This week in ESG
Growing consideration for climate risk among investors, Goldman Sachs exits Net Zero Banking Alliance, and climate insurance becomes mandatory in Italy.
Key highlights
🌳 Climate risks now a key focus for long-term investors – a new PwC report highlights a growing trend: long-term investors like pension funds and sovereign wealth funds are increasing their climate considerations by boosting investment in the green energy transition, including renewable energy, EVs, and batteries.
👋 Goldman Sachs exits NZBA – Goldman Sachs has left the Net Zero Banking Alliance (NZBA) – a high-profile, UN-backed, organisation focused on steering bank financing activity towards net zero. This comes shortly after their asset management arm exited the Climate Action 100+ engagement group.
🍟 Coca-Cola cuts back sustainability goals – Coca-Cola reduced its recycling targets, and eliminated key goals around refillable container usage, and sourcing ingredients in accordance with sustainable agriculture principles.
🌪️ Italian companies must insure against climate risk – from 2025, new rules will require all companies in Italy to insure themselves against the increasing threat of natural hazards such as floods, wildfires, and landslides.
Spotlight - ESG in Mergers & Acquisitions (M&A) activity
Source: Deloitte 2024 ESG in M&A Trends Survey. ER&I = Energy, Resources & Industrials, LSHC = Life Sciences and Healthcare, TMT = Technology, Media and Telecoms
The chart shows whether survey respondents have ever stopped potential acquisitions due to ESG concerns, split by industry. This is according to the results of a Deloitte survey questioning 500 corporate and private equity M&A leaders globally.
Why this matters?
It’s encouraging to see ESG is being taken seriously when considering M&A activity, with the majority of respondents across all industries having decided to not proceed with an acquisition due to ESG concerns.
ESG is key for long-term risk mitigation and the futureproofing of returns, and can help protect a company’s reputation and prevent consumer backlash. Given the overall attractiveness of sustainability-focused organisations, being seen as a leader in the space can also increase a company’s overall valuation.
And we're doing our thing...
On a separate note, we're proud to share that we've been independently assessed by the United Nations Principles for Responsible Investment (UN PRI) and have been awarded an outstanding 4-star rating across all assessment areas.
This demonstrates our commitment to embedding ESG factors into our investment selection, management, and oversight across our in-house solutions.
Read the full update in our recent article Principles for Responsible Investment - Strong 2024 results.
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