Where theory and practice meet: Sustaining and impactful, and especially for governance fiduciaries.
Author: Christopher K. Merker, Ph.D., CFA
Christopher K. Merker, PhD, CFA, is a director with Private Asset Management at Robert W. Baird & Co. He holds a PhD in investment governance and fiduciary effectiveness from Marquette University, where he has taught the course “Sustainable Finance” since 2009. Executive director of Fund Governance Analytics (FGA), an ESG research partnership with Marquette University, he is a member of the CFA Institute ESG Working Group, an international committee currently exploring ESG standards, publishes the blog, Sustainable Finance, which covers current topics around governance and sustainability in investing, and is co-author of the book, The Trustee Governance Guide: The Five Imperatives of 21st Century Investing.
The Canadian province of Quebec has big plans of becoming the “battery of the U.S. northeast” by feeding power generated from its dams and other hydro plants to millions of people in Vermont, Massachusetts and New York state. But dry conditions that have affected energy output worldwide are forcing one of the world’s largest hydropower producers to cut exports.
“There wasn’t enough snow or rain in the regions where we needed it,” said Michael Sabia, chief executive of Hydro‑Québec, the provincial utility. “We can’t make it rain, as much as we’d like to.”
MINNEAPOLIS—On a 60-degree day here in early March, Derek Hughes and his son, Dylan, tried out their cross-country skis on artificial snow that had melted into a slushy mess.
“It feels like the cross-country equivalent of water skiing,” said Hughes, 42 years old, as his 8-year-old son—skiing for only the third time all winter—looked up with a smile.
This is the winter that wasn’t in Minnesota and other states across America’s normally frozen northern tier. Record warm temperatures and low snowfall have forced the cancellation of everything from ice fishing tournaments to dog sled races to winter carnivals. Business has dried up for ski resorts, snowmobile makers and any other venture that relies on cold weather and white powder to make a living.
The Loppet Foundation, the nonprofit that oversees winter recreation in the park where the Derek Hughes and his son were trying to ski, has seen a 60% drop in revenue compared with last winter, said executive director Claire Wilson.
“Winter is our bread and butter,” she said. “We can’t have another year like this.”
Michael Polsky is getting into fights all over the country.
The Chicago billionaire, a Ukrainian immigrant who made his fortune through wind, solar and other renewable-energy projects, wants to build a lot more. And he also wants to build natural-gas-fired power plants.
At every turn, he says, he faces opposition from either the left or the right—illustrating his view that the country’s approach to energy has gone completely off the rails.
“It’s crazy,” said Polsky, who founded his company, Invenergy, in 2001. “Why if you build renewables you’ve got to be on the left, and if you build coal or gas you’ve got to be on the right? To me, you build what makes sense to build.”
Global average temperature rise in February reaches 1.77C above pre-industrial levels
The warmest northern hemisphere winter on record was accompanied by unsurpassed sea surface temperatures and unusual drought and rain patterns across the world, the European Earth Observation Agency said. The global average temperature in February was 1.77C above the pre-industrial average and marked the ninth month in a row of record heat, the Copernicus Climate Change Service said.
WASHINGTON—The Securities and Exchange Commission approved new requirements that public companies disclose their greenhouse-gas emissions, but dropped a key provision that was fiercely opposed by business groups.
The 3-2 vote in favor of the rule comes after a two-year process involving intense lobbying from some of the world’s biggest industries and influential climate groups. It has faced relentless criticism from corporations and Republican lawmakers who say the agency is reaching beyond its authority.
“These rules will enhance the disclosures that investors have been relying on to make their investment decisions,” SEC Chair Gary Gensler said Wednesday. He said they would give investors consistent and reliable disclosures about climate risks.
Wall Street’s top regulator will vote on March 6 on whether to adopt rules requiring U.S.-listed companies to report climate-related risks, the agency said in a notice on Wednesday, in a potentially major overhaul of U.S. disclosure rules.
The Securities and Exchange Commission rules aim to standardize climate-related company disclosures about greenhouse gas emissions, risks and how much money they are spending on the transition to a low-carbon economy. The agency says that such information is important for investors.
SANTIAGO, Chile—Forest fires roared across a heavily populated swath of central Chile, killing about 100 people and destroying some 3,000 homes, according to government officials. The destruction is disrupting Latin America’s most market-friendly economy.
Some 370 people were missing, Mayor Macarena Ripamonti of Viña del Mar said early Sunday. Her city, along with hillside communities around the port city of Valparaiso, have borne the brunt of the damage from the fires that began Friday.
In a televised address late Saturday, President Gabriel Boric warned that “given the conditions of the tragedy, the number of victims will surely go up.”
On Sunday, as he toured the hard-hit town of Quilpue, Boric said the disaster was the worst since the 8.8-magnitude earthquake and tsunami in 2010 that killed more than 500 people. The number of victims from the fires “will increase significantly,” said the president, who declared two days of mourning.
The imperatives of climate change demand enhanced risk management in the commercial real estate (CRE) loan market: Investors and lenders must refine their strategies and conduct meticulous property-level risk assessments as part of their credit analysis. Community and regional banks are particularly susceptible to climate-related financial risk due to their CRE loan balance sheet exposure and must navigate unpriced climate risks to ensure balanced and resilient loan portfolios. To maintain portfolio health and overall stability, these institutions must exercise ongoing vigilance in their risk monitoring.
Exxon MobilXOM -0.16%decrease; red down pointing triangle is suing two sustainable investment firms in a bid to block them from putting forward a shareholder proposal that would commit the oil company to further curb its greenhouse-gas emissions and target its customers’ emissions.
In a federal lawsuit filed in Texas on Sunday, the Houston-based oil giant said investment firms Arjuna Capital and Follow This became Exxon shareholders only to put forward proposals that would “diminish the company’s existing business.”
U.S. sustainable funds had their worst calendar year in 2023, according to Morningstar, which has been tracking them for more than a decade.
Investors pulled $13 billion from U.S. sustainable funds in 2023, including $5 billion in the fourth quarter alone, due to a combination of lagging performance, politics and one iShares fund’s bad year.
