This week in ESG
COP 29 finance deal reached, US antitrust concerns and proposed regulation of ESG ratings providers.
Key highlights
🪙 COP 29 closes with shaky finance deal – a historic commitment of $300bn per year in climate finance was made from richer to poorer countries. However, the small print left much to be desired with many arguing the amount pledged is still not enough to combat climate change. Parmenion’s Ethical Oversight Committee (EOC) chair, Chris Hegarty, shares his insights in 'How much is clean air worth to you?'.
🏭 Asset managers anti-trust lawsuit – Texas and other US states are suing Blackrock, Vanguard and State Street claiming they broke antitrust laws by pressuring for cuts in coal production, leading to higher energy bills for consumers.
🌈 Walmart cuts diversity efforts – the world’s largest retailer will cut Diversity, Equity and Inclusion (DEI) initiatives, such as training staff on racial equity, while reviewing its support of events such as Pride. This comes in response to threats of boycott from right-wing activists.
🔗 40% of global companies tie executive pay to ESG goals – a new KPMG sustainable investment report shows that over 40% of the largest global companies are linking executive and board compensation to ESG integration.
👀 UK proposes regulation of ESG ratings providers – a proposed new law would place ratings providers under the FCA’s oversight, aiming to improve transparency and trust in the sector.
🌳Surge in newly labelled sustainability funds – the number of funds qualifying to use the FCA’s new sustainability labels is gathering pace, with over 30 confirmed at the time of writing and a further 100+ in the process of applying. This should boost transparency, trust and competition in the UK sustainable funds market, ultimately benefitting consumers.
Spotlight - global emission trends
Source: OurWorldinData.org, Global Carbon Budget (2024), Apollo Chief Economist. t = metric tons.
The chart above shows the differences in carbon emissions produced (from fossil fuels and industry) over time from the European Union, US and China.
Why this matters?
While western nations have started to reduce emissions in recent years, driven by a global push towards fighting climate change, China’s emissions tell a different story. The country now emits twice as much from fossil fuels and industry as the US, and a massive six times more than the EU. This is exacerbated by more developed nations increasingly manufacturing offshore, relying on countries such as China to produce goods – and the associated emissions – for them.
After briefly slowing during pandemic lockdowns, Chinese fossil fuel consumption has continued to shoot up, with coal still heavily relied on for power. However, there’s still room for optimism: a top-down push has led to large-scale moves into electric vehicles, solar power and continued technology investment. This leaves us hopeful that emissions will ‘peak’ within the next few years, and then finally start falling.
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