures compliance, transparency and accountability and is therefore imperative for translating policies into environmental and social action. Thereby, there is a growing need to internalise issues by introducing tools and techniques which will enhance sustainable performance and drive real change by assuming greater responsibility. Although ESG as a concept may not be the definitive future of sustainability reporting and investment amid S&P Global removing ESG scores from debt ratings while ESG fund performance. Compounded by the heavy burden of the geopolitical state of Europe, it is imperative that this is not seen as a reason to stand still on issues jeopardising sustainability.
Martyn Fiddler Aviation (MFA), too, is obligated to do so. Therefore, over the summer, MFA took on Ben Long, a student at the University of Leeds, studying for a BA hons in Environment and Business. During Ben’s time with us, he worked to outline a proposal to begin to develop mechanisms and reporting strategies to incorporate internally and to clientele to enhance environmental and social performance and development – following ESG guidelines.
Understanding MFA’s carbon footprint across Scope 1, 2 and 3 is a prerequisite to formulate the management, monitoring, and targets to address the prominent E pillar of sustainability. Achieving this understanding is a strong basis and provides a catalyst for reducing the psychological distance from business activity to environmental issues through visualising environmental impact as a quantifiable metric and, therefore, lays the foundations for development.
Monitoring the S performance at Martyn Fiddler was conducted through open and anonymous employee surveys to enhance communication between management and staff, giving employees a voice, while assessing job satisfaction and enrichment. Additional director surveys were concluded to assess board priorities and approaches for the medium to long term.
Accountability for the actions of all stakeholders in an integrated holistic manner is a prerequisite for long-term prosperity in the aviation industry. Carbon Offsetting and, in particular, Sustainable Aviation Fuel have been heralded as transformative catalysts for mitigating greenhouse gas emissions from the aviation industry. However, both prospects are largely in their infancy and inadequate to translate the need for immediate action. Hereby the role of effective communication, to aid understanding of the driving and inhibiting factors to enhance sustainable performance, is required to develop the transition from the short to medium to long-term. Thus, the role of two-way communication and stakeholder relationship development is heightened to further incubate sustainable development to reaffirm a strong relationship between MFA and stakeholders to solidify trust as an informative contact. Subsequently, enabling MFA to translate and equip clients with environmental and social tools to account for unintended negative externalities which occur due to the prevalence of mental heuristics when making decisions as cognitive capacity is exceeded.
Ultimately, the benefits of calculating emissions, implementing environmental management systems and life cycle analysis, mental model development and social assessment surveys are reliant on the implementation of a thorough follow-up process on the collected data to enact progressive development. However, this is the beginning and the freedom to conduct internal assessments and openness to ideas from academia displays MFA’s approach towards Governance – one of transparency – striving to enhance a corporate purpose reflecting a developing focus on ESG concerns and management for long-term success.
Ben told us:
“The opportunities offered during this process to me cannot be understated for personal and professional development. The internship has extended further than purely research and work experience. For me, it has provided an opportunity to network and build relationships with a diverse range of professionals and personalities over eight weeks in a new environment and sector of industry. Such development has extended outside of the office, as I was inaugurated to the MFA Summer Party – venturing into South Barrule plantation to introduce myself most professionally, at war shooting each other (not quite literally) and axe throwing. This encapsulates the inclusivity at MFA; incorporating people of all backgrounds together in a team-building environment to develop a strong teamwork ethic and culture.”
