We're Watching in ESG & Impact: A Weekly Newsletter from IPA (02.12.24)

ESG and Impact Updates

NYC pension funds are requesting banks to report ratios of clean energy financed to fossil fuels financed

1.???New York City Comptroller Brad Lander and trustees from New York City Employees’ Retirement System, Teachers' Retirement System, Board of Education Retirement System, and New York City Police Pension Fund filed shareholder proposals to Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, J.P. Morgan Chase, and Royal Bank of Canada, asking them to disclose their energy-supply financing ratios and progress on ratio targets. BloombergNEF?analysis found that energy sector investment must reach a 4:1 ratio of clean energy to fossil fuel by 2030. In 2022, North American banks averaged a 0.6:1 ratio

More than half of individual investors plan to increase their sustainable investments

1. Morgan Stanley survey conducted across the US, Europe, and Japan found that 54% of individual investors plan on increasing investments in measures that address climate change and other ESG issues, and 57% stated their interest in sustainable investment has increased in the past two years. The top sustainable investing themes were climate action, healthcare, water solutions, and circular economy. Hesitant investors cited the lack of transparency in sustainability reporting (63%), potential for greenwashing (61%), and lack of sustainable investment knowledge (52%) as deterrents

US wealth inequality has deepened since the pandemic

1. New York Federal Reserve study found the growth of inflation-adjusted wealth of white households outpaced that of Black and Hispanic households from the beginning of 2019 to the third quarter of 2023. Moreover, white and Hispanic households saw their net worth climb (28% and 20%, respectively), but Black households’ net worth was 1.5% lower than pre-COVID levels. NY Fed researchers ascribed these trends to divergence in financial asset growth as most of white financial wealth was invested in businesses, equities, and mutual funds which experienced considerable appreciation, whereas Black financial wealth was primarily invested in pensions, which experienced slower growth

Regulatory Developments

The Environmental Protection Agency’s (EPA) new reduced limit on industrial particles is projected to prevent 4,500 premature deaths annually and create $46 billion in net health benefits in its first year

?????????????????1. The stricter regulation lowers the annual standard for fine particulate matter to nine micrograms per cubic meter of air from 12 micrograms. These particles known as PM 2.5 are?around 2.5 microns in diameter and include soot produced by factories and power plants. It is linked to health effects such as asthma, and heart and lung disease and can disproportionately impact low-income and minority communities more likely to live near industrial facilities. Starting in 2032, states exceeding standards could face penalties

In the Markets

??????????????????1. Brookfield Asset Management raised $10bn for its Global Transition Fund II, focusing on global energy transition

?????????????????? 2. KKR?raised $6.4bn for its fund focused on infrastructure and renewable energy investments in Asia Pacific. It is the largest pan-regional infrastructure fund for Asia Pacific

??????????????????3. Heart Aerospace, a Swedish hybrid-electric airplane developer, raised $107m in Series B funding. Some investors included Air Canada, the European Innovation Council Fund, United Airlines, and Y Combinator

??????????????????4. Holcim, a Swiss-based green building solutions provider, acquired ZinCo, a German provider of green roofing systems

?????????????????? 5. Swell Energy, a home energy company, acquired Renu Energy Solutions, a North Carolina-based residential and commercial energy storage solutions provider

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