Sense and Sustainability – May 2022

ESG investing came under sustained attack in May, with the Ukraine war creating new tensions and Elon Musk claiming that ESG ratings had been turned into a ‘scam’. HSBC’s head of responsible investing was suspended after referring to climate crisis warnings as ‘unsubstantiated’ and ‘shrill’. Coldplay were branded ‘useful idiots for greenwashing’ after announcing an oil company partnership aimed at halving touring emissions.

MEETING THE NEED

Still, the need for ESG remained strong, with Deloitte finding that unchecked climate change will cost the global economy $178tn and American Century Investments saying the appeal of impact investing has reached an all-time high. As lawmakers reached initial agreements on reforms to the EU carbon market, the EU unveiled its largest ever ban on dangerous chemicals. Read Edison’s report on investing in real assets in an uncertain world and watch the CEO of Edison client Aspire Global explain how responsible gaming can be encouraged in the high-growth iGaming market.

PLAYING A PART

Corporates are still responding, with IKEA entering the US residential solar market, Heinz developing a paper ketchup bottle and Unilever and Axa investing in a new €1bn regenerative agriculture fund. As The Body Shop launched a campaign for young people to have more of a say in politics, MasterCard linked compensation for all its employees to ESG goals. Edison client Melrose Industries is embracing sustainability by continuously developing ESG practices and creating or enhancing products assisting in global decarbonisation. Edison initiated research on Gresham House, which has a strong position in alternative asset management with a sustainability focus.

TRUSTING IN TECH

Technology is aiding efforts, with algae-powered computing becoming a reality as scientists create a reliable and renewable biological photovoltaic cell. The value of the ESG data market could exceed $1.3bn this year. Edison client Digimarc has pioneered a platform enabling a more efficient, reliable and economical means of automatic identification.

STAYING IN THE LOOP

As the automatic swapping of electric car batteries expands from China to Norway, here are seven things that investors need to know about hydrogen fuel cells and Edison client Loop Energy. Don’t lose heart this summer as ESG causes continue to become more important than ever.