The End of ESG, UNGA, South Australia, Cement, and Amazon
Here are 5 ESG insights you might have missed this week:
1. The End of ESG-
ESG is both extremely important and nothing special.
It's extremely important because it's critical to long-term value, and thus any practitioner or academic should take it seriously, not just those with "ESG" in their job title or list of research interests. Considering long-term factors when valuing a company isn’t ESG investing; it’s investing.
It's nothing special since it's no better or worse than other intangible assets that drive long-term value and create positive externalities, such as management quality, corporate culture, and innovative capability. We want great companies, not just companies that are great at ESG.
Link to Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4221990
2. UN General Assembly Previews Climate Summit Conflicts-
UN Secretary-General António Guterres made clear in his speech to world leaders that a successful COP27 outcome must include funding for loss and damage.
The United Nations General Assembly this week gave hints of a coming clash between developing nations and the industrialized world over how to compensate vulnerable nations that are being hit hardest by climate change.
With climate disasters taking a mounting toll in vulnerable countries, much of the focus at November's COP27 climate summit in Egypt may be on the responsibility of industrialized nations to provide funding to those countries for climate damage they did not cause.
Link to Source: https://www.axios.com/2022/09/23/un-previews-climate-summit-conflicts
3. South Australia Set to Become First Big Grid to Run on 100% Renewables-
South Australia’s gigawatt-scale electricity network is within touching distance of phasing out fossil fuel backup.
Even when wind and solar have produced much more electricity than is needed in the state at any one time, it has always had to have some synchronous generators, and always gas fired generators in South Australia, running to ensure some of the principal grid services can still be delivered.
South Australia is a living laboratory of how to manage the transition to wind and solar, and an inverter-based grid, and it is remarkable to see how the engineering assessment of system needs has rapidly evolved in recent years.
Link to Source: https://www.climatechangenews.com/2022/09/16/south-australia-set-to-become-first-big-grid-to-run-on-100-renewables/
4. How Amazon Became the Largest Buyer of Renewable Energy in the World-
That financial and legal arrangement, known as a PPA (power purchase agreement), has been a crucial force in the U.S.’s transition to clean energy.
Amazon has leveraged that ecosystem to go on the largest ever solar and wind shopping spree, buying 15.7 gigawatts globally over the past three years, nearly equal to the prodigious energy demands of the $1.4-trillion company.
“If it was a market that only waited till something was built—and then you went out and tried to sell the -electricity—these projects wouldn’t get done,” says Harkrader. “People like Amazon, or Microsoft, Walmart, Target—on and on—are standing up and making this market possible. And it’s exploding.”
Link to Source: https://time.com/6213666/amazon-renewable-energy/
5. SBTi Cement Guidance-
The cement sector is the third-largest industrial energy consumer and the second-largest industrial CO2 emitter. It represents about 7% of CO2 emissions globally.
The Cement Science Based Target Setting Guidance is the world’s first framework for companies in the cement sector and other potential users of cement such as construction businesses, to set near- and long-term science-based targets in line with 1.5°C.
It provides a detailed understanding on how to set targets and deal with processes that are specific to the cement and concrete sector, greenhouse gas accounting criteria and recommendations, as well as examples on how different types of companies can use the tools and guidance to submit a target for validation.
Link to Source: https://sciencebasedtargets.org/sectors/cement
One more thing: A summary of the speech by U.N. Secretary-General Antonio Guterres in this week’s General Assembly.
Find the video here: https://www.youtube.com/watch?v=EX78qHw0g7E
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