Maitland/AMO Sustain Monitor – 30 July 2021
Welcome to the revamped Sustain Monitor, which each Friday will summarise only the top ESG and sustainability announcements that you should know.
Last weekend saw G20 climate and energy ministers reach an impasse over the phasing out of coal, with China, Russia, India, Turkey and Saudi Arabia among those defending the fossil fuel. Breaking the stalemate over issues such as coal financing and setting a date for coal phaseout will require a step change in climate diplomacy between now and the G20 leaders’ summit on 30 October. It will also be a key indication of what the planet’s largest emitters may be willing to compromise on at COP26.
From the E to the S of ESG a global survey of 525 listed companies in 22 markets by our very own /amo network has shown that Covid-19 and last summer’s protests over racial inequality have impacted corporate leaders’ priorities. The survey shows that almost half of the companies reviewed (47.4%) included at least one value related to broader social issues in their annual report this year, an 11% increase over the previous year. As a result, “people & community” emerged as the most popular category of corporate values in 2021, ahead of “ethics & integrity” which led the field last year. Keep an eye out for next year’s survey to see if this trend continues…
There are 94 days to go until COP26.
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The top stories this week
What’s happening in policy and regulation
BETTER BATTERIES: A new report from the House of Lords’ Science and Technology Select Committee has warned that the government’s plans to scale up the battery manufacturing sector are not sufficient to successfully deliver the transition to net-zero or ensure that the UK remains a global leader within the industry. ‘Battery Strategy Goes Flat: Net-Zero Target at Risk’ notes that other nations have already invested more heavily in the space but says there is still a window of opportunity to turn things around if serious action is taken.
BOILER ISSUES: The UK government could be set to push back the proposed ban on new gas boilers by five years to 2040. The controversial decision to push back the deadline for the phasing out of fossil fuel heating systems is over the associated costs for transitioning households.
Ahead of COP26
MOOVING TOWARDS NET ZERO: A new UN-backed ‘ground-breaking’ initiative has been announced which aims to cut emissions across the global dairy supply chain. The Pathways to Dairy Net Zero will be officially launched at the UN Food Systems Summit in September ahead of COP26. Those involved in the new initiative include the Global Dairy Platform, the International Dairy Federation, and the Sustainable Agriculture Initiative Platform.
The sustainable investing trend continues
GREEN INVESTMENTS: According to the Global Sustainable Investment Alliance’s Global Sustainable Investment Review, sustainable investments now account for one-third of professionally managed assets across all major markets, having grown by 15% over the last two years.
FUND FLOWS: Morningstar’s recent report – Global Sustainable Fund Flows: Q2 2021 in Review – has revealed that global sustainable fund net inflows fell by 24% between Q1-Q2 this year. However, it notes that the $139bn Q2 figures is still one of the highest ever recorded.
Voting, fund closes, and voluntary carbon markets
TIME TO VOTE: Fidelity International has announced that from next year it will vote against management at companies that fail to tackle the climate crisis. The Group, which oversees $787bn in assets, will vote against boards that do not take steps to limit global warming to 1.5°C above pre-industrial levels.
BROOKFIELD FUND CLOSE: Brookfield Asset Management has announced an initial $7bn closing for its Brookfield Global Transition Fund – making it the world’s largest fund focused on the global transition to a net-zero economy. Brookfield has now established a hard cap of $12.5bn for the fund.
VCMI: The UK government and the Children’s Investment Fund Foundation have partnered to fund a Voluntary Carbon Markets Integrity Initiative. The scheme is backed by the COP26 Presidency and the UN Development Programme and will look at how to bring credibility and transparency to the voluntary carbon offsets market and stop greenwashing in the industry.