The E in ESG: The Race to Green
The E in ESG ?curates the week’s latest?#sustainability ?news; focusing on regulatory developments, innovation, and the intersection of?#environmental ?and organizational best practices.
This week's Newsletter includes:
"The increasing prevalence of physical, financial and social impacts arising from the climate crisis has shifted stakeholder sentiment and created a unique opportunity for value creation in the transition to a net zero economy. Global inflows into sustainable assets reached over US$4 trillion and Canadian investments in sustainable funds more than doubled in 2021 with the growth tapering in 2022. This paradigm shift in the global allocation of capital demonstrates the importance of factoring climate-related risks and opportunities into the price of investments to ensure efficient capital allocation as well as the importance of managing the concomitant increased risk for potential “greenwashing” or “climate washing”.
This “race to green” is happening against the backdrop of a rapidly evolving landscape for sustainability-related disclosures and a growing wave of greenwashing litigation against companies and their directors and officers. Greenwashing allegations span claims of inaccurate or misleading statements about climate-related financial and operational impacts and risks, climate-related commitments or strategies and sustainability-related attributes of products or corporate activities. Activists are increasingly using innovative climate-related litigation strategies to not only obtain monetary damages, but also to garner publicity and to drive corporate change."
Adam Thompson , IBM Consulting’s Global Head of Sustainable Finance
"Whether directly or indirectly involved in the oversight of corporate disclosure documents, compliance professionals have an increasingly difficult role ensuring that the information provided to investors, consumers and other stakeholders is accurate, driven in part by the hyperfocus on ESG issues and the lack of related regulatory guidance. But for these stewards of compliance,?ESG ?is the wild west, as reporting continues to evolve from completely voluntary to a hybrid of mandatory and voluntary disclosure.?
With an eye toward expected SEC climate, board diversity and other ESG mandates, compliance professionals can evaluate their ESG-related processes and policies now to position the company for success later by understanding what their peers and leading companies are disclosing."
"With just seven years to go to meet 2030 climate goals, none of the biggest U.S. banks are on track to align their oil and gas targets with a scenario that limits average global temperature rise to no more than 1.5° Celsius, the threshold necessary to avoid more catastrophic climate change. Each of these banks have committed to net zero emissions by 2050 while setting interim targets for specific sectors by 2030, but a new analysis from Ceres and the Transition Pathways Initiative Centre (TPI Centre) finds significant gaps in the 2030 targets necessary to achieve these global goals.
"We are seeing more banks in the U.S. and globally set 2050 net zero targets with interim 2030 targets, which is an important step in protecting our financial institutions from climate risk," said Steven M. Rothstein, managing director of the Ceres Accelerator for Sustainable Capital Markets at Ceres. "However, it's critical that the methodology behind these targets is transparent and comparable to inform both bank management and investors. Our analysis is a particularly vital tool for investors to evaluate banks' decarbonization progress."
The Ceres and TPI Centre analysis extrapolates four key findings on the current state of target-setting practices and methodologies:
Why Is There Such a Heightened Interest in ESG?
As we touched on above, consumers and stakeholders are beginning to insist that corporations behave more responsibly. That means ESG is essential for an enterprise’s continued success in today’s marketplace. But why has ESG assumed such an important role? There are a few reasons.?
First, ESG issues themselves are intensifying. One of the public’s biggest concerns is climate change, which mental health professionals now consider to be a major source of stress. According to the National Institute for Health Care Management (NIHCM),?55% of people report feeling anxious about the impact of climate change . From water shortages and wildfires in the western U.S. to increasingly intense hurricanes and heat waves across the southern states, individuals are?experiencing firsthand the effects of our changing climate —and they’re starting to demand that companies do something about it.?
Additionally, smartphones have provided people with unrelenting, 24/7 access to news and social media, providing a greater awareness of ESG issues from racial disparities to corporate misconduct.
领英推荐
This increased appetite for enterprise sustainability demands that organizations take meaningful steps to achieve sustainability goals. But ESG isn’t just about responding to consumer pressure. Sustainability programs can also allow organizations to:
2010 to 2021: reduced operational GHG emissions by 61.6%.* Over the last two years, we completed 1,455 energy conservation projects.
Diversion: 93.8% (by weight) of?IBM ’s total nonhazardous waste from landfill or incineration.
“While we are proud of the progress we have made, we are mindful that advancing our environmental, social and governance goals is a continuous journey of improvement. I am always inspired by?IBM ers’ constant dedication to this essential work and their pursuit of a better future for all.” Arvind Krishna ,?IBM ?CEO.
ESG Today: EU regulators propose changes to extend, simplify sustainable investment?disclosure rules
Europe’s three primary financial regulatory agencies, the European Supervisory Authorities (ESAs), announced on Wednesday a series of proposed amendments aimed at extending and simplifying the EU’s Sustainable Finance Disclosure Regulation (SFDR). Proposals include the addition of information regarding the decarbonization targets of financial products, and the inclusion of a dashboard providing information about products’ sustainable and taxonomy-aligned investment.
The new proposals follow the request by the EU Commission for the ESAs, which include The European Banking Authority (EBA), The European Insurance and Occupational Pensions Authority (EIOPA), and The European Securities and Markets Authority (ESMA) to review indicators for the SFDR’s indicators for principal adverse impact (PAI) and financial product disclosures.
The Biden administration on Wednesday unveiled a series of strict vehicle emissions standards anticipated to reduce greenhouse gas emissions (GHG) from the transport sector by billions of tons over the coming decades, and to accelerate the transition to electric vehicles.
The new proposals, announced by the U.S. Environmental Protection Agency (EPA) include more stringent greenhouse gas emissions standards for both light- and medium-duty vehicles for the 2027 – 2032 model years, with stringency increasing in each year to reach a 56% reduction in light-duty fleet-wide GHG emissions in 2032, compared to current 2026 standards, and a 44% reduction for medium-duty vehicles, as well as a separate set of heavy-duty truck emissions standards. Overall, the EPA estimates that the rules will result in a reduction of nearly 10 billion tons of CO2 emissions through 2055. The White House
UPCOMING EVENTS
April 19:?Sustainability LIVE New York
Don't miss?Sarah Thuo 's Keynote session!?Sustainability Magazine
Paul Houde, MBA ,?Galina Mishiev ,?Dianna Heard ,?Miao Zhang-Cohen ,?Nicole Park ,?Dorothy Quincy ,?Matt Hodak ,?Richard Douglass