Keynote Address by
The Honourable Pennelope Beckles
Minister of Planning and Development
Environment, Social and Governance (ESG) Conference
Tuesday May 2, 2023
The Hyatt Regency, Port of Spain
Your Excellency Harriet Cross – High Commissioner of the United Kindom to Trinidad and Tobago
Ms. Toni Sirju Ramnarine – President, AMCHAM T&T
The Board of Directors – AMCHAM T&T
Mr. Nirad Tewarie - CEO, AMCHAM TT
Distinguished Speakers and Panelists
Other Invited Guests and conference attendees
Members of the Media
Good Morning, and greetings from the Ministry of Planning and Development to everyone joining us today.
I’m pleased for the opportunity to address you today, at the American Chamber of Commerce of Trinidad and Tobago’s Environment, Social and Governance or ESG Conference. Furthermore, I would like to commend AMCHAM TT for having the foresight to establish its ESG committee, which serves as a forum for the education and exchange of ideas on current issues regarding ESG investing and focusing on understanding the implications for ESG standards in Trinidad and Tobago. This conference will definitely serve to expand knowledge in these areas and enhance conversation on the topic. Furthermore, the conference embodies a job well done to the Board, Executive and Staff of the Chamber. Please keep up the excellent work.
The concept of ESG or environmental, social, and governance investing is used to assess investments based on corporate policies encouraging responsible citizenship from corporate entities. However, in many jurisdictions ESG has superseded responsible investing and has become a strategic imperative for businesses.
While much of the focus is on corporations and business entities, ESG has very direct implications for governments, of which Trinidad and Tobago is far from exempt. Unfortunately, the weather extremes recently experienced, especially in east Trinidad, have magnified the additional perspectives and urgency for government organisations to consider the subject of ESG.
Losses suffered by individuals and the damage to national infrastructure highlight the need to incorporate three main variables into national development strategies, namely exposure to climate risk, long-term social effects, and governance issues.
Many experts agree that ESG has implications for attracting external investments into a country. From an environmental perspective, the increase in the number of extreme weather events in recent years has raised public awareness about climate change and other natural occurrences. Investors and rating analysts are not just looking to see if risks are present, but also want information regarding what plans a government has to address these risks. I am pleased to say that Trinidad and Tobago has been incorporating this sort of thinking, which is evidenced by the National Development Strategy, Vision 2030. I am referring particularly to Theme 5, which calls for ‘Placing the Environment at the Centre of Social and Economic Development’.
This enhances the principle of the environment as an interconnected element of governance and management systems for the government, as well as the common thread that supports all sectors which contribute to the social and economic development of the nation.
At the mention of social factors challenging our communities, we are considering the implications and opportunity cost of these events on operations at the community level and their effect on financial planning over time. According to the IMF, the economic cost of disasters for the Caribbean is substantial, exceeding twenty-two billion US dollars between 1950 and 2016, compared with fifty-eight billion for similar disasters globally. The consequence of this is that funds allocated for other pertinent development projects such as schools, infrastructure and programmes have to be re-directed for recovery and rebuilding efforts.
The aforementioned are integrated with governance factors because they are a component of government management, operations, and financing. The concept of governance in ESG includes governmental decision-making, policies, legal requirements, organisational structure, and financial and budget management practices, all of which are continuously undertaken at the central government and municipal corporation level, to undertake projects and programmes benefitting citizens.
So, in essence, while ESG mandates responsible citizenship from corporate entities, it demands ‘Delivering Good Governance and Service Excellence’, which is articulated as Theme 3 of Vision 2030, which is also connected to what we have placed as Theme 1, ‘Putting People First: Nurturing our Greatest Asset’.
We are cognizant of the additional roles of government in the ESG framework as a facilitator and regulator to some extent, and we have been giving attention to this.
A key focus for us is developing a robust ESG reporting framework that meets requisite standards while responding to national circumstances as well as the business environment, as there is no one-size-fits-all application. Therefore, such a framework that mandates reporting on various aspects of ESG, with particular attention to climate change and all the attendant issues thereto, has been a main priority of government’s climate change mitigation drive, while informing national development objectives.
Although the private sector has taken initiatives to increase the standards for ESG reporting because of its own evolving business models and global norms, what it means for national development planning and national development is really where the rubber meets the road. Virtue signaling and greenwashing unfortunately have become practices that undermine confidence and investment potential, where lofty and ambitious goals and intentions are publicised but there is little or no accountability, and often, the opposite is done in business policy and practice, much to the detriment of the achievement of development and climate goals.
The increasing recognition of the private sector in contributing to the global climate solution has become more evident in the discussions at recent Conferences of the Parties to the United Nations Framework Convention on Climate Change for example. This is also a recognition of the private sector itself. The only way in which there can be mutual confidence in working together towards a common goal is through a robust and transparent ESG framework.
In the environmental, social and governance thrust, the businesses community is recognising the importance of the global Sustainable Development Goals or SDGs, which are also drivers of Government’s national development goals and priorities. What this is allowing is a level of accountability and responsibility on the part of government and the private sector to limit greenhouse gas and carbon emissions.
Trinidad and Tobago has committed in its Nationally Determined Contribution, which is up to the year 2030, to a reduction in overall cumulative emissions from the three main emitting sectors namely power generation, industry and transportation by 15% by 2030 from business as usual. In absolute terms, this is the equivalent of one hundred and three million tonnes of carbon dioxide.
The estimated cost of meeting this objective is two billion US dollars, which is expected to be met partly through domestic funding and international financing including through the Green Climate Fund. In this regard, Trinidad and Tobago has also committed to reducing its public transportation emissions by 30% or one million, seven hundred thousand tonnes of carbon dioxide equivalents (CO2e), compared to 2013 levels, by December 31, 2030. We have made these goals public, eliciting the demand for accountability and transparency, which are also core principles of ESG.
So, while government aims to facilitate the development of businesses as global citizens through ESG, we are setting the example by undertaking, among other things, the following in the context of sustainable environmental, social and governance goals:
• A National Climate Change Policy to guide climate action, which is now being updated to include the provisions of the Paris Agreement and the decisions taken regarding implementation of those provisions, as the national climate agenda is guided by international climate policy;
• A Carbon Reduction Strategy from which the Nationally Determined Contribution under the Paris Agreement was derived and a long-term strategy for reducing greenhouse gas emissions to 2050;
• Detailed inventories of greenhouse gas emissions and identified intervention measures to reduce these emissions;
• A functional measurement, reporting and verification system for greenhouse gas emissions, being managed by the Environmental Management Authority (EMA). I hope to take a Note to Cabinet soon to formalise this system into the legislative framework to make greenhouse gas reporting and mitigation actions mandatory, and I expect to get the relevant technical drafting instructions from the EMA soon to set this in motion;
• A Just Transition of the Workforce Policy to address issues not only related to retooling, re-schooling and reskilling the workforce in preparation for the inevitable energy transition, but to also address the displacement of livelihoods affected by the impacts of climate change;
• A National Adaptation Plan which details strategies and actions in relevant vulnerable sectors to increase resiliency and integrate climate change in the national development process; and
• A draft e-mobility policy to catalyse the penetration of electric vehicles in the transportation mix. The finalisation of the policy is currently underway, after conducting some analyses to determine technical barriers and ways to overcome them.
So, while the road may have varied routes, as we drive the vehicle of ESG, which is electric of course, the destination is clear: a sustainable future. The positive I have seen, especially from the interest AMCHAM TT has demonstrated, is that we can extend the goal of sustainability beyond the boundaries of Trinidad and Tobago, making the differences that can also resonate around the globe, setting the examples of public private partnerships for environmental and social good that really matter.
What we always have to keep at the top of our consciousness is that what we to today is not for today alone, but for the inheritors of our planet’s future. On that note, I thank you all for the opportunity to share these thoughts with you this morning and I also thank you for your attention. Please enjoy the remainder of the conference.