Sense and Sustainability – February 2022

As we move from a vegan January to a sustainable one, it’s a time to put money where mouths are. Huge sums of money are being devoted to ESG causes, with Blackstone investing $100bn in energy transition and Saudi Arabia transferring $80bn of shares to a wealth fund for green projects. General Motors is planning to build $7bn of electric truck battery capacity in its biggest-ever investment. Read our report on the role hydrogen will play in decarbonising the energy system. NextEnergy Capital has raised $896m for its third ESG fund, Citi has issued a $2bn bond to support affordable housing and HSBC has put $100m into Bill Gates’s Breakthrough Energy Catalyst climate solutions initiative. ESG exchange-traded funds are predicted to double inflows of cash in 2022.

HITTING SNAGS
Some obstacles have emerged along the way, with capital flows into impact funds falling by 10% in 2021 because of the COVID-19 pandemic, while the ESG wave may have ‘hit a wall with disinterested investors’. One in five young workers are reported to be resigning over a lack of parental leave. Oat milk pioneer Oatly has had its knuckles rapped over ‘misleading’ environmental claims and lots of ghost flights still fill the sky. As banks Wells Fargo, Citigroup and Morgan Stanley are found to have received a boost in their green credentials despite providing $74bn to polluting companies, campaigners are urging investors to force banks to demand green plans before funding fuel firms. The European Union has launched a review of the ESG ratings sector Sinking 1,000 New York subway trains in the Atlantic to create a reef has not gone as planned.

A NEED FOR ACTION
There’s still plenty more to be done, with businesses sending a powerful signal to the United Nations on the need for a legally binding plastic pollution treaty and consultants EY creating 1,300 new jobs at a £100m new advisory business called EY Carbon. Aviva Investors says it will vote to get directors kicked out of firms that fail on sustainability grounds. As 102 millionaires call on governments to ‘tax us now’, GlaxoSmithKline’s research chief has defected to join Jeff Bezos’s bid to defy ageing. Read our ESG Edge report on watermark solutions provider Digimarc and our research on how international trading company BayWa is adapting its strategy and operating processes to contribute to limiting the effects of climate change.

MAINTAINING OUR ENTHUSIASM
As a new study calls the megadrought in America’s west the worst for 1,200 years, Edison executive director Neil Shah warns in City AM that climate change will reduce the availability of coffee and drive up prices. However, a survey has found that although 70% of Britons want to help the planet, more than 50% don’t sustain their efforts. With sustainability by its very nature a marathon rather than a sprint, it’s vital that we don’t lose our appetite for meaningful change.