In this issue, we highlight the challenge of reducing carbon and hitting Paris climate targets. We review how banks are making slow progress, the small number of companies responsible for most greenhouse gas emissions, the energy requirements and climate implications of AI, and the Science-Based Targets initiative’s (SBTi) controversial recent statements about carbon offsets. We also take a look at recent government policy changes that have watered down their own transition commitments. Together, these topics highlight the need for innovative and efficient financing solutions for

In this edition we’ll look at the latest projections of how the Inflation Reduction Act (IRA) will impact US carbon emissions, as well as its political durability. We’ll also look at how in Europe carbon prices are falling, while the Chinese EV industry is making inroads based on their low cost advantage. Finally, the climate data isn't improving, with oceans proving the latest example of accelerating change. Future impact of the IRA – The National Bureau for Economic Research (NBER) published its most recent analysis of the IRA under

In this newsletter, we'll look at how the politicization of ESG and sustainability writ large over the last 18 months has created a stark difference between US and European approaches. This is both in support for ESG initiatives at companies, as well as the political and community support for solar and wind solutions. Despite this backsliding, the climate reality was significantly outside the bounds of normal for 2023, making the political headwinds even harder to understand. The lack of political will for support of ESG

In this month’s newsletter, we look at potential progress associated with COP 28 that is wrapping up as we write, 2023’s record-breaking emissions, as well as asset owner allocation trends, and data from Pitchbook on impact fund performance.   COP review – With COP 28 winding down, we’re broadly skeptical about the outcomes of the meeting. Although it’s encouraging that the words “fossil fuel” were used for the first time in COP language, we are skeptical it will amount to much if it doesn’t specifically call for phasing

In this month’s newsletter, we look at trends in climate investing and progress ahead of COP 28 in Dubai at the end of the month. We also find a few green shoots among some depressing trends in climate change mitigation efforts that have been politicized and lost momentum in certain geographies. Is there a ‘COP’ out ahead? – The next UN climate change conference takes place at the end of November, and our expectations for significant progress are low. Oil companies and politicians have recently backtracked on their commitments, which perhaps

In this issue, we look at how the proliferation of climate frameworks is an opportunity for AI to harmonize analysis. Even with the best climate frameworks, there's the question of whether accounting for carbon as opposed to reporting it will drive better outcomes. We'll also look at how governance is (again) often taken for granted and ends up hindering otherwise promising organizations. Finally, we'll look at how water remains an issue (and potential investment opportunity) in different ways in different areas. One climate framework to rule them all?  - Over the past few

Recent issues of The Wall Street Journal (September 12th’s edition ran “ESG Does Neither Much Good nor Very Well”) and The Economist (July 23rd’s cover was “ESG: Three Letters that Won’t Save the Planet”) illustrate a growing backlash against “ESG” even as scrambled supply chains suffer further interruptions from droughts and flooding. A 60/40 portfolio, made up of the SP500 SPX and the Barclays U.S. Aggregate, lost 16% in 2022; after 2008’s 21% loss, this was the second worst performance since 1976, Barron's reports. Seemingly

After five years of positive flows into ESG-focused strategies in the public markets, it is unsurprising that sustainability-oriented investing (here, we use “ESG” and “sustainable” interchangeably) is coming under scrutiny. For example, the Jul 23, 2022 edition of The Economist ran a cover that said “ESG: Three letters that won’t save the planet.” Bloomberg, in June, reported on how ESG funds had fared less badly than the broader market in 2022 so far, despite owning relatively more technology names and relatively fewer energy stocks. Yet

This paper explores the metrics that companies can use to measure the experience of women in the workplace more consistently. We take stock of the current state of measurement by evaluating the current parties involved in reporting: Governments, ESG Ratings Providers, Accounting and Disclosure Framework Boards, and Exchanges. We then present a robust suite of metrics that companies should strive to collect and report. This set of metrics, Four for Women, buckets metrics into Representation, Pay, Health, and Satisfaction and comes from Wharton’s Social Impact

This paper is the product of a collaboration between Dream and Impact Delta. Dream is one of Canada’s leading real estate companies, with over $10 billion in assets across North America and Europe. Dream’s purpose is to deliver strong returns while delivering positive impact in the communities where it works. We advised Dream on the launch of its impact investing strategy, which is outlined in this white paper.

Investors must understand the full impact of their decisions. Several tools exist to help them We published a white paper today, which explores the increasing importance of externalities in investment decision-making. Amid the upheavals of 2020, a growing number of investors are convinced they must understand the full impact – financial, environmental, and social – of their decisions. While externalities are inherently hard to measure, more progress on this question has been made than many mainstream investors realize. These are the main ideas, and the PDF is

Asset owners’ decisions affect people over the world, so they want to know if investment managers’ ESG efforts are serious. Here are eight things to check. ESG flows and marketing ramp up Over the past few years, there has been steady growth in the number of firms and funds that seek to integrate ESG into their investment strategies.  According to the UNPRI’s 2019 Annual Report, the organization saw a 20% year-on-year growth in its signatory base; in North America, 456 new signatories joined UN PRI in 2018, and