Wineries must monitor ESG risk to avoid sour grapes

Like other industries, many wineries have started to push for ESG. Major initiatives in recent years have included waste recycling and treatment, working with environmentally friendly shippers, and introducing compostable containers.

Wineries have also moved to use sheep and goats to mow the lawn and chickens to combat pests. Recycling has been extended to pomace (wine waste, skins, stems, and seeds).

In addition to environmental benefits, wineries also reported cost savings from ESG efforts and the introduction of solar energy. In Australia, De Bortoli Wine’s sixth-largest winery was able to save “thousands” of Australian dollars a year by producing 5.5% of its electricity using the technology, according to a 2016 Wine Australia report.

In the US, California is at the top in wine production – the state produces at least 85% of the country’s wine, according to figures from NAAW – and is also leading in small-scale solar production, according to Chester Energy and Policy, which cited the study. and the US Energy Information Administration found that California accounted for 43% of the world’s total solar power generation in 2016.

read more: California wineries threatened by rising temperatures and longer wildfire season

“Economically, efficient use of energy and water can reduce operating costs,” PAK Programs disaster management specialist Justin Guerra (pictured) said. Insurance Business.

However, promoting sustainability has opened businesses up to new challenges. Solar energy can cause wineries to suffer from grape guilt if the risks are not properly calculated, according to Guerra.

“A large solar base adds weight to any product,” Guerra said.

“Depending on the shape and condition of the panels, they can increase the risks associated with wind, lightning or other weather conditions.”

Solar panels are also critical to the power grid and require regular maintenance and cleaning, according to Guerra, while other risks can be catastrophic.

“Some of these systems also use battery power for storage at night or on cloudy days and use battery rooms that, if not properly ventilated, pose fire hazards and release hydrogen gas,” said Guerra.

read more: Do you know the dangers of solar panels?

Despite the risks, solar energy can be “good”, Guerra said, and agents and brokers should help customers stay green.

“With climate change becoming an increasing threat to wineries in recent years, it is important to work towards a sustainable future,” said Guerra.

“[Agents should] ensure that any ESG tools or infrastructure are added to the policy with proper analysis and patiently work with clients to resolve any issues that may arise. “

For some wineries, ESG efforts have shifted to promoting capital gains above operating cost savings.

“With a good reputation and eco-friendly products, some wineries will see higher sales,” Guerra said.

In addition to financial benefits, there is another benefit for wineries looking to boost their ESG efforts, and it’s one that’s shown across all sectors.

Read more: Climate and ESG are central to risk management

“It can help recruit people, as the data shows that the next generation is more interested in the work of companies that accept their responsibility for the environment and provide work to encourage workers to give back,” said Guerra.

“This can translate into a stronger, more motivated workforce.”

The transition to green is not without risk, and Guerra emphasized the importance of planning and preparation.

“When businesses change their primary source of energy or change their harvesting practices to become more sustainable, there are economic and employment impacts,” he said.

“With new information to manage and additional training for employees to teach them how to use these new methods, business owners must be prepared and trained in how to effectively use sustainable practices.

“Before making any major changes, we always encourage business owners to talk to their insurer to make sure they are taking the right steps to keep their business safe and environmentally friendly.”