Resource Center

Sustainable financial products are marked with an increasingly large list of tags, from green, sustainable, socially responsible to thematic ESG, water, carbon or impact funds, and not every investor might know how to make sense of these terms. Sustainable fund labels can be one way to signal to the market that the fund has a dedicated responsible investment strategy.

The COVID-19 pandemic is likely to further amp up the market’s interest in ESG investment research. It’s not just that ESG funds and indices have generally outperformed their non-ESG counterparts since the COVID-19 sell-off began in mid-February.[i] It’s also that the pandemic itself has drawn attention to ESG issues ranging from biodiversity and habitat loss to employee relations and supply chain management.

Automakers have been hit hard by the COVID-19 pandemic, with widespread plant closures, stalling demand for vehicles and mounting tensions between corporate management teams and government bodies. On the upside, several auto companies have responded to the global health crisis by pivoting parts of their business models to supply the growing demand for ventilators needed for patients suffering from severe respiratory symptoms of COVID-19.

The Economist named 2019 the year of the vegan; however, veganism is one part of a much greater trend away from animal proteins. While vegetarianism also continues at a steady growth rate, it is the flexitarian – i.e. traditional meat eater who makes a conscious effort to reduce their meat intake – that is having a notable impact on the market. This has been further accelerated by COVID-19 and the disruption to the fresh meat industry.

At a time when climate change has caught global attention and efforts are being made to meet the UN sustainable development goals, however concrete – the most widely used man-made material on earth – is a significant source of carbon dioxide (CO2) emissions and often overlooked. Cement, a key ingredient in concrete, accounts for about 7% of global CO2 emissions and is the second-largest industrial emitter of CO2 after the iron and steel industry [i]. The cement production process is responsible for 95% of concrete’s carbon footprint. Under the International Energy Agency’s sustainable development scenario, cement producers will need to reduce their carbon intensity at an annual rate of 0.3% per tonne of cement produced up to 2030 [ii]. With carbon emission regulations tightening globally to meet the 2-degree scenario (2DS) targets, cement companies that fail to adopt low-carbon processes and improved energy efficiency could face risks in the form of potential fines from non-compliance and lost opportunity costs by failing to innovate processes.

In April 2020, the International Labour Organisation (ILO)[i] estimated that in the second quarter of 2020 there will be a 6.7% decrease in working hours globally (approximately 195 million full-time employees), primarily in the sectors hardest hit by the Coronavirus pandemic: food service, manufacturing and retailing.

As we mark the 50th Anniversary of Earth Day, we highlight the need for a collective effort in order to combat the impacts of climate change. In this blog, we explore the important role that investors play in mobilizing the transition to reduce emissions and how sustainable solutions can support this.

This year, we mark Earth Day under a pandemic. To date, casualties of the novel coronavirus include more than 170,000 deaths, ongoing disruptions to healthcare systems and a deep economic downturn. As we face the first global recession in a decade, Earth Day – the theme of which this year is climate action – serves as a reminder for investors to reflect on how their investment activities relate to social and environmental health concerns.

In this blog post we highlight the need for living income and living wages to build resilient supply chains and resistance to shocks such as the current COVID-19 pandemic. We explore the important role that investors play and how engagement efforts contribute to progress.

The coronavirus pandemic has been sudden and significant. The transition from business as usual to crisis response has meant that daily routines are no long routine and future planning is in a state of constant revision. We are learning new ways to source essential goods and connect with people. The same applies to companies. While truly exceptional, the pandemic illustrates the importance of proactive business planning and robust risk management systems, with companies’ ability to respond to shocks and adapt to changing circumstances being tested profoundly.

As our global community continues to endure an altered way of life amidst the on-going COVID-19 outbreak, it is only natural to ask what each of our lives, professional and otherwise, will look like on the other side. Once children and teachers go back to school and workers return to their offices, will our society have done everything it could have to mitigate the social and economic impacts of this crisis and will we have built in resiliency against future system shocks?

Following the Council of Institutional Investors Conference, we highlight two emerging social issues that were top of mind for active investors, Cyberthreats and Human Capital & the Future of Work, and discuss how partnering on engagement can drive long-term value.

One of the lasting impacts of the COVID-19 pandemic will surely be a transformed understanding of supply chains. As we touched on in earlier posts[i] in our coronavirus blog mini-series, we expect the pandemic to catalyze a range of efforts by management teams to better understand the vulnerabilities of their supply chain. While executive teams closely track their tier 1 suppliers, many are unaware of the full scope of their global supply chain. Bain & Co recently estimated that up to 60% of executives have no knowledge of the items in their supply chain beyond the tier 1 level.[ii]

There is significant hype associated with the rollout of 5G networks, which is largely tied to the incredible data transfer speeds 5G capable networks can offer. However, speed is only part of the equation. Beyond speed, key attributes of 5G also include lower latency, reduced cost per gigabyte and larger connection volumes. 5G, unlike previous network technology, will be software-defined, enabling networking functionality to be flexible and adaptable over time.[i] As a result, 5G is anticipated to create a new digital backbone to power future infrastructure needs – a topic we explored in Sustainalytics’ report, 10 for 2020: Creating Impact Through Thematic Investing.

In the space of four months since the first cases of COVID-19 were diagnosed in Wuhan, China, the virus has spread to 178 countries globally. As a consequence, nearly 3 billion people around the world are living with varying degrees of lockdown imposed by governments aiming to slow the spread of the contagion.

In February 2020, the WHO Director-General Tedros Ghebreyesus said misinformation about COVID-19 is just as dangerous as the virus itself. “We are not just fighting an epidemic; we are fighting an ‘infodemic.’ Fake news spreads faster and more easily than the virus and is just as dangerous.”[i]

Since the World Health Organization declared the COVID-19 outbreak a pandemic on March 11, global stock markets have seen losses not experienced since the 2008 financial crisis.

The highly anticipated final report by the TEG (Technical Expert Group) on the EU Taxonomy was published in early March, followed by a stakeholder information session. You can read our blog post on last fall’s developments here.

Growing public concern over climate change is pushing investors to increasingly assess how their portfolios are pivoting to a low carbon economy. Because of its large carbon footprint, the coal industry is a prime target of environmental activism and divestment campaigns, and it is becoming the investable hot potato few want to hold.

With this blog, we continue our mini-series on the novel coronavirus and some of the related impacts that we see developing in specific industries and for specific ESG issues.