ESG News

February 2020

Vital Farms’ industry-first traceability effort
Fast Company

Inherent Group's portfolio company Vital Farms, in a pioneering initiative in food traceability, enables consumers to see (pre-recorded) 360-degree video of the pastures where the eggs from a given carton are laid. The effort comes amidst increasing consumer interest in understanding where their food comes from, which is particularly relevant in a vertical where claims like "free-range" are frequently misleading.

Ceres: BlackRock CEO letter on sustainable investing is a game changer
Ceres

"BlackRock’s renewed promise to actively engage, and when necessary, vote against companies that are not making sufficient progress on sustainability and climate risk will help to build a more transparent capital market system."

-Mindy Lubber, CEO & President, Ceres

20 Things to Watch in 2020
Financial Times

From an international carbon pricing regime to 'going olive', The FT's Moral Money team highlights 20 ESG 'resolutions' to watch for in the new year.

Sustainable Debt Joins the Trillion Dollar Club
Bloomberg

Investor demand is surging for green, social and sustainability bonds and loans as well as debt securities that react to the sustainability performance of the borrower.

Goldman Sachs’ Commercially Driven Plan for Sustainability
Financial Times

David Solomon. CEO of Goldman Sachs, says the company is targeting $750 billion of financing, investing and advisory activity to areas focused on climate transition and inclusive growth. He also calls for governments to put a price on the cost of carbon.

Mr. Solomon writes, "Looking ahead, the needs of our clients will increasingly be defined by sustainable growth. Our firm's long-term financial success, the stability of the global economy and society's overall wellbeing all depend on it."

Shh! Companies are Fixing Accounting Errors Quietly
Wall Street Journal

Companies are increasingly correcting accounting problems by quietly updating past numbers, rather than alerting investors and reissuing financial statements. A study finds that almost half of these  “quiet” revisions to SEC filings from August 2004 through 2015 met at least one of the guidelines for them to be considered “Big R” restatements that require alerts to investors and restatements of financial results.

How an Italian Energy Company Revolutionized Sustainable Investing in Structured Credit
Forbes

Why Enel's SDG-linked issuance is a potential game-changer in the world of sustainable credit.

  • Sustainability KPI linked to interest margin step-up
  • Expands investor base for ESG-linked products
  • Unconstrained use of proceeds broadens the issuer base
Moody’s Sees ‘Emerging Threat’ to Oil & Gas Companies from Climate Regulation
Responsible Investor

Moody's lowered ExxonMobil’s credit outlook to negative from stable – in part due to the “emerging threat” to fossil fuel companies from climate change regulation and tax, with the oil major also exposed to “rising” litigation risk linked to climate
change and related disclosures.

How Boeing Lost Its Bearings
The Atlantic

An interesting and timely reminder of the long-term impact of company culture on performance. The Atlantic tracks the genesis of Boeing’s current troubles to the early 2000s when the financially-driven management culture of acquired McDonnell Douglas started replacing the engineering-driven culture of legacy Boeing.

Enel Launches the First SDG-Linked Bond

A subsidiary of Enel, the Italian energy company, issued a $1.5 billion bond where the interest payment steps up 25bps if the company fails to meet specific sustainability performance metrics. This bond marks the first issue of its kind, where a sustainability KPI causes a rate to step up, rather than down. And, the issue was oversubscribed.

Clean Energy the World Needs: Startups Take Aim at Nuclear Fusion
Bloomberg

A deep dive on the private companies that are working on commercializing fusion.

Progress Report: Accelerating Action for a Low-Carbon World
The Investor Agenda

The Investor Agenda 2019 Annual Progress Report showcases investor action and progress made on climate change.

To date, nearly 1,200 investors have taken action in one or more of the focus areas of The Investor Agenda since its launch in September 2018.

 

Decarbonization Factors
George Serafeim, Harvard Business School

This working paper analyzes how integrating 'decarbonization strategies' into a portfolio can lead to better returns and positive alpha.

Examining the Macroeconomic Impacts of a Changing Climate

Written Testimony of Alicia Seiger, Managing Director, Stanford Sustainable Finance Initiative. Prepared for the U.S. House of Representatives, Committee on Financial Services, Subcommittee on National Security, International Development and Monetary Policy.

Peabody Scraps $800 Million Bond Amid Investor Pushback on Coal
Bloomberg

Peabody Energy Corp. scrapped an $800 million junk-bond sale meant to refinance existing debt and pave the way for a joint venture as investors increasingly wary of the prospects for coal producers demanded double the average yield of similar BB rated peers.

Inside North Carolina’s Big Effort to Transform Health Care
The New York Times

Case study from North Carolina how value-based care is being implemented at the individual provider level, and some of the issues to be worked through.

Transformative Capital: How Mission-Related Investing Can Deepen Foundations’ Impact
Ford Foundation

Ford Foundation lays out its approach to mission-related investing, and makes the point that if all U.S. foundations were to allocate 8% of their assets to MRI investing, together they would have $72 Billion to pressure corporations to broaden their focus from shareholders to include all stakeholders.

Founder’s Grip on WeWork May Be Hard for Investors to Stomach
Reuters

Investors in the upcoming initial public offering of The We Company are being asked to lower their standards for corporate governance beyond what other technology startups have demanded, say securities law experts.

The Last Straw: Will Plastic Become the Next Stranded Asset?
MSCI

MSCI analyzes what tighter anti-plastics regulation and negative consumer sentiment could mean for the oil and gas companies producing petrochemicals - the main inputs for plastics. The financial impact could be significant.

Research: Actually, Consumers Do Buy Sustainable Products
Harvard Business Review

Consumers are increasingly focusing on sustainability when making purchasing decisions, according to research by the Center for Sustainable Business at NYU Stern. Their analysis shows that 50% of the growth in sales of consumer packaged goods in the last five years came from purchases of products marketed as 'sustainable'.