SUSTAINABLE INVESTMENT

BlackRock pushes companies to adopt 2050 net zero emissions goal

BlackRock, the world’s largest asset manager, will push companies to commit to achieving net zero emissions by 2050 and raised the prospect of letting go of companies that fail to do so from its actively managed funds. In his annual Letter to CEOs and Letter to clients  BlackRock’s chief executive Larry Fink said a “tectonic shift” in the investment landscape was happening faster than he expected, with investors reallocating capital towards companies with robust ESG practices. Fink ranked climate change as the asset manager’s highest priority. BlackRock will ask investee companies to disclose their plans for meeting 2050 net-zero targets, and potentially exit holdings of companies that don’t improve. The letters also warn that companies that don’t quickly adopt ESG practices will see their businesses and valuations suffer. (Financial Times*)

ENERGY

S&P warns 13 oil and gas companies they risk downgrades as renewables pick up steam

Rating agency S&P has warned 13 oil and gas companies – Including some of the world’s biggest such as Chevron, Exxon Mobil, Royal Dutch Shell and Imperial Oil – that it may downgrade them within weeks given the increasing competition from renewable energy. Others at risk of downgrade include Australia’s Woodside Petroleum, Shell Energy North America, Canadian Natural Resources, China Petroleum & Chemical Corp and French group Total. The rating agency raised its risk rating for the entire oil and gas sector to “moderately high”, due to the move away from fossil fuels, poor profitability and volatile prices. The downgrade will initially be kept to one notch, but S&P will not exclude increasing this to a two-notch downgrade upon revision due to industry risk and other material factors. (The Guardian)

CLIMATE CHANGE 

Two-thirds of global population think climate change is an emergency, UN finds

Two-thirds of people worldwide think climate change is a global emergency, according to The Peoples’ Climate Vote, the biggest ever survey on attitudes towards climate change conducted by the UN Development Programme (UNDP). Around 1.2 million people in 50 countries were polled, with those aged 14-18 making up half of those surveyed and showing the highest degree of concern of all groups. On average, 64% of participants saw climate change as an emergency, with Italy and the UK raking top in concern levels at 81%. Preferred policies for fighting climate change vary per region, with renewable energies being favoured in countries where fossil fuels are a major source of emissions, and land and forest conservation ranking first in nations with high deforestation.  (BBC; The Guardian)

DEFORESTATION

2 in 3 banks have no commitments to stop financing deforestation

Some 95 of the world's largest 150 banks and investment firms – Including BlackRock and Wells Fargo – have not published policies to prevent the companies they finance from destroying forests, according to new analysis from non-profit Global Canopy. The report reveals that around two-thirds of these businesses do not have any public commitments denying finance to firms accused of deforestation or attaching conditions to financial packages in this instance. The NGO estimates that up to $2.7 trillion of investments could be linked to deforestation. Governance performance was found to be worse in the US market, but many European organisations are still financing high forest risk companies, including Santander and Deutsche Bank. While financial companies are aiming to mitigate climate change on other fronts, many are failing to tackle deforestation. (Edie)

CIRCULAR ECONOMY

Ikea to sell spare parts in sustainability push

Ikea will begin offering spare parts to customers worldwide as the world’s largest furniture retailer seeks to prolong the life of its products as part of a big sustainability push. The flat-pack pioneer has already started trials of selling second-hand furniture, buying back old goods and leasing office and home equipment, as it looks at ways of becoming a circular business whose products are re-used or recycled. Ikea has now developed an online ordering system that will be rolled out worldwide on its website this year in a move aimed at prolonging the life of its products. The firm is aiming to become climate-positive and circular by 2030, setting numerous goals such as sourcing at least a third of its wood from recycled sources by the end of the decade. (Financial Times*)

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