Sustainability In The News: Trends in ESG
A hopeful message on the future of sustainable investing
“The incoming administration campaigned as pro-coal, climate change skeptics. But against these political headwinds, we see more powerful economic forces at work. The underlying drivers advancing many environmental technologies are increasingly beyond most regulatory intervention. And consumers are progressively seeking more sustainable products and services.”
Quantifiable changes on the horizon include:
- The US EIA estimates LED lighting will achieve 80% market penetration by 2040. This will decrease the amount of energy Americans use from lighting by half.
- By 2025, estimates project that one in 5 new vehicles will be either fully or partially electric.
New mathematical analysis is showing that ESG companies show lower volatility in their stock performances when compared to their peers in the same industry. It could break with the well-known financial concept that less risk means lower returns.
MSCI’s Key 2017 Trends in Environmental, Social, Governance: MSCI wants investors to think big because analyzing short-term policy shifts will not account for a long-term outlook.
Among these trends?
- Owning the long game: In 2017, some of the world’s largest investors may differentiate themselves by gearing toward the long view as globalization and technological advancements have strained social cohesion and fanned populist sentiment.
- The Shift from Regulatory to Physical Risk: Focus on policy uncertainty around climate change in the wake of the U.S. election is misplaced. In 2017, we believe investors will turn their attention to mitigating exposure to the physical risks from global warming, especially as water is becoming scarcer in regions from the Middle East to the U.S.
Continue supporting the move to a low-carbon economy, said a letter signed by 530 companies and 100 investors to President Trump and Congress.
“We, the undersigned members in the business and investor community of the United States, re-affirm our deep commitment to addressing climate change through the implementation of the historic Paris Climate Agreement. We want the US economy to be energy efficient and powered by low-carbon energy. Cost-effective and innovative solutions can help us achieve these objectives. Failure to build a low-carbon economy puts American prosperity at risk. But the right action now will create jobs and boost US competitiveness. We pledge to do our part, in our own operations and beyond, to realize the Paris Agreement’s commitment of a global economy that limits global temperature rise to well below 2 degrees Celsius.”
- Among the 530 companies? eBay, IKEA, Timberland, Tesla, Ben & Jerry’s, and General Mills
- Among the 100 investors? New York State Common Retirement Fund, the California State Teachers Retirement System, and Trillium Asset Management
“A Clean Energy Future is needed for the success of our students.” Higher education professionals also wrote a letter to President Trump and his administration—among their first points is the need to remain in the Paris Agreement. If you agree, text Paris Agreement to 52886 to tell your legislators.