Davos TakeAways
After the last private jet flew off and Davos started its annual renewal from the center of global attention into a lovely alpine resort town, the perennial question lingered: what happened?? As always, the critics of this meeting point to its excesses, but the real value of Davos comes from concentrating the powerful, wealthy, idealistic and intellectual into an idyllic, small and cozy spot - the ensuing connections are the magic.
The World Economic Forum (WEF) annual meeting is also a great platform for announcements - here are some notables from an ESG lens:?
$1 Trillion Green Investment
BloombergNEF's 2023 “Energy Transition Investment Trends” reported investments in the clean energy transition hit $1.1 trillion in 2022, roughly equal to the amount invested in fossil fuel production.
Renewables achieved a new record of $495 billion in 2022, up 17% from the year prior. Electric vehicles and infrastructure was a close second at $466 billion – a 54% increase. While hydrogen had the least investment, it was the fastest growing sector more than tripling over the year before.
BloombergNEF's Albert Cheung said “Rather than slowing down, energy transition investment has surged to a new record as countries and businesses continue to execute on transition plans.”
Climate Trade Wars
The US and EU have recently introduced subsidies, tariffs and other policies aimed at speeding the green energy transition but also pitting close allies against one another.
The tax credits in the Inflation Reduction Act (IRA) are causing the most tension. European officials have called them a “job killer” and began outlining their own plan to subsidize green energy industries — possibly sparking a “subsidy war.”
Meanwhile, the tax benefits of the IRA - passed with zero Republican votes -? are going to red states. The Wall Street Journal showed Georgia, Arizona and Texas and other conservative states have garnered the lion's share of new investments.?
White House officials Brian Deese, John Podesta and Jake Sullivan took aim at the competitiveness criticisms - citing a new analysis from the Boston Consulting Group to claim that the IRA “will help increase clean-energy production and deployment not just in America, but around the world.”
Democrats Launch Sustainable Investing Caucus
Countering the rising ESG opposition from Republicans, the new caucus will advocate for policies sought by the sustainable investment industry.?
The climate disclosure rules from the Securities and Exchange Commission (SEC) will be a focus. Representative Juan Vargas (D-Calif.), who will co-chair the group with Representative Sean Casten (D-Ill.), said? “...we must...ensure that investors...receive the disclosures needed to make profitable and ethical decisions in our capital markets.”
Fake Green News?
Among the many alarming changes at Twitter under Elon Musk, misinformation about the climate crisis is on the rise. A new study found Twitter was recommending the hashtag "#ClimateScam" when users search "climate" - appearing in 362,000 posts by December. ?
Deloitte issued a paper showing that greenwashing can be dangerous: “Every day, companies are adding to the promises made [and even] a small promise can have a big impact on the organization’s reputation.” The paper points to the successful lawsuit brought by Friends of the Earth regarding Shell’s climate-related promises.
A Class-Action Wave Is Coming for ESG Claims
A survey by law firm Norton Rose Fulbright found that 28% of in-house counsels said their ESG dispute exposure increased in 2022. The key reasons are the absence of clear ESG standards, and heightened regulatory scrutiny. Partner Rachel Roosth said “If these disclosures are perceived as false, misleading or insufficient, litigation may ensue.”
Amazon in the ICU
The Brazilian government airlifted 16 starving Yanomami indigenous people. President Luiz Inacio Lula da Silva accused his predecessor, Jair Bolsonaro, of "genocide" against the indigenous group. During Bolsonaro’s presidency, Amazon deforestation affected an area the size of Belgium and hundreds of Yanomami died of malnutrition and pollution.
The AI of ESG?
The AI bot ChatGPT has captured the world’s imagination in a very short time. While not perfect, the bot passed both a prestigious MBA exam and a medical licensing exam.
Applying ChatGPT to ESG, Lawrence Heim has been testing the platform to duplicate his ESG writings, with varying results. ?Andrew Winston was a bit freaked when he asked ChatGPT to define and compare 'ESG' and 'sustainability’ and got this response:?
"ESG stands for environmental, social, and governance. These are the three main categories that investors and companies use to evaluate the sustainability and societal impact of an investment or business.
Environmental factors include things like a company's carbon footprint and its approach to preserving natural resources. Social factors include a company's treatment of its employees and impact on the community, while governance deals with a company's leadership, ethical business practices, and transparency.
Sustainability, on the other hand, is a broader term that encompasses a variety of concerns related to the continued well-being of society and the planet. It includes elements of ESG, but can also encompass issues like economic inequality, access to education and healthcare, and community development.
In summary, ESG is a specific framework to evaluate the impact of a company or an investment on the Environment, Social and Governance aspects of the society and sustainability is a broader term that encompasses this framework and other aspects that may impact the long-term well-being of the society and the planet."
Wow…this is pretty good!? Maybe I will ask the bot to write next week’s edition…
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Chief Marketing Officer
1 年Impressive ESG highlights from Davos 2023! ???? The shift towards green investing and the potential subsidy competition in response to US climate incentives are noteworthy. It's good to see a focus on combating greenwashing. And I'm thrilled to hear about ChatGPT's performance in MBA, medical, and ESG assessments!
London-based global communications lead specialising in Corporate Communications | People Engagement | DEI advocate l Speaker | NGO founder | Intercultural Studies Lecturer l Adventure documentary producer
2 年Thanks for sharing, Tim. Recently, I read an insightful report, titled “My Kids Have Replaced Me With ChatGPT”. It is predicted that 2023 is going to be the tipping point for AI-enhanced business. If anyone is interested to understand more about ChatGPT, how it works, its limitations and risks, and the short-term prospects for application, I encourage you read the report: https://lnkd.in/ejiFavv2
Realtor Associate @ Next Trend Realty LLC | HAR REALTOR, IRS Tax Preparer
2 年Thanks for Posting.
Environmental Researcher and Inventor at No Company
2 年Soon, all the known sources of energy in the world will be forgotten and entered the archives of the historical laboratory of human sciences! Yes, the discovery of the scientific answer to one of the most complex questions in the world of physics will turn the importance of energy into a historical joke and will prevent the wasting of the world's valuable assets. Also, contrary to the past, the concerns of the world's environment have decreased and excessive energy consumption will make the leaders of the countries happy. These new power plants in deep water will help clean the seas and oceans while producing clean energy, and our world will enter a green and human-centered civilization for the first time in history! This power plant does not need any kind of fuel and only uses the natural properties of air and water that nature has given us. To start this dynamic open-cycle power plant, we only need the output energy from a child's bicycle dynamo (1ATM). All information is available in the files of the patent website. Fortunately, physicists are very surprised to find this great discovery. https://register.dpma.de/DPMAregister/pat/register?AKZ=1020201194676