ESG is PR Spin, SEC, Joint Indicators, and Rhinos
Here are 5 ESG insights you might have missed this week:
ESG is PR Spin and Marketing Hype-
Blackrock’s former sustainable investing CIO Tariq Fancy writes in USA Today Op-Ed that Wall Street is greenwashing the financial world, making sustainable investing merely PR, which is a distraction from the problem of climate change.
In many instances across the industry, existing mutual funds are cynically rebranded as “green” — with no discernible change to the fund itself or its underlying strategies — simply for the sake of appearances and marketing purposes. In other cases, ESG products contain irresponsible companies such as petroleum majors and other large polluters like “fast fashion” manufacturing to boost the fund's performance.
As disheartening as this reality is, claiming to be environmentally responsible is profitable.
When I left the industry in late 2019, I was frustrated by the lack of any real change. But I took some comfort in believing that if we weren’t doing as much as we could, at least we weren’t doing any harm. Since my departure, I have had a lot of time to think about this issue, and I’ve reassessed my opinion. I believe we are doing irreversible harm by stalling and greenwashing. And all in the name of profits.
We’re running out of time and need to accept the truth: To fix our system and curb a growing disaster, we need government to fix the rules.
Also, as a response and an opposing view, have a look at the push-back from Responsible Investor's co-founder Hugh Wheelan.
Sources: https://www.usatoday.com/story/opinion/2021/03/16/wall-street-esg-sustainable-investing-greenwashing-column/6948923002/ & https://www.responsible-investor.com/articles/blackrock-s-former-sustainable-investing-cio-tariq-fancy-is-totally-wrong-that-esg-is-spin-and-marketing-hype
SEC Response to Climate and ESG Risks and Opportunities-
SEC is responding with an all-agency approach and launches climate and ESG webpage.
In light of demand for climate change information and questions about whether current disclosures adequately inform investors. Public input is requested from investors, registrants, and other market participants on climate change disclosure.
According to the SEC, the page brings together agency actions and the latest information about climate and environmental, social and governance investing. It will appear on the front page of SEC.gov and will be updated as the agency continues to respond to investors.
Release of Joint Indicators for Impact Measurement-
IFC and the GIIN harmonize impact standards.
The Joint Impact Indicators (JII) from the Global Impact Investing Network and International Finance Corp. bring together the GIIN’s IRIS catalog with IFC’s Harmonized Indicators for Private Sector Operations (HIPSO), which cover gender, equality, jobs, and climate.
The JII will help reduce reporting burden on investee companies and increase the availability of comparable impact data to inform decision-making. By setting clear and common indicators, the JII will help capture the economic, social, and environmental impacts of investments, allowing investors to improve their effectiveness, transparency, and accountability.
NGOs Name Top Banks Who Put $3.8 Trillion Into Fossil Fuels-
The world’s biggest banks have pumped a staggering $3.8 trillion into fossil fuel industries over five years, a new report by an alliance of NGOs has revealed.
The report, ‘Banking on Climate Chaos,’ shows that the world’s 60 largest banks have actually increased their investments in fossil fuels since 2016, the year following the Paris Agreement, peaking in 2019 with total investments of $824 billion. That total dipped by 9% in 2020, in line with the global fall in fuel demand caused by the coronavirus pandemic.
Canada’s Carbon Price is Constitutional, Supreme Court Rules-
In a split decision, the judges on the Supreme Court of Canada found that climate change poses a real, serious threat to the world — one that’s serious enough to allow the federal government to step on some provincial toes.
The decision was the culmination of years of disputes between some provinces and the federal government over the Greenhouse Gas Pollution Pricing Act (GGPPA). The law, which was introduced in 2018, laid out a national framework for pricing carbon – one that applies to everyday consumers as well as industrial emitters.
The act details a minimum set of standards for pricing carbon, leaving provinces free to establish their own policies beyond that initial threshold. However, if those provincial policies don’t meet the standards set out in the federal law, Ottawa slaps its federal carbon tax on the province.
Opponents called the Act a “constitutional Trojan horse” as they suggested Ottawa could regulate whatever it wanted as a result of this law, because so many aspects of the economy produce emissions. Others called it a monumental step forward for climate action and smart economic policy.
One more thing: An innovative outcomes-based bond designed to raise funds to grow the population of endangered black rhinoceros in South Africa- World’s First Wildlife Bond to Track Rhino Numbers in Africa. The aim is increase the population by 4% per annum.
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