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McKinsey, Singaporean and Australian Greenwashing Rules, Net-Zero Tracker, and a Tropical Island

Source: Pixabay

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

1. Singapore Issues ESG Funds Disclosure and Reporting Guidelines-

  • The objective of the new circular is to mitigate the risk of greenwashing by facilitating greater comparability in the disclosures made by retail ESG funds.

  • The Monetary Authority of Singapore, which is Singapore’s central bank and integrated financial regulator, issued a Circular on 28 July 2022 detailing the Disclosure and Reporting Guidelines for Retail ESG Funds. The new guidelines will take effect on 1 January 2023.

  • The new disclosure and reporting guidelines for Retail ESG Funds by MAS is a very important step in combating greenwashing and further build confidence in the tiny, prosperous country’s financial system and serves as a model for other countries to emulate.

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2. Does ESG Really Matter—And Why?-

  • Although valid questions have been raised about ESG, the need for companies to understand and address their externalities is likely to become essential to maintaining their social license.

  • Criticisms of ESG are not new. As ESG has gone mainstream and gained support and traction, it has consistently encountered doubt and criticism as well. The main objections fall into four main categories. 1. ESG is not desirable, because it is a distraction. 2. ESG is not feasible because it is intrinsically too difficult. 3. ESG is not measurable, at least to any practicable degree. 4. Even when ESG can be measured, there is no meaningful relationship with financial performance.

  • Accordingly, the responses to ESG critics coalesce on three critical points: the acute reality of externalities, the early success of some organizations, and the improvement of ESG measurements over time. And the case for ESG cannot be dismissed by connections between ESG scores and financial performance and changes in ESG scores over time.

  • While the acronym ESG as a construct may have lost some of its luster, its underlying proposition remains essential at the level of principle. Names will come and go (ESG itself arose after CSR, corporate engagement, and similar terms), and these undertakings are by nature difficult and can mature only after many iterations. But we believe that the importance of the underlying ideas has not peaked; indeed, the imperative for companies to earn their social license appears to be rising. Companies must approach externalities as a core strategic challenge, not only to help future-proof their organizations but to deliver meaningful impact over the long term.

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3. The Net-Zero Industry Tracker-

  • This first edition of the Net-Zero Industry Tracker report sets the World Economic Forum’s ambition to establish a robust tracking platform that supports the emergence of low-carbon industries by the decade’s end.

  • Industrial sectors account for nearly 40% of global energy consumption and more than 30% of global greenhouse gas emissions. The transformation of these sectors is pivotal to reaching net-zero emissions by 2050.

  • While efforts are under way and commitments are being made, the reality of net-zero for these industries is lagging and extrapolating from today’s speed of progress will fall far short. It is time to close the gaps with timely and consistent monitoring of industrial decarbonization.

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4. Australia Financial Industry Body Sets Anti-Greenwashing Expectations for Fund Managers-

  • The Financial Services Council (FSC), Australia’s financial services industry’s standards and policy setting body, announced the release of new climate-related guidelines for investment managers to set targets, report on risk, and avoid greenwashing.

  • The primary purpose of the guidelines is to set common baseline expectations for the industry’s approach to net zero claims, disclosure of climate-focused investment features, and reporting on climate-related risk.

  • The publication also provides guidance for investment managers for labelling of funds that claim to address climate risk, in order to avoid greenwashing by misrepresenting the sustainability attributes of the funds. The guidance includes expectations for the disclosure of funds’ objectives and sustainability-related investment approaches.

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5. Corona Announces Opening of Corona Island, World’s First Sustainable, Single-Use Plastic-Free Island-

  • Open to the public in Summer 2023, the natural oasis achieved the highest level of sustainability verification by Oceanic Global’s Blue Standard.

  • Global beer brand Corona announces the grand opening of Corona Island, a tropical sustainable destination for eco-tourism off the coast of Colombia. A first-of-its-kind island paradise, Corona Island is free of single-use plastic, encouraging guests to reconnect with the natural world through immersive hospitality experiences.

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One more thing: an infographic by John Lang summarizing sixth assessment report from the IPCC. The visualizations are a great depiction and summary of the more than 1500+ pages from the report. Just in case you haven’t had the time to read through it all...

Find the infographic here:

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This first edition of the Net-Zero Industry Tracker report sets the World Economic Forum’s ambition to establish a robust tracking platform that supports the emergence of low-carbon industries by the

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