Environmental, social, and corporate governance practices have been under scrutiny for the past year. In this article, we focus on the most significant ESG controversies related to the environment. Our research provides a detailed overview of the top environmental issues that surfaced during the year, highlighting the most talked-about controversies and the companies involved. We dive into each of these issues, analyzing their impact on the environment.
Environmental Risks: Focus 2023
We outlined the prominent risks in 2023: social risks, with layoffs and strikes gaining attention; environmental risks, marked by wildfires and oil spills; and governance risks, where tax evasion and ethical violations like bribery were in focus. Each risk category underscores the urgent issues facing society and the need for accountability and action.
Figure 1: Environmental risks in 2023.
Environmental Controversies of 2023
Environmental risks may not match the sheer number of mentions that social risks receive, but their presence in discussions has steadily grown over the year, particularly in the third quarter. Let's explore the most common controversies that have emerged.
Climate Change and Policy
September saw increased discussions about atmospheric emissions, notably due to the emissions from volcanic eruptions, hybrid cars, and the discovery of toxic metals in food products.
Impact on Biodiversity
The wildfires that spread in June sparked significant debates around their impact on biodiversity, leading to increased mentions and concerns related to environmental preservation.
Figure 2: Top environmental sub-risks in 2023.
Top 5 Environmental Controversies
These controversies are ranked by relative volume*.
- Marathon Petroleum
Volume of mentions: 62
Relative volume: 69%
A significant portion of environmental risk discussions surrounding Marathon Petroleum was due to its chemical leak in Garyville. This incident led to massive fires, so large they could be observed from space. (source)
Volume of mentions: 30
Relative volume: 54%
Nestlé faced scrutiny in 2023, with over half of its environmental risk mentions associated with drought controversies. The company was urged to cease its water mining activities following severe droughts in France. (source)
Volume of mentions: 178
Relative volume: 53%
Coca-Cola garnered attention due to a hydrochloric acid leak in January 2023, leading to significant environmental concerns. (source)
Volume of mentions: 571
Relative volume: 31%
Exxon, along with Guyana’s environmental agency, was implicated in breaches of oil spill insurance policies. (source)
Volume of mentions: 872
Relative volume: 23%
An oil spill from a Shell pipeline adversely affected farms and a river in a region of Nigeria already grappling with pollution. (source)
Environmental risks remain a significant concern for companies in various industries. The top 5 environmental controversies in 2023 were not only related to oil and gas companies but also included companies in other industries, such as Nestlé and Coca-Cola. These incidents underscore the importance for businesses to prioritize sustainability and take responsibility for their impact on the environment. By adopting sustainable practices and reducing their environmental footprint, companies can mitigate future risks and ensure long-term success.
Make sure to read the full article, which includes top controversies for social and governance topics here.
Relative volume*: Relative to the total volume of E, S, or G risks for the company during the same period.
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