Sustainable, Impact and ESG News and Investment Digest (week ending 29 November 2020)

A weekly round-up of developments in sustainable, impact and ESG news and investing.

In this week's digest:

• Seed planting drones
• Proxy advisor to sue SEC on new "wing-clipping" ruling
• Court gives Macron climate ultimatum
• CBAM's impact on developing economies
• COVID-19 highlights labour supply chain issues in fashion

Seed planting and reforestation with drones

Cutting edge drone technology had fused digital intelligence and automation in a move to replant the world's forests. Bio-degradable pods with seeds and all the nutrients a tree needs are dropped from drones to reforest barren landscapes and areas at risk of deforestation. The target is to plant 500 billion trees. The technology has been developed by Dendra Sytems in the UK.

This technology represents a step-change in the way we look at reforestation. It is a complex issue involving solutions from cutting-edge scientists and engineers. The technology can reforest in hard to reach remote areas and across large areas.

Source: World Economic Forum

Proxy advisor to sue SEC on new "wing-clipping" ruling

International proxy advisor ISS is to sue the SEC, which is seeking to clip its wings with a new ruling. ISS believes the new ruling will threaten its independence and how it informs clients.

The new ruling requires proxy advisors to provide a copy of their reports to corporations at the same time they are released to clients. There will also be a requirement to inform clients if corporations plan to rebut the reports.

Source: Reuters

French court gives Macron a deadline on climate

France's highest administrative court, the Conseil d'Etat, has questioned the credibility of president Macron's climate strategy and laid down a three-month deadline.

The court noted that France is already missing its targets, despite being a key signatory to the Paris accord. France had committed to reduce emissions by 40% by 2030. The court has asked for a "please explain" and has an ability to direct and bind the government to take action.

In between 2015-18 the rate of decline in greenhouse gasses in France was only half what is required to meet the 2030 targets.

Source: Reuters

CBAM's impact on developing economies

The EU carbon border adjustment mechanism (CBAM) will disproportionately impact developing economies with carbon taxes according to Allianz.

Africa will be particularly affected, although it has a large potential capacity to develop its hydrogen production offering in the future if the overall political backdrop can be stabilised.

Source: Allianz

COVI9-19 highlights labour supply chain issues in fashion

There has been a recent focus on how fashion companies treat their employees and supply chains. Evidence suggests that many manufacturers weren't paid for orders during the pandemic and there needs to be higher higher standards in supply-chain management.

Challenges in analysis include the availability of data and developing long-term supplier relationships.

Lowest cost suppliers unfortunately often also have the lowest regulation and worker protection. Suppliers are most often also price takers, giving them minimal bargaining power. However, there is increasing pressure by global investors to provide transparency in supply chains and conditions, which is slowly changing the industry.

Source: Robeco