The importance of the work over the past several years of the Sustainable Accounting Standards Board in developing industry-specific ESG disclosure recommendations was underscored with the recent letters to company leadership from two of the world’s leading asset management firms.
During your travels, or even going about your usual business and personal activities, do you recall the days when… Pilots remember having to use cockpit instruments when flying over large cities because the “smog” (usually thick yellow) eliminated visibility below. That was caused by belching smokestacks as dirty coal was burned for industrial use or for generating electric power.
Here we are now in a new year, and new decade (the third decade of the 21st Century) and much of the buzz is all about (1) climate change and the dramatic impacts on business, finance, government and we humans around the globe; and (2) many more investors are moving their money to more sustainable investments.
The big news this week for sustainability professionals: The publication of the much-anticipated annual letter to corporate chief executive officers by Larry Fink, Chair and CEO of BlackRock -- the world’s largest asset manager (with almost US7 trillion in Assets Under Management).
It is a favorite pursuit of journalists and commentators at each year-end and the start of the new calendar year to look back and look forward to identify “top stories” and significant trends of the year past. And to look ahead at “what might be” in the new year. We present a few of these musing for you in this first newsletter of the year 2020.
There is no doubt now – the world’s largest asset managers are definitely focused on corporate sustainability and sustainable investing (the two go hand-in-hand) as survey after survey is telling us. In recent years we seen considerable momentum as asset owners and their managers adopt or further enhance their sustainable investing / ESG investing approaches. And to gauge the progress we’re seeing major, global asset managers busily take the pulse of the capital market players.
The terms of reference are familiar now to many more institutional owners and their managers (as well as to a growing number of retail investors who are their clients and beneficiaries). This movement began as “socially responsible investing” (“SRI”) which evolved over time to “sustainable & responsible investing” and on to “sustainable & responsible & impact investing” in the 21st Century.
In recent months we’re increasingly hearing and using the simplified term “sustainable investing” and “ESG investing”.
Climate Change and Corporate Reporting – the two terms are increasingly coupled now as many more investors and stakeholders are requesting information from publicly-traded companies about their awareness of, and strategies & actions for addressing the many risks posed to the enterprise by climate change.
Important sea change: many more investors are now asking companies for information about their preparation for climate change and some, demanding a report if none has been issued.
There are many voices raised now and joining in the public dialogues on corporate sustainability, citizenship, responsibility, ethics, governance…and more. These fit into the commentary stream on the future of capitalism -- and how to make it work for everyone.
There are rigorous companion dialogues – rapidly growing in number -- related to the role of sustainable investing as many more asset owners and their managers adopt new approaches, many focused on corporate ESG performance and outcomes. We see this as further reinventing of capitalism. Do you?
The United Nations Population Prospects 2019 tells us that there will be nine billion souls to feed on this Good Earth by year 2050 (up from seven billion-plus of us today). The greatest growth will be in Asian nations (such as India, China) and on the African continent.