NATURAL CAPITAL

Cross-sector companies with $2.1 trillion of debt face natural capital risks

Companies with $2.1 trillion of debt are heavily dependent on nature for resources and materials, even as many of them contribute to its destruction, according to Moody’s Investors Service. The bond credit rating agency found companies in 12 sectors, including mining, oil and gas, and shipping, have “high” or “very high” exposure to natural capital risks. Additionally, 16 other sectors, including homebuilding and retail and apparel, with $8.3 trillion of debt outstanding, were found to face moderate exposure to natural capital risks. Natural capital risks include natural resources becoming increasingly scarce, and possible fines for industries that have high potential to damage natural environments. There are increased reputational risks for companies perceived to contribute to biodiversity loss, and investors and regulators are paying closer attention to companies’ impacts on nature. (Bloomberg*)

SUSTAINABLE INVESTMENT

Axa to stop investing in firms linked to deforestation & biodiversity loss

AXA Investment Managers (AXA IM), the insurance company’s investment management arm, will stop investing in companies that contribute to deforestation or the loss of biodiversity. The new policy targets firms involved in cattle, soy, and timber extraction industries that are facing major land-use and biodiversity controversies and that have "a critical impact on deforestation and natural ecosystems conversion." AXA will use deforestation data provided by disclosure platform CDP. The move is aimed at bolstering a policy it launched in 2014, which excluded companies that didn't have sustainable palm-oil production certificates or were involved in illegal logging or unresolved land-rights conflicts. AXA IM is also seeking to boost its engagement with the companies it invests in to encourage them to strengthen efforts to preserve biodiversity and move toward sustainable practices. (Bloomberg*, MarketWatch)

TECHNOLOGY & INNOVATION 

Volvo to test fossil-free steel for its vehicles in a first for the industry

Swedish automaker Volvo has announced it is to test fossil fuel-free steel for its cars, after signing a deal with Swedish steel maker SSAB to purchase steel made from hydrogen-reduced iron at the pioneering HYBRIT plant in Sweden. The steel purchased through the deal would be used for testing purposes, and potentially a concept car. The HYBRIT project is a joint venture between SSAB, iron ore producer LKAB, and energy firm Vattenfall that aims to replace coking coal with fossil fuel-free electricity and hydrogen to power the steel making process. Decarbonising steel presents a major challenge for industry and policymakers as they attempt to hit climate goals, given the energy-intensive sector is a prolific industrial emitter and responsible for around 7% of global carbon emissions. (Business Green)

CLIMATE CHANGE

SK Group accused of greenwashing after gasfield investment U-turn

SK Group, one of Asia’s top producers of oil, electric vehicle batteries and computer chips, is facing a backlash from activist groups after finalising a large Australian liquefied natural gas deal months after promising to end new overseas oil and gas investments. Environmental groups claimed SK’s decision in March to spend $1.4 billion developing the offshore Barossa-Caldita gasfield contradicts a pledge made in November 2020 to abandon new fossil fuel investments. The promise by SK was part of its pledged pivot to environmental, social and governance investments. Activists have decried that the high amount of greenhouse gas from the Barossa-Caldita project will raise serious doubts on SK Group’s ESG initiative, and will undermine global efforts to mitigate climate change by reducing greenhouse gas emissions. (Financial Times*)

GENDER EQUALITY

Male managers can act as barrier to women’s development in finance

Male managers are a barrier to women's development in the finance industry because they are “better at office politics”, concludes new research carried out by the LSE and the Women in Banking and Finance campaign group. The research, based on interviews with 79 women in the City, found those polled felt they had to show sustained excellence in order to progress and faced more scrutiny than male peers. Women also expressed experiences of male managers sitting on diversity platforms while doing little to improve it.. The report found the problem to be worse among black women – a quarter of whom said they were held up to higher levels of scrutiny and needed to work harder to receive the same recognition as men and white women. (BBC News)

*Subscription required