• Gustavo Bernal Torres

Municipal Bonds, ESG Tech, Ag-hype, and CEO Pay


Source: Pixabay



Here are 5 ESG insights you might have missed this week:


ESG Disclosure Guidance for Municipal Bond Issuers-

  • The Government Finance Officers Association (GFOA), which includes finance officers of over 20,000 municipalities across the US and Canada, issued its first guidance encouraging climate risk disclosure by municipal bond issuers.

  • The best practice guidance tries to address a disclosure gap, which obscures the municipal debt repayment risks stemming from sea level rise, wildfires, and other climate risks.

  • Governments play an important role in that overall assessment by providing specifics about their ESG challenges and action plans and in doing so, increasing transparency to the entire municipal market. ESG disclosure provides governments the opportunity to tell their story of what they are facing and how they are addressing the issues, a point of view that is valuable to the broader municipal market.

  • Source: https://www.gfoa.org/materials/esg-disclosure


The Technologies That Are Transforming ESG in the Private Markets-

  • Insights from an expert panel of private equity managers and technologists hosted by SuperTechnology North America to discuss the impact of technology on ESG.

  • Main discussion points and trends: Structuring ESG inputs, Automating ESG data collection, Regulatory vs. bespoke ESG models, Standardization of ESG metrics, Private market perceptions of ESG.

  • While the early days of ESG measurement in the private markets present some new challenges, the industry as a whole is enthusiastic about the trend and optimistic about its impact. Overall, private market participants see ESG reporting as a trend that will enable them to manage their money more effectively and gain more visibility into a historically opaque asset class.

  • Source: https://ihsmarkit.com/research-analysis/the-technologies-that-are-transforming-esg.html


CEO Pay Tied to ESG Sets Canadian Banks Apart From the Crowd-

  • Canada overall is ahead of the curve, with 16% of its companies studied by Sustainalytics reporting relatively transparent ESG criteria tied to pay. That trails only Australia, at 20%.

  • Canada’s six largest banks have all added ESG components to their chief executive officers’ compensation frameworks, putting them in a small minority of companies that tie executive pay to such measures.

  • How environmental, social and governance matters affect pay varies by firm, as does the percentage of compensation involved. Still, the Canadian lenders stand out because only 9% of the 2,684 companies in the FTSE All World Index tracked by researcher Sustainalytics in a 2020 study had tied executive pay to ESG.

  • Source: https://www.bloomberg.com/news/articles/2021-03-18/ceo-pay-tied-to-esg-sets-canadian-banks-apart-from-the-crowd


A New Approach to Problem-Solving Across the Sustainable Development Goals-

  • The Brooking Institution's new report, 17 Rooms: A new approach to spurring action for the Sustainable Development Goals, describes an effort to innovate around the process of SDG problem-solving itself.

  • COVID-19 has only underscored the central message of the Sustainable Development Goals that the underlying problems are both interconnected and urgent, so new mindsets are required to generate faster progress on many fronts at once.

  • In practical terms, 17 Rooms consists of participants from disparate specialist communities each meeting in their own “Rooms,” or working groups, one for each SDG. Each Room is tasked with a common assignment of identifying cooperative actions they can take over the subsequent 12-18 months. Emerging ideas are then shared across Rooms to spot opportunities for collaboration.

  • Source: https://www.brookings.edu/blog/up-front/2021/03/12/a-new-approach-to-problem-solving-across-the-sustainable-development-goals/


Regenerative Agriculture is the Next Great Ally in Fight Against Climate Change-

  • Nancy Pfund, managing partner and founder of DBL Partners, tries to temper the hype around Regenerative Agriculture.

  • Regenerative agriculture: It encompasses practices such as cover cropping and conservation tillage that, among other things, build soil health, enhance water retention, and sequester and abate carbon.

  • The broad excitement around regenerative agriculture is tied to its potential to mitigate climate impact at scale. The National Academies of Sciences, Engineering, and Medicine estimates that soil sequestration has the potential to eliminate over 250 million metric tons of CO2 per year, equivalent to 5% of U.S. emissions.

  • Source: https://techcrunch.com/2021/03/11/ag-industry-is-the-next-great-ally-in-fight-against-climate-change/




One more thing: From ESG Risk Monitor- an ESG Risk Bot for a free assessment of your company (Registration required).


Find the bot here- https://www.esgriskmonitor.com/esg-frontend/risk-bot



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