Many SMEs feel the green tape emerging as a cost in everyday operations as the climate era makes it an imperative to count carbon alongside commercial numbers. It is a supply chain issue, however many of the benefits of complying with sustainability edicts might not be apparent. For a larger company physical climate risk is measured and mapped into a double materiality assessment, but for a small firm it might seem immediate, as cash flow issues in an election year with a war risk climate are saturating leadership attention spans.
Carbon is a proxy for environmental indicators, and seen as a step towards mitigating climate change risks. But adaptation to physical risk profiles needs more input measures such as a flood and heat risk assessment might yeild more actionable insights than a carbon emissions assessment, as a mere reporting data point.
There are two kinds of ESG; regulatory and material, which one are we looking at?