By Ira Srivastava
1. Companies are not decarbonizing fast enough. According to new research published by the MSCI, companies around the world are slowing down their emission mitigation while government-led mitigation is accelerating. Companies are predicted to pass the 1.5 degree warming limit by April 2026, while 13 of the G20 countries will reach a decarbonization rate of 4.5% per year. Only 20% of public companies have decarbonization strategies in line with limiting warming to 1.5 degrees Celsius. Many companies are expected to decarbonize more slowly from 2022 to 2030 than they did in 2015 to 2020, with corporate scope 1 emissions expected to increase. Governments are taking the lead, and companies must step up to play their part as well.
2. US and China’s Envoys for Climate meet ahead of COP28. U.S. Special Presidential Envoy for Climate John Kerry and Xie Zhenhua, the Chinese Special Envoy for Climate Change met in California to discuss climate cooperation. The Sunnylands Statement affirms China and the United States’ joint collaboration on climate issues and acknowledges the growing risks related to climate change. The two countries will create a Working Group on Enhancing Climate Action in the 2020s to push reductions in methane emissions, boost carbon capture capacity, and accelerate the energy transition. The statement also includes plans to promote a circular economy, energy and resource efficiency, and reverse biodiversity loss.
3. Sky high CEO salaries are impacting company performance. As You Sow, a shareholder advocacy group, published its annual 100 Most Overpaid CEOs list. The organisation found that companies with lower shareholder returns tended to have the most overpaid CEOs. The average S&P 500 company saw annual returns of 8.5% from 2015 to 2023, while the companies on this Top 100 list saw 7.9% annual returns. The companies with the 25 highest paid CEOs saw an average of 6.5%. The salaries of the 10 most overpaid CEOs increased from US$56 million 10 years ago to US$88 million in 2023, a 59% increase. Cumulative nominal average hourly worker compensation for private employees in the US has only increased from $23 to about $33 in that same time period (43%). The CEO of Live Nation Entertainment, Michael Rapino, topped the list. He made US$139 million while the median wage of a Live Nation employee is US$26,000 annually.
4. Corporations’ climate commitments are not in line with their lobbying actions. Research from InfluenceMap found that despite making commitments to reaching net zero, many corporations do not support government climate policy. 58% of 300 companies in the Forbes 2,000 list were “net zero greenwashing” by committing to net zero targets but lobbying against climate policy. Companies at “significant risk of net zero greenwash” include Chevron, Delta, ExxonMobil, Stellantis, among others. As the climate crisis intensifies, companies need to put their money where their mouth is and support climate action internally and at a government level.
5. Negotiations continue on a global plastics treaty. The International Negotiating Committee met for the third time this month to discuss a global plastics treaty to address plastic pollution. A draft is expected by the end of 2023. According to Jyoti Mathur-Filipp, Executive Secretary of the Secretariat, there is significant momentum for a treaty to be developed. Mathur-Filipp emphasised the environmental disaster that plastic pollution has caused. The final session to agree on the text of the treaty will be held in November 2024, and the treaty will be open for signatures in 2025.
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Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.