ESG Weekly News Update: April 28, 2023
General ESG News
Bloomberg: UK Shift to Electric Vehicles Under Threat From Delays to Charging Network
The number of electric vehicles in the UK is increasing, but the country’s charging network concerns people. More chargers need to be installed. Funding is not the issue but rather the lack of human resources in the permitting departments is driving the capacity concern.
Several new companies are entering the charging industry, and consolidation is expected.
The volume of procured electricity in the next 12 months will probably be more than 20 times greater than a couple of years ago.
Forbes: How Earth Day Can Jumpstart ESG Client Conversations
Earth Day is a good opportunity for advisors to reach out to their more environmentally conscious clients to help them better understand ESG and sustainable investing and climate change opportunities and impacts. A few tips include:
Taking the mystery out of the initials using educational tools
Anticipating concerns about the performance impact of ESG and sustainable investing
Offering non-investment tips related to positive environmental impacts
Reaching out to NextGen investors
Making it a year-round engagement effort.
Sustainable Brands: Social Sustainability Is the Next Supply Chain Frontier
The forthcoming SEC rule on human capital management fueled focus on the social pillar of ESG, which includes the management of a sustainable supply chain free of child labor, forced labor, unsafe working conditions, unfair wages, and racial and gender discrimination. Companies must not only eliminate these negatives but also proactively participate in resolving social issues. Three big impact areas are workforce development, community investment, and leadership diversity.
As a society, we must think of the world as a community of environments. The climate, governance, and social impact should be seen as interconnected.
People and organizations must participate in shared responsibility and shared access to success and failures.
We must design for the future considering all possibilities. A sense of community ownership can challenge how many people think and solve problems, benefiting all stakeholders.
GreenBiz: Why communicating on climate is so hard
Outside of the ‘climate action echo chamber,’ few folks see global warming as a crisis in need of immediate action. To help solve this, we can communicate better on climate and the underlying challenges.
Compelling narratives can help create order in a chaotic world, but it is nearly impossible to condense the complexities of the climate crisis into a single narrative.
When crafting climate communication, it is important to avoid the ‘hero vs. villain' framing – narratives based on cooperation, mutual interest, and common humanity will be more effective.
In general, humans care more about meaning than truth. This is why it is so easy for people to downplay or outright deny the climate crisis with the narrative that ‘woke liberals are undermining capitalism’ while failing to see the truth that ESG is simply about investing with an eye for ESG risk and opportunity with the goal of creating long-term value
Because of this, framing the climate crisis as a dual economic threat and opportunity might resonate with more audiences
Climate doomism is just as unhelpful as denial and downplay.
Ultimately, the best climate communication will help people understand the severity of the situation while giving them the agency to do something about it.
Investment Trends
ESG Today: Australia to Issue Inaugural Green Bond
The government of Australia will issue its first-ever green bond next year. The new green bond program will help enable investors to support public net zero-focused projects, attract more green capital to Australia, and improve the scale and credibility of Australia’s green finance market.
The Australian government also outlined several commitments to develop a sustainable finance market, which includes backing the development of a sustainable finance taxonomy and efforts to tackle greenwashing. Last year, Australia set its climate goals into law, including targets to reduce greenhouse gas emissions by 43% by 2030, compared to 2005 levels, and to achieve net zero by 2050.
ESG Today: China, Singapore, Partner to Scale Green Finance
Both the central banks of Singapore and China announced the launch of the China-Singapore Green Finance Taskforce (GFTG) which will target deepening cooperation on green and transition finance.
Priority areas include taxonomies and definitions, products and instruments, and technology. It aims to provide issuances and mutual access to green and transition bond products between the countries.
The Wall Street Journal: Investors Show Support for ESG Goals – Unless It Means a Financial Hit: Poll
According to a new poll from Pennsylvania State University and Rokk Solutions, a majority of investors believe their financial returns depend – at least in part – on companies’ climate change mitigation efforts.
The poll also revealed a bipartisan wariness of ESG-related losses, and while most agreed (72% of Democrats and 40% of Republicans) that investment managers should consider environmental and social risks when selecting stocks, they are not willing to risk a financial hit by investing in firms with strong ESG principles.
This wariness is a key ‘fault line’ in the mounting Republican pushback against sustainable investing.
Companies and Industries
GreenBiz: Climeworks Expands to The US While The EU Taxes Carbon Imports
Climeworks, a large carbon capture firm, confirmed its plans this week to expand to the United States. They aim to strategically take advantage of new economic opportunities in the U.S. and have already applied to participate in three hubs as a part of the Department of Energy’s Regional Direct Air Capture Hubs program. The company is initially expected to hire about 100 U.S.-based employees.
Climeworks sees great potential in the United States, especially with access to renewable energy infrastructure and advanced CO2 storage sites.
Reuters: Climate activists spray protests on U.S. bank offices on eve of annual meetings
On Monday, climate protesters spray painted graffiti on the New York office buildings of Citigroup Inc and Bank of America Corp. They accused the banks of being "climate criminals" a day before the lenders’ annual shareholder meetings. Major U.S. banks are being pressured to commit to stopping funding for new fossil fuel projects.
ESG Ratings, Reporting, and Standards
ESG Today: Less Than Half of Professionals Confident in Organizations’ ESG Reporting Capabilities: Deloitte
According to a new poll from Deloitte of more than 3,000 professionals, less than half (about 45%) state that they are confident in the abilities of their organizations’ financial teams to report on ESG financial metrics.
Data collection and staffing shortages were cited as the top ESG reporting challenges.
These low confidence marks also come as regulatory requirements for climate and sustainability reporting are increasing, with new disclosure requirements being introduced in the U.S., EU, and UK.
The poll also found that confidence in ESG reporting capabilities increased significantly if organizations had dedicated ESG reporting staff in place or if finance teams were typically involved in ESG managers.
Less than 20% of respondents said that their organizations have an ESG controller, and more than 40% reported no plans to hire one.
According to the poll, there was a positive connection between organizations with an ESG controller and organizations with good ESG data management and reporting.
Government Policy
Reuters: EU Lawmakers Back Human Rights, Environmental Checks for Big Companies
On Tuesday of this week, European Union lawmakers backed rules requiring thousands of large companies to identify and mitigate human rights abuses. Additionally, the European Parliament’s legal affairs committee voted to approve the EU CSDDD draft.
Lawmakers aim to start negotiations with EU states for final deals by the end of the year.