Like-minded stakeholders, innovators and entrepreneurs are counting on hydrogen generation to combat climate change and dramatically minimize CO2 emissions. Well-established players are prioritizing decarbonized hydrogen to propel the green portfolio. The environmental, social and governance (ESG) performance has received an impetus with bullish government policies. In April 2021, U.S. President Joe Biden announced a robust goal of minimizing greenhouse gas emissions by 50-52% by 2030. Green hydrogen—created from the electrolysis of water—has gained ground as the most environmentally friendly fuel to produce energy without emitting CO2. In common parlance, hydrogen is a major enabler of clean energy transition and produces zero emission at the point of use.
Exponential demand for green hydrogen has boded well for ESG policies amidst the fuel warranting significant storage, transportation and production infrastructure. The U.S. has proposed Climate Disclosure Rule requiring public companies to make GHG-related disclosures. Besides, it mandates public companies to disclose Scope 1, 2 and 3 emissions. The disclosure rule is poised to prompt and incentivize industry participants to infuse funds into greener energy. Hydrogen could be a silver bullet to minimize GHG emissions. Industry players are gearing up to provide a sustainable future with cost-effective, dependable and accessible green hydrogen energy.
Environmental Perspective
As stakeholders emphasize a clean hydrogen economy to boost productivity, reduce carbon footprints and minimize operating costs, bespoke hydrogen generation solutions could bring a paradigm shift globally. Investors are aligning their businesses with environmental performance, with companies striving to inject funds into clean energy technologies to foster energy efficiency and cut climate-changing emissions. Even though hydrogen is a low-carbon energy source, transportation of hydrogen using internal combustion engine trucks contributes to GHG emissions. These trends have compelled leading companies to invest in green hydrogen. In 2022, Plug Power acquired Joule Processing to bolster its green hydrogen ecosystem and reduce the logistics networks and hydrogen infrastructure cost. The company plans to augment the green hydrogen production to 200 TPD by 2023 across North America.
Social Perspective
Investors prioritize community investment, diversity & inclusion, ethical supply chain, harassment-free workplace and employee health. Prominently, these factors act as a marker shaping the future of business, creating resilient business plans and cementing equality of opportunity. Linde has been at the helm with over 80% social score as it integrates sustainable strategies into business strategy. The company introduced the Global Giving program to infuse over USD 4 million into educational programs. The Board of Directors and CEO are accountable for social issues affecting Linde. Meanwhile, the CHRO oversees management and retention, talent sourcing, inclusion and diversity. However, the global voluntary turnover rate was pegged at 6.7%, according to its Sustainable Development Report 2021.
Governance Perspective
Ensuring compliance with the rules, regulations and laws has become a major prerequisite for sound corporate governance. NEL ASA published its first sustainability report in 2020 with the goal of 100% of executive management and other employees completing anti-corruption training by 2022. In September 2020, the company launched its whistleblowing channel—NEL Ethics Hotline. In the next month, it introduced the Nel Anti-Bribery and Corruption Policy and the Nel Competition Law Policy.
A transparent government structure is a vital cog in the governance pillar for sustainable growth. Companies such as Plug have set the goal of continuing the development of ESG governance to boost transparency, standardization and consistency across the landscape. The CEO at Plug organizes weekly hall meetings with employees to share updates on initiatives and answer questions and queries. The company provided compulsory training on vigilance to eradicate corruption and bribery.
