Chapter 2: Sustainability Sub-Types, Climate Impacts, and Responses: Insights for GARP SCR Examination

Hello Readers,

In today's post, I am going to discuss about different sustainability sub-types and their relationships. Sustainability sub-types being sustainable development, sustainable consumption, sustainable business, and sustainable investing and ESG; climate impacts; and climate responses.

For the aspirations of GARP SCR examination, this post is from Chapter 2 and is an important topic based on which at least 2-3 questions usually come.

Please observe below points:

1. "Climate change’s impacts" are cross-cutting and do not just fall within sustainability . Few parts are explicitly under climate change alone. Please see shaded area#1. While shaded areas # 2,3,4,5 are explicitly under Sustainability alone.

2. "Climate policy" falls under sustainable development, but government policies are not typically discussed in terms of ESG, which is a moniker mainly used by the financial industry and corporations. Please observe from shaded area# 5 that sustainable development for countries is not only about climate change.

3. A firm’s or financial institution’s climate finance and climate risk management can be seen to sit fully within ESG.

4. Topics like "Climate finance" and "Climate risk management" sit within ESG completely.

5. While non-financial corporations are more focused on sustainability than ever, the use of the term “ESG” occurs for them mainly in an investor relations capacity

6. Corporations set corporate-level climate goals, but these can be motivated by bottom-up consumer pressure or government policy just as much as by ESG-related pressure from investors or lenders.

7. "Sustainable business practices" by the corporations have certain practices which related to topics other than climate change as shown in the shaded area #2.

8. "Sustainable consumption" (by the consumers) indeed relates to climate change and sustainability but sits outside the ESG.

Other useful links from the same chapter:

The Importance of Ecosystem Services for Human Well-being

Understanding Greenwashing, Greenwishing, and Sustainability Challenges

Sustainability Sub-Types, Climate Impacts, and Responses

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