Maitland/AMO Sustain Monitor – 17 September 2021

17th September 2021

Companies not adequately reporting their climate risk are continuing to receive scrutiny from environmental NGOs, despite the recently growing demand from governments and investors for clarity on how climate change may impact companies’ financial performance.

 

A review of 107 global companies in carbon-intensive sectors, including energy, cement and transport, found that over 70 per cent did not indicate whether they had considered climate when preparing their 2020 financial statements. The research, conducted by the Carbon Tracker Initiative and the Climate Accounting Project, raises questions over whether investors are able to make effective capital allocations as companies may be either overstating their assets or understating their liabilities. Climate campaign organisation ClientEarth has recently levelled similar accusations, singling out Just Eat and Carnival cruises for not addressing how climate change will affect their operations and finances in their investor reports.

 

Whilst commitments to tackle emissions have been broadly welcomed, expect continued demand for clarity over how companies’ actual finances will be impacted.

 

There are 45 days to go until COP26.

 

If you’d like to hear more about Maitland/AMO Sustain and our bespoke sustainability offering, please contact sustain@maitland.co.uk

 


Top stories this week

Fashionable timing..

SIGNED, SEALED, DELIVERING: Asos has launched a new sustainability strategy – Fashion with Integrity – which targets a range of ESG goals by 2030 including plans to deliver a net-zero value chain, embed circular design principles and ensure at least 50% of leadership-level positions within the company are held by women.

PRIMARK PLEDGE: Fast fashion retailer Primark has announced a host of new sustainability goals, pledging to reduce its carbon footprint by 50%, switch to sourcing more sustainable or recycled materials for its products and enhance the durability of the items it sells, all whilst promising to remain affordable.

Green bonds..

SUSTAINABLE FITCH: Credit rating agency Fitch has launched an ESG ratings arm for fixed income. ‘Sustainable Fitch’ will aim to produce a rating for every labelled bond by 2022, and eventually rate the entire fixed income market.

GREEN BOND BENEFITS: A report from the European Securities and Markets Authority has identified a correlation between green bond issuance and decarbonisation levels, concluding that utilities, banks and energy companies that issue green bonds have decarbonised faster than non-green bond issuers in the same industries.

New appointments..

CABINET RESHUFFLE: Boris Johnson’s recent cabinet reshuffle has seen Simon Clark, a long-standing advocate of the net zero transition, returning to government as Chief Secretary to the Treasury whilst Greg Hands is set to become the new Minister for Energy and Clean Growth.

TNFD UPDATES: The Taskforce of Nature-related Financial Disclosure has announced the appointment of Tony Goldner as Executive Director of its Secretariat. The TNFD Secretariat will be comprised of a globally distributed team hosted by the Green Finance Institute and supported by the United Nations Development Programme and the United Nations Environment Programme Finance Initiative.

Changing energy landscape..

END IN SIGHT: New analysis from E3G and Global Energy Monitor claims that the beginning of the end for the global coal power industry may soon be in sight. The report found that since the Paris Agreement in 2015, the pipeline for new coal projects worldwide has decreased by 76%.

STORMING AHEAD: New figures from RenewableUK have revealed that the UK’s floating wind energy pipeline is the largest in the world, with more projects either planned or in operation than anywhere around the globe. The UK has a 8.8GW pipeline of floating wind projects, representing 16% of the global total.

In central banking..

FINNISHED BY 2050: The Bank of Finland has announced a ground-breaking target of achieving carbon neutrality within its €8bn investment portfolio by 2050. The announcement is believed to be the first time a central bank has targeted carbon neutrality through its investments.

And finally..

LAGGING BEHIND: An update from the Science Based Targets initiative has revealed how far behind US corporates are in the net zero transition compared to their European counterparts. The SBTi revealed that only one US power company has approved science-based targets.