All Things Sustainable

Pollution, over-fishing, coral bleaching and the impact of climate change — the oceans are clearly in trouble. Over the past decade, many more nature-based projects have gotten the support of green financing mechanisms, such as green bonds, but little of that new money has benefited the ocean economy. To help fix that financing gap between the terrestrial and marine worlds, some banks are experimenting with a new type of financing instrument known as a blue bond. The first such instrument was issued in October 2018, enabling the island nation of Seychelles to offload a portion of its debt in return for increased marine protection. The deal stabilized Seychelle's debt position, while boosting investment in the local marine economy. Since then, half a dozen other countries or banks have issued blue bonds, including the World Bank, the Bank of China and the country of Belize. In this episode we speak to Ramzi Issa, a managing director at Swiss bank Credit Suisse, who helped arrange the recent Belize blue bond, which raised $364 million. Part of that money was used to restructure Belize's debt and part of it is allocated for marine conservation. As Ramzi says, "You're effectively creating funding for these projects through debt relief. So that was kind of a key feature of the transaction when [investors] participated." For now, blue bonds remain a niche market. But they join other innovative efforts to increase ocean investment flows. In July 2021, for example, we interviewed the marine explore Jacques Cousteau's grandson, Philippe, who is also working to bring the oceans to ESG investors. Listen to the episode here: https://podcasts.apple.com/us/podcast/how-cousteaus-grandson-is-bringing-oceans-to-esg-investors/id1475521006?i=1000527653970 Both blue bonds and other form of sustainable financing for the oceans could get more attention during the U.N. biodiversity conference known as COP15 being held in China in late April and early May. Correction: This episode was updated to correct a reference to Credit Suisse, which is a Swiss bank. 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 ([email protected]) and Esther Whieldon ([email protected]). Photo credit: Getty Images

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 ([email protected]) and Esther Whieldon ([email protected]). Photo credit: BlackRock Inc.

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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). 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 ([email protected]) and Esther Whieldon ([email protected]). Photo credit: Getty Images

The EU proposed a carbon border adjustment mechanism in 2021 as part of a broad climate package designed to reduce carbon emissions by 55% from 1990 levels by 2030. This mechanism — widely known as 'CBAM' — would put a tariff on imports of carbon-intensive goods. The proposed regulation aims to prevent EU-based companies from moving production to other jurisdictions with less stringent climate regulation (also known as 'carbon leakage'). It also aims to avoid imports of carbon-intensive products to the detriment of EU companies. CBAM will be phased in from 2023 if approved by the European Parliament and EU member states, so companies are already putting measures in place to ensure they adhere to the potential new rules, says Yaroslav Alekseyev, a partner at law firm Linklaters, in this episode of the ESG Insider podcast. Some experts believe CBAM will encourage other jurisdictions to set carbon prices. "If a company from a country outside of the EU wants to export products into the European Union market, they will have pay that CBAM at the border if they don't have a domestic carbon price that is high enough," says Sanjay Patnaik, director of the Center on Regulation and Markets at Washington, D.C.-based think tank the Brookings Institution. "That could really set incentives around the world." But some industrial sectors are not convinced. We hear tom Emanuele Manigrassi, the public affairs manager at trade group European Aluminium, who says the aluminium sector does not believe CBAM will support low-carbon production. His organization is calling for CBAM to be tested before it is introduced. 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 ([email protected]) and Esther Whieldon ([email protected]). Photo credit: Getty Images

To welcome the New Year, we hear from experts across the ESG world about what sustainability trends they are watching in 2022. Our guests in this episode of ESG Insider include Curtis Ravenel, who is Secretariat for the Task Force on Climate-related Financial Disclosures and senior adviser to former Bank of England Governor Mark Carney. We also talk with the Head of Global Sustainability Research at Morgan Stanley, and the Head of Energy and Environment Transition at French bank BNP Paribas. And we hear from an activist investment firm in the U.S. that has been pressing companies to perform racial equity audits. Themes we cover include the importance of holding financial institutions accountable for decarbonization pledges, the outlook for sweeping change in biodiversity disclosure and data, and rising investor pressure on companies to address social inequities. Here are links to our most popular episodes from 2021: https://www.spglobal.com/esg/podcasts/at-cop26-why-article-6-matters-to-companies-and-investors https://www.spglobal.com/esg/podcasts/goldman-sachs-executive-on-demystifying-measuring-the-s-in-esg We'd love to hear from you! To give us feedback on this episode or share ideas for future episodes, please contact cohosts Lindsey Hall ([email protected]) and Esther Whieldon ([email protected]) Photo credit: Getty Images

In this year's final episode of ESG Insider, we talk with David Blood about two big sustainability issues impacting the financial sector as we head into 2022: Plugging the climate financing gap, and aligning investment portfolios with Paris Agreement goals. David is a senior partner at Generation Investment Management, the sustainable investment firm he founded with former U.S. Vice President Al Gore. David tells us about the strategy behind Just Climate, a new venture Generation Investment Management launched in October 2021 to tackle the net zero challenge at scale. "To achieve our goal of limiting global temperature rise to less than 1.5 degrees C, every financial transaction must take climate into consideration," David says in the interview. "I don't believe yet that the asset owner community or the asset manager community fully embrace that, have fully internalized that notion." He also talks about his role leading the Portfolio Alignment Team. This group was created in 2020 by Mark Carney in his capacity as U.N. Special Envoy for Climate in response to rising interest from investors and lenders in measuring how portfolios align with Paris Agreement goals. The Portfolio Alignment Team published its latest report shortly before COP26. In this episode, we also speak with Carter Powis, a consultant with McKinsey who led the firm's support of the team. "Knowledge of portfolio alignment tools is still in a very nascent state across the financial sector," Carter says. "As a result, there are some pervasive misunderstandings about what these tools are and why they're important." Photo credit: Generation Investment Management

'Net zero' was a buzzword in the sustainability world in 2021, but big questions remain about what this term really means. In this episode of ESG Insider, we'll hear how the Science Based Targets initiative, or SBTi, is defining net zero in its newly released corporate standard. And to understand the challenges the financial sector faces in defining and achieving net zero targets, we talk to Curtis Ravenel, who is senior adviser to Mark Carney — the former Bank of England Governor who now acts as U.N. special envoy on climate finance. We'll also hear from Jeanne Martin, senior campaign manager at U.K.-based investor activist group ShareAction, about where European banks stand and why they need to make significant progress toward their net zero goals by 2030. To learn more about the extent to which big corporations in multiple sectors are setting net zero targets, read an analysis by S&P Global Market Intelligence: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/path-to-net-zero-stakeholders-demand-action-on-ambitions-as-pledges-swell-67951124 Photo credit: Getty Images

In this final episode of our miniseries on emerging technologies that can help companies achieve net zero emissions by mid-century, we're examining two cutting-edge projects for the agricultural, mining and road construction industries. In this episode of ESG Insider, we explore how scientists in California are using a new technology called enhanced weathering to help the farming and mining industries become part of the climate solution. We also hear how Spanish energy and infrastructure company Acciona is working with the paper industry to help decarbonize the process for making roads. Photo credit: Getty Image

What do Glenfiddich whisky, yoga pants and a trash-burning waste-to-heat plant in Europe have in common? They're all part of efforts to use emerging technologies to tackle climate change. As companies and countries around the world pursue net zero targets, one big question is: How do you ensure the carbon removal technologies we will need 20 to 30 years down the road are available, affordable and easily scaled? In this episode of ESG Insider, we bring you the second part in our miniseries about emerging climate technologies. We hear how Scotch whisky maker Glenfiddich uses a part of its distillery process to power delivery trucks. We explore how biotech company LanzaTech is using bacteria to recycle gases into ethanol that is used to create everything from yoga pants to shampoo bottles to low-carbon aviation fuels. And lastly, we learn how Fortum Oslo Varme's waste-to-energy trash-burning plant in Norway is being converted to capture carbon emissions and send them to be permanently stored deep under the North Sea. This technology is often referred to as bioenergy with carbon capture and storage, or BECCS, and can be used to help tackle climate change when done in a sustainable manner. Photo credit: William Grant & Sons

Can a global array of CO2-sucking machines save us from the worst ravages of climate change? This episode is the first in an ESG Insider miniseries about new carbon-removal technology. This week we examine a method called Direct Air Capture, or DAC Right now, DAC is expensive and only at the nascent stages of development. But there's growing support from entrepreneurs and some large companies to deploy the approach on an industrial scale. In this episode, we interview Steve Oldham, CEO of a Canadian company called Carbon Engineering, which is building a giant carbon-sucking plant in America's oil-rich Permian Basin. Oldham explains how the technology works; why his company almost shut its doors; and why it now has the backing of Bill Gates and a host of fossil fuel companies, including Occidental, BHP and Chevron. We also talk to Daniel Egger, Chief Commercial Officer of Swiss firm Climeworks. The clean tech company recently switched on the world's largest DAC plant in Iceland. A smaller DAC plant run by Climeworks in Switzerland already sells the CO2 it extracts to greenhouses and to Coca-Cola, which uses the gas to put the fizz in its namesake drink. Our third guest is Stuart Haszeldine of the University of Edinburgh, which describes him as the world's first official professor of carbon capture and storage. Haszeldine explains how DAC technology can help remove the large volumes of CO2 that humans have pumped into the air since the Industrial Revolution. He also points out that, despite recent progress on DAC technology, most politicians and policymakers have yet to back the idea because it "seems to promise magic out of thin air." Photo credit: Getty Images

Protecting biodiversity and adopting nature-based solutions: Both play a critical role in addressing climate change and therefore cannot be ignored. This is a key theme we heard repeated at COP26, the U.N.'s big climate conference that took place in Glasgow over the first two weeks of November. In this episode of ESG Insider, we explore the emerging dialogue on climate change and nature-based considerations. For example, 92% of country climate pledges, known as Nationally Determined Contributions, or NDCs, submitted for COP26 included nature in their plans, Capitals Coalition CEO Mark Gough tells us. The Capitals Coalition advocates for companies to identify, measure and value their impacts and dependencies on natural capital, social capital and human capital. "Climate change is a driver for nature change," says Mark. "But also, nature can help to drive the changes that we want to see in the climate to make improvements there." In this episode, we also talk with Sarah Bratton Hughes, Global Head of Sustainability Solutions at UK-based asset management firm Schroders. She outlines how the firm is moving to reduce deforestation risks in its portfolios. And we'll hear how hard-to-decarbonize sectors such as steel and chemicals use nature to help meet their climate targets from Anthony Hobley, who is co-executive director of the Mission Possible Platform, a partnership between the World Economic Forum and the Energy Transitions Commission. For further coverage of COP26, listen to the podcast episode on Article 6 here: https://podcasts.apple.com/us/podcast/at-cop26-why-article-6-matters-to-companies-and-investors/id1475521006?i=1000539436647 And listen to the podcast episode where we interviewed the co-chair of the Task Force on Nature-related Financial Disclosures, or TNFD, here: https://podcasts.apple.com/us/podcast/the-new-task-force-in-town-tnfd-co-chair-talks/id1475521006?i=1000528412510 Photo credit: Getty Images

There have been a lot of headlines coming out of COP26, the big United Nations climate conference that took place in Glasgow the first two weeks of November. In this episode of ESG Insider, we bring you inside the event through interviews with COP attendees. We hear about the mood on the ground: chaotic, but with an overriding sense of optimism that the world can make progress toward the goal of limiting global warming to 1.5 degrees C relative to preindustrial levels. "For the first time, that target seemed to be in reach," says Mike Wilkins, Head of Sustainable Finance Research at S&P Global Ratings and a member of the Task Force on Climate-related Financial Disclosures, or TCFD, who has attended many previous iterations of COP. Part of that sense of progress came from the growing presence of the financial sector at COP. "The finance sector was really clearly present and active, and communicating the need for financial institutions to take account of climate change. And that was a new part of the dynamic this year," says Divya Mankikar, Global Head of ESG Market Engagement at S&P Global Sustainable1. We saw many private sector pledges during COP26, including an announcement from the Glasgow Financial Alliance for Net Zero, or GFANZ, that financial institutions representing $130 trillion of assets have committed to Paris Agreement goals. We should celebrate that progress, says James Vaccaro, Executive Director of the Climate Safe Lending Network, a group with the goal of bringing international bank lending in line with the Paris Agreement. "A few years ago, if anyone was really talking seriously about large global banks making net zero carbon commitments … it would have been seen as quite fringe or radical," James tells us. But he says there is more work to do. "Once you do have people in the tent … you want to move very quickly from a situation of normalized best practice into raising the bar for everyone." Photo credit: Getty Images

The 26th U.N. Climate Change Conference, known as COP26, is well underway in Glasgow. A big theme during the first week of the conference was the financial sector's role in addressing climate change. In this episode of the ESG Insider podcast, we talk to Samu Slotte, global head of sustainable finance at Danske Bank, Denmark's largest bank by assets. Samu talks about Danske Bank's recent decision to join the Net-Zero Banking Alliance, a group of banks committed to aligning the greenhouse gas emissions of their lending and investment portfolios with net zero by 2050 or sooner, in line with the Paris Agreement. A challenge being discussed at COP26 is ensuring adequate climate financing makes its way to developing nations. "The overarching picture is that there's plenty of cash around looking for suitable investments," Samu says. But he warns that the money is just not getting where it is needed. "The cash seems to be stuck in proven technologies in stable jurisdictions." Photo credit: Getty Images

The 2021 proxy season brought a new level of shareholder support for key ESG-related themes ranging from climate change to diversity disclosures. In this episode of ESG Insider, we talk to Sustainable Investments Institute founding executive director Heidi Welsh. "We've entered a whole new era" of shareholder support for ESG issues, Heidi tells us. "Investors want more information on climate change, on diversity and inclusion, on corporate political influence," she says. For additional information about the 2021 proxy season, listen to our episode on the implications of shareholders' ouster of several Exxon Mobil board members: https://podcasts.apple.com/us/podcast/exxon-board-ouster-over-climate-change-has-big-implications/id1475521006?i=1000524283710 And you can also find all our coverage of COP26 at http://spglobal.com/cop26 Photo credit: Getty Images

At COP26 in Glasgow in the first two weeks of November, government officials from around the world will gather to discuss plans for achieving the Paris agreement on climate change. A key issue on the table is Article 6, which involves international cooperation through carbon markets. In this episode of ESG Insider, we talk with Kelley Kizzier, who was a lead Article 6 negotiator at previous COP gatherings, including in 2015 when countries reached the Paris agreement on climate change. Kelley, who is currently vice president for global climate at the Environmental Defense Fund, also recently joined the board of directors of the Taskforce on Scaling Voluntary Carbon Markets. Kelley explains why Article 6 matters to companies and investors. She also outlines how Article 6 could affect voluntary carbon markets, where companies buy carbon credits to help meet their net zero goals. To learn more about carbon markets and the role of Article 6, listen to the latest episode of the Platts Future Energy podcast from our colleagues at S&P Global Platts. https://www.spglobal.com/platts/en/market-insights/podcasts/platts-future-energy/101221-cop26-paris-agreement-article-6-voluntary-carbon-markets-carbon-footprint-emissions Photo credit: Getty Images

In this episode of the ESG Insider podcast, we talk to Jessica Alsford, Head of Global Sustainability Research at Morgan Stanley. In the run-up to COP26, the big United Nations climate conference taking place in Glasgow in November 2021, there has been a lot of discussion in the sustainability world about the path to net zero and the role the financial industry will play in reaching the goals of the Paris agreement. In the interview, Jessica talks about what needs to happen at COP26 to move companies beyond their headline net zero commitments into specific and transparent action plans. "We can't just wait 30 years and see what happens," Jessica says. "So now, what comes next is [companies providing] that granularity, that visibility, about what are the specific actions" they are taking to achieve their end goal. "Investors are looking for annual disclosure and reporting on progress so that you can very clearly see which companies are decarbonizing and at what rate," she adds. Jessica also says the lack of standardization in sustainability disclosure frameworks poses challenges for the ESG world. Still, she says, the direction of travel is clear: "You need more data in order to be able to make the ESG investment decisions." Photo credit: Morgan Stanley

The coronavirus pandemic and a growing awareness of social risks have thrust the 'S' in ESG into sharper focus for many sustainability-minded companies and investors. Issuance of social bonds — debt instruments that raise money for things like affordable housing, health and education — surged nine-fold to $165 billion dollars in 2020 from the previous year, according to data from Environmental Finance, a global sustainable finance news and analysis provider. And as that market expands, investors are seeking clear guidance on social investment definitions. The European Union has already developed a green taxonomy, or a classification system of sustainable businesses and sectors. In this episode of ESG Insider, we look at the potential social taxonomy the EU has proposed to help define the 'S.' "We've got a good understanding of the E," says Victor van Hoorn, executive director at Eurosif, a European forum that promotes sustainable investment. "We're more or less starting with a blank sheet of paper when we're talking about the 'S.'" Check out our episode on the green taxonomy here: https://podcasts.apple.com/us/podcast/defining-green-what-investors-need-to-know-about-the/id1475521006?i=1000531954636 Photo credit: Getty Images

Over the past year and a half, we've seen companies, investors and regulators put a growing emphasis on the 'S' in ESG. But there is still a common refrain in the ESG world that social issues are nebulous or difficult to measure. In this episode of ESG Insider, we hear how one of the largest financial institutions in the U.S. is tackling the 'S' and making it measurable. "The 'S' does get less focus," says Asahi Pompey, Global Head of Corporate Engagement at Goldman Sachs. "People still think it's kind of amorphous. What exactly is the 'S'? Is it in hiring? Is it in retention? Is it recruiting? Is it investments in communities? Here's the answer: It's all of those." Asahi talks about how Goldman Sachs is adapting its internal policies, its investment approach and its business models with the 'S' in mind. For example, earlier this year, the company launched its One Million Black Women initiative, committing more than $10 billion to advance racial equity and economic opportunity by investing in Black women. And in 2020, Goldman Sachs announced that it would stop underwriting IPOs for companies in the U.S. and Europe that don't have diverse boards. In the interview, Asahi also talks about corporate America's changing approach to social issues broadly and racial equity in particular. But she cautions that those changes could be short-lived if society does not keep the issue on the front burner. "Corporate America has a long way to go in order to drive sustained progress on the 'S,'" Asahi says. "Now, we've seen commitments across the industry and various sectors. That being said … it can't be episodic, and it has to be sustained, and it has to be measurable. We all know things get done when they're measured." Photo credit: Goldman Sachs

In this special New York Climate Week episode of the ESG Insider podcast, we explore how the built environment – new building construction plus existing offices, apartment blocks, airports and other structures – is responsible for nearly 40% of all global carbon dioxide emissions, and what it will take to decarbonize this vast sector. In the episode, we interview three experts on the subject: Mark Reynolds, CEO of Mace Group, a large construction company focused on making buildings more sustainable; John Mandyck, CEO of a non-profit in New York City called Urban Green Council; and Dana Schneider, director of energy and sustainability at the Empire State Realty Trust, which owns the Empire State Building in New York, an iconic structure that has made significant headway in lowering its carbon footprint. Lowering the carbon footprint of the built environment is a massive task. Although building emissions reached their highest level in 2019, many cities have not yet embarked on sizable decarbonization plans. Some landlords could have to spend millions to retrofit buildings. Construction companies are under pressure to use less carbon-intensive materials. Homeowners are being prodded to spend money to make homes energy efficient. And investors with face the challenge of assessing the transition risk. That helps to explain why at least three panel discussions at this week's NY Climate Week were devoted to carbon emissions from the built environment, and why the big UN COP26 climate conference this fall will similarly dedicate an entire day to the subject. Photo credit: Getty Images

When we talk about the technologies the world will need to tackle climate change, low-carbon hydrogen is increasingly part of the discussion. Two recent studies raise some big questions about whether some of these hydrogen technologies are as climate-friendly as proponents claim. In this episode of ESG Insider, we look at the research and development of blue hydrogen, which is derived from natural gas and paired with carbon-capturing technology to reduce the resulting emissions. And we also examine what role green hydrogen, which is created using renewable generation to separate water molecules, could play. We talk with the authors of those two recent studies and we hear from a hydrogen expert at a European research institute about the current state of the industry and what role the government is playing in promoting these technologies. Photo credit: Getty Images

There's a massive gap between the amount of investment needed to make the climate transition happen and what is occurring today. In this episode of ESG Insider, we explore the role that green banks can play in plugging that funding gap. Green banks can differ in scope and approach but are generally created to leverage government funds to mobilize private investment in clean and resilient infrastructure on the local scale. They exist in many parts of the world, including Australia, Japan, Malaysia, Switzerland, the U.S. and the U.K. In the episode, we'll hear from Reed Hundt, co-founder, chairman and CEO of the Coalition for Green Capital, which has helped organize a number of green banks and is pressing the U.S. Congress to create a federal green bank. And we'll look at how the first state-level green bank in the U.S. — the Connecticut Green Bank — has evolved since forming in 2011. We talk with Connecticut Green Bank President and CEO Bryan Garcia, who tells us: "Our goal is to demonstrate to the ... capital markets that this is a safe area of investment, and we're willing to put our capital at risk in front of you to do that." Photo credit: Getty Images

In early August, the U.S. Securities and Exchange Commission approved a proposal by Nasdaq to require companies listed on the New York-based exchange to disclose certain board diversity information. In this episode of ESG Insider, we explore what the rule means in practice for companies and investors. We hear from Matt Patsky, the CEO of Trillium Asset Management, about why investors view board diversity as a material factor — and what the SEC approval indicates about the direction of disclosure in the U.S. "The SEC's willingness to approve this Nasdaq board diversity rule sends a strong signal that they believe there's materiality to diversity," Matt says. "And with that belief, I think it means we're moving closer to the SEC mandating disclosure of diversity information from companies broadly." For the corporate and regulatory perspective, we talk with Cam Hoang, a corporate securities and SEC compliance lawyer and partner at the law firm Dorsey & Whitney. We also hear the recruiter's perspective on the new rule from WSS Executive Search CEO & Founder Becky Heidesch, who has been helping companies find candidates with diverse profiles for decades. In the episode, you'll hear us refer to an S&P Global Market Intelligence analysis of gender diversity on U.S. company boards and executive teams. You can read that research here: https://platform.mi.spglobal.com/web/client?auth=inherit#news/article?id=65743394&cdid=A-65743394-9776 To learn more about human capital management disclosures in the U.S., listen to this earlier episode of ESG Insider: https://traffic.libsyn.com/secure/esginsider/ESG_Insider_US_Diversity_Regulations_-_v3.mp3 Photo credit: Getty Images

A sobering new report from the U.N.'s Intergovernmental Panel on Climate Change tells corporations and governments in no uncertain terms: Act with urgency to lower emissions and adapt to the impacts of climate change at a more rapid pace and bigger scale. In this episode of ESG Insider, we look at the implications of the IPCC report for investors and companies, and we talk to two scientists who helped write the nearly 4,000-page document to better understand its key findings. Claudia Tebaldi, a scientist with the Joint Global Change Research Institute at the Pacific Northwest National Laboratory and one of the report's authors, says incremental changes can make a big difference — for better or for worse. "Every little bit matters," says Claudia. "This is in the bad sense that every little bit of warming is making the situation worse, but also that every little thing that we can make to slow down and stop [global warming] is going to matter." We also talk to Kirsten Spalding, senior director for the investor network at Ceres, on how the lPCC's latest findings will shape future investor engagement with companies on climate change. The report shows that "the need for action is even on a shorter timeline than we knew before," Kirsten says. Photo credit: Getty Images

Several countries will soon make it mandatory for large companies and asset managers to calculate and publicly report their climate-related risks. It's a complex accounting challenge and many businesses aren't fully prepared. The governments of the U.K., New Zealand, Hong Kong and Switzerland, as well as the G7 group of nations, are among those backing mandatory reporting under the Taskforce on Climate-related Financial Disclosures, or TCFD, framework. The push towards compulsory TCFD reporting will put pressure on banks, businesses and asset managers that have yet to embrace such disclosure. A big reason why many companies struggle with TCFD implementation is because it's hard to collect, collate and analyze detailed emissions-related data in all areas of their operations. Companies also need to train their employees on technical aspects of reporting under the framework. Above all, TCFD implementation must be roundly embraced and instilled — all the way from the C-suite to product and client-teams — and that takes time. In this episode, we speak to Thora Frost, senior manager of green finance at the Carbon Trust, a London-based consulting firm that works on climate change and sustainability issues. And we interview Matthew Townsend, partner at U.K. law firm Allen & Overy. "You have a blizzard of regulation and policy coming down the line, certainly over the next five years, and I don't see it letting up in many jurisdictions," Townsend says. Photo credit: Getty Images

If you've been following sustainability headlines over the past few years, chances are you've heard about the EU's green taxonomy — essentially, a dictionary that defines how sustainable a business or sector is. It assesses more than 100 economic activities and is designed to steer companies as they adapt their business strategies to climate change, as well as help investment funds judge sectors based on their environmental performance. Investors will also have to disclose what percentage of their investments are in line with the taxonomy. The new regulation is expected to radically change how investors and companies report on their environmental performance. It will be enforced from 2022, which does not leave investors a lot of time to get up to speed. And the taxonomy is not quite finalized, with further regulation expected in 2023 — creating some big challenges for investors trying to navigate the changing sustainability landscape. To talk us through what investors can expect from the taxonomy, we spoke to Helena Viñes Fiestas, commissioner at Spain's Financial Markets Authority. She's also rapporteur of the EU Platform on Sustainable Finance, a body of experts from industry, finance and civil society who advise the EU's executive arm on the future of sustainable finance policy in Europe. "I like to compare it a little bit with food products," Helena says of the taxonomy. "If you market your product as low fat, it's only fair to ask how much fat it has and whether or not it's too much. This is exactly the same, where the taxonomy becomes the recommended daily intake." Photo credit: Getty Images

Wall Street's top regulator, the U.S. Securities and Exchange Commission, is in the early stages of creating a number of new ESG-related disclosure rules, including on the issue of human capital management. Human capital management refers to the way that companies manage their workforce. It includes things like a company's approach to hiring, recruitment, pay and benefits, and the working conditions a company provides. Right now, public corporate disclosures on these topics are voluntary in the U.S. But many investors say that leads to insufficient and inconsistent data. "I think it's unfathomable that, in this day and age, the only metric that companies are currently required to disclose is the number of people that they employ — especially when we talk to every company and they tell us that their human capital is their most important asset," says Aeisha Mastagni, a portfolio manager in the sustainable investment and strategies group at the California State Teachers' Retirement System, one of the largest public pension funds in the U.S. "And yet we as investors have no way to measure that, benchmark that, compare it to other companies in our portfolio." In this episode, we explore the changing state of human capital data disclosure in the U.S., why some investors want disclosures to become mandatory, and what to expect from the SEC. We also talk to securities and governance lawyers at the Philadelphia-based law firm Dechert and with Bryan McGannon, director of policy and programs at US SIF: the forum for responsible and sustainable investment.

In mid-July 2021, the heaviest rainfall in a century triggered intense flash floods and inundated several towns in Germany, the Netherlands and Belgium, causing at least 188 deaths. The floods in Europe are a reminder that although emerging markets are likely to be hit hardest by a temperature rise, richer countries in the northern hemisphere are far from immune from the effects of severe weather. In this episode, we talk with experts to understand the biggest climate risks facing Europe's biggest economies, analyzing physical risk data from S&P Global Trucost. Guests on the episode include Irene Lauro, an economist with asset manager Schroders; and Swenja Surminski who leads adaptation research at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. And we talk to Berenberg Bank analyst Michael Huttner about how the floods could impact insurance companies.

The EU is working to reform its Non-Financial Reporting Directive, regulation introduced in 2014 requiring large companies to report on environmental and social issues, such as the impact of climate change on their business and the diversity of its board. The proposed new rules, called the Corporate Sustainability Reporting Directive (CSRD), would expand the reporting requirements and drastically increase the number of companies disclosing this information. CSRD would also make auditing of companies' sustainability reports obligatory. Corporations, regulators and investors increasingly recognize that environmental, social and governance risks need to be accounted for alongside financial risks when valuing a company. Investors are seeking consistent data and standards to guide them in their investment decisions around ESG factors. In this episode, we speak to Saskia Slomp, CEO of European Financial Reporting Advisory Group, or EFRAG, which advises the EU on the use of accounting standards within the bloc and which was asked by the European Commission, the EU's executive arm, to develop proposals for the new directive. "The development of mandatory common sustainability reporting standards is necessary to progress to a situation in which sustainability information has a status comparable to that of financial information," she tells us. "So many companies receive additional information requests for sustainability information from stakeholders." Photo credit: Getty Images Related past podcast episodes: Banks' big green EU taxonomy challenge https://podcasts.apple.com/us/podcast/banks-big-green-eu-taxonomy-challenge/id1475521006?i=1000511776202 EU revolutionizes sustainability regulation with SFDR https://podcasts.apple.com/us/podcast/eu-revolutionizes-sustainability-regulation-with-sfdr/id1475521006?i=1000514008934

The EU has proposed a European Green Bond Standard as part of its strategy to drive investment into sustainable finance and achieve net zero carbon emissions by 2050. The new rules will also aim to protect investors from greenwashing, which is when an investment is made to sound greener than it is. Although they represent a tiny fraction of the overall debt market, green bonds — debt that finances environmentally friendly projects such as wind farms or solar power — have grown rapidly over the last eight years, from virtually nothing in 2012 to nearly $300 billion in 2020. The EU is counting on further growth in the market to meet the targets in its European Green Deal, designed to mobilize at least €1 trillion of sustainable investment over the next 10 years. The rules will be tougher than other existing green bond guidelines because issuers will have to prove their green bonds are financing projects in line with the EU's "green taxonomy," a dictionary of sustainable activities. In this episode, we speak to Climate Bonds Initiative CEO Sean Kidney, who was part of an advisory group that helped shape the new rules. Regulation has "been right from the beginning, a feature of the development of the market. Issuers have followed the regulations, and it's grown to be a very large successful market," he tells us. Listen to our episode on the EU's green taxonomy: https://open.spotify.com/episode/5b3qx805nauyVGvcJo9Wsr Photo credit: Getty Images

The world's biodiversity is in peril and its loss poses big financial risks to businesses and the global economy. More than half of the world's economic output — or about $44 trillion — is moderately or highly dependent on nature, according to the World Economic Forum. Moreover, the collapse of biodiverse ecosystems could hurt global GDP by $2.7 trillion annually by 2030, the World Bank warns in a new report. Until recently, biodiversity loss was rarely viewed as a substantial risk to corporations. But that is changing and a new task force has been formed to help companies and financial institutions better understand the scope of the risk. The Task Force on Nature-related Financial Disclosures, or TNFD, aims to create a voluntary framework that companies can use to assess their nature-related risks and opportunities. In this episode, we talk with Elizabeth Mrema, who is co-chair of the TNFD, about the goals of the task force, how she envisions them being implemented and how biodiversity is inherently linked to climate change.

More than 50 years ago, explorer Jacques Cousteau introduced millions of viewers to the marvels of the undersea world. In 2021, the ESG world is increasingly focused on biodiversity, and the oceans are a big part of that picture. Goods and services from the world's oceans and coasts are worth at least $2.5 trillion annually, while the overall value of the ocean as an asset is at least 10 times that amount, according to a 2015 estimate from the WWF. In this week's episode, we interview Cousteau's grandson, Philippe, the co-founder of a nonprofit called EarthEcho International that works on ocean health. "It's important to start thinking about a restoration ethic and returning the oceans to abundance," says Philippe. "For far too long, the environmental movement has been a movement of deprivation and doom and gloom. It has not been enough of a movement of opportunity and hope." We also hear from Doug Heske, CEO of impact investing company Newday Impact that has teamed up with Philippe to promote ocean restoration, especially among younger investors. And we interview fund manager Paul Buchwitz from one of Germany's largest asset managers, DWS, about how the company is aiming to ocean-related risks while tapping into new investment opportunities offered by ocean restoration projects. Photo credit: Getty Images

Investors are increasingly calling on companies to reflect climate-related risks in their financial results. In September 2020, global investor groups representing more than $103 trillion wrote an open letter asking companies and their auditors to include climate-related risks in financial reporting. Accounting standard setters and international auditing boards are also requesting that firms pay more attention to future climate risks when they produce their financial results. "There has been a big kind of anomaly there, almost a loophole, that climate has not been taken into account," David Pitt-Watson, executive fellow at Cambridge University's Judge Business School, tells us. We also interview International Accounting Standards Board (IASB) Vice Chair Sue Lloyd about plans for a new international sustainability standards board. "I still talk to a lot of investors who are surprised that there isn't more information in the notes to the financial statements about the assumptions that have been used," Sue says. And we speak to Veronica Poole of Deloitte for an auditor's point of view. She says recent guidance the International Auditing and Assurance Standards Board (IAASB) issued on the topic of climate-related risk "is extremely valuable, and I think certainly should be looked at and used by auditors in their work as they challenge the assertions made by clients around the impact of climate change risks and opportunities on their business."

On June 17, 2021, U.S. President Joe Biden signed legislation making Juneteenth a federal holiday. In this episode, we're looking at how corporate America is changing its approach to diversity — and race in particular. June 19th, or Juneteenth, marks the official end of slavery in the U.S. in 1865. But the ugly systemic racism that slavery was built on endures. In 2020, the murder of George Floyd put that racism front and center for the world. And in response, many companies begin publicly addressing race and inequality. One way that change has manifested itself is recognition of Juneteenth. In 2020, many companies started observing the holiday — including our own parent company, S&P Global. We spoke to Tamara Vasquez, Global Head of Diversity, Equity and Inclusion at S&P Global, about the company's decision to observe Juneteenth and her experience of the growing intersection of business and diversity. And we speak to Rodney Sampson, professor, angel investor and nonresident senior fellow at the Brookings Institution. Rodney is also Executive Chairman and CEO of Opportunity Hub, a platform he co-founded to build inclusive ecosystems for innovation, entrepreneurship and investment. "We have a theory that until there's capital at stake, whether it's investment capital or revenue, companies aren't really going to double click and actually become transformative in their investment as it relates to their racial equity or Diversity, Equity and Inclusion," Rodney says. Further reading from S&P Global: How The Advancement Of Black Women Will Build A Better Economy For All Image credit: Getty Images

Regulators and supervisors around the world are increasingly concerned about the effects of climate change on financial stability. So they're turning to climate stress tests to amass key data on financial institutions' exposure to potential stranded assets and their ability to manage risk. Since the 2008 financial crisis, stress tests have become a critical tool for regulators to gauge how well banks can withstand hypothetical adverse scenarios, such as a sharp market downturn or an economic shock. Regulators can then determine, for example, whether banks need to hold more capital to protect themselves against risk. In a world first, the French central bank conducted a climate stress test on its financial sector. In this episode, we speak to Laurent Clerc, director for research and risk analysis at France's Prudential Supervision and Resolution Authority, which conducted the tests in its role as the supervisory arm of the French central bank. "What is not necessarily perceived by institutions is the urgency," Laurent tells us. "Delays in reshaping lending or delays in insurance policies might also delay the necessary transition." Image credit: Getty Images

Last week the ESG world saw a major shakeup at one of the world's largest oil majors. Specifically, at Exxon Mobil's annual proxy meeting, shareholders voted to replace three board members with directors put forward by a small activist investor group — known as Engine No. 1. The group claimed Exxon was not moving fast enough to address climate change and that the board needed a fresh perspective to steer the company in the right direction. Shareholders have threatened for years to oust board members if companies don't move fast enough on climate change. But last week, they carried through on that threat. To better understand the implications of the vote for both Exxon and other companies, we talked with Andrew Logan, senior director of oil and gas at Ceres, which works with investors to press companies to tackle climate change. "I think this will certainly get the attention of other boards in this sector and beyond," Andrew said. "Nothing focuses the minds of a corporate director like the possibility that they might lose their job." Image credit: Getty Images

What do Chipotle, an air conditioning company and one of the world's largest activist investors have in common? They're all tackling the challenge of how to incentivize executives to advance corporate sustainability goals. In this episode, we talk with Chipotle Head of Sustainability Caitlin Leibert about the company's plan to tie 10% of annual executive incentive bonuses to sustainability goals. Linking executive compensation to ESG goals is a way for companies to "put your money where your mouth is," Caitlin says. But European activist investor Cevian Capital believes that many companies could make their ESG-linked incentives more robust and transparent, says Harlan Zimmerman, a senior partner at the firm. We also hear from Marcia Avedon, Trane Technologies' Chief Human Resources, Marketing and Communications Officer, about how the air conditioner and heating company is looking to incentivize all its employees to act on its sustainability targets. "We are weaving sustainability...into everything we do as a company," Marcia says. Photo credit: Getty Images

As more companies look to adopt ESG-friendly strategies, they sometimes run up against the challenge of finding the financial justification for doing so. Furthermore, opponents of ESG initiatives often question whether such efforts cost companies more money than it brings them. This is the heart of the debate over ESG – are companies sacrificing financial returns as they move to become more socially and environmentally responsible? A number of studies have found that companies with strong ESG practices tend to perform better. But it can be difficult to measure the financial impact of less tangible factors. For example, what's the payoff of cutting your company's emissions? What is the financial impact of expanding your paid sick leave? In this episode, we'll explore a methodology developed by the Center for Sustainable Business at the New York University's Stern School of Business that helps companies put a price on things like employee retention, avoided costs, and improved insurance rates. The methodology is called the Return on Sustainable Investment, or ROSI. From the center's director Tensie Whelan, we'll hear how the methodology has helped companies understand the financial benefits of their ESG programs. And we'll talk with Kate Chisholm, the Chief Sustainability Officer at Capital Power, a publicly-traded independent power producer in Canada, that used the ROSI tool to assess its decarbonization strategy and decided to retire its coal-fired power plant fleet in 2023 as a result. ROSI "helps you put numbers where intuition was the best thing you could do before," Kate said. Photo credit: Getty Images

The European Union's new Sustainable Finance Disclosure Regulation, or SFDR, is expected to drastically change the scope of sustainable investing by providing greater transparency and increasing disclosure. And this is a particularly big deal for the private equity world, which has historically relied on self-regulation. Broadly speaking, private equity refers to investments in or ownership of private companies, and in this episode, we ask how SFDR is impacting the private equity industry. We hear from Sophie Flak, managing partner in charge of ESG at French investment firm Eurazeo. Sophie was a member of an EU expert group that put in place some recommendations on SFDR. She says that the industry has a long way to go on ESG, and this new regulation will help drive progress and transparency. "But the road is a bumpy one," she adds. We also talk to Andy Pitts-Tucker, who works closely with private equity firms in his role as managing director of APEX ESG Ratings. He expects that SFDR will require "a significant leap" for a majority of the industry. "ESG is quite new to a lot of people in the private market world," Andy says. SFDR comes from the EU, but has a reach that extends far beyond Europe. Andy says international regulators are watching closely and learning. "It's a game-changer," he tells us. "What we're certainly going to see is regulators around the globe adopting their own policies." Photo credit: Getty Images

We've seen an explosion of companies setting net zero targets in 2021. That prompted us to ask: What comes next? After you set a decarbonization goal, how do you go about meeting it and measuring progress? To answer these questions, we talked to some of the world's largest companies — Walmart, AT&T, Duke Energy and State Street Global Advisors — in a recent S&P Global webinar. This episode of the podcast highlights some of the key takeaways we heard from those executives. Walmart Chief Sustainability Officer Kathleen McLaughlin tells us how the retail giant is working with thousands of suppliers to achieve zero emissions by 2040. AT&T Chief Sustainability Officer Charlene Lake talks about how the telecommunications giant is working up and down its supply chain to pursue its science-based target of reducing emissions. Duke Energy Chief Sustainability Officer Katherine Neebe explains how the utility, which has most of its emissions occur in the production of electric generation, is seeking the most reliable and affordable path to net zero. And we hear from Carlo Funk, the lead ESG Investment Strategist at State Street Global Advisors covering Europe, the Middle East and Africa regions. Carlo unpacks how the asset manager is engaging with companies to lower its portfolio emissions. Photo credit: Getty Images

Hundreds of companies around the world have made ambitious promises to purchase only wind, solar and other types of clean electricity to power their operations. But many of these corporations aren't buying actual physical electricity from renewable sources. Instead, they are snapping up incredibly cheap instruments known as unbundled renewable energy certificates, or RECs, which allows them to make "100% renewable power" claims while continuing to emit greenhouse gases as before. The practice is also problematic because it does little to encourage the establishment of new wind or solar farms —not a good outcome in the broader fight against climate change. In this episode, we talk to Max Scher, head of clean energy and carbon programs at software giant Salesforce, which used to buy RECs but no longer does so. "My general fear here is that if we are hyper-focused on… purchasing RECs, we're going to miss the hard work, the important work, on reducing energy consumption, thinking about siting of facilities on cleaner grids" and other real-world steps to lower the carbon footprint of corporations," Max tells us. We also hear from an analyst at Lazard Asset Management, and from Matthew Brander, a carbon accounting expert at the University of Edinburgh who cautions that buying RECS instead of actual renewable power can be "a very low-cost easy way of making it appear to have reduced emissions." Photo credit: Getty images