All Things Sustainable

In his 2022 letter to CEOs, BlackRock chief executive Larry Fink wrote: “Divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net zero. And BlackRock does not pursue divestment from oil and gas companies as a policy.”  In this episode of the ESG Insider podcast, we’re talking to the world’s largest asset manager about its approach to engaging with companies, including those in carbon-intensive sectors. We interview Victoria Gaytan, Vice President at BlackRock Investment Stewardship, the team responsible for engaging with companies and for proxy voting on clients’ behalf.   Victoria tells us about BlackRock’s engagement priorities for 2022, and what to expect from the upcoming proxy season. She also describes how the firm’s expectations of corporate boards are evolving on a range of ESG issues, from diversity to climate change to executive compensation.   “We look to boards to have a clear understanding of how executive leadership instills the company's strategy and purpose into day-to-day operations, and how it seeks to ensure that corporate culture is experienced as intended across workforce and the company's key stakeholders,” Victoria tells us.  We'd love to hear from you. To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.hall@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com).  Photo credit: BlackRock Inc.

Companies have two options going forward: transform or be transformed, according to a Feb. 28, 2022, report by the U.N.'s Intergovernmental Panel on Climate Change, or IPCC. Companies can either make transformational changes now that will help them be resilient to the physical impacts of climate change in the future, or they can continue to be reactive and wait until climate change forces them to transform at an even greater cost, the IPCC finds. In this episode of ESG Insider, we talk with one of the lead authors of the IPCC report, Dr. Edward Carr, who is also Director of the International Development, Community and Environment Department at Clark University. He was a lead author of the chapter in the IPCC report about climate resilient development pathways, which outlines the role companies and investors can play in adaptation. The good news, according to Ed, is that companies are well-placed to develop longer-term adaptation plans and find new opportunities for transformation. At the same time, companies cannot do it alone. Governments, the private sector and the public must all work together to adapt to climate change and lower emissions. Listen to our episode on the IPCC's August 2021 Group I report on the scientific basis for climate change here: https://soundcloud.com/esginsider/in-fighting-climate-change We'd love to hear from you. To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.hall@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com). Photo credit: Getty Images

Ahead of International Women’s Day, we’re looking at how the U.K. is moving the needle on gender diversity in corporate boardrooms. Many countries have mandatory quotas for the minimum number of women on corporate boards. The U.K., in contrast, adopted a voluntary approach to improve gender balance in the business world. Has it worked?  In one important sense, yes: Nearly 40% of board seats at the U.K.’s top 100 companies are now filled by women, and notable gains have also been made at the board level of the U.K.’s 350 largest companies, according to a new report. However, there are still very few women CEOs or CFOs in the U.K., and only a third of leadership roles are held by women.  In this week’s episode of the ESG Insider podcast, we speak to Denise Wilson, Chief Executive of the FTSE Women Leaders Review, which published the report in February. Wilson describes how the decision to routinely and openly publish data naming and shaming companies that fall short of suggested gender-balance targets has acted as a nudge, persuading more businesses to appoint female board directors to meet growing investor and societal expectations on diversity.   To read more about gender diversity at global companies: https://www.spglobal.com/en/research-insights/featured/women-ceos-covid   To read more about gender diversity at U.S. companies: https://www.capitaliq.spglobal.com/web/client?auth=inherit#news/article?id=65743394&KeyProductLinkType=6     To read S&P Global Sustainable1 research on corporate diversity, equity and inclusion policies: https://www.spglobal.com/esg/csa/yearbook/articles/progress-toward-corporate-diversity-requires-more-than-ticked-boxes-and-token-hires    To subscribe to our new newsletter, The Social Equity & Impact Review: https://spgi-mkto.spglobal.com/Subscribe-The-Social-Equity--Impact-Review.html   We'd love to hear from you. To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.hall@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com).  Photo credit: Getty Images

If you listened to our bonus episode of the ESG Insider podcast last week, you know we were on the ground attending GreenBiz, one of the largest sustainability conferences in the U.S. that brought together about 1,300 sustainability professionals. A big theme we heard at the event is that sustainability is accelerating rapidly — and that change is especially pronounced in the evolving landscape for standard-setting bodies and disclosure regulations. At the conference, we sat down with one of those standard setters to discuss the big developments afoot: Katie Schmitz Eulitt, Director of Investor Relationships at the Value Reporting Foundation, formerly the Sustainability Accounting Standards Board, or SASB. "There's excitement about the harmonization that is happening in this space and maybe a little frustration about, 'well, why can't we just get it done now — why do we have to wait?'" Katie says. "But I think we've come so far so fast that some of us are kind of pinching ourselves." We also talk with Kristen Sullivan, who is Sustainability and ESG Services Leader at Deloitte. Kristen moderated a panel at the conference titled "The SEC Homes in on ESG," and in the episode she tells us what to expect in the near term from the U.S. Securities and Exchange Commission when it comes to climate and human capital management disclosure rules. "It's a matter of when, not if, the regulators are really putting that definition around disclosure expectations," Kristen tells us. And to hear what all these changes look like in practice for companies, we sat down with Jaclyn Allen, Director of Sustainability at fashion company Guess. "The investor community is really concerned about climate, and they want to know that the company that they're investing in has a long-term view for the business as a whole," she says. S&P Global Sustainable1 was a sponsor of the GreenBiz conference. Listen to the bonus episode, featuring an interview with GreenBiz Group Chariman and Co-Founder Joel Makower: https://podcasts.apple.com/us/podcast/bonus-episode-a-sneak-peek-at-greenbiz-one-of/id1475521006?i=1000551417128 We'd love to hear from you. To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.white@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com). Photo credit: Getty Images

State Street Global Advisors, the world's third-largest provider of exchange-traded funds, is expecting more action and transparency from companies in 2022 on climate change and social issues – and it wants to use its influence to drive that change. "We view divestment as the last resort," says Karen Wong, who is Global Head of ESG and Sustainable Investing at State Street Global Advisors. "We do believe overall that it's absolutely important to have the voting and engagement in our toolkit to drive changes." In 2022, the ESG Insider podcast will be talking with large asset managers around the world about their policies and practices on key ESG topics because they can play a critical role in pressing companies to review and address those issues. In this episode, Karen outlines some of the circumstances under which State Street Global Advisors would vote against a company's directors, the new expectations the asset manager is setting for climate and workforce diversity-related disclosures, and how the firm is handling evolving regulations, including the EU's Sustainable Finance Disclosure Regulation, or SFDR., Listen to our related podcast episode that explores what SFDR is and why it's important: https://soundcloud.com/esginsider/eu-revolutionizes We'd love to hear from you! To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.white@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com). Photo credit: State Street Global Advisors

In this bonus episode of the ESG Insider podcast, we're taking you on the road to the big U.S. sustainability conference GreenBiz22. We sit down with Joel Makower, who is Chairman and Co-Founder of GreenBiz Group, which produces the three-day event bringing together sustainability professionals from many of the largest U.S. companies. The event is an opportunity to take the pulse of the corporate world on topics ranging from net zero to biodiversity to social equity. As Joel tells us in the interview, it's also a chance to hear how a diverse group of companies across sectors are handling the explosive growth in the ESG movement. "All of a sudden, this function within companies that used to be kind of a backwater — sustainability — is now sitting there on Wall Street and sitting there in the boardroom in some fashion in most companies, and that's created a whole new dynamic. So it's a very exciting moment," Joel says. It's also a "be careful what you wish for" moment, Joel says: "This is the moment where all of a sudden, everybody wants a piece of you." Tune in to the podcast next week for more interviews on the ground at the conference. We'd love to hear from you. To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.white@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com). Photo credit: Getty Images

Climate change is driving up insurance-related losses on a global scale even as homeowners, businesses and communities around the world continue to build in hazard-prone areas such as those that experience frequent flooding or storm damage. In this episode of ESG Insider, we examine how one of the world’s largest insurers is tackling rising risks from climate change in an interview with Ernst Rauch, Chief Climate and Geo Scientist and Head of the Climate Solutions Unit at Munich Re. A recent report from the German insurance company found that natural disasters around the world caused about $280 billion in damages in 2021. About $120 billion of those damages involved assets covered by insurance — up from $82 billion in 2020 and $57 billion in 2019. Ernst explains that there is ample data available to help the insurance industry make informed decisions about exposure to different kinds of climate risks. But this information is not always easily accessible to the public. “The issue is how to bring this information to the people, to the citizens and to the businesses,” he says. Listen to our episode on record rainfall in 2021 that caused deadly flooding in Western Europe: https://podcasts.apple.com/us/podcast/record-floods-highlight-climate-risks-to-business-in/id1475521006?i=1000530552007 We'd love to hear from you. To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.white@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com). Photo credit: Getty Images

In this episode of the ESG Insider podcast, we explore a key theme emerging at the center of the ESG movement in 2022: That’s the idea that environmental, social and governance factors should not be considered in isolation, but rather should be understood in relation to each other. In the episode we speak to Dr. Richard Mattison, who is President of S&P Global Sustainable1 and a member of the Taskforce on Nature-related Financial Disclosures, or TNFD. Richard talks about the need to tie together the net zero, nature and social agendas. “We can't achieve a transition to a net zero economy without also being a nature-positive transition and a just transition,” he says. Listen to our episode on the International Sustainability Standards Board, or ISSB: https://soundcloud.com/esginsider/standard-setters-work-to-close Listen to our episode on the TNFD: https://soundcloud.com/esginsider/the-new-task-force-in-town Read the full report from S&P Global about the key trends that will drive the ESG agenda in 2022: https://www.spglobal.com/esg/insights/key-esg-trends-in-2022 We'd love to hear from you! To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.white@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com). Photo credit: Getty Images

At the beginning of January 2022, a key element of the EU’s sustainable finance policy came into effect — the green taxonomy, a kind of dictionary of sustainable activities. Investors must now disclose how their funds meet taxonomy climate-related requirements, while large companies need to report on how much of their business is in line with the taxonomy. But an ongoing debate over whether natural gas and nuclear power should be included in the tool is overshadowing the taxonomy’s introduction. The EU announced at the New Year that it had begun consultations on including gas and nuclear after delaying a decision earlier in 2021 following pressure from sustainable investors, activists, and its own expert advisory group. The bloc faces pressure to avoid making countries that are highly dependent on fossil fuels feel they are being left behind in the transition. Meanwhile, critics say the EU risks hurting its reputation as a global leader in sustainable finance regulation. To find out how investors are viewing the debate, we speak to Rachel Ward, policy programme director at the Institutional Investors Group on Climate Change, which represents more than €50 trillion of assets under management and has called on the EU to exclude gas from the taxonomy. “Gas cannot meet the prescribed requirements included in the taxonomy. To do so would be misleading,” she tells us in this episode of ESG Insider. We also speak to Matthias Fawer, a senior analyst for ESG & Impact Assessment at Vontobel Asset Management, who says the proposal to include nuclear and gas in the taxonomy comes during the “difficult and delicate” transition period that is taking place until renewables can replace fossil fuels. And Alexander Lehmann, head of the Sustainable World Academy at Frankfurt School of Finance and Management, tells us that the proposal adds complications and potential risks for investors. To learn more about the EU’s green taxonomy, listen to our earlier episode here: https://soundcloud.com/esginsider/defining-green-what-investors We'd love to hear from you! To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.white@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com). Photo credit: Getty Images

In 2021, the world saw many major climate-related disasters ranging from wildfires, to flooding and hurricanes. The U.S. National Oceanic and Atmospheric Administration, or NOAA, recently released its annual climate trends report, providing an important snapshot of the physical risks from climate change in the U.S. The report also puts a price tag on those risks: U.S. weather and climate-related disasters reached $145 billion in 2021. In this episode of ESG Insider, Climatologist Karin Gleason of NOAA's National Centers for Environmental Information explains how climate change is amplifying extreme weather events by making them happen more often, last longer, and cause more damage. And Karin's colleague, Climatologist Adam Smith, says 2021 further proves that the world must both adapt to the physical risks of climate change and mitigate future impacts by curbing greenhouse gas emissions. As for physical risks, "it's a socioeconomic question about how can we make ourselves more resilient collectively, whether it's the individual level, homeowner level, a town, even at the state and the federal levels." We'd love to hear from you! To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.white@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com). Photo credit: Getty Images