Asset managers fear Morningstar ESG rating could cost them billions
Asset managers fear losing billions of dollars as a result of a Morningstar initiative that will enable investors to compare the ethical ratings of thousands of funds tracked by the data provider. Morningstar will release the environmental, social and governance scores of a large proportion of the 200,000 funds it tracks for the first time before the end of March. Sasja Beslik, head of responsible investment at Nordea Asset Management, said the ratings will “completely change the narrative” of investing, forcing portfolio managers to consider ESG factors, or risk scoring badly compared with their peers. A senior executive at a European-based asset manager, who did not want to be named, said: “Portfolio managers are very worried. The group that has not paid much attention to ESG in the past is suddenly very keen to understand the implication [of Morningstar’s scores].” Morningstar’s ESG scores for funds will be based on company ratings from research company Sustainalytics. (Financial Times*)
Policy & Research
Richest 62 people as wealthy as half of world’s population, says Oxfam
The vast and growing gap between rich and poor has been laid bare in a new Oxfamreport showing that the 62 richest billionaires own as much wealth as the poorer half of the world’s population. Oxfam said that the wealth of the poorest 50% dropped by 41% between 2010 and 2015, despite an increase in the global population of 400 million. In the same period, the wealth of the richest 62 people increased by $500bn to $1.76 trillion. Timed to coincide with this week’s gathering of many of the super-rich at the annual World Economic Forum in Davos, the report calls for urgent action to deal with a trend showing that 1% of people own more wealth than the other 99% combined. Mark Goldring, the Oxfam GB chief executive, said: “It is simply unacceptable that the poorest half of the world population owns no more than a small group of the global super-rich – so few, you could fit them all on a single coach. (Guardian)
Report: Rapid switch to renewable energy can put Paris climate goals within reach
The International Renewable Energy Agency (Irena) meeting in Abu Dhabi said on Saturday that countries can achieve the Paris Climate change targets by scaling up renewable energy to 36% of the global energy mix by 2030, which would provide about half of the emissions reductions needed to hold warming to 2°C. An Irena report released on Saturday found doubling the share of renewables by 2030 would increase global GDP by up to 1.1 percent or about $1.3 trillion, and provide jobs for more than 24 million in the renewable sector. “The Paris agreement set a long-term vision for the deep reduction of global emissions and the need to decarbonise the energy sector,” Adnan Amin, Irena’s director general said in a prepared statement. The United Nations climate chief, Christiana Figueres, has said repeatedly she was looking to the Paris agreement to send a clear signal to the business community of a shift away from a fossil-fuel driven economy. Some of those changes are already underway. Global clean energy investment attracted a record $329bn last year, according to a report released on Thursday by Bloomberg New Energy Finance. (Guardian)
Corporate Reputation
Facebook in the “awkward position” of deciding what counts as a tragedy
Facebook has been criticised for failing to deploy its Safety Check feature, designed to make it easier for users to send updates to friends and family members during a crisis, after an apparent terror attack in Jakarta on Thursday. While Facebook quickly activated Safety Check during the Paris attacks last year, the company didn’t activate it in the hours following the violence in Jakarta. The feature was first unveiled in 2014, but the Paris attacks were the first time it was triggered in response to a terror attack. 4.1 million users checked in with the tool in the following 24 hours, according to Facebook. A week after the Paris attacks, Facebook deployed the tool after a bombing in Nigeria. “We’re now working quickly to develop criteria for the new policy and determine when and how this service can be most useful,” Facebook founder Mark Zuckerberg said at the time. But the exact scope of that policy remains unclear, and Facebook did not immediately respond to an inquiry about why it did not turn on Safety Check for the attack in Jakarta. (Washington Post)
Chipotle to close all stores for all-staff meeting on food safety
The restaurant chain Chipotle Mexican Grill will close all of its US eateries for a few hours during the morning of Feb 8 for an all-staff meeting on food safety. Conducted via a live satellite feed, the session will feature Chipotle officials thanking the company’s roughly 60,000 staffers for their efforts to address recent food-borne illness issues that arose among some of the company’s customers . Chipotle said sales at stores open at least a year dropped 30% in December. Company executives said the meeting would include a discussion of new safety measures implemented by Chipotle, a company famed for serving fresh food and ingredients. Employees will also get an opportunity to ask questions and voice any concerns. “We’re going to let all of our folks know about how this happened, and, in detail, all the steps that we’re taking to ensure that it won’t happen again,” Chipotle founder and co-CEO Steve Ells said. “It’s going to be a great rally.” (USA Today)
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