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cocoa farming

The Sustainability Conundrum of Living Income in Agriculture

Living Income is a crucial consideration among leading companies across some sectors and their supplier companies throughout the agricultural and food supply chain. Companies that manage ESG risk in their supply chains, making targeted investments to improve their resilience, are better positioned to build investor confidence.

EU Taxonomy in Limbo - Reporting Alignment of Article 8 and 9 Funds in 2022

For observers of the EU’s Sustainable Finance Strategy, 2022 kicked off with a crack and a bang as the European Commission went ahead with plans to include natural gas and nuclear-related activities as potentially sustainable under their ‘Green Taxonomy’. However, in midst of this furor, seemingly less attention has been paid to other components of the regulation that have quietly taken effect from the 1st of January 2022, presenting their own set of challenges.

oil and gas ESG risk

The ESG Risks of National Oil Companies Taking Over Fossil Fuel Production from International Oil Majors

As growing pressure to cut GHG emissions is causing Western oil majors to sell their high-carbon assets, it is expected that National Oil Companies (NOCs) will pick up some of the production. For investors holding an interest in or considering investing in NOCs or sovereign debt, it is worth assessing how fossil fuel production shifts will impact their portfolio’s alignment with climate ambitions and ESG values.

What Happens When Companies are Receptive to Investor Feedback on ESG?

When companies are receptive to investor feedback, there are clear real-world impacts and positive changes. Such engagement outcomes vary and are directly tied to the company and its company-specific exposure to material ESG issues.

biodiversity and ESG stewardship

3 Reasons to Skill Up and Scale Up ESG Stewardship in 2022

As our clients and the industry at large focus on proactively mitigating risk and capitalizing on this evolving landscape, stewardship will be a key lever for savvy investors—particularly those facing external pressure to divest. Here are the ESG themes we see influencing stewardship priorities this year.

Climate Action for Investors

For Investors with Ambitions to Lead on Climate Action Post COP26

In the weeks following COP26, investors in the UK and worldwide face a myriad of upcoming climate-related regulations heading towards the implementation phase. In addition, major global coalitions such as the Glasgow Financial Alliance for Net Zero have sprung up to attempt to accelerate decarbonization via targeted investment.

ESG Risk Ratings in APAC - Supporting the Corporate Sustainability Journey

Hear from a panel of ESG thought leaders in the Asia-Pacific region on how ESG ratings have supported their sustainability and financial objectives.

Exploring the Role of ESG Factors in the Fixed Income Investing Process

While many mainstream investors with an equity focus are applying ESG considerations as a part of their investment decision-making processes, how are fixed-income investors looking at ESG factors to assess corporate credit risk, bond selection, and other related activities?

EU Action Plan SFDR

Momentum Around Principal Adverse Impact Data Remains Strong Despite SFDR Delays

Despite the shifting timelines, we observe that the market momentum around PAIs is not diminishing, quite the contrary. Investors in the scope of the regulation are using the fourth quarter of this year to get acquainted with PAI data and set up their systems. Most investors we speak with want to be prepared in time to be able to monitor PAIs throughout 2022 and adjust their portfolios to boost their PAIs (or rather limit the downside, as these are adverse impact indicators). This means that PAIs may significantly impact stock selection and portfolio construction by fund managers keen to have ‘good’ PAI scores.

biodiversity species

Biodiversity: A Crisis Equaling, Possibly Exceeding, Climate Change

According to the UN’s Convention on Biological Diversity the main drivers of biodiversity loss are habitat loss and degradation, climate change, pollution, over-exploitation, and invasive species. Habitat loss is directly linked to the conversion of natural ecosystems to agricultural lands and unsustainable use of water resources.

European Court of Human Rights

Bringing Investors and Companies Together to Accelerate Human Rights Progress

Human rights issues have been rising on the responsible investment agenda in recent years. The COVID-19 pandemic and the Black Lives Matter movement have provoked even more pointed discourse on the topic. The European Union’s current efforts to introduce rules to hold companies accountable for social and environmental risks in their supply chains further accelerate that ascent. This wave of legal requirements and normative expectations is impacting financial markets worldwide, with responsible business regulations already in place or quickly becoming valid.

water ESG investing

Investing in Water for Positive Impact

With the threats of climate change and the existing inequalities in natural resource access and availability around the world, ensuring an adequate supply of clean water is necessary to ensure the well-being of all people across the world.

hurricane

Impact of Climate Change and Extreme Weather on Essential Services

Utilities have found themselves in the literal and metaphorical eye of the storm over the last year as hurricanes, floods and wildfires of increasing frequency and strength have wreaked damage on their assets. In late August, Storm Ida made landfall in Louisiana, USA and devastated the power grid lines. Entergy, the utility operating in Louisiana, supplying most of New Orleans, restored 90% of the supply only by mid-September, with 87,000 customers still without power.

The circular way forward could be the key to reducing food waste

Indications that a food crisis is imminent are clear. Fundamental changes in the global food system are required to address these challenges. This decade is a watershed moment for urgent efforts to close the loop, and companies and investors can play a pivotal role. Despite being closely connected to issues such as climate change and basic human rights, food waste has attracted comparatively less attention from companies, investors, and other stakeholders.

Responsible Investing

Recent market trends put engagement and voting front and centre for responsible investors

From a market perspective, engagement and voting on governance issues have been used as levers for influence for a long time. On the other hand, environmental and social issues were historically addressed from a values-based perspective or primarily for fact-finding purposes. Today, many responsible investors leverage corporate dialogue as a tool to influence and drive meaningful change and impact

North American Material Risk Engagement Trends: ESG Reporting Frameworks, Emission Reduction Targets and Beyond

There are many factors that rating agencies consider within its overall assessment. For example, ESG rating companies tend to look for at least three years of ESG metrics to determine company trends and long-term ESG targets, goals, and strategies to manage and reduce ESG risks at least five years ahead. Read on to learn about how Sustainalytics' Material Risk Engagement program promotes and protects long-term value by engaging with high-risk companies on financially-material ESG issues. (A North American Snapshot)

ESG Risks of Aging Pipelines for U.S. Energy Infrastructure Investors

Pipelines play a critical role in the U.S energy infrastructure transporting natural gas, crude oil, natural gas liquids, petroleum, and petrochemical products. While these pipelines play a vital role in supporting the U.S economy, investors are increasingly scrutinizing pipeline operators' long-term economic profitability and sustainability practices. A closer look into the status of pipelines reveals a particular issue that investors need to consider.

construction industry protocol

ESG Investors Consider Socioeconomic Impacts of COVID-19 in the Construction Industry

The construction industry can have a reputation for workforce insensitivity and is highly vulnerable to economic and social variabilities. The ESG Impacts of COVID-19 drive companies to adapt to significant challenges related to the demand for construction services. This construction sector research snapshot highlights relevant social issues that corporations face due to ripple effects from the pandemic using Sustainalytics’ ESG Risk Ratings and Controversies Research.

Sustainalytics Weighs in on EU Taxonomy’s State of Flux

Delays, Questions and Confusion: Updates on the EU’s Sustainable Finance Disclosure Regulation

In this blog, we look at the delay of the level 2 regulation, some aspects of the Q&A, and the ongoing confusion and divergence around SFDR. We pay special attention to the potential impact of the Principle Adverse Impact indicators, an element of SFDR.

covid-19 vaccine storage dry ice

ESG Risk Exposure from COVID-19 Vaccine Transportation and Distribution

As mass vaccination against the coronavirus started, a key challenge has been to keep millions of doses of vaccines at the right temperature. An increase in temperature inside a truck or aircraft, by half a degree, for half an hour, would reportedly result in a 'defrosted' vaccine which has then to be discarded.