Buzz: Transfer to editor

Leveraging climate mitigation and nature to increase resilience

• How climate change and nature destruction are driving economic losses from extreme weather events
• Climate risk and the insurance protection gap
• The financial, economic, social and fiscal consequences of the protection gap
• WWF recommendations

NB sustainable investing activities are covered in this report.

Social media platforms have transformed global communication, commerce, and civic engagement. Dominated by key actors such as Meta, TikTok, LinkedIn, and Snap Inc., the industry is characterized by complex value chains and rapid innovation. These platforms integrate content creation, data analytics, user interaction, and monetization strategies—often powered by targeted advertising and AI-driven personalization.

However, the shift toward algorithmic control, AI-based moderation, and global scale has created a host of environmental, social, and governance (ESG) concerns. These range from energy-intensive infrastructure and biased content moderation to systemic human rights issues such as freedom of expression, privacy, and labor rights in content moderation roles. Regulatory scrutiny is growing, particularly around data practices, misinformation, and exploitative advertising models.

This briefing outlines the structural characteristics of the sector, the evolving production and workforce models, and the most salient ESG risks shaping the future of social media governance. 

Key Insights:

• In the European Union, environmental, social, and governance (ESG)-focused investments must exclude controversial weapons, though current regulations cover only four categories: anti-personnel mines, cluster munitions, biological weapons, and chemical weapons.
• Investors may go beyond EU rules and consider international treaties and national laws that address other controversial weapons such as depleted uranium, white phosphorus, and nuclear weapons. 
• Among controversial weapons, nuclear weapons are currently the most actively reviewed, with a growing number of investors reintegrating them into their investable universes. In the Morningstar Sustainalytics coverage universe, 110 companies are involved in nuclear weapons-related activities.  

Key Insights: 

• Rising global defense spending is creating investment opportunities, even for sustainability-oriented investors. Morningstar Sustainalytics’ universe includes around 860 public and private companies involved in military contracting.
• Of these, 73% provide supporting products and services to the sector, such as technology, equipment, and machinery.
• Many of these firms are involved in non-weapon-related activities.
• Approximately 27% of military contractors in our universe are based in Europe.
• While European regulation does not pose a barrier to financing or investing in defense companies, market participants are still expected to conduct thorough ESG due diligence.
• The most relevant ESG risks for defense firms stem from business ethics, product governance, and environmental issues.

Electricity bills are rising across much of the United States with no end in sight, meaning we are heading into 2026 at risk of handicapping emerging economic sectors such as data centers and advanced manufacturing that depend on low-cost electricity, as well as increasing hardship for families that already struggle to pay power bills.

With utilities planning to spend an unprecedented $1.4 trillion dollars by 2030 in grid upgrades to meet rising demand for power, concerns are mounting that high electricity costs could slow economic growth and put more households at financial risk.

Emissions from oil and gas used to be simply calculated using a uniform carbon content in these resources — a barrel of oil was reported to emit 434 kg carbon dioxide equivalent (CO2e), and an equivalent barrel of gas was reported to emit 315 kg of CO2e. But now we know how different oil and gas, and their resulting emissions, really are.

That’s because these resources are diverse, ranging from the heaviest oils, with the consistency of peanut butter, to wet gases that are more like cream soda. Their varying makeups require varying complex processes to extract, process, transport, and turn oil and gas into fuels and other end products. As such, their associated emissions cannot be standardized so simply.

Technological progress is rarely linear.

From the automobile to the television to solar power, a process of “gradually, then suddenly” can be observed.

This process traditionally follows five distinct phases (outlined in Exhibit 1 - see link below.

The good news when it comes to our clean energy future is that many promising solutions are reaching stages of maturity that bring them closer to widespread adoption across a wide array of sectors and geographies.

The area around California's Salton Sea is incredibly rich in lithium — enough to support over 375 million electric vehicle batteries. A new mine, dubbed Hell's Kitchen, plans to tap this vast mineral wealth. Once completed, it will be among the largest lithium producers in the world.

Hell's Kitchen is one of several new mines that have been fast-tracked by the U.S. federal government as part of an ongoing push to scale up domestic critical mineral supplies. Demand for these minerals — which include lithium, cobalt, rare earth elements and others — is surging both in the U.S. and globally, in part thanks to the rise of clean energy technologies like electric vehicles, utility-scale energy storage and solar panels.

This rising need is rapidly outpacing U.S. production, meaning the country will have to both increase imports and scale domestic mining in the coming years.

One of the biggest food trends right now seems to be protein. Everyone from social media influencers to food companies to governments are telling us to eat more of it.

The new U.S. dietary recommendations are the latest to join the fray. The guidelines emphasize “protein, dairy and healthy fats,” calling for Americans to eat as much as twice the daily protein intake recommended by the National Academies’ Institute of Medicine.

While some individuals require higher amounts of protein, raising the recommended levels of protein for the general public is cause for some debate. But what’s indisputable is the fact that there are many ways to meet our protein needs — and not all of them have the same impact on people and the planet.

Land-use change has long been recognized as a major contributor to global warming. Deforestation and agriculture alone account for nearly 25% of human-caused greenhouse gas (GHG) emissions.

One might think this effect is uni-directional: Cutting down trees, plowing up grasslands and draining wetlands release GHGs that fuel climate change. But satellite monitoring shows that this relationship is a two-way street. Climate change itself is increasingly leading to the loss and degradation of forests, grasslands, wetlands, rivers and even farms, creating a dangerous feedback loop.

Where can investors find long-term, inflation-linked income with minimal correlation to economic cycles, backed by government funding and demographic tailwinds? The answer lies in an overlooked corner of the UK market: critical social infrastructure.

Transition finance is a better instrument to fight rising carbon emissions while maintaining attractive returns.

Last month’s COP meeting may have disappointed. Then again, the real climate progress we saw in November happened in bond markets and around market frameworks anyway, not negotiating rooms.

COP30 ended without a fossil fuel phase-out roadmap, even though absolute world emissions are at an all-time high. But recent weeks also delivered two significant developments in transition finance that could unlock capital where it's most needed: the International Capital Market Association (ICMA) released guidance recognising climate transition bonds as standalone instruments, and the EU Commission scrapped its Article 8 and 9 sustainability regime, introducing a new transition product category.

Listen to Jason Mitchell discuss with Bob Litterman, Kepos Capital, about how efficient markets are at pricing climate risk.

Also available: Sustainable Investment Activity Report – Q3 2025