S Factors, Big Oil, Regenerative Agriculture, and Books
Here are 5 ESG insights you might have missed this week:
Is This A Turning Point For Big Oil?-
Three oil giants suffered separate blows in one day, marking what one analyst called “the start of a new era” for the industry.
Royal Dutch Shell suffered the first blow, as a civil court in the Netherlands ordered the company to cut its carbon dioxide emissions 45% below 2019 levels by the end of the decade.
Then, at the annual shareholder meeting of Exxon Mobil Corp. in Dallas, a comparatively tiny activist hedge fund -Engine No. 1- seeking to shift the oil giant away from fossil fuels and toward renewables won two seats on the board of directors.
Finally, climate-concerned shareholders at Chevron Corporation’s annual investor confab voted to force the company to make a plan to cut emissions generated from the use of its product ― making the Texas firm responsible for the pollution its customers create when burning oil and gas.
Source: https://www.huffpost.com/entry/big-oil-climate_n_60aea7f6e4b0a256831b5d3a
Biden Order Calls for Disclosure of Financial Risks of Climate Change-
President Biden announced an Executive Order on Climate-Related Financial Risk, with wide-ranging transparency, disclosure and investment implications for investors, companies and regulators.
According to the White House, the executive order aims to help the federal government to address the climate crisis and mitigate the economic risks of climate change, beginning with the measurement and reporting of the financial impact of those risks.
These actions may move the U.S. significantly closer to the deployment of mandatory climate and sustainability disclosures by companies, which is currently under consideration by the SEC. Secretary of the Treasury Janet Yellen has recently expressed support for sustainability reporting initiatives, such as the TCFD climate reporting framework, and the IFRS initiative towards developing a climate disclosure standard, and has committed to working with the SEC on its review of sustainability reporting requirements. Such a move would also bring the U.S. in line with other jurisdictions’ mandated sustainability reporting rules, including the UK and European Union.
Source: https://www.esgtoday.com/biden-order-calls-for-disclosure-of-financial-risks-of-climate-change/
Seven Ways Finance Has Changed In The Year Since George Floyd’s Murder-
The raw injustice and the social protests that followed pushed investors, corporate executives and policymakers to recognize the risks of systemic racism.
Racial justice investing ripples
Overlooked founders and fund managers shine
Surge in Black-owned businesses
Relief for Black farmers
New uses for corporate cash
Fiscal-justice risk is priced
"Defund the police" goes local
Source: https://impactalpha.com/seven-ways-finance-has-changed-in-the-year-since-george-floyds-murder/
Amplifying the “S” in ESG: Investor Myth Buster-
The white paper is the result of a collaborative effort by the ESG Working Group, Refinitiv, International Sustainable Finance Centre (ISFC), White & Case, Eco-Age, The Mekong Club, and the Principles for Responsible Investment (PRI), convened by the Thomson Reuters Foundation.
Myth 1- Financial materiality: Social performance is less financially material than environmental performance
Myth 2- Starting point: It is too difficult to know how and where to start assessing social performance
Myth 3- Data: The “S” indicators are too hard to measure; there is no reliable and comparable data
Myth 4- Integration process: Qualitative surveys or questionnaires are the best method for tackling social issues and analysing the social aspects of performance
Myth 5- Relevance to investors: Integrating “S” indicators is only relevant for impact investors
Unlocking Investments in Regenerative Agriculture-
The case for regenerative agriculture is clear—if all other fossil fuel emissions were eliminated immediately, emissions from the global food system alone would make it nearly impossible to achieve the Paris climate goals.
There are also dozens of corporate and institutional investor commitments to natural capital or sustainable farming that include regenerative agriculture. Managers of 48 different funds have raised more than $3.9 billion, much of it since the start of 2020, for regenerative agriculture. Capital from several sources is ready to flow to the field.
Despite inconsistent nomenclature, a diverse set of asset classes has emerged for regenerative agriculture. Efforts to transition more acres or hectares of land to regenerative agriculture were once reserved to philanthropy and blended finance. Now, commercial-rate investors have access to real assets for traditional farmland conversion to regenerative management (e.g., Clear Frontier Agriculture Management), financial loan platforms for smaller farms or pooled projects (e.g., Steward), carbon market platforms (e.g., Nori), processing and distribution platforms connecting growers and buyers (e.g., Soil Heroes), and companies and technologies that simplify the transition process through better data management (e.g., Trace Genomics) or improved land management (e.g., Vence). The pathways for capital to enable regenerative practices are numerous.
One more thing: From Barron's- 5 of the Best Books on ESG and Impact Investing
Find the list here- https://www.barrons.com/articles/its-a-jungle-out-there-five-of-the-best-books-on-esg-and-impact-investing-51621546439
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