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Some good news to start with: e Coalition of First Motives, Launched last year to help build markets for clean technologies, unveiled a significant expansion at the annual meeting of the World Economic Forum in Davos. Seven countries are joining, including India and Japan, while the number of companies in high-emission sectors that commit to acquiring zero-carbon technologies has nearly doubled.
This is a “remarkably important demand signal” that will help free up the trillions of dollars of investment needed to move the climate, says Rich Lesser, global chairman of Boston Consulting Group. .
Indeed, it is hard to overstate how much the environmental, social and governance agenda has become mainstream this year in Davos. A decade ago, these issues were a fairly niche field. Now about half of all sessions have a loose ESG topic. Or as one WEF official put it: “The people who worked on ESG had to say, ‘Listen to us!’ “And often there was a feeling that we were being patted on the head. Now we are in the center.”
This is not necessarily welcome for all ESG enthusiasts: the prominence of these issues is causing a backlash in some parts, and the sheer proliferation of sessions means many overlap. But, if nothing else, it helps explain why so many ESG teams have appeared in Davos – and are likely to return next year. Continue reading for more Monday highlights of intense discussions here in the Swiss Alps. (Gillian Tett and Andrew Edgcliffe-Johnson)
Davos Monday briefly
The OECD’s significant deal to raise taxes more than multinational corporations Lagged behind scheduleSaid Matthias Corman, the organization’s secretary general. Referring to “difficult discussions,” Corman said there is now no chance the deal will be implemented next year, as originally planned.
Frozen Russian assets can be used Rehabilitation Fund of Ukraine After the war, European Commission President Ursula von der Lane said. “We must not leave a stone unturned, including if possible, the Russian assets we have frozen,” she said.
President of the European Central Bank, Christine Legard Reduce the risk Of the recession on the continent, but said the ECB would proceed cautiously in reducing monetary stimulus amid rising inflation. “We should not rush and we should not panic,” she said.
HKEX: A new green gateway to China?
There is only one delegation from Hong Kong participating in Davos this year due to the Covid-19 restrictions of the territory (among others). This is the mighty Hong Kong Stock Exchange, which has long been a prominent representative at the event. Unsurprisingly, the stock market told participants it remains open to business, despite the epidemic and political turmoil. However, it also sought to promote another, somewhat salient message: HKEX hopes to be a green gate for international investors looking to take advantage of China’s ESG – friendly parts.
More specifically, HKEX seeks to make itself a bridge to what is known as China’s “GBA” – the Gulf region – which has about 80 million inhabitants and a rich ecosystem of dynamic start-ups, many of which focus on green. Technology and other advanced areas of climate change. “We use this sustainability and green focus as a key connection to China,” HKEX chairman Laura Cha told Moral Money.
This may turn out to be a fruitful marketing strategy. But there is competition: John Tuttle, vice president of the New York Stock Exchange, said in a session in Davos that he is constantly telling Chinese companies looking for listings on the NYSE that they should “well understand the ESG and report sustainability and carbon footprint, as it will attract institutional investors” Indeed, he estimates that 40% of investors are now focusing on this when examining the listing. The green battle between HKEX and the NYSE is underway. (Gillian Tet)
Nature accounting is getting off track
Currently, many companies are begging themselves frantically for new accounting reforms stemming from the International Council for Sustainability Standards and the Task Force on Climate-Related Financial Disclosures (TCFD). Opinions about the benefits of these groups are mixed: while some large companies and banks welcome them, there has been a lot of gossip in Davos about the impending backlash against these new reporting burdens from parts of the corporate world.
However, there is another set of standards that is falling down a trajectory that companies need to be aware of: the Task Force on Nature-Related Financial Disclosures (TNFD). Sources from this body told Davos representatives this week that they will release an initial plan next month detailing how boards can, or should, incorporate biodiversity issues into their corporate accounts to recognize the costs of consuming natural resources and put a price on nature.
David Craig, who heads this initiative, freely admits that this is not going to be as simple a task as using TCFD, as the latter focuses primarily on one measure – carbon emissions – while the former pursues multiple goals. But the TNFD group is deliberately trying to create a model according to the TCFD strategy, albeit with a few twists. Instead of using Scopes 1, 2 and 3, for example, the TNFD may focus on distinguishing between supply chain problems “upstream” and “downstream,” Craig said.
Meanwhile, pressure on companies to look into these issues is rising, given the fact that 50% of global GDP is closely linked to natural resources, according to the WEF. Switzerland has said in Davos meetings that it is expected to consider making TNFD mandatory in some years to come.Watch this space – and the TNFD report next month. (Gillian Tet)
Environmental disclosure standards will help little to improve organizational practice until they are clearly linked to valuations and cash flow effects, according to Peter Baker, president of the World Business Sustainable Development Council (WBCSD), which represents 230 “think ahead.” Companies ranging from Accenture to Yokohama Rubber.
“We are building a massive system of ESG exposure but not everything is in cash. Money controls. Discounted cash flows are the core for shareholders and capital markets. Sustainability has made incredible progress, but it will not grow until the capital market is the driving force,” Bucker told Moral Money on the sidelines. World Economic Forum.
While praising the efforts to measure and harmonize environmental manifestations, he also called for broader social manifestations on the part of societies, warning that “inequality is the next great crisis.” He added that a committee set up by the WBCSD will produce recommendations by the end of this year on how managers can address issues including tax, inequality, wages, human rights, re-learning and diversity. (Andrew Jack)
Elsewhere in ESG: The weather is fiery at annual meetings
Westminster Central Hall in London, one of the city’s most spectacular venues, is known for hosting the BBC’s annual concerts on New Year’s Eve. But on Tuesday, the hall was the site of a stormy scene during Shell’s annual meeting, in which alleged climate activists glued themselves to seats.
The rally The rally was adjourned for almost three hours because the protesters disrupted the proceedings. (Read Tom Wilson’s full report For all the details, and videos of Reuters Here).
Today the demonstrations are aimed at New York. About 100 religious leaders and young people plan to demonstrate outside the annual BlackRock meeting in central Manhattan. Protesters are demanding that BlackRock get rid of companies that are expanding fossil fuel production.
Wednesday marks one of the busiest days of the year at annual U.S. shareholders’ meetings. Amazon, Twitter and Facebook will hold their meetings. The three are facing increasing pressure from companies, from executive pay to confidentiality agreements. Amazon, for example, faces A huge of 15 shareholders’ proposals – The most he has faced since 2010 at least.
Investor support is already building for shareholder petitions at these meetings. Asset Manager Neuberger Berman said this week that he is voting in favor of a proposal for content standards shareholders in Meta, the parent of Facebook. Further disclosures about content enforcement will help shareholders see if risks on platforms are being addressed, Neuberger Berman said. Facebook has advised shareholders to vote against the proposal.
Not all sessions will see fireworks. Exxon and Chevron, the two leading targets of U.S. climate activists, will hold virtual meetings and comfortably evade the disruption it faced.
Votes on Wednesday will indicate the impact of the campaigns of environmental activists and social activists at the annual meetings, and whether their provocations change organizational behavior. (Patrick Temple-West)
While the controversy continues to rage around the words of the head of HSBC Asset Management’s responsible investments at the summit of moral money in Europe last week, Philita Clark from FT. Claims Because Stuart Kirk’s speech revealed “broad and confused thinking around a key aspect of climate change: financial risk.”
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