Temperature Ratings, Data Centers, JPMorgan, Conservative Stewardship, and Training
Here are 5 ESG insights you might have missed this week:
1. Missing the Mark: CDP Temperature Ratings - 2022 Analysis-
No G7 country's corporate sector is aligned with the Paris agreement's 1.5°C goal.
As we approach COP27, this briefing with Oliver Wyman uses CDP’s latest temperature ratings to assess whether current corporate emissions reduction targets are ambitious enough to meet the Paris Agreement’s 1.5° Celsius goal.
The G7’s private sector has an important role to play in that effort. Strong momentum in 2021, particularly in the runup to last year’s COP26, saw the number of corporates committing and setting climate targets increase rapidly. Yet, our analysis shows that the greenhouse gas (GHG) emissions reduction targets publicly disclosed by companies in G7 economies are still only ambitious enough to align with a 2.7°C decarbonization pathway.
Link to Source: https://www.cdp.net/en/research/global-reports/missing-the-mark
2. Data Centers, Backbone of the Digital Economy, Face Water Scarcity And Climate Risk-
About 20% of data centers in the United States already rely on watersheds that are under moderate to high stress from drought.
For years, companies that operate data centers have faced scrutiny for the huge amounts of electricity they use storing and moving digital information like emails and videos.
Now, the U.S. public is beginning to take notice of the water many facilities require to keep from overheating. Like cooling systems in large office buildings, water often is evaporated in data center cooling towers, leaving behind salty wastewater known as blowdown that has to be treated by local utilities.
Link to Source: https://www.npr.org/2022/08/30/1119938708/data-centers-backbone-of-the-digital-economy-face-water-scarcity-and-climate-risk
3. JPMorgan Product Reveals Wall Street’s Shifting Views on ESG-
A new ESG product that JPMorgan Chase & Co. is about to start offering clients shows how rapidly perceptions are changing about the investment strategy.
JPMorgan, the biggest US bank, has teamed up with software firm Datamaran to develop a data-analysis tool for clients to gauge not just the environmental, social and governance risks facing portfolio companies, but also the ESG risks that such assets pose to the world around them. While the concept -- known as double materiality -- is already built into EU ESG regulations, it has yet to make inroads in the US.
Double materiality is “the only way to think about ESG in a way that is both forward-looking and comprehensive,” said Jean Xavier Hecker, the Paris-based co-head of EMEA ESG research at JPMorgan and the architect behind the new tool called ESG Discovery.
Link to Source: https://www.bloomberg.com/news/articles/2022-09-07/jpmorgan-product-reveals-wall-street-s-shifting-views-on-esg
4. Three Myths About the Global Energy Crisis-
Russia is not winning the battle for supplies nor disrupting efforts on climate change and clean power.
Myth 1: Russia is winning the energy battle. A short-term jump in energy export earnings can’t offset a permanent loss of trust & markets. Moscow is doing itself long-term harm by alienating the EU, its biggest customer. Its oil & gas sector will also struggle under sanctions.
Myth 2: The current crisis is a clean energy crisis. In fact, more low-carbon energy would have helped ease the crisis, and a faster transition is the best way out of it. When people blame clean energy, they are moving the spotlight away from the real culprits: the gas crunch & Russia.
Myth 3: Today's crisis will stop us from tackling climate change. The crisis can actually be a historic turning point towards a cleaner and more affordable & secure energy system. We’ve seen key momentum with the EU’s REPowerEU Plan, the US Inflation Reduction Act, Japan’s GX green transformation plan, and clean energy plans in China & India.
Link to Source: https://www.ft.com/content/2c133867-7a89-44d0-9594-cab919492777
5. While Criticizing ESG Investing, Florida, Texas Public Pensions Have Overwhelmingly Supported ESG-
On average, public pension plans voted 90% of the time in favor of ESG shareholder resolutions, while ESG-focused funds averaged 85%.
Public pension funds from Florida and Texas, two states that have vocally criticized sustainable investing in recent months, have overwhelmingly voted for sustainable-investing practices in the past, new research from Morningstar has shown.
In 2021, the Florida Retirement System voted 99% of the time for ESG resolutions. The Teacher Retirement System voted 97% of the time for ESG resolutions, and the Employees Retirement System of Texas voted in favor 85% of the time.
Link to Source: https://www.morningstar.com/articles/1113157/while-criticizing-esg-investing-florida-texas-public-pensions-have-overwhelmingly-supported-esg-resolutions-morningstar-study-says
One more thing: The SBTi has released nine new training modules on setting financial science based targets, have a look!
Find the modules here: https://sciencebasedtargets.org/sectors/financial-institutions#training-modules
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