This week in ESG
Here’s what’s been making the headlines in the world of sustainability and responsible investing this fortnight, and what advisers should know:
Key highlights for advisers
- Renewables help cushion Europe’s energy shock – greater use of solar and wind power is helping to ease the impact of the current energy shock linked to tensions in Iran. These renewable sources are reducing dependence on oil and gas imports, easing pressure on energy prices and helping to moderate inflation rises.
- US releases TotalEnergies from $1bn offshore wind commitment – the Trump administration has told French energy company TotalEnergies it no longer needs to proceed with several offshore wind projects off the coasts of New York and North Carolina. The company is expected to redirect this investment towards US oil and gas production instead.
- 24 US states challenge rollback of key climate ruling – a coalition of 24 states has filed a federal lawsuit against the Trump administration after the Environmental Protection Agency repealed a central climate ruling that classified carbon emissions as harmful to people and the environment. The states argue the move overlooks extensive scientific evidence on the risks of pollution.
- UK issues over £6bn of green gilts maturing in 2037 – the UK government has launched a new round of green bonds, adding a 2037 maturity alongside its existing 2033 and 2053 issuances. Updated guidance means proceeds could now also be used to support nuclear energy projects.
Spotlight: Iran conflict worsens global hunger
Source: Bloomberg; UNCTAD, 2024 data
Why this matters
The chart highlights how concentrated global fertiliser supply chains have become, with a large share of seabound fertiliser imports originating from the Gulf region. That reflects the fact that major producers in Saudi Arabia, Qatar, the UAE, and Iran supply a disproportionate share of key fertiliser products. Much of these product's transit through the Strait of Hormuz, a key shipping route. Disruptions in this shipping route have already led to sharp drops in shipping volumes and a plunge in fertiliser exports.
The United Nations World Food Programme warns the Iran conflict could push up to 45 million more people into acute hunger if tensions don’t ease within the next few months. With the Strait of Hormuz effectively closed and risks in the Red Sea rising, both energy and fertiliser supplies are under strain, adding pressure to global food systems.
Fertiliser is far more than just another commodity; it’s a fundamental input underpinning global crop yields. With roughly a quarter to a third of global fertiliser trade moving through the Gulf corridor, any extended disruption tightens supply sharply and feeds through into higher input costs for farmers worldwide.
For advisers, this matters on multiple fronts: supply side constraints on fertiliser add upward pressure to food prices – compounding inflation – while also making emerging markets that depend on imports more exposed to shocks. This shows how geopolitical disruptions, even outside traditional financial markets, can ripple into portfolios.
Read more from our investment team
Our investment team this week looked at how diversified alternatives are performing in the face of rising geopolitical risk and what that might mean for investors balancing inflation, rates, and equity volatility.
You can read the full Weekly Market Update here: Market Update - Diversified Alternatives filling the gap
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