SUSTAINABLE INVESTMENT

US investors set to test companies’ handling of coronavirus

US companies are facing a large number of demands from investors concerning their handling of the Covid-19 pandemic. This comes alongside an increasing number of demands from investors for companies to address environmental and social concerns. Pfizer and Johnson & Johnson are facing calls for greater disclosure on pricing of Covid-19 vaccines and therapeutics. Shareholders also submitted proposals regarding companies’ efforts to protect their workers from Covid-19. For instance, New York City’s pension funds filed a petition calling Amazon to be more transparent about its efforts to mitigate health risks from coronavirus. Investors are also scrutinising how executive bonuses are being adapted to guarantee executives get paid even as the pandemic badly hits the business. Vanguard has already voted against bonus plans at Aramark and Walgreens Boots Alliance.  (Financial Times*)

POLICY

World Bank revises climate policy but stops short of halting fossil fuel funding

The World Bank, the biggest provider of climate finance to developing countries, is finalising a new five-year climate action plan amid growing political momentum in Britain, the United States and other countries to end public financing of high-emission fossil fuel projects. An internal presentation outlining the World Bank’s new climate plan shows the institution has committed to align its financing flows with the objectives of the Paris Agreement, but made no promise to halt the funding of fossil fuels. Instead, the World Bank will assess gas projects on a case-by-case basis and will support the transition away from coal. The World Bank also failed to specify what aligning with the Paris Agreement means. Environmental campaigners are concerned the pledges might yield little change in practice. (Reuters)

SUSTAINABLE INVESTMENT 

Zurich Insurance to require investee companies to set Paris-aligned climate targets

Zurich Insurance Group has launched a series of initiatives encompassing the company’s investments and operations, aimed at accelerating the transition to a net-zero emission economy. The group will require investee companies producing 65% of portfolio emissions to set Paris-aligned targets, if they lack them. Zurich has stated that it will vote against board members at shareholder meetings if companies refuse to set targets following engagement. Zurich’s portfolio emissions reduction targets include 2025 goals to reduce the intensity of emissions of listed equity and corporate bond investments by 25%, as well as the intensity of emissions of direct real estate investments by 30%. In its own operations, the company is committing to absolute reductions in operational emissions of 50% by 2025, from a 2019 baseline. (ESGToday)

ENERGY

China’s Longi, the world’s biggest solar company, joins the hydrogen market

China’s Longi Green Energy Technology, the world’s biggest solar company, is entering the hydrogen market. The move reflects the company’s bet that a combination of solar and storage will be the cheapest form of energy in most nations globally by the end of the decade. Most industrially-used hydrogen is currently made using fossil fuels. Scaling up and reducing costs of producing hydrogen using renewable energy sources is deemed as one of the world’s best chances at avoiding the worst impacts of climate change without lowering current industrial production levels. China is both the largest market for clean power and the world’s biggest polluter. In 2020, the country added 136 gigawatts of renewable electricity installation, more than half of the world’s total. (Bloomberg 1, Bloomberg 2)

SUSTAINABLE FASHION

H&M launches initiative highlighting sustainable fashion processes and innovation

Fashion brand H&M has announced the launch of Innovation Stories, a sustainable fashion initiative which will see the company launch multiple collections throughout 2021, each using sustainable materials and processes. The first collection under the initiative is Science Story, introducing new materials such as EVO by Fulgar, a bio-based yarn derived from castor oil, and Desserto, a plant-based alternative to leather. H&M’s initiative is part of the brand’s stated commitment to a sustainable and circular fashion system. The company also announced new sustainability targets, including a goal to use 30% recycled materials by 2025, supported by innovations in the recycling of post-consumer fabric without quality loss, and to use 100% of materials that are either recycled or sourced in a more sustainable way by 2030. (ESGToday)

*Subscription required