Photo by 1971yes on iStock
June 18, 2024
Authors
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Director, Energy, Extractives, Transport, and Industrials, BSR
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Julia Hunter
Consultant for Space and Sustainability, BSR
Key Points
- The commercial space industry is undergoing rapid growth and change.
- However, the long-term impacts of this new economy remain unclear, and many industry experts are not familiar with established sustainability practices.
- BSR is launching a Space ESG Executive Program, which will explore peer industry case studies, reporting best practices, models for good governance, and more.
Space is changing: In 2023 a commercial rocket exploded over Texas, spreading debris over a natural preserve; in November 2023, a Michigan citizens' group helped defeat a proposal to build a spaceport site near Lake Superior; and new questions are arising about emissions of rockets in the upper atmosphere and the congestion of many satellites in earth orbit. The best opportunity to foster proven sustainability excellence in the space industry is now, to reduce cost, risk, and ensure the new space economy is as good as it can be.
The commercial space industry is undergoing rapid growth and change—forging an entirely new economy with unforgiving requirements. Consideration for the long-term impacts of the new space economy is fragmented and remains an emerging priority for the space sector.
Many industry experts haven’t prioritized sustainability practices due to a lack of demand from stakeholders, conflict with specific technology, and core mission objectives. The opportunity to build these practices into business plans is before us: we’re launching a rapid start program for space practitioners to upskill experts on the best ways to manage sustainability topics.
The sector is developing at a rapid pace: already in 2024, there have been over one hundred successful orbital rocket launches. These launches are expanding satellite constellations to provide global broadband service, enabling future missions to Mars and the Moon, developing a working space tourism sector, and advancing supporting technologies for scientific exploration and industrial development. The industry also has the potential to create new impacts for people and the environment.
For many legacy industries, managing the impacts of their activity on people and the environment has become standard practice. Investors, customers, and business partners have high expectations that externalities are well understood, and managed, and risks mitigated. The cost of failing to do so is too great: legal action from communities can delay production; reputations and contracts can be lost from sourcing conflict minerals; entire facilities can be shut down from climate-related events; and launch schedules can be delayed for years when communities are put at risk of launch failures. Strong governance of environmental, social, technical, regulatory, and other risk factors strengthen business plans and improve investment security.
Yet, many actors in the commercial space industry remain behind traditional standards of sustainability governance. While some large, diversified companies have comprehensive sustainability programs, we believe there are a few fundamental reasons the sector is lagging overall: the operating environment is very different, and the sector is growing incredibly fast. Greenhouse gas emissions, for example, are a bedrock pillar of most company’s sustainability work, and an urgent global issue. For space operators, air emissions occur in traditional ways, as well as across all layers of the lower and upper atmosphere. Raw materials must be sourced from highly technical supply chains with geopolitical and human rights risks. They are also left to build up in the upper atmosphere upon re-entry. Meanwhile, investors are rushing to grab a piece of the $700B—some say $1T—industry as it outpaces global GDP growth. A rush of cash into a highly complex, technically challenging field under pressure to show positive value is a perfect storm for a lack of governance.
Today, space companies are beginning to rise to meet the present and coming demand for integrated risk management. BSR’s research shows there is significant attention to the risks of orbital debris. The safety—of flight crews and communities on the ground—is widely acknowledged as a paramount concern. And like other industries, addressing climate risks, challenges in attracting and retaining talent, and managing risk in supply chains are affecting space business. Leaders we’ve spoken to are grappling with understanding how to manage these sustainability issues in the context of space. There are many urgent questions, and as any Chief Sustainability Officer might sympathize, not enough time and great complexity for which investments will generate the best return on reputation, risk, and performance.
We have heard the call for collaboration to break down and prioritize actions, as well as a greater understanding of best practices and optimal implementation strategies. To catalyze sustainability proficiency for space industry leaders, we’re launching a Space ESG Executive Program.
This six-month program will bring together a group of practitioners to gain a common understanding of good governance, ESG regulation, demonstrate practices in ESG excellence, and develop a common statement for ESG practice in space. We believe this rapid, lightweight learning network will help bring clarity in decision-making, drive impact and lower the cost of action. We also believe it can spark the opportunity for long-term collaboration to create shared standards for ESG excellence in the space industry.
If you’re in the space sector, we’d love to talk. Reach out to us here.
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