An ESG Primer (1): E is for Environmental!

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In April, Age of Light Innovations hosted a webinar to discuss the introduction of ESG into construction projects. It was a great session and we all learned a lot from a group of great speakers. The inevitable outcome is that Age of Light Innovations will continue to investigate the use and benefits of ESG strategies in construction projects.

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And on 7th July, Age of Light Innovations, together with The Light Review, will be hosting the next webinar, and we’ll be starting with E is for ENVIRONMENTAL. Find out more about this webinar by keeping an eye on The Light review and Age of Light Innovations.

This article opens the door on that issue.

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Suddenly, ESG is everywhere. Most importantly, it’s appearing in tender documentation as a prerequisite for any company considering making a pitch for a project specification.

What happened?

Basically, investors (AKA people with lots of money to play with) haven’t been seeing the Returns On Investment that they were promised. Construction projects haven’t delivered the goods. Investors need assurance that their ROIs will continue to come in well down the line.
Long-term quality is everything.

What investors are looking for is a system of project screening that makes for a safer bet. And they have recognised that projects that are developed and managed using ethical criteria tend to deliver a better result. The buildings work better for longer; building occupants are more settled . . . and there is more money to be made. That sounds like a win-win-win all round.

ESG (Environmental Social and Governance) criteria provide a set of standards upon which investments can be better protected. Here’s how it works:

  • ESG criteria are used to screen investments and encourage development companies to act responsibly.
  • ESG criteria help investors to avoid financial losses by reducing risky practices on the part of development companies.
  • The growth of ESG has been matched by a growth in Greenwash . . . which leads to better oversight in order that bad practice is kept out of the process – at every link in the supply chain.

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Let’s look at E is for Environmental. It broadly covers four themes:

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No.1: Climate change:

This one, I sincerely hope (!), we have a handle on. The climate catastrophe that we’re trying to avert is a consequence of burning fossil fuels that put carbon into the atmosphere, something  we’ve been doing for the past 250 years or so and we now have THIS DECADE to put things right. And, as this is the only home we’ve got, there’s nowhere else to run away to, Elon Musk notwithstanding.

Energy efficiency:
The global lighting industry has done fantastic work to improve energy efficiency and we’ve not been slow to pat ourselves on the back for that. What we’re not so good at is controlling the rebound effect – that’s the rule, also known as the Jevons Paradox, that says that the more efficient a technology becomes, the more we use it and, duh, the more energy we use. Say hello to the LED revolution. Who’da thunk  it?

Energy origins:
And we really need to start paying attention to where our products are coming from and how they are made. This is incredibly difficult because it means making hard choices. As we need to move away from burning fossil fuels, that means moving away from electrical generation using those same fossil fuels – and a lot of countries that make excellent lighting product are still reliant on burning dirty coal (at worst) or gas (at best).

This is a nettle waiting  – begging even – to be grasped. We need to look at those companies to see what mitigation practices they have in place to compensate for their core energy spend. I suppose we also need to ask if its even possible to mitigate for coal-fired generation? ( Dirty Balkan Power )

No.2: Natural resources:

To be honest, I’m not happy with the use of the word ‘resources’ here. It’s a word that is redolent of exploitation; it’s a term that assumes that a natural material is an asset – and assets are there to be profitable. Maybe we should call it what it really is . . .

 No.2:   The Biosphere:

It may be a high-falutin’ term, but we need it because there’s a huge element of carelessness that we need to take into account that ‘resources’ don’t cover.

The ‘Resources’ thing:
Because no one has yet invented the Replicator, so beloved by Starfleet and the source of Captain Picard’s favourite Earl Grey tea, we are obliged to dig things out of the earth if we want to make something – or plant tea bushes in the earth and then feed them on artificial fertilisers – that we’ve dug out of the ground. You see, there’s no way of getting away from it. The answer lies in the soil.
( Sustainable fertiliser )

Like a box of chocolates, the earth’s bounty is not infinite and eventually we get down to the Caramel or nothing. We are approaching the Caramel horizon. We’ve ripped away the plastic layers and torn the box apart but there are no Hazelnut Swirls left; just a few chocolate crumbs stuck in the corner.

Circular Economy:
What we can do to help the natural resources question is to make best use of what we already have and learn how to make things last longer. Because of the issue of energy reduction discussed above, recycling is no longer the preferred route when a light fixture comes to the end of it’s life; we now look to re-use a product or else to re-manufacture a new product from the original product. The Light Review has written extensively about the Circular Economy.

The ‘Careless’ thing:
We have a history of taking what we want and ignoring the rest. Sometimes we choose not to ignore it and just kill it because that makes our live easier. But because we’ve never considered the interconnectedness of everything on this planet, we haven’t understood how destroying one element has an impact on the rest of the ecological network. Until now.

  • Farmers have preferred to use pesticides to kill anything on six legs, regardless of whether those critters are helping to pollinate crops. Short-term expediency; long term craziness – or starvation as we might come to call it.
  • Loggers choose to cut down millions of acres of rainforest for its timber, regardless of the forest’s role in providing the air that we breathe. Short-term profit; long term death.

We could go on – but let’s not.

Responsible Outdoor Lighting at Night (ROLAN)
Let’s talk about bats – and insects – and sea turtles. This is a new focus on how we use light at night.
Because we tend to be incredibly short-sighted (selfish), and utterly anthropocentric when it comes to how we use artificial light we’ve been as unaware of the damage that we’ve been doing as farmers and loggers. So this is not just about astronomers having their night-time vigils spoiled, this is another iteration of the destruction of the food chain. We kill things that we need to help feed us by being careless with the way that we use light.

Let’s aim for a new paradigm: the Night is for Darkness. Let’s learn to love it. CARPE NOCTEM!

No.3: Pollution and waste

When we make things, we produce pollution and waste. When we transport things, we produce pollution and waste. When we throw things away . . . you get the picture.

The way that we make and use energy and the way that we choose to make / use / dispose of the things that we make determine the extent of that pollution and that waste. And here we’re talking about smoke-stack pollution in the air and industrial effluents in the water supply. These are things that can be cleaned up. Why does it matter (I hope that I’m not hearing you ask)? Because foul air and foul water not only causes damage to ourselves, it also impacts on the health of the plants and the insects and the animals that come into contact with it. And that, ultimately, damages us.

Production management:
By now, you can see the pattern that’s emerging. Good production practices and sound design criteria can result in a zero-waste, zero pollution company. That’s what we need to head for.
Before we leave this one: don’t forget that the most ubiquitous form of pollution in the lighting industry comes from transportation; from the trucks delivering the goods, to the sales force promoting the product, to the executives flying to international conferences.

No.4: Environmental opportunities

Let’s end on a positive; so what’s this about opportunities?
We might suggest that what lies at the core of ESG strategies are Opportunities, because – if we get this right – the future is better and less fraught with risk and hazard.

Here’s a few opportunities that might come our way:

  • An exponential rise in clean technologies
  • A step-change in green building practices
  • Actually making a difference in carbon emissions, if not for us, then for our children and grandchildren.

The future for Light:
Archaeologists reckon that our ancestors have had control of fire for around 400,000 years. Not that long, really. But we see no ambition to give it up (darker nights, apart!). So we have to assume that a lighting industry will continue in some form into the future. That lighting industry will be almost waste-free, will produce robust equipment that can last for any number of uses before the components are harvested and up- or down-cycled according to taste.

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RIBA Ethics and Sustainable Development Commission: final report

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This has been the first in a series highlighting the headline topics around ESG. Next up, we’ll look at S is for Social.

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