Friday - February 25, 2022 | ESG
Behind the ESG headlines - February 25, 2022
There is such a wealth of material around environmental, social and governance (ESG) topics, let alone climate change, you almost need a 28-hour day to stay on top of everything. Instead, we’re here to help.
Every week, we will sift through the noise and bring you our top picks in articles, blogs, reports or videos that will help shape your understanding of the risks and opportunities that you and your company face.
- Bloomberg News took a close look at the ratings for banks from MSCI Inc, which grades companies around the world based on ESG criteria. Despite lending billions of dollars to companies in the S&P 500 in oil, gas, mining or power, 13 of 22 of the rated banks got an upgrade in their ESG ratings. The improved rankings reflected what proportion of the overall lending portfolio went to these companies. If it was small, the banks would be deemed “greener”. Good news for their shareholders; not so much for those companies with larger carbon footprints.
- Paul Polman, one of our Competent Boards Faculty, former CEO of Unilever and a seriously wise leader, has highlighted three shifts that companies need to make to be future-fit. Speaking at the recent GreenBiz 22 event in Scottsdale, AZ, Polman said boards and senior leadership must:
- Think beyond net zero
- Pursue systems change
- Become “collectively courageous”
“Whatever it is, if it’s poverty or if it’s climate change or plastics in the oceans, optimizing a current system that simply is not designed anymore to deliver will only bring you so far. And I think we’re at that point right now,” said Polman.
- Biodiversity risks for the planet are gaining greater attention. The World Economic Forum (WEF) has estimated that US$44 trillion of the world’s economic value generation — more than half of global GDP — is moderately or highly dependent on nature. A new Taskforce on Nature-related Financial Disclosures (TNFD) is now raising red risk awareness flags in global financial markets. Indeed, some European firms are now putting this risk on par with climate risk.
- Companies in Europe must watch their ESG steps more closely after the European Commission unveiled new rules around human rights and the environment. The proposal, announced last week, aims to “foster sustainable and responsible corporate behaviour” in such areas as biodiversity loss, child labour and pollution.
- Some feel good news: the newly released Global Green Skills Report 2022 from LinkedIn shows more than 800 million people around the world now work in the green economy. That share of talent has risen by just under 40% in the past six years to now be 13.3% of the global workforce. The data also revealed that the demand for green jobs will outstrip supply within five years (which means some education and training is needed, and quickly, to avoid that).
Mathew Loup is Competent Boards’ Director, Marketing & Communications. Connect with him on LinkedIn.BACK TO NEWS & VIEWS