Monthly Archives: May 2022

As the second-largest economy in the world in 2022, China faces at once the challenges and the opportunities brought about by the Fourth Industrial Revolution. It presents a case where the demographic challenges of an aging population and gender disparity may be fruitfully solved by the measured use of digital technology as the country continues its transition to a greener, data-driven new economy. Healthcare, labour reskilling and gender parity are three areas of focus for domestic policy.

To address the set of interlocked challenges that China faces, a vision of inclusive and sustainable growth that pays particular attention to the elderly and women should be set forth.

China is a rapidly graying country with those aged 60 or above reaching 267 million, or 18.9% of the total population, which may reach one-third before 2050. With a falling fertility rate and an early retirement age, existing welfare infrastructure will be increasingly under duress. Revamping the welfare system is critical for China to maintain its competitiveness and the wellbeing of its citizens. A solution to China's aging population is the upgrading of healthcare services to become better integrated, age-friendly and wellness-oriented. Importantly, welfare reform must work in tandem with social policy so as to make active aging an integral part of economic growth, linking health to wealth and common prosperity.

Closely related, labour reskilling must be a priority for the senior workforce and for those facing employment risk due to automation. Elderly workers in China face persistent barriers to employment, especially in the information technology industries. Reskilling not only enhances the employability of the senior workforce. It also improves the quality of labour force as a whole, which will better serve Chinas economic restructuring and its continued move up the global value chain.

The challenge of China's aging population cannot be addressed without improving the wellbeing of women. Fertility rate must never be merely a target number, even as Chinas birth rate reached a record low in 2021. Rather, it must reflect womens willingness and ability to start families based on their free and informed choices. Attendant social policy and legal institutions must be implemented. Equal pay, fair entry and reentry into the workforce, freedom from harassment and access to legal recourse are among the essential components of that picture.

To achieve the vision outlined above, here are three courses of action that should be taken:

Upgrading the healthcare system involves two steps. First, healthcare should extend beyond treating physical sickness to include mental health, occupational health, full-cycle care and wellness. Consistent with Chinas national strategy on active aging, healthcare services should incorporate key elements such as preventive care and the scientific use of traditional Chinese medicine (TCM). The pandemic notwithstanding, appropriate resources must also be allocated to research and treatment for non-communicable chronic diseases.

Second, the COVID-19 experience in China has demonstrated the power of digital technology in rapidly improving the quality and efficiency of healthcare. The same should be leveraged for healthcare, in general, to achieve the integration of medical data and services both vertically and horizontally across institutions of all tiers. Steps should also be taken toward achieving parity in medical resource distribution across regions.

Concurrent to healthcare upgrading, legal and institutional measures should be implemented to eliminate ageist discrimination in the workplace and to promote flexible, age-friendly work arrangements. Short-term reskilling programs, including those tailored for the digital economy, should be made more accessible to all including the senior workforce. Digital literacy should be as important for young adults as it is for senior citizens. Awareness campaigns and training modules on anti-ageism are also desirable for employers. As the silver economy accounts for a large and growing share, these measures will enhance the overall digital preparedness of the Chinese economy.

No population growth can be sustainably attained without ensuring affordable access to healthcare, childcare, education and employment opportunities for women. Closing the gender gap in China must be pursued from multiple directions, from medical infrastructure, to social and welfare policy, to employment law, to cultural norms.

Free or affordable childcare must be made accessible to all working women in China, for both public and private employers. Public awareness campaigns should advocate for a fair share of childcare and housework for male spouses and partners. In addition, fertility technology remains a vastly under-tapped industry in China due in large part to lagging legal provisions. It should be a top priority for lawmakers and policymakers to ensure that Chinese women have easy access to artificial reproductive therapies (ART) including egg-freezing services. Doing so will address a dire need among millions in China as it will spur a slew of business opportunities. Lessons from advanced economies where some employers provide ART subsidies for employees would be illuminating.

Members of the Global Future Council on China who contributed to the article:

Yuan Jiakai, Vice-President and Chief Representative, China, United Way Worldwide

Edward Tse, Founder and Chief Executive Officer, Gao Feng Advisory Company

Li Xin, Managing Director of Caixin Global, Caixin Media

Liu Qian, Managing Director, Greater China, The Economist Group

Kishore Mahbubani, Distinguished Fellow, Asia Research Institute, National University of Singapore

Xue Lan, Dean, Schwarzman College, Tsinghua University

Written by

Han Jian, Associate Professor of Management and Co-director, Centre on Digital Economy and Smart Enterprise and Centre on China Innovation, China Europe International Business School (CEIBS)

Sarah Kemp, VP International Government Affairs, Intel

Ninie Wang , Founder and Chief Executive Officer, Pinetree Care Group

Meicen Sun, Alumni, Global Shapers Community,

The views expressed in this article are those of the author alone and not the World Economic Forum.

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How to make active aging an integral part of economic growth in China - World Economic Forum

The 50 Minerals Critical to U.S. Security

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

The U.S. aims to cut its greenhouse gas emissions in half by 2030 as part of its commitment to tackling climate change, but might be lacking the critical minerals needed to achieve its goals.

The American green economy will rely on renewable sources of energy like wind and solar, along with the electrification of transportation. However, local production of the raw materials necessary to produce these technologies, including solar panels, wind turbines, and electric vehicles, is lacking. Understandably, this has raised concerns in Washington.

In this graphic, based on data from the U.S. Geological Survey, we list all of the minerals that the government has deemed critical to both the economic and national security of the United States.

A critical mineral is defined as a non-fuel material considered vital for the economic well-being of the worlds major and emerging economies, whose supply may be at risk. This can be due to geological scarcity, geopolitical issues, trade policy, or other factors.

In 2018, the U.S. Department of the Interior released a list of35 critical minerals. The new list, released in February 2022, contains 15 more commodities.

Much of the increase in the new list is the result of splitting the rare earth elements and platinum group elements into individual entries rather than including them as mineral groups. In addition, the 2022 list of critical minerals adds nickel and zinc to the list while removing helium, potash, rhenium, and strontium.

The challenge for the U.S. is that the local production of these raw materials is extremely limited.

For instance, in 2021 there was only one operating nickel mine in the country, the Eagle mine in Michigan. The facility ships its concentrates abroad for refining and is scheduled to close in 2025. Likewise, the country only hosted one lithium mine, the Silver Peak Mine in Nevada.

At the same time, most of the countrys supply of critical minerals depends on countries that have historically competed with America.

Perhaps unsurprisingly, China is the single largest supply source of mineral commodities for the United States.

Cesium, a critical metal used in a wide range of manufacturing, is one example. There are only three pegmatite mines in the world that can produce cesium, and all were controlled by Chinese companies in 2021.

Furthermore, China refines nearly 90% of the worlds rare earths. Despite the name, these elements are abundant on the Earths crust and make up the majority of listed critical minerals. They are essential for a variety of products like EVs, advanced ceramics, computers, smartphones, wind turbines, monitors, and fiber optics.

After China, the next largest source of mineral commodities to the United States has been Canada, which provided the United States with 16 different elements in 2021.

As the worlds clean energy transitions gather pace, demand for critical minerals is expected to grow quickly.

According to the International Energy Association, the rise of low-carbon power generation is projected to triple mineral demand from this sector by 2040.

The shift to a sustainable economy is important, and consequently, securing the critical minerals necessary for it is just as vital.

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Mapped: The 10 Largest Gold Mines in the World, by Production - Visual Capitalist

The demise of globalizationif truecould not come at a less propitious time for U.S. businesses. Illustration by Rob Dobi

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About the author: Joseph Quinlan is head of CIO market strategy in the Chief Investment Office for Merrill and Bank of America Private Bank.

Nothing is more fashionable these days than writing the obituary for globalization. The ensuing tragedy would leave lasting scars on the U.S. But missing from the debate about deglobalization is this: If the world of unfettered, cross-border flows of goods, services, people, capital, and data is really a thing of the past, then one of U.S. businesses biggest bets of the postwar era is about to go bust.

No entity in the world has wagered more resources on globalization over the past four decades than U.S. multinationals. Americas stock of outward foreign direct investment rose from $215 billion in 1980 to $8.1 trillion in 2020, according to figures from the United Nations. The Netherlands, with some $3.8 trillion in FDI stock in 2020, was a distant second, underscoring the fact that no one has a larger global footprint than U.S. firms.

Going global became the mantra of many U.S. companies as the world of the late 20th century was unlocked by falling trade barriers, investment reforms, industry liberalization, falling communications and transportation costs, and the proliferation of regional trading blocs. These structural dynamics were complemented by seminal, one-off events such as the opening of China, economic reforms in India, the enlargement of the European Union, and the collapse of communism.

U.S. foreign affiliates have led the charge overseas. The global foot soldiers of U.S. businesses, these foreign affiliates can now be found in virtually every country in the world, and numbered nearly 39,000 in 2019, according to the latest data from the Bureau of Economic Analysis.

Americas army of affiliates are an economic powerhouse unto themselves, producing nearly $1.5 trillion in output in 2019. Thats equivalent to the total output of Brazil or Spain. They employ nearly 15 million workers, with sales of U.S. foreign affiliates totaling $6.8 trillion in 2019, a figure some 2.5 times greater than U.S. exports of goods and services. The difference underscores how U.S. companies primarily deliver their goods and services to foreign customersvia investment and affiliate sales, not through arms-length trade (exports).

The bulk of these affiliatesroughly 60%are situated in the developed nations, notably the European Union. When it comes to venturing overseas, companies are more interested in gaining access to wealthy consumers and skilled workers, as opposed to chasing low-cost labor. Accordingly, roughly 90% of U.S. affiliate sales are to the local marketrather than for export back to the U.S. Affiliates arent standalone entities but integrated with U.S. parent entities via global supply chains. These linkages promote cross-border trade in goods and services, which in turn supports U.S. exports and attendant investment and employment activities in the U.S.

Given all of the above, the demise of globalizationif truecould not come at a less propitious time for U.S. businesses. Confronting one of the tightest labor markets in decades, the last thing U.S. companies need is less access to foreign talent. Short of critical raw materials, U.S. companies cant afford to be locked out of certain resource-producing markets. And with Americas share of global personal consumption in a structural decline, the future earnings growth of many multinationals hinges on access to consumers in both the developed and developing nations. In the end, globalization has been hugely bullish for U.S. businessesand very beneficial to the U.S. economy in general.

While globalization has motivated U.S. firms to venture abroad, it has also encouraged firms to come to America. No countryincluding Chinahas attracted more foreign investment capital than the U.S. since 1980. Portfolio foreign inflows have been just as robust over the decades, helping to finance Americas perennial budget deficits. At the end of 2020, inward FDI stock in the U.S. totaled a staggering $10.8 trillion, or 26.1% of the global total.

And based on recently released figures from the BEA, both U.S. FDI inflows and outflows rebounded strongly in 2021. The former hit $368 billion, the strongest level since 2016, while the latter topped a record annual level of $403 billion. Thats another way of saying that if globalization is dead, someone forgot to tell the worlds top multinationals. If globalization were truly deceased, the S&P 500 index would be down a lot more than the 18% decline from the peak set in January 2022. The good news is that the markets have not bought into all the hype about deglobalization.

That said, multinationals confront a much more challenging environment than in the past, given rising nationalist calls for reshoring, economic self-sufficiency, and the promotion of national champions, among other policy pressure points. Companies are not deaf or blind to these tensions. Neither are the markets.

Companies are focused on building more resiliency into their supply chains, but in many cases, that means relying more on foreign labor, overseas markets, and non-U.S. resources. To paraphrase Mark Twain, the death of globalization has been greatly exaggerated. For now, that is bullish for U.S. equities, since a sharp turn toward deglobalization would come at a steep cost to the U.S.

Guest commentaries like this one are written by authors outside the Barrons and MarketWatch newsroom. They reflect the perspective and opinions of the authors. Submit commentary proposals and other feedback toideas@barrons.com.

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Deglobalization Would Be Bad for Equities. But Its Not Here Yet. - Barron's

Let s shape the future - University of Antwerp

The University of Antwerp is a dynamic, forward-thinking, European university, with a very good international ranking. We offer an innovative academic education to more than 20 000 students, conduct pioneering scientific research and play an important service-providing role in society. We are one of the largest, most international and most innovative employers in the region. With more than 6000 employees from 100 different countries, we are helping to build tomorrow's world every day. Through top scientific research, we push back boundaries and set a course for the future a future that you can help to shape. Antwerp is a vibrant historical human-scale city in the heart of Europe, with a rich offer of cultural and social activities.

The Sustainable Air, Energy and Water Technology Research Group in the Bioscience Engineering Department (Faculty of Science) is looking for a full-time (100%) PhD student in the field of environmental systems analysis in the food production chain and water cycle (LCA).

The Bioscience Engineering Department was created in 2006, recognizing a strong societal demand in this field, for instance linked to cleantech and environmental technology. In 2009, the Sustainable Energy, Air and Water Technology Research Group was founded, in which prof. Siegfried Vlaeminck launched the Microbial Cleantech and Systems Analysis Team, focusing on sustainable water cycling and food production chains. The team s mission is to develop clean biotechnological solutions and to assess the environmental and economic sustainability of novel treatment and production pipelines. Key domains include technology for nitrogen cycling, nitrification, anammox, single-cell protein (microbial protein), nutrient recovery, and quantitative sustainability assessments including life cycle assessment (LCA), material/substance flow analysis (MFA/SFA) and water network analyses. With a sustainable circular and bio-based economy as goal, the team also contributes to regenerative life support systems like MELiSSA, a necessity for long-term human space missions. The team is a core member of the Microbial Systems Technology Centre of Excellence, the Enviromics valorization consortium, the BlueApp innovation hub for sustainable chemistry, and CAPTURE platform for resource recovery and circular economy. The team is dynamic, international and embraces diversity.

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What we offer

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The University of Antwerp received the European Commission s HR Excellence in Research Award for its HR policy. We are a sustainable, family-friendly organisation which invests in its employees growth. We encourage diversity and attach great importance to an inclusive working environment and equal opportunities, regardless of gender identity, disability, race, ethnicity, religion or belief, sexual orientation or age. We encourage people from diverse backgrounds and with diverse characteristics to apply.

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PhD student Environmental systems analysis in the food production chain and water cycle (LCA) job with UNIVERSITY OF ANTWERP | 294354 - Times Higher...

@AuManufacturings occasional editorial series on the real issues in the 2022 federal election concludes today with a return to industry and innovation policy largely missing in action in the election campaign. By Professor Roy Green.

When it comes to research and innovation, the current election campaign recalls the Sherlock Holmes story featuring the dog that didnt bark.

Heres how it went Gregory (Scotland Yard detective): Is there any other point to which you would wish to draw my attention?

Holmes: To the curious incident of the dog in the night-time.

Gregory: The dog did nothing in the night-time.

Holmes: That was the curious incident.

The problem with assessing the policies of the major parties in this critically important area for the future of our economy and society up to now is that there has been little if anything to assess. But the broad brushstrokes have become more evident in recent days.

The Coalition asks us to endorse their current approach, while Labor has announced a range of new initiatives, primarily focused on the revival and reinvention of Australias diminished manufacturing capability.

The question remains whether anything contemplated in this campaign is adequate to address the challenges of sluggish productivity, wage stagnation and energy transition, let alone the transformation of our outdated industrial structure.

Outdated trade and industrial structure

Lets reflect for a moment on where we are.

Unlike the Norwegians with a 76 per cent resource rent tax and the worlds biggest sovereign wealth fund to underwrite the future diversification of their economy, we failed to take advantage of our commodity boom.

The revenues left over from rich pickings by foreign shareholders fuelled short-term consumption, not the much needed longer term investment in the industries and technologies of the future.

Manufacturing as a share of Gross Domestic Product (GDP) fell from around 30 per cent in the 1960s and 70s to 12 per cent in 2000 after the Hawke-Keating tariff reforms, but showed signs of rebounding in the transition from large scale vertically integrated mass production to smaller, more specialised firms making their way in global markets and value chains.

This repositioning of the Australian economy was interrupted not just by the global financial crisis but more significantly by the commodity price spike that increased our income from the rest of the world, mainly China, but masked a structural deterioration in productivity performance as the high dollar made much of our trade exposed manufacturing uncompetitive.

This experience was also shared by the Netherlands with the discovery of North Sea gas in the 1960s, hence the Dutch disease, and by the UK with North Sea oil in the 1980s.

As the trade deficit in elaborated transformed manufactures (ETMs) doubled in Australia to $180 billion, the manufacturing share of GDP fell further to six per cent, making us one of the least self-sufficient economies in the OECD. (Though the international data must always be qualified to take account of related services that are not included in the measurement of manufacturing.)

The narrowing of Australias trade and industrial structure is reflected both in our precipitous decline in global competitiveness rankings, and in the Harvard Atlas of Economic Complexity which measures the diversity and research intensity of our exports.

Here we have dropped from a ranking of 55 in the 1990s, which was disturbing enough, to 86 out of 133 countries.

Australias vulnerability to external shocks was highlighted in the Covid-19 pandemic, when the lack of what we now call sovereign capability in essential products became a matter of public policy concern.

And yet once again, domestic consumption was safeguarded, this time by an unprecedented fiscal stimulus, defying previous shibboleths about the dangers of debt and deficits.

And once again, the need for productivity-enhancing investment in technological change and innovation was overlooked, against the background of another volatile commodity price spike.

This was despite the contribution such investment would make to more sustainable, net zero emissions growth, hence reducing our debt in the longer term.

Instead, as a result of this policy neglect, combined business and government expenditure on R&D as a proportion of GDP has slumped to 1.79 per cent, compared with 2.2 per cent eight years ago and 2.4 per cent on average for the OECD.

Some countries such as Israel, Finland, Korea and Switzerland are increasing their R&D spend to four and even five per cent of GDP.

Paradoxically, given the rundown of public funding for higher education, universities have taken on the heavy lifting in research and innovation, mainly through access to increasing international student revenues.

The problem here is not only that these revenues have taken a hit from Covid-19, but the research is not always in the areas where it can have most beneficial impact.

And while there are exemplars, nor is it translated as effectively as it could be into economic and social value.

When the latest Intergenerational Report projects annual productivity growth of 1.5 per cent for the next 20 years as a necessary minimum to maintain living standards, we must look to the policy levers that will assist in achieving that target, from current levels of around 0.5 per cent.

These levers must be designed to build our capability and performance in science, technology and innovation, and to increase enterprise absorptive capacity.

And yet not only are these levers missing or inadequate in Australia, they scarcely feature in public debate.

National research and innovation system

Most successful advanced countries are committed to the concept of a national research and innovation system, especially as part of post-Covid recovery and reconstruction.

They see this approach as essential to the development of a competitive and dynamic knowledge based economy.

In Australia we are faced not only with market failure in the research and innovation context but with system failure.

As well as being underfunded, Australias approach is notably fragmented and undirected.

In 2015, a Senate report on innovation found that Commonwealth spending is spread over 13 portfolios and 150 budget line items, few of which connected with each other.

Successive governments, including the current one, have become adept at slicing and dicing an inadequate budget envelope to create myriad programmes lacking interdependence and critical mass.

Our research and innovation effort is also undirected in the sense that it lacks a coordinating focus with national missions and priorities driven by regular evidence-based foresight exercises.

Instead, the largest component of funding is the R&D Tax Incentive programme, whose guidelines have become more opaque as demand continues to grow to the point where its claim on resources is unsustainable.

Other countries make more use of direct targeted programmes aligned to their priorities.

How much of this will change over the next three years?

The Coalition will continue business as usual with a mix of programmes, most of them welcome to recipients but sub-scale and lacking the institutional structures that would ensure longevity of engagement and impact.

Labor has committed to repurpose existing programmes and introduce a new $15 billion manufacturing future fund, from which will be drawn grant, loan and equity support initiatives.

Ideally, in addition to further layers of program funding, the next federal Government will need to look hard at the institutional arrangements that deliver this funding and commit to devising a more coherent, cost-effective research and innovation system.

This will require a number of components, the first being a national coordinating agency, similar to those successfully operating elsewhere, such as Swedens Vinnova, the Netherlands TNO and InnovateUK.

In this context, the second component of reform is a unified mission-driven approach to support for public research, including basic blue sky research, across all discipline areas with independent assessment of grant applications.

It has become dysfunctional and indeed inappropriate for universities to have to backfill research projects with teaching revenues.

Third, while everyone favours increased industry-university collaboration, Australia lacks the structures to conduct this effectively at scale and over long periods of time.

Successful examples around the world, such as the UK Catapult Centres and ManufacturingUSA Institutes, are aggregators which bring together the full range of stakeholders in specialised areas, including universities, multinational companies, SME supply chains and CSIRO equivalents.

Fourth, it has also become evident from local as well as international examples how important place-making is for the development of innovation and entrepreneurship precincts.

Many of these will be nurtured and grown by individual States, but there is scope for the Commonwealth to provide logistic support and access to finance on a cooperative basis, especially in Australias regions.

Finally, and perhaps most importantly, a world competitive research and innovation system will only be as successful as the skills that are brought to bear in the development and deployment of new technologies, design thinking and innovative business models.

Again this is a question not just of resources but institutional structures for capability building, including closer integration of university and VET pathways.

Australias future will not be determined by any single programme or initiative but by a system-wide, research driven transformation of our narrow and unsustainable industrial structure.

While some good ideas have managed to surface over the past week or two, the next government will have to do a lot better than the minimal offering in this election campaign.

The dog still has time to bark.

Roy Green is Emeritus Professor and Special Innovation Advisor at the University of Technology Sydney, Chair of the Advanced Robotics for Manufacturing Hub and Chair of the Port of Newcastle.

Picture: UTS/Roy Green

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Election 22 the real issues - the industry policy dog that didn't bark by Roy Green - @AuManufacturing

A plethora of companies in the region, and particularly their board members and the C-suite, are considering what they need to do to address the environmental aspect of ESG.

The environmental, social, and governance (ESG) framework comprises of three pillars.

The environmental pillar includes business and human interactions with the environment. The social aspect focuses on interactions with stakeholders to end poverty and promotes dignity, equality, and a healthy work environment.

Governance relates to how businesses are administered, including risk, oversight and ethics.

Most companies have a history of contributions through their corporate social responsibility (CSR) initiatives (S) and have been slowly enhancing their corporate governance (G) (Also read: The G is not silent in ESG).

The environmental aspect (E), is the elephant in the boardroom.

People stuck in traffic often complain about being late without considering their own vehicles as responsible for this traffic.

Similarly, companies need to approach the E from two distinct perspectives: how the environment is impacting their organisation, as well as how their own organisation is impacting the environment.

The UAE is taking the lead, with COP28 set to be hosted by the UAE next year. We have witnessed the UAE government encouraging large government entities to put in place strategies around ESG, and drafting legislation that would support the elimination of single use plastics and the establishment of more renewable energy projects.

One of the most significant, and perhaps most misunderstood, risks that organisations face today is climate change. The potential impact of climate change on organisations is not just physicalit will manifest in the long-term.

In December 2015, nearly 200 countries agreed to reduce their greenhouse gas (GHG) emissions, accelerating the transition to a low-carbon economy (LCE). This implies the movement away from fossil fuel energy and related physical assets.

In fact, climate-related risks and the expected transition to an LCE affect most industries and economic sectors.

For many investors, climate change also poses significant financial challenges and opportunities.

The expected transition to a LCE is estimated to require around $1 trillion of yearly investment opportunities.

A 2015 study estimated the value at risk resulting from climate change to the total global stock of manageable assets as ranging from $4.2 trillion to $43 trillion from now until the end of the century.

New research published in 2021 in the scientific journal Nature has also found that almost half of the worlds fossil fuel assets could become worthless by 2036 under a net-zero transition.

Nevertheless, mitigating climate change produces opportunities for organisations. These include: resource efficiency and cost savings, the adoption of low-emission energy sources, the development of new products and services, access to new markets, and building resilience along the supply chain.

Opportunities will also vary depending on the region, market and industry in which the organisation operates.

When organisations examine the impact of climate change, they need to look at both transitional and physical risks (acute and chronic).

Physical climate risks will result if no action was taken on their behalf. However, if organisations do act on climate change, they may witness the transitional impact of moving away from fossil fuels and a carbon-based economy.

Transitional risks involve converting to an LCE. This may entail extensive policy, legal, technology and market changes to address the mitigation requirements of climate change.

Depending on the nature, speed and focus of these changes, transitional risks may pose varying levels of financial and reputational threats to the organisation.

Acute physical risks can be event driven (floods, wildfires, cyclones or droughts). Chronic physical risks, on the other hand, are long-term and include changes in weather patterns, heat waves and rising sea levels.

Physical risks may have financial implications for organisations, such as direct damage to assets and indirect effects from supply chain disruption.

The organisations financial performance may also be affected by changes in water availability, sourcing and quality and food security.

Other factors may also include extreme temperature changes affecting the organisations premises, operations, supply chain, transport needs and employee safety.

Finally, eminent regulations, shifting customer preferences and the organisations own GHG emissions, air and water pollution and waste generation can all be linked to its financial performance.

After examining the impact of the environment on their organisation, board members need to evaluate their own impact on the environment.

This can be broken down into two aspects: the impact resulting in climate change and the impact resulting in resource depletion.

The impact leading to climate change can be mitigated by reducing GHS emissions and achieving carbon neutrality through net-zero targets.

The impact of resource depletion is addressed by improving the circularity of the business and promoting the circular economy (CE).

Net-zero refers to the balance between the amount of GHG produced versus the amount removed from the atmosphere. It is achieved when the amount added is no more than the amount taken away.

A target of completely negating the amount of GHG produced by human activity is achieved by reducing emissions and implementing methods of absorbing carbon dioxide from the atmosphere. The UAE has adopted a net-zero target for the country by 2050 and KSA by 2060.

The CE is a model of production and consumption which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing material and products.

A CE aims to tackle global challenges using three principals: eliminating waste and pollution, circulating products and material and the regeneration of nature. The CE is defined in contradiction to the traditional linear economy of take, make, use and dispose.

The UAE has released its own CE policy 2021-2031. The policy aims to outline some of the ways in which the UAE can transition towards a more effective CE where the countrys natural, physical, human and financial resources are used in the most efficient and sustainable way.

Transitioning to a CE will require collaboration between national and local governments, the private sector and the general public.

The policy is also a call to action for all stakeholders in various sectors to consider how they can think and act in a more circular way to help the country transition to a successful, sustainable and happy CE.

While each companys ESG journey is specific to its industry, maturity and unique business and operating models, ESG targets can only be successfully met when all three pillars are robust. Lets get the elephant out of the boardroom!

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The 'E' in ESG: Addressing the elephant in the boardroom - Arabian Business