ESG and sustainability reflections on 2023 so far
Talk of the town
As the buzz of COP27 and COP15 began to simmer, WEF’s Davos kicked off with green subsidies, energy prices, inflation, and hopes for a better year taking centre stage. Some questioned Davos’ future as the forum to solve these issues. There was more talk of stakeholder capitalism and how it would fare in a difficult economic environment. Major insurers laid out an industry net zero protocol, and a new Coalition of Trade Ministers from 50+ countries was announced to boost international cooperation on climate, trade and sustainable development. Polarisation was the key theme of Edelman’s annual trust barometer, launched at Davos, with business coming out on top for trust amid deepening divisions across the world. Speaking at a Bloomberg event, Blackrock CEO Larry Fink said the ESG narrative is getting “ugly” but reassured that he wants to address its misconceptions and polarisation. Elon Musk tweeted during Davos that the S in ESG is for Satanic. Meanwhile, Bloomberg wrote ‘A snowless Davos tells the world’s elite all they need to know’.
UK
Mission Zero, Chris Skidmore’s Net Zero Review, focused on enabling investment and was taken by many as an indictment of Government inaction and a critique of dissenting Conservative voices who think net zero is bad for business. Mapping the Net Zero Economy, the CBI’s latest report, found that the transition to a greener economy will be worth £71bn. The Financial Services and Markets Bill, continues to progress through Parliament, with green campaigners looking to make climate and nature statutory objectives for the FCA and PRA, giving them the same weight as growth and competition. Environment Act targets have finally been set, including halting species decline by 2030, accompanied by the Environment Improvement Plan 2023. Scrutiny of businesses’ impact on nature is set to rise.
Europe
The EU’s Corporate Sustainability Reporting Directive (CSRD) came into force for large and listed companies who will have to report from 2024. EU President Von der Leyen announced the Net-Zero Industry Act to promote green tech and its supply chains in response to the US’ Inflation Reduction Act (IRA).
Beyond
In the US, the IRA is impacting investment decisions as it set out $369bn of tax breaks for green industry. Reactions have ranged from celebration, protectionism panic, concerns for the developing world, and a necessary debate on what actually needs subsidising. Across Asia, ESG funds doubled their global market share.
Ones to watch
A double date in March for the UK with the legal deadline for a revised Net Zero Strategy (following Friends of the Earth’s High Court win) and the Green Finance Strategy expected – keep an eye on the UK Spring Budget. An update on the US SEC’s climate disclosure rule is expected in April. We await an update on the timeline for the UK Green Taxonomy, further information on the Taskforce on Nature-related Financial Disclosures (TNFD) and the International Sustainability Standards Board’s (ISSB) recommendations. Amidst backlash, we await Larry Fink’s annual letter to CEOs which is expected this quarter.
Seahorse news
On behalf of the APPG on Sustainable Finance, Seahorse Environmental launched and published an Introductory Guide to Green Finance, co-written by the Green Finance Institute. The APPG was also featured in ESG Investor on the future of UK carbon border taxes (CBAMs) with Jerome Mayhew MP.
And finally, Seahorse supported the launch of the Labour Climate and Environment Forum.
Other headlines
When push comes to shove, is stakeholder capitalism a dud? – Responsible Investor
Why it isn’t mad to oppose the World Economic Forum – Spectator
Why net zero tsar’s review is a damning indictment of Tory government – Guardian
The EU should welcome a green subsidy race – Financial Times
UK exaggerating Brexit dividend from City reforms, says watchdog – Financial Times
Reach out to our Head of ESG and Corporate Sustainability, Chloe George, if you’d like to find out more or discuss any of the above.