Sense and Sustainability - June 2022

Managing the backlash

As the backlash against environmental and social governance continued, we were sorting wheat from chaff. The Bank of England was urged to ‘focus on the basics of monetary economics’ instead of climate change, while Germany responded to Russia restricting its gas pipelines by re-firing some of its closed coal-fired power stations. In China and Hong Kong, a record boom of sustainability-linked loans signed by firms raised questions about limited disclosures and the global market for the facilities. Some even thought that Elon Musk had a point with his ‘far-too-honest’ views on ESG.

The basic message remained unchanged, with soaring global temperatures showing the climate emergency is all too real and requires urgent attention. In the field of societal sustainability, smaller FTSE firms were said to be failing on boardroom diversity, with women occupying less than a third of board roles at nearly half the small companies outside the FTSE 350 and only a quarter of director roles held by non-white employees. Nearly two-thirds of senior decision makers told a global survey that their organisation is under-prepared to meet its ESG goals and regulatory reporting mandates.

The world’s current geopolitical conflict is actually likely to drive a renewable energy surge, according to an Edison themed investment report, while other research said renewables could account for nearly 70% of electricity production across the UK and European Union by 2030. As Sony and Honda joined forces to launch a new electric vehicles company and The LEGO Group announced plans to invest more than $1bn in a new carbon-neutral factory in Virginia, retailers H&M and Lululemon backed a $250m fund to decarbonise the fashion supply chain. Nottingham set its sights on becoming the UK’s first net zero city. We issued a guide to everything you need to know about coral bleaching—and how we can stop it, while our ‘Real assets in an uncertain world’ series of webinars included a session examining the potential of renewables to provide sustainable, less correlated returns.

As EU negotiators agreed new regulations requiring large companies to disclose their impact on human rights and the environment from 2024, the Biden administration said it will develop a new policy requiring cigarette producers to reduce nicotine to non-addictive levels. The United Nations-backed ‘Race to Zero’ campaign updated its membership criteria to ask agencies in the advertising and creative industries to take responsibility for their clients’ marketing activities. A Californian court ruled that, under some circumstances, a bumblebee can be a fish to bring dwindling species under the protection of state law. And, although their arrival in Britain is an ‘unmissable’ sign of climate change, who could fail to enjoy the rare sights of black-winged stilts fledglings in Yorkshire and rainbow-hued European bee-eaters breeding on the Norfolk coast?

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