ESG Is A Framework, Not A Marketing Acronym - ESG Weekly Roundup #10
Actively incorporating ESG factors into your operating model is even more important as the COVID-19 recovery begins.
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Each Sunday I’m putting together this brief roundup of ESG related content. You can reply to this email, leave a comment, or message me on Twitter. Thanks to all the new subscribers who’ve joined this week!
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Brennan
Reading Time: 8 minutes
Chart Of The Week
Source: Which ESG Issues Mattered Most? Defining Event and Erosion Risks
Quote Of The Week
“My own view is that when you hear management saying, “I don’t have time to think about ESG, or the cost might be too high”, this is a fundamental red flag. It means they are looking at ESG through the lens of philanthropy or some other peripheral view, rather than as something that should be core to the purpose and strategy of the organization.” - George Serafeim
Source: Corporate Resiliency and the Future of ESG
What I’ve Been Reading
The Rise of Standardized ESG Disclosure Frameworks in the United States:
Although a number of ESG disclosure standards have been developed and some have been incorporated into mandatory reporting regimes by non-U.S. regulators, any implementation by a U.S. company of an ESG disclosure framework remains voluntary at this time. Despite several proposals in 2019 from U.S. federal lawmakers on ESG disclosure requirements (which have not been adopted to date), the Securities and Exchange Commission’s (“SEC”) January 2020 proposed amendments to the MD&A rules did not include requirements for specific ESG or climate-related disclosures.
SEC Chairman Jay Clayton and Commissioner Hester Peirce issued statements reaffirming the existing principles-based, materiality- focused approach the Commission adopted in its 2010 guidance, [2] and highlighted threshold issues that pose challenges to imposing a standardized ESG disclosure regime, including the complex landscape surrounding ESG disclosures and the forward-looking nature of climate-related ESG disclosure.
IGCC submission on the Australian government’s energy technology roadmap:
The Government must embed the technology road map in a strategy designed to achieve net-zero emissions by 2050 if it wants to unlock institutional capital in a broad range of low emissions technologies on the scale required. The development of credible and investable long-term strategies will improve investors ability to assess climate-related risks and opportunities, to measure and disclose portfolio exposure to the low carbon transition and to support the activities needed to further invest in opportunities to support the transition to a zero-carbon, climate-resilient world.
Carmakers slip further from compliance with upcoming EU CO2 goals:
Carbon dioxide emissions from new cars in Europe rose for the third year running in 2019, provisional data from the European Union’s environment agency (EEA) showed on Friday, with carmakers further lagging the bloc’s upcoming climate goals.
HNWIs in Asia Pacific Drive Demand For ESG:
One aspect of assessing culture is understanding how their wealth manager and portfolio matches their social values. One of the key takeaways from the survey was that HNWIs want to integrate responsibility into every part of their wealth strategy. While HNWIs are increasingly demanding that the companies in which they invest have positive practices regarding ESG issues, they are still looking for a good return on their investment.
Microsoft adds to diversity plans, aims to increase the number of Black employees:
Microsoft Corp on Tuesday set a five-year diversity goal to address racial inequality at its offices, following protests over police brutality against African Americans in the United States.
The company said it will add another $150 million in diversity and inclusion investment to double the number of Black and African-American people managers, senior individual contributors, and senior leaders in the United States by 2025.
Amazon to Launch $2 Billion Venture Capital Fund to Invest in Clean Energy:
The new fund, which will be called The Climate Pledge Fund, will invest in companies across a number of industries, including transportation, energy generation, battery storage, manufacturing and food and agriculture, according to the company. The aim is to help Amazon and other companies reach a goal of “net-zero” carbon emissions by 2040. Amazon and a number of other companies are seeking to reduce the climate impact of their operations, both through reduced use of fossil fuels and investments in projects such as reforestation.
Department of Labor Proposes Limit on ESG Investments in Retirement Plans:
A notice of the proposed rule notes that “recent trends involving ESG investing … may lead ERISA plan fiduciaries to choose investments or investment courses of action to promote environmental, social, and public policy goals unrelated to the interests of plan participants and beneficiaries in financial benefits from the plan and expose plan participants and beneficiaries to inappropriate investment risks.”
What I’ve Been Watching
The ESG Alphabet Soup Series
Is ESG Investing Just Marketing Spin? [definitions]
Is ESG Investing Just About Climate Change? [environmental factors]
Social Risks, Modern Slavery, And ESG Investing [social factors]
Governance, The Keystone Of ESG Investing [governance factors]
What Is The Greenhouse Gas Protocol? [environmental factors]