Where theory and practice meet: Sustaining and impactful, and especially for governance fiduciaries.
This article recommends that a shift in focus is needed on the ESG drivers of value creation (i.e. materiality).
Despite countless studies, there has never been conclusive evidence that socially responsible screens deliver alpha. A better model exists, argue Harvard Business School luminaries MichaelPorter, George Serafeim, and Mark Kramer.
Nordic pension investors have committed to carbon neutral portfolios by 2050 as part of a new asset owner campaign.
Members of the alliance will set and publicly report on intermediate targets “in line with Article 4.9 of the Paris Agreement”, thereby holding themselves publicly accountable, according to a statement about the new initiative.
A spokeswoman said this meant the investors would be setting targets for the same points in time as countries will under the accord.
“The idea is that investors and countries can influence each other towards higher levels of ambition as they set such targets, especially when they set them in synchronicity, and when they proceed in lock-step,” she added.
https://www.bloomberg.com/graphics/2019-can-renewable-energy-power-the-world/
The chief executive of the world’s largest private coal company sat before a group of U.S. lawmakers who wanted to know whether the fuel had a future. He didn’t hesitate. “Coal,” he said, “is the future.”
Not quite. This April, for the first time ever, renewable energy supplied more power to America’s grid than coal—the clearest sign yet that solar and wind can now go head-to-head with fossil fuels. In two-thirds of the world, they’ve become the cheapest forms of power.
Solar and wind will power half the globe by 2050, based on BloombergNEF forecasts. By that time, coal and nuclear will have all but disappeared in the U.S., forced out by cheaper renewables and natural gas.
J.P. Morgan Asset Management is joining a chorus of global financiers saying that protecting the environment will be a key consideration for extending shipping loans.
“There is not an institutional investor today in the Western world that is not thinking about the impact of environmental, social and governance factors,” Andy Dacy, the chief executive of the finance firm’s global transportation group, told a meeting at the International Shipping Week here.
“Anyone looking for [shipping] capital, if you’re not employing such a strategy, it’s going to be increasingly very difficult to get capital.” Mr. Dacy said.
The ongoing debate about environmental, social, and governance (ESG) investing sometimes feels like a rehash of that age-old rhetorical question.
Proponents of ESG data believe it can help investors better understand the risks and opportunities companies face and may even offer alpha generation potential. On the other hand, skeptics think ESG criteria limit the universe of available stocks and that such restrictions are bound to negatively impact returns.
To return to our metaphor, having the ESG cake means generating strong investment performance, while eating it too implies doing good from an ESG perspective.
So which is it? Can investors have it all?
https://www.gatesnotes.com/Energy/A-question-to-ask-about-every-climate-plan
I get to learn about lots of different plans for dealing with climate change. It’s part of my job—climate change is the focus of my work with the investment fund Breakthrough Energy Ventures—but it’s just as likely to come up over dinner with friends or at a backyard barbecue. (In Seattle, we get outside as often as we can during the summer, since we know how often it’ll be raining once fall comes.)
Whenever I hear an idea for what we can do to keep global warming in check—whether it’s over a conference table or a cheeseburger—I always ask this question: “What’s your plan for steel?”
I know it sounds like an odd thing to say, but it opens the door to an important subject that deserves a lot more attention in any conversation about climate change. Making steel and other materials—such as cement, plastic, glass, aluminum, and paper—is the third biggest contributor of greenhouse gases, behind agriculture and making electricity. It’s responsible for a fifth of all emissions. And these emissions will be some of the hardest to get rid of: these materials are everywhere in our lives, and we don’t yet have any proven breakthroughs that will give us affordable zero-carbon versions of them. If we’re going to get to zero carbon emissions overall, we have a lot of inventing to do.
https://crr.bc.edu/wp-content/uploads/2019/07/SLP67.pdf
U.S. state and local pension funds manage over $4 trillion in retirement assets for 20 million active and retired plan members. Given the significance of these funds, proper oversight is vitally important to government officials, plan participants, and taxpayers alike. The challenges to effective pension fund governance have been well documented, and significant research has demonstrated that the characteristics of pension boards matter. This brief summarizes public pension fund governance, discusses key aspects of public pension boards, and presents additional evidence that a well-designed board relates to better plan outcomes.
https://www.sageadvisory.com/debatable-yet-undeniable-taking-responsibility-for-climate-change/
People can curb climate change and mitigate environmental pollution by voting with their money and investing in companies that have policies in place to limit such negative activities.
Although it has long been debated as to what extent humans are contributing to climate change and our ability to adapt, what is undeniable is the fact that the earth is getting warmer. The current warming cycle is occurring twice as fast in the Arctic than anywhere else on earth, and it is causing significant changes in the extent, duration, and conditions of sea ice. The loss of sea ice around the Svalbard, an archipelago in the Norwegian Sea, is predicted by scientists to be particularly profound in the coming decades.
https://www.commonfund.org/news-research/blog/top-stewardship-imperatives/