This week in ESG
New data shows most businesses see sustainability as an opportunity, while the UK drops green taxonomy plans, and the US considers unwinding emission regulation.
Key highlights
🌍 Earth Overshoot Day arrives (too soon again) – 24th July marked the day when we consumed more resources than the Earth can regenerate in the year – five months too early. See our Earth Overshoot Day article for more information on the crisis.
🏭 Legal pressure mounts on major emitters – The International Court of Justice (ICJ), the UN’s judicial body, has released a landmark report indicating countries have legal obligations to reduce emissions. This opens the door to lawsuits against wealthier higher-emitting nations.
📈 Sustainability: not just ethical, but profitable – according to a new Morgan Stanley survey, 88% of companies believe sustainability is a value creation opportunity, which could lead to benefits such as higher profitability, greater revenue growth, and improved cost of capital.
💰 UK shelves Sustainable Finance taxonomy plans – following negative feedback from an industry survey, citing high potential costs, the UK government will not be proceeding with plans to create a classification system for sustainable economic activity.
😷 US considers stopping the regulation of greenhouse gas emissions – the US Environment Protection Agency (EPA) are considering scraping a landmark ruling that carbon emissions are a danger to health and welfare. If reversed, a significant unwinding of regulation would follow – despite overwhelming scientific consensus.
Chart spotlight - US renewable domination
Source: Apollo; IRENA, Apollo Chief Economist (GW = Gigawatts)
Why this matters
While recent environmental news from the US paints a very mixed picture of the country’s progress, it’s hard to argue with what’s actually being produced. As the chart above shows, in terms of new power installations, renewable production has dominated traditional forms of energy for the last 10 years - and this gap has only been growing over time.
The current US administration can, and certainly will, make things more difficult for sustainability efforts. But with the popularity of renewable energy growing and costs continuing to become more competitive versus non-renewables, it’s unlikely even Trump can stop this trend.
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