Riverstone Sustainable, Impact and ESG News and Investment Digest
Our regular round-up from Riverstone of developments in sustainable, impact and ESG news and investing. Riverstone will be publishing regularly on both leadership and generally on sectors where we see ongoing growth. Energy transition and ESG will be a key theme in this regard.
In this digest:
- Business Council of Australia backs climate change bill
- Sustainable bonds to reach 8-10% of total global issuance in 2021
- Plastic waste solution index launched
- Investors rethink ESG investing after pandemic chaos
- Sustainable investing is now a third of US FUM
Business Council of Australia backs climate change bill
The Business Council of Australia (BCA) has backed independent MP Zali Steggall's proposed legislation to set new zero emissions target's by 2050.
The proposal recommends a science/risk management based approach to align business and shareholders. The proposal will be progressed via a private members bill with the aim of creating an independent climate change commission whilst incorporating the government's technology investment roadmap.
Source: The Guardian
Sustainable bonds to reach 8-10% of total global issuance in 2021
Moody's estimates global green bond issuance will increase over 30% to around US$650 billion in 2021. However, this is just a drop in the ocean compared to the estimated US$3.5 trillion required per year going forwards (according to ex Bank of England Governor, Mike Carney).
Sustainable bond issuance will reach 8-10% of total bond issuance in 2021. The Biden administration will also help accelerate issuance further with its new clean energy policies. Although the sustainable market in Australia is nascent it is also expected to grow rapidly in the coming years.
Source: AFR / Moodys Investor Services
Plastic waste solution index launched
Solative, Morgan Stanley and ISS have launched an index of companies who are leading the vanguard search for viable plastic waste solutions.
The index will be called the Solactive ISS ESG Future of Plastic Index and will be aimed at investors running sustainable funds or looking to create sustainable investment solutions.
Plastic waste is one of the more immediate challenges to be addressed by the sustainable investing community. Disturbingly, the World Wildlife Fund estimates humans can consume 5 grams of microplastic per week, on a global average (that's a credit card each!) . Hidden plastics can appear in unexpected context, such as the lining of plastic coffee cups.
Source: ESG Today
Investors rethink ESG after COVID-19 chaos
This Bloomberg article looks at how ESG assets managed to outperform many sectors during the pandemic period and made some investors reassess their approach.
Covid has brought forward the need for change and seen many investors reassess their priorities, objectives and required long-term outcomes.
Source: Bloomberg
Sustainable investing now represents a third of US FUM
Sustainable investing now accounts for 33% of total US FUM. Sustainable funds have increased 42% between 2018 and 2020. ETF funds represent a major proportion of these funds.
The Paris Climate Accord has driven increased awareness and there was a major investment 'inflection' point around 2018.
Source: CNBC