The green transition: Germany lagging and the US battling

Falling behind

Germany, once an economic growth engine, has now become a laggard, according to the International Monetary Fund (IMF) predictions. The country's growth is expected to be slower than that of the US, UK, France, and Spain in the next five years.

Germany faces multiple challenges - one of them is the failure to create a successful energy transition. The move away from nuclear power and issues with transitioning to renewable energy have affected competitiveness. The current government struggles to sufficiently invest in emerging sectors and to adapt Germany's economic model "to thrive in a more fragmented, greener and ageing world", writes the Economist.

War against ESG

BlackRock's attempts to push ESG topics in corporate boardrooms is facing challenges, as public resistance to it grows. "For the first time, the world's largest asset management fund voted down the majority of ESG proposals for the 2022–23 proxy season", writes The Epoch Times. Liberal-leaning US pension fund leaders and politicians are cautioning against reversing their commitment to ESG causes, criticising BlackRock for leading a "misinformed and shortsighted war against ESG", states the Financial Times.

The support for ESG resolutions dropped to 7% this year from 47% in 2021 and 22% in 2022, summarises Nawar Alsaadi. Similarly, the CEO company letters are shifting away from the ESG terminology:

Besides the BlackRock CEO Larry Fink, its former chief investment officer for sustainable investing Tariq Fancy also actively engages in the public ESG debate. Mr Fancy was questioned about the root causes of significant ESG issues, such as greenwashing. He suggested that these problems might arise from professionals lacking proper qualifications and struggling to effectively communicate the associated risks and opportunities, states Financial News . For a more elaborate read, delve into his four-part essay discussing a shift in his perspective on 'sustainable investing'.

At the same time, Financial Times article reports that a growing number of blue-chip US companies are using ESG - environmental and social factors - to decide bonuses for top executives. Investors now are worried the metrics are being gamed to increase payouts. Three-quarters of S&P 500 companies have disclosed that environmental, social and governance metrics contributed to executives’ pay, up from two-thirds of companies in 2021, according to data from The Conference Board and ESGAUGE - ESG Intelligence & Analytics , an ESG data analytics firm.

The rise of Artificial Intelligence (AI)

The Atlantic has one of the best articles on the potential implications of the use of AI models for the future of humanity: "Does Sam Altman know what he's creating?". It explores the rise of ChatGPT and the work of Sam Altman, the CEO of OpenAI . The article combines informative insight with thought provoking questions about how AI might affect white collar jobs and society at large within the next decade, and what it might mean for social cohesion and economic wellbeing. AI will change everything, but currently there is no global coordination or oversight mechanism to avoid unintended and potentially catastrophic consequences of its use.

In the news

InvestESG: 185 countries have agreed to launch an innovative new fund for biodiversity

Financial Times: Investors warn ‘fluffy’ ESG metrics are being gamed to boost bonuses

CEEnergyNEWS: E.ON issues EUR 1.5 bn of green bonds

Euronews.green: Young people are taking 32 European countries to court

Responsible Investor: Investor frustration over SFDR reports

The Wall Street Journal: Are We Ready for a $100 Billion Catastrophe? How About $200 Billion?

Foreign Policy: On the Highway to Climate Hell

The Economic Times: Extreme weather events to stay, businesses should fine-tune ESG strategies

CNBC: ‘Not just money and math’: Young people are willing to sacrifice returns for ESG

Recommended readings

Sixth Assessment/ Synthesis report by IPCC- Climate Change 2023: IPCC has published its latest report, showing that #Climatechange is a threat to human well-being & planetary health, and that there is a rapidly closing window of opportunity to secure a liveable & sustainable future for all. The solution lies in climate-resilient development.

PR claims and reality: This report reveals how big European oil companies are failing to contribute to the energy transition, and how they are scaling back their ambitions to curb their emissions.?

Global boiling: An insightful article by Kate Mackenzie and Tim Sahay explores in more depth the warming of the planet and the extreme weather events.

Credit rating stability at risk: While the effects of accumulating climate risks remain intangible and uncertain, they are expected to bring about credit rating fluctuations and instability. However, substantial efforts to address these rating concerns are currently lacking, writes Hazel Ilango for the Institute for Energy Economics and Financial Analysis (IEEFA) .

Saudi Aramco: United Nations human rights experts have raised concerns about aramco global human rights impact due to its significant role in the climate crisis.

Consuming fossil fuels: Fossil-fuel subsidies reached a record high of $7 trillion last year, rising by $2 trillion over the past two years - according to research by the International Monetary Fund :

Fanning the flames: A digital story from International Institute for Sustainable Development offers the latest evidence of G20's progress in aligning public finances with emission reduction needs:

Debt-for-climate swaps: Academics and policymakers are urging the global community to prioritise debt-for-climate swaps, writes Jonas Gamso . This involves forgiving a nation's debt in return for investments in climate adaptation and mitigation.

ESG dilemmas: While corporate managers strive to enhance their ESG performance, they encounter dilemmas and trade offs, such as deciding between improving worker conditions, reducing carbon emissions, or prioritising profit-driven shareholder interests.

AI & Climate: AI might hold solutions for many challenges, yet assessing what AI means for something as complex as climate change might pose some questions, writes Christopher Caldwell on illuminem .

SBT gold standards: This article by Plan A offers a comprehensive overview of science-based targets and how it is reshaping corporate sustainability:

Linkedin post: "It is okay to be angry!" - writes Hans Stegeman on the relation between anger and climate activism.

Sustainalytics survey: By participating in the 晨星 survey, CSR and sustainability professionals can contribute to a broader understanding of corporate ESG practices.

EU taxonomy - progress, data and the road ahead: In a new article, LSEG Data & Analytics explores the key challenges for investors when it comes to using the EU Taxonomy and SFDR in practice.

Global reserves & major currencies: Brad Setser 's insightful X / formerly Twitter thread shows the interesting developments in global reserves.

LinkedIn post: Narendra Tiwari published a post on Building ESG: Why SMEs and Corporates Should Move Beyond Single Materiality Assessment, with key points covered.

Podcasts

Sustainability Bridges: In this episode of Eurosif - The European Sustainable Investment Forum podcast, Aleksandra Palinska and a special guest Philippe Zaouati , Founder and CEO of Mirova , delve into challenges for fund managers in sustainable investment decisions. They explore ESRS, CSDDD, SFDR, and global sustainable finance agenda development.

2050 podcast: The latest episode of the Czech podcast, issued by Fakta o klimatu , explains how climate change and extreme heat is specifically affecting the urban environment.

Sustainable cities: For our Hungarian subscribers, we recommend the following podcast covering climate action, issued by the Green Policy Center . In the linked episode you can learn about sustainable urban planning.

Events

Hybrid: Join the webinars the Euronext Sustainability Week from 4 to 8 September, an entire week dedicated to Sustainable Finance.

Hungary: Sustainable World 2023 by portfolio.hu? is taking place on 12 September in Budapest.

Online: Transforming Supply Chain ESG Data Collection by?Briink will be held on 13 September.

Czechia: The 7th National Conference on Quality and Sustainability by the Ministerstvo pr?myslu a obchodu ?eské republiky will take place on 14 September in Prague.

Czechia: 14 September, fair Venture presents its educational course "Certified Sustainability Manager" in Prague. The course has been developed through international collaboration with a contribution of leading Czech experts in sustainability and ESG.

US: This year?Climate Week NYC?will be held from September 17-24, in partnership with the United Nations General Assembly and is run in coordination with the United Nations and the City of New York.

New York, USA: A special session will be held by Inevitable Policy Response in cooperation with Fitch Ratings , Carbon Tracker , UN Principles for Responsible Investment and Glasgow Financial Alliance for Net Zero (GFANZ) . The event will explore key questions around the future climate policy pathway, the viability of the 1.5°C climate goal, and the implications of the upcoming transition for institutional investors and corporate’ transition risk from the perspectives of a credit ratings agencySpeakers include Jakob Thom? from Theia Finance Labs , Monica Agrawal from Fitch Ratings , Alex Michie from GFANZ, and Mike Coffin from Carbon Tracker.

Czechia:?ESG in Practical Context, a six-week educational program by the Sustainable Business Association starts on 18 September.

Hybrid: the?BlackRock Investment Forum 2023?will take place between 20 September and Thursday 21 September, virtually and in London.

Czechia:?Hospodá?ské noviny?is hosting its annual?Green Deal Summit?on 26 September in Prague. The topics that will be discussed include green investing, hydrogen strategy, and energy.

UK: The?London Climate Technology Show?is happening on 26 -27 September,?focused on the fast developing climate technology value chain.

Hybrid: Annual Conference on Law and Sustainable Finance in the EU 2023, an event by Academy of European Law ERA, is happening between 28 -29 September.

Slovakia: The 13th edition of?SAPI Energy Conference?focused on renewables is happening on 4 and 5 October in Senec.

Online: The next Climate Bonds Initiative online GSS+ bond training takes place between 17-19 October 2023.

Bucharest, Romania: The Climate Change Summit returns to Bucharest, gathering some of the brightest minds in sustainability, climate and environment topics. Tune in to watch online, or explore attendance in person!

Czechia:?On 18 October, the US Department of State,?CRDF Global,?PwC Czech Republic?and the?AmCham CZ?are hosting investors and startups to an exclusive roundtable discussion on managing investment risk associated with emerging technologies with military & commercial applications.

Italy:?RICS?-?World Built Environment Forum Europe?will take place on 19 - 20 October in Venice.