Business Ethics and Economic Downturn - A Closer Look at China

In October 2019, China posted its lowest quarterly GDP growth rate (6.0%) in 30 years. While the country’s trade war with the US might have added to the economic headwind, the economic results are in line with a decade of cooling down following years of double-digital growth.

The Opioid Crisis and the Continued Uncertainty for Affected Companies

As the first National Prescription Opiates Multidistrict Litigation (MDL) cases are set to get underway in late October, we take a closer look company involvement in U.S. opioid crisis and how it has evolved since our first article on the topic in 2017. We also provide an overview of how the ESG risks highlighted in our initial article have materialized over the last two fiscal years (FY2018 and FY2019) for the companies involved.

Children’s Rights – the smallest things can have the biggest impact

Imagine there was a stakeholder group that formed a third of the global population and was pertinent to business in various ways: as customers, as employees’ family members, and as key participants in local communities and in society at large. These people would be guaranteed to run the world in the future. Almost everyone would know and be related to representatives of this network, and many would consider them the most important people in their lives. You would expect companies and investors to assess the impact they have on these powerful influencers and try to capitalise on the related opportunities, but that is rarely the case. This is because the group I’m talking about is children. When it comes to incorporating children’s rights and needs into business and investment strategies, there is still a long way to go given their number and potential.

The Impact of Country ESG Risks on Company Operations

In this article we explore how operating in Peru affects the world’s second largest mining producer of precious metals, Barrick Gold. Based on analysis from our recently launched Country Risk Ratings, we discuss how the challenges facing Barrick’s mining operations in Peru are strongly influenced by the country’s ESG risks.

Generali Green Bond Framework and Second-party opinion

Assicurazioni Generali SpA (“Generali” or the “Group”) is a global insurance and financial services company based in Italy. Founded in 1831, Generali now operates in over 60 countries with approximately 71,000 employees and is one of the world’s largest insurance providers by revenue. It is well positioned in the insurance business, and with its asset management business in Europe, with a growing presence in Asia and Latin America. In addition to Generali’s three strategic pillars ­– profitable growth, capital management and digital transformation – Generali established sustainability as a key initiative and one of its important goals for 2021 (Read more: https://www.generali.com/our-responsibilities).

Introduction to Sustainability Linked Loans and ESG Ratings

Sustainable finance and green lending are on the rise as more borrowers and lenders recognize the potential benefits of green and sustainability-linked loan products for their businesses. According to the Loan Markets Association (LMA), sustainability linked loans are a "dynamic and innovative product that enables lenders to incentivize improvements in the borrower's sustainability profile.” Sustainability linked loans align the loan terms to the borrower's performance against pre-determined sustainability performance targets such as a company’s ESG rating. Learn more about ESG Ratings

Tax Transparency in Australia

As Benjamin Franklin once said, “in this world nothing can be said to be certain, except death and taxes.” He was referring to the world in 1789. In today’s world, death remains a certainty. Taxes on the other hand, are less certain as companies, accountants and lawyers have found ways to reduce tax obligations.

Brazil: Deforestation in the Global Context - Part 2

In our previous blog post, we detailed the impact that the new Brazilian government’s policies have had on deforestation and could have on Brazil’s Indigenous Peoples. In this second article, we will explore how material recent developments in Brazil could be for the companies, communities and financial institutions involved. We will also take a closer look at Brazilian meat processing company JBS SA (JBS) and the consequences it may face due to international concern over deforestation.

Emerging market equities, ESG risk and sector tilts

The International Monetary Fund’s (IMF’s) recent downward revision to its projections of near-term global expansion reflects growing concerns about brewing market tensions. Central issues affecting capital markets include trade disputes between the US and China, Brexit and subdued investment and demand for consumer durables. According to the IMF’s latest outlook, global real GDP will grow 3.2% in 2019 and 3.5% in 2020 – a downgrade of 10 basis points (bps) for each year compared to the IMF’s previous outlook last April.[i]

The fairy-tale of Faroese fish farming

Aquaculture is the fastest growing food production sector in the past 20 years. It will become vital in meeting the rapidly increasing demand for seafood, and is expected to provide 50 per cent of total seafood consumed in the coming years.[i] Contributing to an increased protein supply and global food security, aquaculture also carries many risks. These risks include the potential spread of diseases and parasites, use of antibiotics and pesticides, and the escape of fish from fish farms which can jeopardize wild populations.

China’s Millennials and ESG

A country’s demographics has a strong influence on long-term social trends, including the development of ESG issues. With millennials becoming the dominant cohort among the workforce and consumers, we are witnessing the social transformations that come with a new generation. Although occurring globally, these transformations are particularly dramatic in China, due to the contrasting social environments experienced by China’s millennials and their parents.

Shareholder Rights Directive II gets transposed into local legislation - a look at say on pay

The newly updated European Shareholder Rights Directive (“SRD II”) (2017/828/EU) aims to promote long-term shareholder engagement at companies listed in EU-regulated markets. These changes were prompted by an almost decade-long conversation that arose in the wake of the 2008 global financial crisis. Since then, many market actors have flagged shareholder short-termism as a key contributor to the crisis, with long-term engagement conversely seen as a bulwark against similar failures in the future.

ESG Ratings and Sustainability Linked Loans – Insights from the field

In the spring, Sustainalytics launched an Issuer Information Series covering our new ESG Risk Ratings, our company research and feedback process and sustainable finance trends.

Brazil: Deforestation in the Global Context

On January 1, 2019, Jair Bolsonaro began his tenure as the president of Brazil. On his first day in office, he signed several decrees aimed at increasing power for the Ministry of Agriculture, at the expense of the Ministry of Environment. According to NGOs, this indicates a shift in government priorities away from environmental stewardship and protection of Indigenous rights towards bolstering the agricultural industry’s interests.

The business case against letting the well run dry

Do you believe climate change is a problem needing urgent attention? Have extreme weather events got you thinking about the personal or professional risks you face? Are you interested in how the global population will be fed in the future? Concerned about the mass migration of people in search for a better life? Worried about the outlook of energy production? If you answered yes to any of these questions, then you may also want to consider the vital element connecting all of the above: water.

Navigating Developments in the Sustainable Finance Market

On June 18th, in the heart of London’s financial district, Sustainalytics hosted its inaugural breakfast symposium, Navigating Developments in the Sustainable Finance Market. It was a full house, with over 60 engaged attendees, including Sustainalytics clients, prospects and partner financial institutions. The expert panel focused on developments and trends in the European and global sustainable finance space. Sustainalytics’ own Trisha Taneja (Sustainable Finance Solutions Product Manager) was joined by David Zahn, Head of European Fixed Income at Franklin Templeton Investments, and Heike Reichelt, Head of Investor Relations and New Products at the World Bank. Kevin Ranney (Director, Sustainable Finance Solutions) moderated the panel.

Sustainable Development Goals – Green Financing as a Bridge to the SDGs

The purpose of green financing, as stated by the UN Environment Programme, is to increase the level of financial flows (from banking, micro-credit, insurance and investment) from the public, private and not-for-profit sectors to sustainable development priorities. The aim is to align financial systems, working with countries, financial regulators and financial sectors, to direct capital allocation to sustainable development that will shape the production and consumption patterns of tomorrow. Financial mechanisms such as Green Bonds help this alignment as they promote public-private partnerships for sustainable development.

The role of technology companies in technology addiction

As personal technology and social media platforms become ubiquitous in our personal and professional lives, we explore the role played by technology companies in technology addiction. The term ‘technology addiction’ is a catch-all phrase typically used to describe frequent and compulsive internet, smartphone, gaming and social media use.

Implications of the use of rare-earth elements in the wind energy market

Investors who are bullish on renewable energy are often drawn to the wind energy market. Alongside solar, wind energy has been rapidly adopted worldwide and continues to receive significant investments compared to other renewables.[i]

Mexican companies remain dedicated as government backtracks on climate commitments

Since taking office in December 2018, Mexico’s president Andres Manuel Lopez-Obrador, often referred to as AMLO, has not inspired much hope among investors in the country’s energy sector. The first six months of his presidency has confirmed investor concerns that the privatizing of the energy industry would be rolled back under AMLO, who has made energy sovereignty a cornerstone of his administration’s agenda. The contracts issued under the 2013 energy reforms have been placed under review and the energy auctions for oil, natural gas and renewables projects that were scheduled for 2018 were cancelled. The energy auctions scheme was introduced in 2015 as a key measure to achieve Mexico’s energy reduction commitments of 30 per cent and 35 per cent by 2021 and 2024, respectively.