RI ESG Briefing, July 28: SDGs, Macquarie, Climate Disclosure Standards Board

Environmental

The UK’s Environmental Audit Committee has launched
an inquiry into domestic implementation of the UN Sustainable Development Goals (SDGs). It follows a report by the International Development Committee that expressed concern about “insufficient” progress towards domestic implementation so far, and a “worrying lack of engagement” by government departments.

The chief executive of Macquarie Group has said he is “very aware” of stranded-asset risks in the firm’s portfolio, according to reports. Nicholas Moore spoke ahead of Macquarie’s AGM, focusing on the implications of Brexit, but also facing repeated questions about the company’s exposure to stranded assets. “We are very aware of the potential for that,” Moore said, reportedly, adding that Macquarie considers the “worst-case” scenario in relation to its vulnerability to stranding, and “will size our exposure having regard to that possibility”.

The World Business Council for Sustainable Development (WBCSD), the Climate Disclosure Standards Board (CDBSB) and Ecodesk have created a discussion platform to share knowledge with corporates around non-financial reporting, in a bid to improve disclosure standards. The platform, dubbed The Reporting Exchange, will help companies prepare sustainability information for voluntary and mandatory reporting purposes, and provide guidance on the various reporting regulations, codes and practices observed by the world’s stock exchanges. It will also be open to regulators, investors and NGOs to provide feedback, and for organisations developing new reporting initiatives. Interested users are invited to register for the final test period ahead of the platform’s launch, which is pencilled in for December 2016.

China’s coal consumption has peaked ahead of forecasts, according to a paper co-authored by Nicholas Stern. Published in the Natural Geoscience Journal, ‘China’s post-coal growth’ was written by Stern, alongside Ye Qi, Tong Wu, Jiaqi Lu and Fergus Green. It states that “slowing GDP growth, a structural shift away from heavy industry, and more proactive policies on air pollution and clean energy” have caused the country’s economic growth to decouple from a growth in coal consumption. It has now, the report claims, reached the point at which consumption will decrease. Other estimates have predicted China to peak between 2020 and 2040.h6. Social

The Global Unions Committee on Workers’ Capital (CWC), a network for unions worldwide, has written to the PRI calling on it to elevate the ‘(s)ocial’ in ESG. In a response to a consultation on the PRI’s strategy for the next decade, the CWC says this could be achieved by ensuring investors have the information they need to evaluate how companies provide decent work opportunities, space for social dialogue and adhere to internationally recognised labour standards. It also says investors should be supported to engage collectively on social issues and better understand how their investments may affect the lives of investment beneficiaries and society more generally

NGO War on Want has released a report saying UK companies are guilty of a “new colonial invasion” in the pursuit of minerals. The report, The New Colonialism: Britain’s scramble for Africa’s energy and mineral resources, says British firms controls resources worth more than $1trn often at the expense of the environment and human rights. Scotland-based Cairn Energy is highlighted in the report for plans to explore for gas and oil in the disputed territory of Western Sahara, that some consider under occupation by Morocco. Norges Bank divested Cairn Energy earlier this year over its operations in the area.

Governance

Australian consumers view big business, banks and politicians as unethical, according to the findings of Governance Institute of Australia’s inaugural Ethics Index. In a survey with 1000 Australians, it also found they rate chief executives and directors as the most important factor influencing ethics in organisations; over government laws, regulations and financial penalties.

Less than half of hedge fund managers “care” about ESG issues, according to a study by asset manager Unigestion. The study, which surveyed all the firm’s hedge fund and private equity managers, identified 53% of the respondents in the hedge fund category as having “no interest” in ESG issues, with 17% “caring” but not applying any processes to reflect that. The remaining 30% were active in implementing ESG. Other findings included a decrease in the number of Asian managers identified as “reluctant” to consider ESG factors in investments – from 33% in 2014 to 13% in the latest study, which covers 2015. The number of respondents to the survey was undisclosed, but Unigesion claims it constitutes 91% of its hedge funds and private equity managers.