This blog is part of a regular series of blogs on the wide topic of ESG and items that have caught my attention.
Official announcements
Resources and Reports
3. In a recent report, Moody’s Investor Services announced it expected global issuance of green, social and sustainability bonds – collectively referred to as sustainable bonds – to reach a record $650 billion in 2021, up 32% from last year and that while it expected green bond issuance to surge 39% after a flat 2020, growth in social and sustainability bond issuance will slow as coronavirus-related financings begin to stagnate.
4. The annual Dear CEO letter from the CEO of BlackRock instructed companies to develop climate-compatible business plans backed by data on their emissions. “There is no company whose business model won’t be profoundly affected by the transition to a net zero economy—one that emits no more carbon dioxide than it removes from the atmosphere by 2050,” Fink wrote. The letter went to define an ultimate goal for companies to become “consistent with a global aspiration of net-zero greenhouse gas emissions by 2050.”
5. The NYU Stern Center for Sustainable Business has developed a Return on Sustainability Investment (ROSI) methodology to bridge the gap between sustainability strategies and financial performance, helping to build a better business case for both current and planned sustainability initiatives. It has also issued a recent report highlighting that among the 1,188 board members of the 100 largest U.S. companies, only three had climate expertise and only 6% offered broader environmental expertise.
6. A recent article in the Financial Post quoted a London hedge fund that expected the price of carbon emissions to rise from the current level of €33 per tonne to €100 by the end of the year. As well as making a lot of money for its investors, it could have a dramatic impact on the profitability of certain companies.
7. The Carbon Disclosure Project (CDP) is a global disclosure system that claims to have the most comprehensive collection of self-reported environmental data in the world with over 9,600 companies disclosing information on their platform. Their latest report names 10 companies it rates as an A for Climate change, Forests and Water Security.
8. In January 2021, the Science Based Targets initiative (SBTi) released its annual progress report. With over 1,000 companies involved, it claims that:
The 338 companies in their analysis collectively reduced their annual emissions by 25% between 2015 and 2019 – a difference of 302 million tonnes, which is equivalent to the annual emissions of 78 coal-fired power plants;
The typical SBTi company has reduced its scope 1 and 2 emissions at a linear rate of 6.4% a year since setting their targets, more than the 4.2% annual reduction the SBTi requires for targets aligned with 1.5°C; and
Scope 3 target setting is now standard practice: 94% of companies with approved science-based targets have set scope 3 targets in line with climate science.
To measure the progress of science-based target setting towards a 20% threshold (deemed to be critical mass) within key sectors and geographies, the SBTi used a sample of 1,840 high impact companies based on their potential contribution to climate mitigation. This is determined by a combination of their greenhouse gas emissions and market capitalisation.