• Gustavo Bernal Torres

Case Studies, Shell, Deforestation 2020, and Elephants


Source: Pixabay



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


1. UN PRI's New Case Studies-

  • UN PRI released 17 new case studies of how global asset managers and asset owners integrate ESG factors into their investment process.

  • Examples include:

  • British Columbia Investment Management Corporation (BCI): Developing an ESG risk and opportunity framework

  • Amundi: Facilitating a just transition for climate

  • BMO Global Asset Management: Understanding clients’ ESG preferences

  • The Barclays Bank UK Retirement Fund: Integrating ESG factors into a DC Default Diversified Growth fund

  • Robeco: Launching a Paris-aligned fixed income strategy

  • Northern Trust Asset Management: Developing an NT ESG Vector Score

  • Link to Source: https://www.unpri.org/searchresults?qkeyword=&parametrics=WVSECTIONCODE%7C1016


2. Shell and Third Point: Spinning (Off) the Sector-

  • Carbon Tracker’s new research work stream focuses on “Corporate Research”. Their first document focuses on Shell and how the US activist hedge fund, Triple Point, is pushing for a demerger into a legacy energy business and a low-carbon business.

  • The Third Point proposal could be seen as an illustration of the polarisation in the asset management industry between: those who support investee companies in their energy transition effort, others becoming “impatient” at the costs involved with this, yet others looking to avoid any exposure to fossil fuel and, lastly, an opportunistic constituency driven by short-term goals.

  • Carbon Tracker's conclusion: The Third Point proposal represents a useful stimulus to understand better, through the lens of a corporate finance operation, the changes and pressure that oil companies are facing in implementing their energy transition plans. But does not seem to represent, as it stands, the ideal solution for Shell, at this juncture, and certainly not for the climate, given over-reliance on gas as a bridge fuel and failure to align Shell’s business model with a 1.5C pathway.

  • Link to Source: https://carbontracker.org/reports/shell-and-third-point-spinning-off-the-sector/


3. Rohingya Sue Facebook For $150bn Over Myanmar Hate Speech-

  • An example of legal risks within social factors. Dozens of Rohingya refugees in the UK and US have sued Facebook, accusing the social media giant of allowing hate speech against them to spread.

  • They are demanding more than $150bn (£113bn) in compensation, claiming Facebook's platforms promoted violence against the persecuted minority. An estimated 10,000 Rohingya Muslims were killed during a military crackdown in Buddhist-majority Myanmar in 2017.

  • The company is accused of allowing "the dissemination of hateful and dangerous misinformation to continue for years". In the UK, a British law firm representing some of the refugees has written a letter to Facebook, seen by the BBC, alleging: Facebook's algorithms "amplified hate speech against the Rohingya people".

  • Link to Source: https://www.bbc.com/news/world-asia-59558090


4. Hundreds of Companies Promised to Help Save Forests. Did They?-

  • Cargill, Nestle, Carrefour and others pledged to reach net-zero deforestation in their supply chains by 2020.

  • Ten years ago, some of the world’s largest companies, including Coca-Cola, Kellogg’s, Walmart and Mars, pledged to change their practices to help end deforestation by 2020. Some, like Nestle and Carrefour, went even further, saying they would eliminate deforestation from their supply chains altogether.

  • The 2020 deadline arrived, and some companies reported advances toward their goal. No company, however, could say it had eliminated forest destruction from its supply chain. Many others did not even try.

  • Without regulation, we will see similar articles in 2030 explaining why the net zero pledges failed.

  • Link to Source: https://www.nytimes.com/2021/12/02/climate/companies-net-zero-deforestation.html


5. How Elephants Help Pump Planet-Warming Carbon Underground-

  • The hungry and rowdy herbivores are eating and trampling the vegetation that stores carbon and keeps it from heating the atmosphere.

  • You’d be forgiven for thinking that their voracious appetites and blundering steps might be disturbing and releasing the carbon stored in this ecosystem in much the same way wildfires do. But, incredibly, the way herbivores disturb the landscape actually helps it lock up more carbon in durable stores that are difficult to reach.

  • Large animals seem adept at reorganising where ecosystems store carbon, directing a larger fraction towards persistent and stable reservoirs underground. This shows how valuable intact wildlife communities can be, and should urge us to protect the few remaining herbivore-rich ecosystems on Earth, such as the African savanna.

  • Link to Source: https://theconversation.com/climate-change-how-elephants-help-pump-planet-warming-carbon-underground-170415




One more thing: We recommend you have a look at the UK’s CFA Society Climate Change podcast series. In their latest episode, they interview the CIO at Legal and General and discuss their ESG framework.


Find the podcast here: https://soundcloud.com/user-499217748/climate-change-podcast-series-episode-6-developing-a-high-level-framework-to-responsible-investing


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