Manager Selection, Emissions Data, ESG Balanced Scorecard, and Planetary Doom
Here are 5 ESG insights you might have missed this week:
Asset Owners Say ESG Expectations Now Play ‘Major Role’ in Manager Selection-
Environmental, social, and governance (ESG) factors are now key criteria for selecting new asset managers, according to a survey of pension schemes, insurance firms, and family offices worth a combined USD7 trillion.
According to the survey from bfinance, asset owners are also distancing themselves from managers that are not keeping up with the drive toward responsible investment.
60% of investors say that sustainability considerations play a major role in manager selection, up from 41% in 2018.
Almost 1/3 of endowments and foundations terminated a manager due to sustainability considerations.
Obtaining consistent ESG reporting and data across asset managers and asset classes is a major challenge for over 50% of the asset owners surveyed.
Source: https://www.institutionalassetmanager.co.uk/2021/02/08/295576/asset-owners-say-esg-expectations-now-play-major-role-manager-selection & https://www.bfinance.com/insights/white-papers/esg-asset-owner-survey/
Inevitable Planetary Doom Has Been Exaggerated-
A piece from The Atlantic noting that although climate change is a real threat to us all, feeling helpless or overwhelmed isn’t going to solve it. Hope for the future is a reasonable and a necessary prerequisite for action.
"But environmentalists are so good at emphasizing worst-case scenarios that when we look to the future, apocalypse often feels inevitable. After all, aren’t we in the “sixth mass extinction”? Haven’t populations of wild animals already crashed by 60 percent? Don’t we have just “10 years left” to avert climate meltdown? Do we really dare to hope?"
"Jesse Jenkins, an energy-systems expert at Princeton, also rejects the idea that if we fail to keep warming under 1.5 degrees Celsius, the key target in an influential United Nations report, all is lost. “Any time you see a round number like 2.0 or 1.5 or 20 percent by 2020, that is a political number,” he said. “The reality is that every 10th of a degree matters.” There is no threshold after which it is not worth fighting."
"There will be more crises, more setbacks. But there is no “too late.” In the longer term, we know what we need to do to stop climate change, save species, and make sure everyone breathes clean air and drinks clean water. Not everything can be saved. But 2021 can be better than 2020, and 2031 can be much, much better than 2021, if we demand it."
A Tidal Wave of New Carbon Emissions Data Soon Will Be Upon Us-
A radical increase in available carbon emissions data may be just around the corner. Should it happen within a matter of months as proponents hope, its effects will spread around the world to dramatic effect.
In this short piece, the author talks about the attempt to map and publish in real time all the major sources of human-made carbon emissions on the planet, right down to individual factory/facility level.
Central to this shift is likely to be is a collaborative endeavor called Climate TRACE. Climate TRACE (Tracking Real-Time Atmospheric Carbon Emissions) is a project to use satellite image processing, remote sensing technologies, machine learning and artificial intelligence to monitor worldwide human-made greenhouse gas emissions in real time.
If this comes off later this year as planned, it will have potentially huge ramifications for investors, politicians, the COP26 negotiations, ESG strategies, and environmental consumer and citizen activism. And the journey to increased transparency and accountability with regard to emissions is only going to accelerate.
2021 Impact Fund Universe Report: A Market Map for Institutional Investors-
From Phenix Capital a report providing insight into the evolving impact fund market, analysing trends in the allocation of impact capital across different themes, asset classes, SDGs and geographies from over 1,600 of the funds monitored by the Impact Database.
Investors continue to pour billions into sustainability-themed stock funds, making “ESG” one of the hottest trends in asset management. But new private impact funds worldwide raised just €10 billion ($12 billion) last year – less than 30% of the capital raised by new funds in 2019.
In a very challenging year for fundraising, the biggest strategies in the space continue to confirm the preferred sector allocation trends in recent years, attracting scalable institutional capital to renewable energy and climate-related infrastructure.
Over 2020, publicly-listed funds have produced positive returns and outperformed their own stated benchmark.
Source: https://www.phenixcapitalgroup.com/2021-impact-fund-universe-report & https://impactalpha.com/tale-of-two-markets-public-markets-esg-funds-roar-private-market-impact-funds-struggle/ (Registration required)
Reimagining the Balanced Scorecard for the ESG Era-
In this article from Harvard Business Review, the authors propose an update to the Balanced Scorecard, one of the most successful management tools of all time, so that it can better help align stakeholders coming from very different places around each other’s goals as well as their own.
Companies are increasingly aware that their customers and society in general expect businesses to adopt and work towards social and environmental objectives as well as the traditional financial ones. This involves not only re-evaluating firms’ models but re-imagining new, more inclusive ecosystems from a multi-stakeholder point of view.
By evolving the Balanced Scorecard and Strategy Map’s perspectives to reflect today’s expanded role for business in society, we believe that the BSC will help businesses focus and deliver on society’s expanded expectations for sustainable and inclusive economic growth.
One more thing: From last Sunday's SuperBowl ads, GM making an effort to push EVs mainstream with two ads - "No Way Norway" and "ScissorHandsFree"
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