Orbian publishes its fourth ESG and SCF Report

Orbian, May 2024

Welcome to the fourth edition of Orbian’s annual ESG report. Drawing upon polling of several thousand of Orbian’s clients, located around the world, we’re delighted to publish this benchmark report in celebration of Earth Day, the 54th annual celebration of the amazing planet we all call home.

This year’s survey results show encouraging progress in all aspects of our clients’ consideration of ESG topics. In some cases, this marked a reversal of the less positive sentiment in the immediate wake of the Covid pandemic. For many companies, the urgent priorities of recovering from pandemic disruptions necessarily reduced focus on perceived longer-term ESG challenges. That this focus is now returning is to be celebrated. As we have noted in the past, and as the underpinning philosophy of this report, we believe that buyers, suppliers and Supply Chain Finance (SCF) firms working together can leverage supply chains to achieve global sustainability goals and build long-term resilience in their value chains. This makes the opportunity for all stakeholders to engage with sustainable SCF vast. Despite these opportunities, there are several challenges associated with sustainable SCF, which has meant adoption remains nascent.

It is our role as an SCF firm to provide a suite of services that allows buyers and their suppliers to overcome these challenges to meet their mutually established ESG objectives. It is critical that a key component of this support is the provision of financing to ensure that firms can engage meaningfully with ESG initiatives. Merely performative approaches designed to “tick ESG boxes” are, at best, irrelevant and can in fact do harm as they become a lightning rod for criticism by sceptics of the ESG agenda.

Over the next 25 years, as the global economy continues a transition away from fossil fuels, it is estimated that the total investment requirements will (substantially) exceed $100 trillion. This is an enormous opportunity that offers a compelling “Win-Win-Win-Win” alignment between buyers, suppliers, investors and the Planet.

At Orbian, we take both the challenges and opportunities of Transition Finance, finance raised or deployed by corporates to implement their net-zero transition (OECD Transition Finance Tool Kit), seriously. In 2023, we provided over $2.5billion in finance to companies engaged in the renewable energy industry. In 2024, we expect to increase this amount by at least 50%. We are proud of this performance in this area but can only strive to improve. It draws upon one of the many recommendations with which this report concludes: i.e top down/coercive approaches to Sustainable SCF do not work and are detrimental to buyer-supplier relations. Finding a pathway that incorporates meaningful sustainability considerations while working closely with suppliers is a core recommendation of this report. A bottom up, inclusive approach that deploys technology when creating SCF programs cannot resolve all challenges, but they can build common ground and enhance understanding while significantly supporting the push towards effective Transition Finance across industries.

Read the full report here

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