By Ira Srivastava
1. Amazon reaches net-zero targets ahead of schedule. Amazon has released its 2023 annual report and announced that it has reached its goal of 100% renewable energy globally seven years ahead of schedule. In 2019 the company made the pledge of using 100% renewable energy in global operations by 2030. Since then, Amazon has been the “largest corporate purchaser of renewable energy globally”. This was achieved by funding over 500 clean energy projects. Despite this, Amazon has admitted that artificial intelligence development would be an obstacle in its path to net-zero. Amazon’s next step is to work with suppliers to ensure that the rest of its supply chain is environmentally-neutral.
2. Shareholders are focused on ESG this proxy season. Both ESG and anti-ESG measures are gaining traction in this year’s proxy season. There are 18% more governance-related proposals compared to 2023, however environmental and social proposals dropped by 6% and 5% respectively. Anti-ESG proposals grew by 19% from last year, with the majority of those proposals focused on social issues. However, support for anti-ESG proposals is still low at just 2.8%. Artificial intelligence, biodiversity, and health and safety proposals were also introduced this proxy season.
3. Addressing energy issues from data centres. Energy use from data centres is a significant issue that the world needs to address. Due to an expected increase in energy demand, utility companies are delaying coal power plant shutdowns and increasing natural gas capacity. Both of these actions delay the climate transition and will increase dependence on fossil fuels at a time when rapid decarbonization is crucial. In order to address this, tech companies must be transparent and accountable regarding their data centres, as it is unlikely that they were unaware of these impacts on water and energy usage. The technology industry should work together with governments to create performance and energy standards to ensure data centres are consuming resources as responsibly as possible. Finally, technology companies would do well to revisit their policies around data centres and set sustainability commitments specifically regarding them.
4. Financial institutions and ESG technology. The ‘Chartis Market View: ESG and Climate Risk Survey’ collected data from 77 risk management professionals at institutions that have US$1 billion to $500 billion in assets under management. The respondents were from the Asia Pacific, North American, European, and Middle Eastern/North African regions. It found that 52% of those surveyed felt that regulatory compliance was their biggest challenge in the future. The firms averaged US$250,000 to $500,000 in annual ESG investing, with North American and European firms often spending more than US$500,000.
5. The 2024 Transparency Index. Connected Impact has released its transparency report of 200 listed companies in the United States and the United Kingdom. Here are some key takeaways:
- 64% of customers actively select socially and environmentally responsible companies. Corporate transparency will help attract more customers.
- 58% of the 100 largest US companies are disclosing ESG matters without sharing it widely with the public to avoid claims of greenwashing, creating a communication gap.
- Social transparency is significantly lower than environmental transparency, as few companies disclose on disability, LGBTQ+, and age diversity.
- Governance transparency is also low, with few companies reporting on workplace incidents, supply chain risk, or business ethics training.
Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.