Independent research companies

Highlights include:

- Steady growth in impact investing assets: At 14% CAGR over the past five years, there is continuous growth in the assets allocated to impact investing strategies. The dynamics between large and small investors are particularly intriguing, suggesting that investors are increasingly playing to their strengths — a sign of a maturing market. 
- The rise of equity-like debt and public asset classes: Investors are leveraging the unique features of these asset classes to derive value, indicating a strategic shift in how capital is deployed.
- Satisfaction with financial performance despite unmet targets: Investors report high satisfaction with financial performance, even when targets are not met. This underscores the need to enhance data-sharing practices to better understand actual impact performance results. The GIIN’s impact performance benchmarks represent an important step in this direction, but there is much more work to be done.

"In 2024 we welcomed back the PRI Awards after a break in 2023 with new awards recognising action in climate, nature and human rights - plus a new special category on private markets. The large number of high-quality submissions is testament to the level of innovation across the industry."

There were a couple of key themes across the submissions:

- Competition was tight.  Selecting shortlists and winners was a highly competitive process. In view of the challenging landscape, we were encouraged and impressed to see continued leadership and innovation in the submissions.
- Innovation is alive.  Private markets and emerging markets are areas of real innovation and change. Submissions highlighted practices from a wide range of asset classes, including high yield fixed income and art.
- A global shortlist.  Shortlisted submissions came from  Malaysia, UK, Brazil, France, Denmark, Costa Rica, US, Singapore, Sweden, and the list goes on.

"In this episode of Nature Breaking you’ll hear all about WWF’s 2024 Living Planet Report. This bi-annual report functions as a check-up on the health of the Earth. Underpinning the report is the Living Planet Index, which monitors populations of mammals, birds, reptiles, amphibians, and fish around the world. This year the report found that monitored wildlife populations declined by an average of 73% since 1970. Importantly, this year’s report also reveals that the Earth stands on the verge of tipping points for tropical forests and coral reefs that could have severe consequences for people and nature everywhere. Joining the show to explain the Living Planet Report is Dr. Rebecca Shaw, WWF’s chief scientist. Rebecca will walk us through the methodology of the report, what its key findings really mean for wildlife and ecosystems, and what we all can do together to put our planet on a more sustainable pathway."

FrenchSIF: Forced labour and child labour - First year report

In 2021, FrenchSIF (FIR) has formed a coalition of ten of its investor members – Amiral Gestion, Amundi, AXA Investment Managers, Candriam, LBPAM, LFDE, Meeschaert AM, ODDO BHF AM, Ofi Invest AM, Sycomore AM – with over €3,300 billion in assets under management, to support the fight against forced labour and child labour worldwide.

10 companies with high stakes in the issue – Food, Automotive, Consumer Discretionary, Construction, Hotels, Industries and Utilities – have been selected to lead this commitment initiative.

The RHSF methodological grid, developed as part of its programme 8.7, was used and adapted to the needs of the exercise.

For the third consecutive year, RepRisk’s report on greenwashing highlights trends in the number of companies linked to misleading the public about their environmental impact. While the 2024 data shows an overall decrease in greenwashing cases for the first time in six years, high-risk cases of greenwashing surged by over 30%.

Clothing Companies  

Smoking, vaping and convenience stores

Hospitals 

Heating, Ventilation, and Air Conditioning (HVAC) 

Universal Design

• the demographic shift towards an aging population (1) and
• cater to the estimated 16% of the global population living with a significant disability (2).

Universal Design is the creation of an inclusive environment (including any buildings, products, or services within) that can be accessed, understood and used to the greatest extent possible by all people, regardless of age or abilities.

Universal design respects user dignity and rights, whilst also often making business sense. It can expand market reach, enhance customer satisfaction, improve reputation, reduce future modification costs, enhance the convenience and usability of products, and potentially minimise litigation risk.  

Purpose: 

To understand how well-prepared supermarkets are for:

• the demographic shift towards an aging population (1) and
• cater to the estimated 16% of the global population living with a significant disability (2).

Universal design reaches beyond these groups to their caregivers, families and communities.     

Research RFP: Heating, Ventilation, and Air Conditioning (HVAC) 

Purpose: 

To better understand the environmental hazards of critical chemicals used by the heating, ventilation, and air conditioning (HVAC) sector, how they interact with the need for greater energy efficiency, and where our list of companies sit in terms of their environmental impact. 

As investors in the sector we recognise the human benefits HVAC can bring in a variety of environments. But we need demonstrable evidence that the rapid growth of this sector going forward doesn’t come with large environmental impacts such as long-term chemical loading on the environment.

Requirements:   

1. Where do PFAS chemicals exist in the HVAC sector? What are the barriers to rapid phase out?
2. Does a phase out of F-gases always correspond with energy efficiency?
3. Where can greater energy efficiency gains be made?
4. Where can lower environmental impact be achieved?
5. Highlight environmental leaders and laggards from our list of 17 companies.

Research RFP: Stewart Investors - Hospitals 

There is a significant shortage of hospitals and clinics in emerging markets and investment in the sector is critical for better human development outcomes. Historically we have been wary of the potential conflict that exists between for-profit hospitals/clinics and best healthcare outcomes. This has prevented us from investing in the sector. We would like to challenge this view and see if we can identify healthcare groups that are able to manage these risks well. 

Purpose: 

To identify leaders and laggards in terms of managing real and perceived conflicts between profit and best healthcare outcomes within the listed hospital sector.

Requirements: 

We would like this report to consider the following:

1. What are the key areas of conflict in for-profit hospital management?
2. How can minority investors assess this?
3. What do best and worst practices look like?
4. Who are the leaders and laggards?
5. How do companies manage the specific challenges of affordability when operating in very low-income communities?

Research RFP:  Stewart Investors - Smoking, vaping and convenience stores

Smoking products (tobacco and vaping) constitute a significant part of many convenience store sales directly and indirectly via footfall. This represents a significant earnings risk as societies work towards reducing the health harm caused by these products through evolving consumer preferences and regulatory changes.  

Purpose: 

To identify companies most and least at risk and to identify best practices in reducing these risks.

Requirements:   

1. A brief analysis of regulatory trends around smoking sales from retail outlets (which countries have banned, changed etc). No overview of the issue itself please. Just focus on regulatory rules around sales practices.
2. Calculate/estimate the current percentage of sales and profits from smoking (tobacco and vaping) and historic trends for each company.
3. Calculate/estimate the indirect impact from smoking footfall for each company.
4. Analyse what steps are being taken at a company level to address these risks. Are there any obvious leaders/laggards
5. Anything else the authors feel would be interesting. 

Research RFP: Stewart Investors - Clothing Companies 

Clothing companies have significant environmental, labour and human rights risks in their supply chain. In addition, the short-duration nature of their products throws up significant life cycle challenges. It’s been a long time since we invested in the sector, partly because of this. We would like to revisit and understand better leaders and laggards in terms of their supply chain management and lifecycle management. 

Purpose: 

To identify leaders and laggards in supply chain management and lifecycle management in clothing sector.

Requirements: 

We would like this report to consider the following:

1. Which companies are leading and lagging in terms of supply chain management (human rights, labour practices and environmental in particular)? Feel free to use any framework but we are looking for specific evidence or anecdotes.
2. Which companies are leading and lagging in terms of lifecycle management?

Green stocks had a torrid time over the last couple of years as high inflation and higher interest rates made investments in these growth areas unprofitable. On top of that, ESG investing has gone too far in some areas, due to tons of companies greenwashing their business or engaging in empty virtue signalling. No doubt, the air has gone out of the bubble. But was there a bubble to begin with?

Andreas Barth and Christian Schlag from the University of Frankfurt have creatively tackled this issue. They reason that if ESG investments are made primarily because companies with better ESG credentials have fewer downside risks, then a company that improves its ESG credentials should not only see its equity risk premium drop but also its credit risk premium.

If, on the other hand, investors buy green stocks because they are green and not because they have lower risks, then share prices should rise as ESG credentials of a company improve while credit risk premia do not change.

By looking at the behaviour of share prices vs. credit risks as priced in company CDS one can differentiate between one and the other. So, here is what happens to share prices vs. credit spreads for companies sorted by the ESG credentials. Quartile 1 stocks are the companies with the best ESG credentials, while Quartile 4 stocks are the companies with the worst credentials. As you can see, companies with the best ESG credentials saw their share prices rise above and beyond the change in CDS spreads, indicating that these stocks benefitted from being green.

The world is starting to split into two trading blocs. This forces companies in the US and Europe to friend-shore some of their production and move it from China to other countries. In my discussions with business leaders, Southeast Asia came up several times as an ideal place to move production facilities. Now, some data shows that the region indeed increasingly benefits from investments, particularly in green technologies.

The energy transition to renewables is a major problem because China dominates the markets for key commodities needed in the space as well as the supply of key products such as solar cells, batteries, etc. And as we all know, China and the Western world are increasingly at odds with each other about trade practices, political vision, etc.

To support a whole-economy transition to net zero, financing and related services across four key transition financing strategies need to scale. The IPCC estimates that a three- to six-fold increase in financing is needed by 2030 to limit warming to 1.5 degrees C.2 The private financial sector has the scale to mobilize the majority of the necessary capital and enable real-economy decarbonization, with more than 675 financial institutions, 
representing 40% of global financial assets, independently committed to the goal of net zero by 2050 through membership in one of the sector specific financial alliances comprising GFANZ. 

The transition to net zero presents financial institutions with unprecedented opportunities to scale Transition Finance across all sectors of the economy. Decarbonization efforts by the real economy, supported by government policy and private finance all play a role in driving Transition Finance. GFANZ defines Transition Finance as investment, financing, insurance, and related products and services that are necessary to support orderly real-economy transition to net zero across four financing strategies: 

1. Climate Solutions: Entities and activities that develop and scale climate solutions;
2. Aligned: Entities that are already aligned to  a 1.5 degrees C pathway;
3. Aligning: Entities committed to transitioning in line with 1.5 degrees C-aligned pathway; or
4. Managed Phaseout: The accelerated managed phaseout of high-emitting physical assets.

LGT's latest stewardship report covers key areas of their activities, including:

• Stewardship at LGT
• Voting at LGT
• Engagement at LGT
• Collaborative engagements
• Public policy advocacy

It is increasingly clear that methane emissions from fossil fuels operations represent investment risk. Methane emissions are responsible for about 30% of global warming to date - and deep cuts in these emissions are required this decade to meet Paris goals.

In the past year, regulation has tightened significantly on methane emissions from fossil fuels, in both producer and importer jurisdictions. In tandem, companies are increasingly being scrutinised on their methane performance by independent measurement campaigns, helped by the recent launch of new satellite instruments.  

The topic also came under the spotlight at COP28 as a raft of nations and companies unveiled new commitments. 

While this momentum is promising, significant risks are apparent where companies are poorly prepared for these advancing expectations and requirements. Many remain in the dark as to the true scale and origin of their emissions, relying upon factor-based estimates in reporting rather than direct measurement.  

This paper aims to support investors to address these risks in their portfolios. It provides engagement frameworks for addressing methane emissions from oil and gas, and coal operations, and for engaging the ecosystem – including banks, governments, and value chain companies.  

Many investors have articulated support for a concept of transition finance that promotes capital allocation and management of assets in line with the transition to a low-carbon economy. But at present, the lack of a robust and consistent definition is inhibiting this capital flow. 

This position paper seeks to outline the investor perspective on the different types of transition finance that can exist, how they can be distinguished, and what is needed to give confidence that an investment can credibly be understood as ‘transition finance’. The paper does not seek to establish specific definitions or guidance although this may be explored in future work.

The position paper covers the following aspects:

• The need for a robust conceptualisation of the term ‘transition finance’ and initial investor perspectives on what it does and does not constitute.
• Several examples of the different types of transition finance that investors have encountered and several classifications by which they might need to be distinguished.
• The common principles that underpin robust, credible examples of transition finance. This section also identifies the next steps for this work.

No country catches more seafood than China, whose share of global catches has quadrupled since 1950. However, the massive expansion of China’s distant-water fishing fleet has come with significant environmental and social costs.

Planet Tracker’s latest report highlights the urgent need for financial institutions and governments to address these issues and promote sustainability, proposing an ambitious transition funded by a RMB 5.5 billion (USD 759 million) sovereign bond, the ‘Hai Feng’ (ocean abundance) bond.

Planet Tracker:  AI needs to reduce its water dependency

Artificial intelligence (AI) continues to attract considerable attention in financial markets. While much of the spotlight is on the competitive opportunities offered by AI strategies, soaring demand has caused supply chain challenges. However, water resources are rarely viewed as an important constraint. If the water consumption of data centres is not dramatically reduced, it will be an increasingly important factor in their location...

...The building of new data centres is increasing demand for water resources. Some data centres are presently located in areas of water stress or are likely to be in the future. Developing cooling technologies which minimise or do not require water is becoming increasingly important. Perhaps AI will find a scalable solution to this problem.

DSM-Firmenich's latest report covers key areas of their sustainability activities including:

• Our approach to sustainability
• Sustainability performance
• Stakeholder engagement
• Sustainability statements

Investors can fund the climate transition by allocating capital to companies that are actively decarbonizing, rather than those that are already low carbon, say Lucian Peppelenbos and Thu Ha Chow.

Summary

• Survey shows 63% of investors will allocate capital to transition strategies
• Focus on climate transition leaders, solutions providers and green bonds
• Traffic Light assessment looks at companies’ alignment with Paris goals

Background - key sustainability concerns arising through the battery lifecycle  

FrenchSIF: Publication of the 2024 European Say on Climate report

Continuing its work over the last two years, Frenchsif has once again joined forces with ADEME to analyse companies' climate strategies submitted to a shareholders' vote at their general meetings (AGMs) and has extended the scope of the analysis to European companies(including the UK and Switzerland). The ACT evaluation of non-French SOCs is carried out with the help of the World Benchmarking Alliance and the Ethos Foundation.

At the end of this AGMs 2024 season, FIR, ADEME, Ethos and WBA have analysed 19 climate plans. We invite you to consult the complete Say on Climate 2024 report.

Investors and wider society increasingly demand more sustainable investments – but does it come at the cost of returns?

Historically, we can show that sustainability has improved multi-asset risk-adjusted returns, which supports the belief that more sustainable companies perform better in the long run, and this feeds through into the returns of mixed equity and corporate bond universes. The question is whether the costs justify the journey.

"Responsible investing has been on a pendulum. Enthusiasm for incorporating ESG issues in investment strategies has given way to a reality check in recent years. Investment firms and clients today face tough challenges, including regulation, research, politics, portfolio implementation and performance. But in our view, responsible investing—the incorporation of financially material ESG factors into investment practices—isn’t going away anytime soon.

As responsible investing evolves, the broad spectrum of client preferences and perspectives are at the heart of today’s ESG challenge. For us, the key question is: How can a global investment firm develop an ESG framework across asset classes that meets varied needs and enhances our ability to deliver the best possible outcomes for clients?"

"This report is a call to action for the U.S. banking sector on climate finance.  

It urges banks to show stakeholders that they have a credible strategy for capturing the generational opportunity of the shift to a clean economy, show critics that the financing they are doing it about business, not politics, and show their clients that they should be partner of choice for climate finance.  

Policies like the Inflation Reduction Act have spurred trillions of dollars in green financing opportunities, but there is no clear picture for investors, shareholders or regulators about how the banks are taking advantage of the clean energy opportunity and the industries of the future. 

The report lays out a set of recommendations for how banks can design effective climate finance targets and frameworks, drive internal innovation, and disclose on climate finance in a consistent, comparable way."

"This first-of-its-kind analysis of corporate disclosures shows that the food sector is making progress on reducing direct emissions but is slow to address supply chain emissions. 

Notably, our analysis reveals that food companies with science-based emissions targets covering their total emissions are more likely to report that they are lowering their overall emissions.  

That important takeaway for the food sector is one of the key findings outlined in the report, which is based on a pioneering analysis by Ceres into the climate-related information disclosed by 50 of the largest North American food companies engaged by investors through its Food Emissions 50 initiative."

• We recently met with HSBC's biggest UK corporate clients to discuss the state of ESG, sustainability, and climate action
• In contrast to the popular narrative, companies are rethinking green in order to better complement their growth ambitions
• In our view, sustainable growth is the only way to deliver on the world's sustainability objectives; degrowth is failure

Clients of HSBC Global Research can access the full report via the HSBC Global Research website or by contacting Wai-Shin Chan

The Global Gender Gap Index annually benchmarks the current state and evolution of gender parity across four key dimensions: Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment. Since launching in 2006, it is the longest-standing index tracking the progress of numerous economies’ efforts towards closing these gaps over time. 

This year, the 18th edition of the Global Gender Gap Index benchmarks gender parity across 146 economies, providing a basis for the analysis of gender parity developments across two-thirds of the world’s economies. Further, the index examines a subset of 101 countries that have been included in every edition of the index since 2006, offering a broad country sample for longitudinal and trend analysis. 

The Global Gender Gap Index measures scores on a 0-100 scale and scores can be interpreted as the distance covered towards parity (i.e. the percentage of the gender gap that has been closed). Cross country comparisons support the identification of the most effective policies to close gender gaps. 

Key findings include the index results in 2024, trend analysis of the trajectory towards parity and in-depth examination of historical and emerging patterns through new metrics partnerships and contextual data.

In a landscape marked by complexities and uncertainties, the path forward remains clear: now is the time for all stakeholders across the value chain, spanning supply, demand and distribution, and including both public and private sectors, to take decisive action.

This means ramping up efforts to transform their energy systems by implementing innovative solutions, mobilizing investment and driving bold policy reforms. By harnessing the momentum of the energy transition, stakeholders can chart the course towards an equitable, secure and sustainable energy future.

SAF - commonly referred to as bio-or synthetic jet fuel, is designed to significantly reduce carbon emissions from air transportation. Unlike conventional jet fuel derived from petroleum, SAF is produced from non-petroleum feedstocks, such as cooking oil, vegetable oils, municipal waste, agricultural residues, and renewable electricity sources. The key to SAF’s sustainability lies in its ability to meet stringent criteria, ensuring that it delivers at least a 50% reduction in greenhouse gas emissions compared to fossil jet fuel over its lifecycle (IATA). 

The production of SAF involves several critical steps: 

1. Feedstock Collection: The raw materials, or feedstocks, are gathered. These include non-conventional sources like used cooking oil, waste products, renewable electricity generated and captured CO₂. 

2. Conversion to Renewable Hydrocarbons: The collected feedstocks undergo a conversion process to transform them into renewable hydrocarbons. This step adheres to ASTM-certified processes to ensure the fuel meets rigorous standards. 

3. Blending: The renewable hydrocarbons are then blended with conventional jet fuel. Each technology allows for blending up to a certified maximum ratio, up to 50%. 

4. Delivery: The blended SAF is delivered to airports and used to fuel aircraft, integrating seamlessly into existing fuelling infrastructure.

SAF is not just a theoretical concept; it is a practical solution that is already in use. With nine certified SAF production pathways, this alternative fuel is becoming increasingly viable and accessible. This publication focuses on four specific SAF production pathways: Hydroprocessed Esters and Fatty Acids (HEFA), Alcohol-to-Jet (ATJ), Biomass Gasification + Fischer-Tropsch (FT), and Power-to-Liquid (PtL).

Campbells latest report covers key areas of their activities, including:

• Our food
• Supply chain
• Environment
• Our people
• Community
• Governance

Australian Ethical Investment: 2023 Stewardship Report 

This report summarises our ethical stewardship activities for FY23. Advocating for a better world is a 
core part of our business plan. We understand that advocating for change on behalf of our customers and  shareholders is a privilege and a responsibility.

We strive to be transparent about our ethical stewardship activities so that these important stakeholders can hold us to account and see how we are leveraging their capital to influence for people, animals and the planet.

To focus our efforts, we pursue four strategic ethical stewardship initiatives targeting high impact sectors. 

These are: 
• turning off finance for unsustainable expansion of fossil fuels 
• stopping livestock driven deforestation in Australia 
• reducing building sector emissions 
• advancing alternatives to animal research

La Banque Postale's latest report covers key areas of their activities, split into the following sections:

• Our undertakings as a responsible investor
• Our responsible investment initiatives 
• A close-up on the environment
• Keys for greater understanding

The rapacious growth of Artificial Intelligence (AI) is expected to cause a dramatic increase in demand for energy and competition for land with access to utilities in the US. Our Research analysts consider these developments, and the knock-on effects on the grid, consumers and corporate sustainability strategies.

ISS: ESG Performance Chartbook: Consumer and Energy, Materials, & Utilities

The purpose of the ESG Performance Chartbook series is to provide the reader with insights into the distribution of ESG Performance Scores per industry within a sector. The charts are based on the underlying data from ISS ESG’s proprietary ratings methodology and are illustrated using histograms and box & whisker charts.

Reviewing ratings distributions allows the reader to appreciate how similar or dissimilar discrete categories are within a particular industry. The discrete categories within this report focus on Environmental, Social, and Governance data and their contribution to an issuer’s overall performance score. They also illustrate the Key Issues for each industry, which reflect industry-specific materiality mapping.

The third publication of the ESG Performance Chartbook series focuses on a selected group of six industries across two sectors:

• Household & Personal Products, Textiles & Apparel, and Leisure. These are 3 of the 10 industries falling within ISS ESG’s Consumer Sector. This sector encompasses ratings coverage of over 1,100 issuers with a Prime threshold of C+ (or 2.25).
• Chemicals, Construction Materials, and Mining & Integrated Production. These are 3 of the 17 industries falling within ISS ESG’s Energy, Materials, and Utilities Sector. This sector encompasses ratings coverage of over 520 issuers with a Prime threshold of B- (or 2.5) for Chemicals and Mining & Integrated Production and C+ (or 2.25) for Construction Materials.

With the update of Australia’s Sustainable Finance Roadmap in June 2024, Australian corporates are facing tough new rules on climate disclosures as the country aligns itself more closely with global standards related to climate and sustainability goals. The Roadmap introduces key reforms for listed companies, focusing on improving transparency, enhancing financial system capabilities, and strengthening government engagement.

Since the initial release of the Roadmap in November 2020, the Australian government has only gradually stepped up efforts to position itself as a leader for sustainable finance in the Asia-Pacific region. ISS-Corporate research found that less than half of the companies in the ASX 300 index are currently aligned with the main global standard for climate disclosures, lagging significantly behind U.S. and European peers. This cautious approach is primarily driven by the dependence of the Australian economy on high emitting industries, such as energy, metals, and mining. The  introduction of climate-related disclosures, aligned with Task Force on Climate Related Financial Disclosures (TCFD) recommendations and, moving forward, with the International Financial Reporting Standards (IFRS) S2, marks a significant step towards standardized and globally comparable climate risk reporting.

Key Highlights

• Climate Disclosures: Approximately 48% of Australian companies (ASX 300) meet TCFD disclosure requirements, lagging comparable indices in the U.S. (S&P 500) and Europe (STOXX Europe 600) peers at 83% and 89% respectively.
• Scope 3 GHG Emissions Disclosures: Australia’s issuers trail European and U.S. companies in Scope 3 emissions disclosures. However, the Utilities, Consumer Staples, and Industrials sectors in Australia demonstrate leading practices for some of the most relevant Scope 3 categories, including “Category 5 – Waste Generated in Operations” and “Category 4 – Upstream Transportation and Distribution.”
• Climate Performance: Two-thirds of Australian companies under review have average or below-average climate performance, lagging their respective European and U.S. industry peers by 31 and 21 percentage points, respectively.

KEY TAKEAWAYS

• Reflecting their strong contribution to major indices, the so-called Magnificent 7 U.S. stocks have been a major focus of investor attention. This article considers the sustainability performance of the Magnificent 7 compared with the remaining equities in the STOXX USA 500.
• The article examines six ESG and climate metrics and considers aggregate performance as well as the dispersion in the data. The Magnificent 7’s financial strength is also reviewed using the Economic Value Added (EVA)-based ISS Financial Rating.
• The Magnificent 7 perform very well across overall ESG performance, carbon risk, emissions, and temperature scenario alignment as well as adequately on water risk. Nonetheless, they notably lag in alignment with the U.N. Sustainable Development Goals.
• While the aggregate results provide insight, for investors the most valuable aspect of this analysis might be to understand the dispersion within the Magnificent 7 and the specific risks and opportunities individual corporate performance present.

Nature-related reporting and transition planning are the current focus areas within sustainability disclosure, Sustainable Fitch says in the latest quarterly update of the ESG regulations and Reporting Standards Tracker. A growing number of organisations are adopting the Task Force on Nature-related Disclosures (TNFD) to report nature-related impact metrics, in light of October’s COP 16 in Colombia. There has also been increasing interest among regulators and standard setters in incorporating climate transition planning into regulatory developments.

What’s the difference between transition investing and sustainable investing?

Investors are increasingly recognising the importance of gender pay gap reporting as a critical measure of a company's long-term viability and ethical standing. Indriatti van Hien and Ruchi Biyani explore how addressing pay disparities can be a strategic advantage.

The race for the US presidency is tight. Although we do not recommend making large portfolio switches based on political expectations, hedging strategies can help investors manage potential volatility and downside risks if markets start to fear changes to trade, foreign, or tax policy.

Meanwhile, we see good potential for stocks exposed to reshoring, a topic likely to persist regardless of who wins the US election. We also think gold can rally if fears rise about geopolitical polarization, inflation, or deficits. In contrast, we see potential risks to consumer discretionary, renewable energy, and parts of the tech sector, along with the Chinese yuan.

Food manufacturers and retailers are increasingly recognising the interconnectedness of protein diversification in achieving climate, nature, and health goals. However, companies are relying mainly on on-farm climate solutions and overlook scientific recommendations to shift diets towards plant-based proteins as a key lever for the agri-food sector's net-zero roadmap. While companies acknowledge the market opportunity of protein diversification, most players are not tapping into its climate mitigation potential and have yet to integrate their growing plant-based product portfolio into their climate roadmaps to support the uptake of sustainable healthy diets. 

This report discusses learnings and insights from the first year (Phase 1, 2023/24) of FAIRR’s Protein Diversification engagement, a collaborative investor engagement with 20 leading food retailers and manufacturers. It also identifies lead industry practice examples and provides an update on the current market and regulatory environment for novel protein sources.  

The way that companies impact nature is becoming increasingly recognised as an investment risk and opportunity. Portfolio Manager Stephanie Niven discusses a new way of managing nature risks from the earliest stages of construction and infrastructure projects.

It is impossible to discuss the transition to a low carbon future without considering the role of government and regulation. In fact, global government spending to support clean energy and carbon capture increased by more than USD500 billion in 2022 as more countries implemented new policies and offered subsidies.International Energy Agency, “Global government spending on clean energy transitions rises to USD 1.2 trillion since the start of the pandemic, spurred by energy security concerns,” December 2022.

“Government policy can be a powerful force in driving green innovation, both in the short and long term,” says Christoph Beuttler, chief climate policy officer at Climeworks, a Swiss start-up that captures carbon from the air for permanent storage.

Climeworks, whose first commercial plant went online in 2017 in Hinwil, Switzerland, removes CO2 directly from the atmosphere, rather than from the chimneys of industrial plants, where most carbon-capture projects operate.

Abstract

We survey 509 equity portfolio managers from both traditional and sustainable funds on whether, why, and how they incorporate firms’ environmental and social (“ES”) performance into investment decisions. ES performance influences stock selection, engagement, and voting for over three quarters of investors, including nearly two thirds of traditional investors. Financial considerations are a primary reason, even among sustainable funds. Few are willing to sacrifice financial returns for ES performance, largely due to fiduciary duty concerns, and voting and engagement are mainly driven by financial considerations. A second reason is constraints. Fund mandates, firmwide policies, or client wishes caused 71% to make stock selection, voting, or engagement decisions that they would otherwise not have. Some of these actions had financial consequences, such as avoiding stocks that would improve returns or diversification; others had ES consequences, such as avoiding stocks whose ES performance they could have improved.

Authors:

Finance Economics and Banking Research Network

Alex Edmans
London Business School - Institute of Finance and Accounting; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Tom Gosling
London Business School

Dirk Jenter
London School of Economics & Political Science (LSE) - Department of Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)
Date Written: September 20, 2024

In this report, Lazard’s Geopolitical Advisory team examines the factors that made China the leading choice for offshoring, the reasons behind supply chain shifts, and evaluates five countries—India, Vietnam, Mexico, Poland, and Thailand—that are becoming increasingly prominent supply chain alternatives in an evolving geopolitical landscape.

The report highlights strengths and risks in each country, describes trends in foreign direct investment across different sectors, and provides a framework that can help guide companies in formulating entry strategies and setting investment priorities.

To access the full report, please click here.

WBCSD: Towards Planet Positive Chemicals: WBCSD unveils Chemical Transformation Roadmap 

Chemicals play a pivotal role in virtually every sector from healthcare to energy, mobility or communication. However, their contribution to global greenhouse gas emissions (~6.3% in 2019) and environmental degradation are undeniable. WBCSD’s roadmap recognizes these challenges, calling for an urgent transformation in how chemicals are produced, used, disposed of and recycled. 

The industry and downstream manufacturing value chains must transition towards just, net-zero and nature-positive chemicals by 2050. This is necessary to contribute to restoring the safe operating conditions of Earth’s biosphere and crucial to maintaining the industry’s social license to operate. 

JobPost: ISS - Sustainability & Climate Sales Specialist (Rockville/Washington | CloseDate: Unknown)

JobPost: ESG Implementation & Strategy Manager [Distribution] (London | CloseDate: Unknown)

 
Employment Type Contract Please note, where PRI has an office there is an expectation to work a minimum of 2 days per week 
 
Location  Hybrid · London, UK   
 
Seniority Mid-level
Closing: 8:00pm, 13th Oct 2024 BST

JobPost: ESG & Impact Associate (London | CloseDate: Unknown)

JobPost: ERM - Consulting Associate - Product Sustainability & Circularity (UK | CloseDate: Unknown)

JobPost: M&G plc - Sustainability Assistant Analyst (London | CloseDate: 21st Oct)

Employment Type Contract Please note, where PRI has an office there is an expectation to work a minimum of 2 days per week 
 
Location  Hybrid · London, UK   
 
Seniority Senior
Closing: 8:00pm, 20th Oct 2024 BST

At Fitch, we have an open culture where employees are able to exchange ideas and perspectives, throughout the organization, irrespective of their seniority. Your voice will be heard allowing you to have a real impact. We embrace diversity and appreciate authenticity, employees work in an environment where they can be their true selves. Our inclusive and progressive approach helps us to keep a balanced perspective. 

With our expertise, we are not only creating data and information, but also producing timely insights from every angle to influence decision making in this ever changing and highly competitive market. We have a relentless hunger to innovate and unlock the power of human insights and to drive value for our customers. There has never been a better time to make an impact and we invite you to join us on this journey.

Sustainable Fitch is currently seeking an Associate Director based in Hong Kong.
Part of Fitch Group, Sustainable Fitch is focused on research and analysis of ESG themes for companies and their debt instruments across the globe. The products offered by Sustainable Fitch include ESG Scores, ESG Ratings and ESG Research, with the support of Product Development and Resource teams. It has offices in Barcelona, Hong Kong, London, New York, Singapore and Toronto.

What We Offer:

• Opportunities for public speaking, external engagement and development of analytical and research skills.  
• Access to a wide range of learning and training programs, courses, and certificates.
• Development of managerial skills.

We’ll Count on You To:

• Produce and oversee the production of ESG ratings, scores, and other analysis, including the review of reports.
• Work alongside peers in the APAC and the global Research team to publish in-depth, thematic research on ESG trends, as well as contribute to Sustainable Fitch’s regular publications.
• Represent Sustainable Fitch at external events.
• Participate in internal and external interactions.
• Serve as a thought leader / internal reference; viewed as a subject matter expert.

What You Need to Have:

• Experience in sustainable finance research or analysis and understanding of the sustainable debt market.
• Fluent English and Mandarin Chinese (written and spoken) a must.
• Excellent written and spoken communication skills.
• Collaborative attitude with excellent inter-personal skills.
• Self-motivation and good time management skills.

What Would Make You Stand Out:

• Experience managing small teams or medium- to long-term projects.
• Expertise in sector(s) analysis (e.g. real estate, technology, natural resources).

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