Landmark. Historic. A breakthrough. Those are some of the terms being used to describe the outcome of COP21, and for once, hyperbole seems appropriate. For the first time, nearly every country in the world has signed on to an accord that commits them to reduce greenhouse gas emissions. For the global financial and energy markets, it’s a strong signal to re-think investments in fossil fuels and double down their bets on zero-carbon energy sources. A few years back, all the major oil and gas companies had units working with renewables.
From the Editor
With a portfolio of nearly $900 billion, the Government Pension Fund Global of Norway is the world’s largest sovereign wealth fund. So when its chief investment manager, Yngve Slyngstad, speaks, markets listen. His comments at COP21 outlined a strategy to move investments out of polluting businesses, according to The New York Times.
From its long coastline to its vast forests, Maine’s natural environment is its primary financial asset, generating both commercial and recreational revenue.
The news that Facebook founder Mark Zuckerberg plans to give away 99% of his shares in the company goes much further than the huge sum involved ($45 billion). It’s the fact that it will be executed through a LLC rather than a nonprofit foundation that has attracted even more interest than the amount of the donation.
The numbers are very big for actress Jessica Alba’s Honest Company, her consumer products business. Sales, $150 million. Sold online and in 4,400 retail stores. A $100 million Series D financing round that values the company at $1.7 billion. Over 135 products on offer. Almost 500 employees. Launched by Alba when, as a new mother, she worried that her baby would suffer the asthma-related allergies that afflicted her in childhood, the Honest Company began as an individual search for products free from toxic chemicals.
The fast-changing world of responsible investment has a new player: the ETHO ETF Fund. Just launched on the New York Stock Exchange, it claims to be the world’s “first broad-based, diversified, and fossil-free exchange traded fund without exposure to the energy sector,” reports Business Green. The Fund is made up of equities from the Etho Climate Leadership Index that lists 400 "climate-efficient" companies across various sectors.
The European Commission has announced 195 energy infrastructure projects to make up the EU’s Energy Union, an effort to knit together the many separate national energy entities throughout the EU. The Projects of Common Interest (PCIs) will create an integrated energy market with diverse energy sources. The PCIs will also boost the levels of renewables on the grid, bringing down carbon emissions. €5.35 billion has been allocated to fund the proposed trans-European energy infrastructure.
Institutional investors are showing more interest in ESG data. While ESG has been on a steady climb up their priority list for several years, the idea has picked up speed recently, driven by several new developments, reports Pensions & Investments.
The first, tentative steps toward defining the use of the term “natural” on food labeling have been taken by the Food and Drug Administration.
As a sustainability subject, building energy management systems (BEMs) may not be as sexy as hybrid cars, renewable energy sources, or LED light bulbs, but you can’t tell that to VCs.
The World Federation of Exchanges has released guidelines for ESG-related metrics that companies should release to investors. Companies listed on the Federation’s 64 global exchanges are urged to report on 30+ metrics to help investors in their decision making.
For those in the C-suite who think of transparency as a squishy, "feel good" concept, now there's a hard number that can be put to the cost of a lack of transparency at the bottom line: $60 billion. That's the drop in market value of Valeant, the pharmaceutical company, since August, when its accounting reporting began to be questioned.
As more investors demand more sustainability information from companies, more businesses are disclosing sustainability data. In 2014, 75 percent of S&P 500 companies produced a CSR or sustainability report, compared to 20 percent in 2011. In response to this trend, nearly 75 percent of portfolio managers and analysts now include ESG factors in their investment decisions.
CR Magazine has published its fifth annual list of the Top 10 Best Corporate Citizens. You might ask, what’s with all the lists (and rankings, ratings, and awards), each with their own methodology, context, and agenda? A quick response is that they grab readers’ attention in this ADD age.
I’ve been working my way through Green Giants, E. Freya Williams' fact-packed book of 288 pages about how nine large corporations are finding profits in sustainability. Williams chose subjects that each had $1 billion or more in annual U.S. revenues of products and/or services that included sustainability in their basic strategy. The nine are GE, Nike, Chipotle, Whole Foods, Tesla, IKEA, Unilever, Natura Brasil, and Toyota.
Two German car manufacturers are making major progress in the use of renewable energy. BMW is powering its plant in South Africa with biogas, a fuel created from dung and organic waste. According to Bloomberg, the facility will provide 25 to 30 percent of the electricity for the plant.
At a time of many questions about youth failure to complete education and consequent youth unemployment, an equally obvious solution may have been overlooked: mentoring. Some 16 million American youth reach the age of 19 without ever having had a mentor of any kind, according to a study that EY co-authored with MENTOR: The National Mentoring Partnership. By taking a more proactive role in mentoring youth, businesses can support education while also creating a sustainable workforce for the future.
In the run-up to December’s climate change conference in Paris, CEOs and chairmen of 11 companies that generate one-third of the world’s electricity have signed a letter requesting “secure, stable, clear, consistent, and long-term policies” to support low-carbon energies.
$4.7 trillion: that’s the total of assets in the U.S. invested using ESG standards, an amount that grew eight times between 2012 and 2014. With this exponential growth has come a question about transparency. Financial Advisor reports on a recent study by US SIF, a nonprofit organization that represents U.S.