Newsletter: Moral Money
What you need to know about the rapidly expanding world of socially responsible business, sustainable finance and more. Delivered twice a week.
Hello, hello from New York. It just closed another climate week and the UN General Assembly gathering. We have summarized three themes from the following week.
But first, we are very pleased.Inside ESG “: FT’s Behind the Money Podcast Series!! In our first two episodes Leila Abboud, FT Paris correspondent, ESG star downfall Emmanuel Faber, Former CEO of Danone.You will hear from again Gillian Tett, Andrew Edgecliff-Johnson When Talik FancyFormer BlackRock Chief Investment Officer for Sustainable Investment. There will be more episodes in the future. Your moral money team is really excited about this series. As always, I would love to hear your feedback on moralmoneyreply @ ft.com.
UN conference sheds light on climate progress that week
Face-to-face speeches and conferences for the United Nations and Climate Change Week provided a comfort return to some similarities to normal after an 18-month pandemic. Still, there remains anxiety that global warming is only getting worse. We have identified five themes this week that show the current situation and future prospects for COP26.
As reported by colleagues Leslie Hook and Camilla Hodgson, Glitter of hope That hostility between the United States and China may not shatter the prevention of global warming. Xi JinpingThe surprising announcement that China will stop funding international coal-fired power plants “has been optimistic about the fierce climate negotiations.”
Environmentalists praised China’s announcement, but questioned how it would be implemented accurately and warned that China also needed to stop domestic coal. “We hope that this important decision on international coal lending can also stimulate China to follow a similar path domestically for the health of its people and the planet,” Greenpeace said. Quite correct.
British Prime Minister despite the European natural gas crisis Boris Johnson There were no signs of diminishing the importance of tackling global warming or downgrading COP26. “It’s time for humanity to grow,” he said.[take] “Responsibility for the destruction we owe on Earth,” he said. “We are doing such irreversible damage,” he added, and soon “we will make this beautiful planet virtually uninhabitable.” If Johnson and Britain can match climate rhetoric and behavior, we may be heading in the right direction. But one big question is whether Joe Biden’s US administration will offer anything in November. This is because it relies heavily on the fate of Biden’s infrastructure bill. At best, that’s a problem.
The financial sector continues to play a major role in making progress. The week included the announcement of $ 25 million in funding for South Asian low-carbon emissions development by Goldman Sachs and Bloomberg Philanthropy. Mark carney, Credit rating agencies and big four accounting firms Alliance Align “all relevant products and services” with achieving net zero greenhouse gas emissions by 2050 and set “meaningful” provisional goals for 2025 within 12 months of participation I promise that. Yay. However, due to the slow pace of action by G20 leaders, some private sector players are afraid that the government will not be able to throw the ball or coordinate its actions in a wise manner within the next few months.
The phrase “yellow vest” (or “Gillette Jones”) was quietly thrown this week as soaring gasoline prices in Europe created a general backlash against climate change reforms. The last time this happened in Paris-the protesters wore yellow vests to express their anger at the fuel tax-the government was forced to make a U-turn. Recently, some politicians have also blamed Texas for power outages on renewable energy reforms. The British government is scrambling to avoid repeating this. However, anxiety is growing.
Amazon founder Jeff Bezos is becoming more and more important to pay attention to in the world of green philanthropy. This week, Bezos will donate $ 1 billion of his $ 10 billion Earth Fund this year to support conservation initiatives under the leadership of Andrew Stair, a respected figure in the field. Was announced. “Nature is our life-support system and fragile,” Bezos declared after revealing that he became more interested in the issue of green after going to space in July. “I heard that looking at the earth from space changes the world view, but I wasn’t prepared for how true it was.”
Accenture sees opportunities in ESG prioritization
Companies that surpass their peers to respect environmental and social issues are generating at least 20 percent more profit, according to a new report. report From Accenture and the World Economic Forum.
However, most companies still have a long way to go. Accenture scored more than 4,000 companies on “Sustainability DNA,” with an average score of 52 out of 100. The yawning gap represents Accenture’s opportunity in the form of services that consulting firms can offer to their clients.
To that end, the company is in the process of providing ESG training to more than 600,000 employees. Peter LacyAccenture’s Chief Executive Officer and Global Leader in Sustainability Services likened the transition to digital 10 years ago.
“We’ve already trained more than 63,000 employees in the last six months alone,” Lacy told Moral Money, and Accenture’s capital markets sector is “the most excited” from the slowest to adopt ESG. Said that it has moved to.
Accenture trend Companies that employ thousands of people as they are seen across consulting firms and accounting firms and are under pressure to improve their impact on the planet and quantify the dollar value of ESG risks they face. There is also. (Kristen Talman)
Woman struggles to break the glass ceiling of a bank
Citigroup Jane Fraser Last year, he was appointed as the first CEO of a major Wall Street bank. Reason for celebration In the sector.
However, according to a new report from Moody’s, women are still faced with a stiff “glass ceiling” when raising their ranks in banks. Many women score entry-level banking, but the phrase “has not yet been evenly translated into executive and board ranks,” Moody’s said.
Moody’s added that women are more likely to take on staff roles in corporate support positions such as human resources, legal and accounting. According to Moody’s, the money-making role is “still mostly played by men,” and it is these roles that have sent people to the C Suite.
Moreover, according to Moody’s, few banks have announced gender-related diversity and inclusive procedures. Of the 72 banks surveyed, few “disclose clear plans to increase board diversity.” It revealed. (((Patrick Temple-West)
Oyster Grit: Private Equity Funds Can’t Promote Portfolio Enterprise Sustainability
The world’s largest private equity fund companies face increasing pressure to prioritize their environmental, social and governance (ESG) issues. Many pension funds, foundations and other limited partners are now demanding that PE companies take ESG seriously.
However, according to a new study, there is a gap between what PE companies are clamoring for sustainability and what portfolio companies are looking for.
In a survey of about 200 private equity portfolio executives, only 44% said their team adopted ESG. Report From consultancy Russell Reynolds Associates. This is in contrast to public company executives who said two-thirds focused on ESG.
Russell Reynolds said the gap “suggests that good intentions have not yet been reflected in the behavior of portfolio companies.” “PE-backed portfolio companies do not appear to be making consistent progress towards their sustainability goals.”
Only one-fifth of PE-backed corporate executives say they are involved in an internal effort to investigate the environmental or social impact of an organization.
PE companies can no longer dismiss this issue as regulated and financial markets are squeezing ESG businesses. Kurt Harrison, Russell Reynolds partner.
Today, he said, PE companies could not withdraw through an initial public offering without reliable ESG measurements and reporting policies. “That’s right, but it’s also a commercial obligation.”
How are ESG funds in line with the United Nations Sustainable Development Goals? According to Util, an AI-based ESG evaluator, “there is little consensus on what sustainability really means or how to measure it.” However, according to Util’s latest report, Sustainable US funds score positive for the 12 SDGs and negative for the 5 SDGs. We also found that sustainable funds are devoted to women-led businesses and have a social and environmental lens. However, performance was still poor with SDG 5 (gender equality) and SDG 7 (partnership for goals).
The cost of switching to a low-carbon economy is far less than the “particularly difficult” impact of climate change on businesses in the region, the European Central Bank reported this week, updating Europe’s summer floods and wildfires. I pointed out as an example of. In the worst-case scenario (no action taken), global warming could knock out Europe’s gross domestic product by 10% and increase corporate loan defaults to the most exposed companies by 30%. FT Martin Arnold has details 3 scenarios What the ECB modeled.
The gender pay gap between MBA graduates has almost halved in the last four years, but men still earn an average of 20% more. New report.. A 2020 study by the Forte Foundation, a consortium of companies and universities founded to address gender imbalances, found that men earned an average of $ 177,112 and women earned $ 147,412.
For four years, the British Academy has hosted one of the most ambitious efforts to rethink the role of business in society.This week final report Set up policy changes and new practices that claim they are needed.You can catch the debate at that launch event between things like CalPERS Unsimpson And of oxford sade Colin Mayer here..
UK companies have called for improved disclosure of long-term feasibility to investors (FT)
The ECB states that the cost of climate change is much higher than the green transition (FT)
Wind power: Not so easy for investors (FT)
10 open questions about the $ 40 trillion ESG industryForbes)
UK Debt Officers Are Employing More Green Financing After Cost Reduction (Bloomberg)
Heroic accounting (Stanford Social Innovation Review)
What we learnt from UNGA week, 2021 Source link What we learnt from UNGA week, 2021