| |  | | | | | | | | | | | Hello!
It's a short working week for us in Britain to celebrate the Queen’s Platinum Jubilee, so you’ll have to survive with just one slice of Sustainable Switch this week. But we have plenty of ESG developments for you to sink your teeth into as the EU has been admonished by the European Court of Auditors for not spending enough on green projects, while China rejigs its tax policies to put more funding into low-carbon developments.
The European Union missed its target to spend 20% of its pre-2020 budget on fighting climate change and overstated its green spending to claim that the goal had been met, the European Court of Auditors said on Monday.
The EU had pledged to spend at least 20% of its 2014-2020 budget on measures to limit climate change, and by its own account hit that goal exactly, spending 216 billion euros ($232.8 billion) in the period.
The auditors, however, warned that the EU had not fixed loopholes in its system of tracking climate spending, potentially undermining its new target to spend 30% of the EU's 2021-2027 budget and 37% of the bloc's COVID-19 recovery fund on climate action.
Elsewhere, China's government said it will expand its range of financial tools and make greater use of fiscal and taxation policies to support the shift towards carbon neutrality, according to policy recommendations from the ministry of finance published on Monday.
The tax system will be adjusted to include more preferential policies encouraging energy and water conservation as well as carbon emission cuts. Import tariffs are expected to be adjusted to meet low-carbon development requirements, according to the ministry.
As well as focusing on key sectors such as energy storage and the shift to renewables, new financial tools will also be developed to support the transportation sector, promote new energy vehicles, and encourage recycling and the comprehensive use of resources.
Meanwhile, the South Australia government announced plans to push ahead with new legislation that it said would help speed up the production of hydrogen in the state.
The new dedicated hydrogen legislation will license and regulate the production of hydrogen in South Australia, Premier Peter Malinauskas said in a statement released at the Hydrogen Conference underway in Adelaide earlier today. | | | | | |  | | | | Soccer Football - General Views of the Lusail Stadium - Lusail, Qatar, March 28, 2022. General view inside the Lusail Stadium, the venue for the 2022 Qatar World Cup Final REUTERS/Pawel Kopczynski | | | | | | | | | | | | | | | | | | | | • | Breakingviews: AGL Energy, Australia’s largest power generator and retailer, is ditching half its board, including the CEO and chair, after billionaire Mike Cannon-Brookes rounded up support to torch a demerger plan. With the obstructive old guard gone, it can more swiftly shed coal, be it under new leadership or a new owner. | | | | | | | | | | | “Opponents of ‘woke’ capital don’t realize that ESG is their best friend. They think that ESG is about rating a company’s social performance. But that’s missing the point. ESG ratings only consider ‘social’ factors – like pollution or employee relations – if they have an impact, current or potential, on a company’s profitability.
“Negative practices, like unregulated waste discharge into rivers, don’t bring down ESG scores if there is no implied cost to the company. Likewise, positive practices, like pay equity, don’t raise scores if there is no evidence that they will bring additional profits.
“A good ESG score simply means that a company is effectively managing social risks to its bottom line, not that the company is producing social value.
“That is why, for example, a tobacco company can get a reasonably good ESG score by performing well on issues like soil conservation or fair trade, even though its products can kill its customers. Tobacco causes terrible social harm, but none of that harm gets reflected in ESG scores, since tobacco sales are legal and don’t carry financial risk to the producer.
“ESG is nothing more than a 21st century update of Milton Friedman’s view that a company’s only social responsibility is to raise its profits. ESG and shareholder value are mirror images.
“From this perspective, it was perfectly reasonable for S&P to kick Tesla out of its ESG index. Tesla continues to be the world’s largest electric vehicle producer, displacing millions of tons of carbon emissions that would otherwise contribute to climate warming. But poor management of social issues – including alleged racism at its main factory in Fremont – could damage its reputation, curb its sales, and reduce its profitability.
“The decision to exclude Tesla was based on the financial consequences of its social risks, not on a measurement of its social value to the world – especially climate – which remains impressive.
“A final irony is that while banishing Tesla from the ESG index, S&P invited Caesars Entertainment, America’s largest casino company. The social harm of gambling, especially addictive gambling, is well-known. But destroying lives through gambling is not illegal and carries no financial risk to the company – therefore no punishment to its ESG score.” | | | | | | | | |  | | | | Graphic by Reuters journalist David Gaffen | | | Fuel prices are soaring worldwide, prompting governments to step up subsidies as leaders vow to do whatever they can to keep gasoline and diesel costs from emptying consumers’ wallets. Major energy agencies - including OPEC and the International Energy Agency - have been lowering their expectations for demand, given the surge in costs.
Many consumers are still making plans to drive - but they might cut spending elsewhere. Read more about the energy crisis and developments in the oil and gas industry written by Reuters journalist David Gaffen in our latest Power Up newsletter delivered in your inbox every Monday and Thursday. | | | | | | | | Black Equity Organisation (BEO), a UK civil rights group for Black people, was launched two years after the death in the United States of George Floyd on May 25. Dubbed the first organization of its kind in the country, BEO aims to dismantle systematic racism and advance equity and justice for Black communities. It will take a large-scale approach to improve Black lives by working with grassroots and community organizations. | | | | | Global asset manager Aviva Investors has appointed Sam Tripuraneni as its new head of sustainable outcomes. Tripuraneni joins the firm from BlackRock, where he most recently served as a director for the sustainable investing team. | | | | | In his new role, Tripuraneni will oversee Aviva Investors Stewardship and Sustainable Outcomes franchises and be responsible for overseeing ESG thematic research, and its integration across liquid asset classes, and will participate in the development of new sustainability and impact strategies. | | | | | Malin Dahlroth has been appointed new president and CEO of Swedish recycling company Sysav. She will replace Peter Engström. Dahlroth joins from her previous position as head of business development for the Nordic region at electricity producer Uniper in Sweden. She will assume her new position in September 2022. | | | | | | | | “ESG is not about being woke or not. Perhaps because ESG’s precursor, SRI or ‘socially responsible investing’, was about making investment decisions based on one’s values - such as the avoidance of ‘sin’ stocks - there continues to be a conflation of terms in this space. By deconstructing these seemingly non-financial issues, like climate change and social inequities, we seek to understand the catalysts that may price them into the market and assess how and when they may impact the financial productivity or valuation of the businesses we own.” | | | | Nikita Singhal, co-head of sustainable investment & ESG at Lazard Asset Management | | | | | | | • | The Bank for International Settlements (BIS) will host a conference today with some of the world's top central bankers from Europe, America, China and more on how central banks should help tackle climate change. | | | | | • | A Reuters report on June 1 looks at crop conditions in Europe as drought threatens to curb harvest prospects in top EU grower France, adding to concerns about global wheat supply disrupted by the war in Ukraine. | | | | | • | German industry group BDEW in Berlin will host its annual conference on June 1, which will feature experts in production and transport of power, gas, heat, e-mobility and hydrogen. | | | | | • | Sweden hosts this year’s ‘World Environment Day’ on June 5, the biggest international day for the environment led by the United Nations Environment Programme (UNEP), and held annually since 1973. | | | | | | | | | | The Great Reboot | | |  | | | After struggling to find staff during the pandemic, businesses in Singapore have increasingly turned to deploying robots to help carry out a range of tasks, from surveying construction sites to scanning library bookshelves.
The city-state relies on foreign workers, but their number fell by 235,700 between December 2019 and September 2021, according to the manpower ministry, which notes how COVID-19 curbs have sped up "the pace of technology adoption and automation" by companies. | | | | | | | | We think you may like these: | | |
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