ISSB, Inflation/Climate Act, Renewable Energy, ESG Surveys, and a 170km Skyscraper
Here are 5 ESG insights you might have missed this week:
1. IFRS Foundation Completes Consolidation with Value Reporting Foundation-
With this, the IFRS Foundation’s new International Sustainability Standards Board’s (ISSB) begins its work to develop a comprehensive global baseline of sustainability disclosures for the capital markets.
The VRF’s SASB Standards serve as a key starting point for the development of the IFRS Sustainability Disclosure Standards, while the Integrated Reporting Framework provides connectivity between financial statements and sustainability-related financial disclosures.
The consolidation delivers on market demand—including from companies, investors and regulators—for simplification of the sustainability disclosure landscape, and follows the consolidation of the Climate Disclosure Standards Board (CDSB) into the IFRS Foundation earlier this year.
2. US Inflation Reduction Act Includes Expansive Tax Incentives for Clean Energy-
US Senator Joe Manchin and Senate Majority Leader Chuck Schumer reached an agreement on a budget reconciliation bill and released the “Inflation Reduction Act of 2022”.
A significant part of the Act focuses on energy tax changes aimed at fighting climate change and promoting domestic energy security. To those ends, the Act extends and expands existing tax credits and adds several new energy tax credits for clean energy projects. The benefits of this historic legislation for investors and developers in the clean energy infrastructure space cannot be overstated.
The Senate's climate deal could bring scale-up of carbon capture in heavy industries and power after years of limited momentum and false dawns.
3. Renewable Energy Investment Tracker, 2H 2022-
Global renewable energy investment had its strongest first half on record, per just-released analysis from the research firm BloombergNEF.
This report covers new investment in renewable energy capacity, and equity raising by specialist companies in renewables and related areas such as energy storage. Overall, $226 billion was invested in renewable energy in 1H 2022, a year-on-year increase of 11% and an all-time record.
The majority ($206 billion) of this was for project deployment (asset finance and small-scale solar). Renewable energy and related companies raised a total of $10.5 billion on public markets in 1H 2022, down 65% from last year. VC/PE expansion investments totaled $9.6 billion, up 63% from 1H 2021.
4. Index Industry Association's 2nd Annual Global ESG Asset Manager Survey-
Despite recent global economic uncertainty and geopolitical turbulence, asset managers reported strong growth in ESG investment over the past year across asset classes and believe it will continue well into the future.
Asset managers expect nearly two-thirds of investment portfolios to contain ESG elements within a decade.
In one year, the number of asset management companies incorporating ESG principles in fixed income increased from 42% to 76%.
Asset managers found significant improvement in ESG tools, metrics, and services.
5. 6 Strategies for Building Socially Responsible—and Profitable—Companies-
A new generation of business leaders is finding innovative and profitable ways to bring about positive change in the world.
In the book Purpose and Profit, George Serafeim offers a roadmap for people at every career stage who seek to align their professional aspirations with their personal values.
In the book, Serafeim details six major ways that companies can adjust to the changing landscape. His book tells the stories of individuals, at every stage of their career, pursuing entrepreneurial and managerial efforts to make a difference in a way that makes them fulfill their own personal purpose.
One more thing: The planned 170 km long horizontal skyscraper to be built by Saudi Arabia.
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