Pico Analytics Fortnightly Newsletter: ESG's and Sustainable Finance Edition
2022 was a busy year for the climate movement with peaks and troughs throughout. We saw economic volatility and war in Europe change our reliance on fossil fuels. We saw successful and unsuccessful summits, talks and conferences, bringing us 'loss and damage finance', fossil fuel lobbyists and commitments to protect biodiversity. We saw seriously questionable behaviour by governments and big business as greenwashing spreads and green commitments fall by the wayside. Importantly, we also experienced moments of sheer joy through positive developments in areas ranging from technology to rewilding, to seeing a gradual shift in public awareness of the climate crisis. As the festive season drew to a close and we stepped into a new year once again full of hope for what could be achieved it is important that we take a moment to look back and remind ourselves of those moments which have shaped sustainable finance moving into 2023. Some may say that money makes the world go round and in the sphere of mitigating the impacts of climate change, innovation to slow climate change, and investment to ensure companies future sustainability, this is most certainly true. In a time when our daily choices will impact upon the future of our planet the actions of the wealthiest people and institutions on earth could prove to be a deciding factor for humanities survival. There is no denying that money matters and where we choose to place it is yet more important whether that be choosing to purchase products from a company who are working to be as sustainable as possible, or investing in start-ups that are transforming waste into cash, we can all make a difference. At a higher level we must continue to place banks and international institutions to back sustainable investments and to ensure their willingness to work with the private sector through blended finance in order to protect and safeguard the lives and livelihoods of people and communities in the developing world.
In January 2022 Bloomberg stated that "global ESG assets may surpass $41 trillion by 2022 and $50 trillion by 2025, one-third of the projected total assets under management globally". The growth of interest in ESG's has naturally been followed by backlash, particularly in the United States where lobbyists are fiercely protecting their interests and access to power and policymaking. Meanwhile, 2022 has presented those working on ESGs with a learning curve as political elections marked significant changes in climate policies, war turned energy, food and other markets on their heads, clean tech such as electric vehicles hit a tipping point, businesses prioritised women and the LGBTQ+ community, and the head of sustainable investing for HSBC said 'climate change is not a risk that we need to worry about' before being swiftly suspended in one of the strangest moments of the year. Companies are feeling the pressure like never before to keep in line with new regulations, meet the eco-friendly demands of consumers and stakeholders, whilst still turning a profit during a cost of living crisis. Sustainable finance has never been more complex and more critical. This edition seeks to provide a comprehensive overview of the state of sustainable finance and ESG's at the culmination of a challenging and ambitious year whilst providing an insight into the actions of those committed groups and individuals who are determined to ensure a sustainable future for all. From financial regulators toughening their stance on 'greenwashing' to how ESG funds will prosper in 2023 this edition, as always, aims to educate, inform, and promote a more sustainable lifestyle whilst turning your attention to those projects and laws which aim to enforce sustainability at the highest level.
We here at Pico Analytics know that it can be disheartening and at times frustrating to read through the various articles and reports concerning climate change, sustainable development and ESG's but it is important to understand exactly what is happening in our world and how our needs and requirements are being met. In our Sustainability Spotlight we move on from the Veganuary initiative and focus on just a few of those companies who are vegan whilst also investing in a more sustainable future by creating products that are both delicious and eco-friendly. Our usual Business Insider video branches out somewhat as we focus on a whole range of businesses and entrepreneurs from across the globe who are turning trash into cash. Our newsletter, as usual, will provide a short summary of some of the most notable, informative, and quirky climate stories of the past two weeks in the hope that it provides inspiration and insight into climate news from around the world. Finally, we want to hear from you, our readers, about any topics that interest you, which we can either produce research papers on or include as stories in future newsletters.
OUR
TOP STORIES
Investors At COP15 - A First for the Biodiversity Summit
by Aime Williams 17th December 2022
The UN Convention on Biological Diversity or Cop15 was not traditionally an important date in the diary for fund managers and business leaders. Yet, in 2022 a new cohort of investors arrived at the summit made up of fund managers, business leaders and investors. Increased awareness of the rising capital value of the natural world and the increased risk companies are facing due to depleting natural resources has attracted a broader audience to what was once a summit for scientists, activists and policymakers. Very few investors and companies have been talking about biodiversity which made their presence all the more surprising with many attending the event for the very first time. "The World Economic Forum estimated in a 2020 report that more than half of global GDP, or about $44tn, was “moderately or highly dependent on nature”. Construction, agriculture and food and drinks are the sectors most dependent on nature, the WEF report highlighted". Yet, biodiversity is at serious risk with the UN Intergovernmental Platform on Biodiversity and Ecosystem Services finding that 1mn animal and plant species were in danger of extinction. It also estimated that about three-quarters of food crops that depend on animal pollination were at risk. This presents not only an environmental or climate crisis but also places the financial stability of entire nations at risk.
The negotiations taking place at the convention were fraught to say the least with finance for the conservation of nature often becoming the area of greatest friction. For businesses the area of discussion most pertinent was whether they were going to have to assess and report their dependence on biodiversity as many attendees believed that disclosures were critical for investors who were looking to invest in sustainable production and reduce exposure to deforestation. Goldman Sachs has made clear that we must begin to invest in nature the right way by focusing on companies that contribute to conservation efforts or investing in companies that work to reduce or manage biodiversity risk. Changes in business and investing will need to go further in the years to come as we must transform our systems to consume fewer raw materials and extract less natural resources. If we fail to tackle rapid degradation of our ecosystems that we depend on for basic necessities of life such as food and water as well as air filtration both businesses and the economy will be affected causing a domino effect of devastation across the globe. Though it is positive to see that investors are becoming aware of the shifting sands under their feet, we must also hope that they will not attempt to negatively interfere with efforts to protect biodiversity by relying on greenwashing or investing in companies that are failing to do all they can to protect the natural world. In essence we must hope that their attendance does not begin to mirror that of the fossil fuel lobbyists at Cop27.
Top Scores for Environmental Disclosures Remain Elusive Amongst Global Companies
by Chris Flood 13th December 2022
In recent years regulators and investors have been making increasing demands for businesses to disclose and be transparent about how their actions are impacting the environment. Unfortunately, companies are struggling to meet these demands with "just 12 companies out of more than 18,700 worldwide merited a “triple A” score for their environmental disclosures in 2022". This is a shockingly minute number considering that 29,500 companies, with a combined market value of more than $24.5tn, received an 'F' after having failed to provide any information to the Carbon Disclosure Project (CDP). Unsurprisingly, the usual offenders such as oil and gas producers (Exxonmobil, Saudi Aramco and Chevron) as well as Tesla, Berkshire Hathaway etc. were among those who have consistently failed to respond or are remaining complacent as they fail to manage environmental risks holistically.
The slow to non-existent progress in reporting climate change risks is making it difficult for investors to make fully informed decisions as they lack crucial environmental data. This has led to the continued misallocation of capital with investors being forced to guess at which company is most sustainable. Those companies who achieved the triple A rating are as follows;
Company Sector Country
Beiersdorf Consumer goods Germany
Danone Consumer goods France
Firmenich Fragrance and flavor Switzerland
HP Technology US
Kao Chemicals and cosmetics Japan
Klabin Pulp and paper Brazil
Lenzing Fibers producer Austria
L’Oréal Cosmetics France
LVMH Luxury goods France
Metsä Board Paperboard Finland
Philip Morris Tobacco USA
UPM-Kymmene Pulp and paper Finland
Fuji Oil, IFF, Mondi, Symrise and Unilever dropped off the list in 2022 after failing to make the grade in the wake of the CDP's more stringent scoring on alignment of corporate plans with the 1.5° Paris accord goal for global warming, as well as verification of deforestation and water data. 59% of the 18,700 companies who did report to the CDP were given a "C" or "D" rating which marks them out as only just beginning to recognize their environmental impact while two thirds of the companies who scored between "A" to "D" made no improvements to their environmental transparency or action compared to 2021. Though it is good to see a few companies waking up to how their behavior is affecting climate change there appears to be a degree of 'reporting fatigue' as companies are "facing multiple disclosure requirements to comply with frameworks such as the Task Force on Climate-Related Financial Disclosures as well as new national environmental reporting requirements". Reporting does not however need to be a dull necessity but could present opportunities to attract new investors whilst also working to improve sustainability in every sector.
How Will ESG Funds Prosper in 2023?
By the Alice Ross 9th December 2022
2022 was a tumultuous year for investors and sustainable funds alike as the war in Ukraine turned access to energy on its head and left many scrabbling around trying to access oil and gas stocks. Now, whether you are investing sustainably or not, easy money isn't there any more as higher interest rates and recessions start to rear their ugly head. Growth stocks such as tech companies and some renewables have previously been a key focus for sustainable funds 'but growth has had a bad year and instead value stocks — those undervalued by the market — have done better'. Yet, asset managers still see an opportunity to make money through sustainable funds in 2023.
Clean energy is one of the most obvious choices even though it hit something of a slump in 2022. Despite the war in Ukraine and the continual promises from governments to move away from Russian oil and gas in favor of investing in renewables there have been a number of bumps in the road. Various wind companies ran into supply chain issues whilst higher interest rates and upfront costs that require borrowing caused the sector to suffer. "Lucas White, portfolio manager of the GMO Climate Fund, reckons the prospects for clean energy companies are much better now than at the start of the year. A lot of this is due to US President Joe Biden’s Inflation Reduction Act, which hands out significant tax credits to clean energy companies". Though the trend is likely to avoid hydrogen companies that are not yet profitable in favor of more mature companies priced at reasonable levels. Companies with a unique advantage such as those benefiting from Biden's Inflation Reduction Act or who have differential offerings such as a product which works well in more extreme conditions are also more desirable. There are also companies who Lucas White believes are a neglected niche such as biofuel companies, sustainable or precision farming and agricultural equipment as well as water companies who handle treatment and the reduction of water waste.
It's not just traditional sustainable sectors that are catching the eye of asset managers. Banks, who play a crucial but overlooked role in the energy transition as they often lend to higher polluting sectors such as oil and gas. "Mike Fox at Royal London reckons that financials have cleaned up their act in recent years: they offer simpler products to consumers, and they’re getting better at disclosing their loan books — which is key to being able to understand the carbon footprint of a company". However, banks vary wildly with some offering lower mortgage rates to those who make their homes more efficient whilst others with complex business models are more difficult to analyze from an ESG perspective. Even with recessions on the horizon for economies across the globe experts believe it will be consumer led and that banks and companies will remain resilient. Though banks offer more obvious financial gains, the circular economy of reuse and recycling is also offering new opportunities for sustainable fund managers. Companies across the sector are working to make product manufacturing more efficient, use sustainable materials and promote the sharing economy. This has extended into healthcare with companies transitioning to reusable containers and packaging for the transport of biogenic material and drug manufacturers attempting to use less water.
Diversification is key for fund managers in 2023 as opposed to buying growth stocks. For many this will mean fund managers may have to learn or relearn skills from the 1990's: price matters, and so do economic cycles. 2023 will show us who is actually good at sustainable investing. "With both institutional and retail investors becoming more savvy about greenwashing and growth no longer a given, sustainable fund managers will have to work hard to prove their worth".
Financial Regulators Toughen Stance on 'Greenwashing'
by Patrick Temple-West 8th November 2022
According to the Bank of America, despite Russia's invasion of Ukraine and the growing threat of global recession, investment in environmental, social and governance (ESG) funds has continued to flow whilst conventional funds have experienced outflows in some months of 2022. As interest in ESG funds and sustainable investment remains stable, regulators are pushing the sector to achieve its environmental ambitions. "In October, the UK’s Financial Conduct Authority proposed rule changes to tackle greenwashing and rein in the use of terms such as “green” and “ESG” in investment fund marketing". Its recommendations included the creation of three categories of 'green' funds and putting asset managers under pressure to validate any sustainability claims their funds make in marketing materials. The FCA is facing a challenge in combining the anti-greenwashing rules into an effective tool which can be rolled out globally to promote environmentally friendly investment products whilst also remaining up to date with developing international standards.
The EU has led the way in the sector with the Sustainable Finance Disclosure Regulation (SFDR) which has now placed investment funds into three categories; conventional; green; and pure green. "Funds in the conventional category do not consider any ESG criteria. Green funds can take a middle-of-the-road approach by considering ESG concerns in their investment strategies. But pure green funds must incorporate sustainable investing into their overall strategies". According to Morningstar half of Europe funds are in the green or greenest fund categories. In 2023 European asset managers will have to disclose certain greenhouse gas emissions and carbon footprints that are linked to their investments. This should in theory prevent funds from marketing themselves as green without changing underlying investment strategies thereby hindering the greenwashing that has become all too common in recent years. Across the pond, Democrats are fighting to push through ESG rules and climate disclosures under the administration of President Joe Biden. The Securities and Exchange Commission have three proposals in the works which would include requirements for the company's scope 3 emissions - which come from the company's suppliers and customers - to be revealed and possibly to be audited. Naturally, this has been met with plenty of opposition with companies arguing they would drive up costs and expose them to litigation risks. However, it would be prudent for companies to have a game plan for when climate disclosure rules do finally land. Though there are fears that having separate sets of rules and regulations for the US and the EU could cause confusion, common rules across major jurisdictions could help, however, there is little hope at the moment that regulators are going to align their frameworks with scope 3 emissions being a source of consistent controversy.
Redirect Green Finance to Developing Nations
by Gillian Tett 27th October 2022
Between 2019 and 2021, there were only $14bn of so-called climate “blended finance” deals — structures that use public money to de-risk green investments — for poor countries.
This shocking data arose just prior to Cop27 showing once again that efforts to tackle climate change around the world using blended finance had shriveled over the previous three years. For non-financiers the term "blended-finance" is worthy-but-dull and is the financial policy equivalent of Bran Flakes that seldom appears in the placards or speeches of climate activists and protesters. But, as became very clear during the proceedings of Cop27 developing countries feel increasingly angry about the lack of financial support provided by wealthier nations to help tackle climate change. Beyond the agreement which was finally agreed to provide 'loss and damage' finance it has become clear that reforms in blended finance could provide the necessary aid. Global climate finance comes in peaks and troughs with parts of the environmental ecosystem drowning in private funding, sending green asset valuations sky high. ESG funds have swelled, despite the backlash, with an expected increase in interest as younger generations in the west who care more for green issues begin to inherit trillions from an older, less climate aware generation. Meanwhile, the developing world faces a drought of finance with an urgent need for funding to make the switch away from fossil fuels to greener alternatives. Yet, Western private sector capital shies away due to political/currency risks, a shortage of credit data and projects often being too small and opaque to meet the criteria of the investment funds. This led to the demands made on multilateral development banks (MDB's) such as the World Bank, to extend dramatically more green loans. "Mia Mottley, the Barbadian premier, wants more than $100bn in such reserves to be repurposed for this cause with a further $650bn in new issuance for clean-energy developments".
Unfortunately, even if MDB funding or aid doubles it will not be enough with the OECD reckons that $2tn a year is needed for sustainable development. Total western aid in 2021 was $179bn. This is why blended financial matters as a small investment from an MDB could entice a much larger amount of private sector capital, combined the two can work together with MDB sharing credit data on emerging markets and rolling out smaller scale projects into larger pools of investible structures. Projects such as this could redirect money in green finance to the parched corners of the system. Such experiments have begun in earnest but are yet to catch on, in part to MDB's conservative nature but also due to the difficulties surrounding combined efforts by public, private and nonprofits groups within the existing structures. Western countries have no choice but to put pressure on MDB's if they want to quell the growing anger of developing countries as the climate crisis continues to grow and become more extreme.
China's ESG Focused Sustainable Funds Record Sharpest Slowdown in the Region
by Peter Ortiz 3rd August 2022
Net outflows of $1.4bn in the second quarter of 2022 mark a sharp slowdown in funds focused on ESG's compared to sustainable funds elsewhere in the region. ESG funds in the Asia Pacific attracted just $929mn during April to June, down from $1.27bn in the first quarter. Taiwan and Hong Kong saw the most net inflows whilst South Korea, India and Indonesia had the biggest net outflows apart from China. China's $1.4bn net outflows were a dramatic turnaround from the $208mn in net inflows of the first quarter. Environmental sector funds led in the net outflows which was attributed to market volatility and investors cashing in on profits. Yet, the drop in inflows mirrored the situation for sustainable funds around the world. "Globally, sustainable funds took in just $32.6bn in net new flows for the second quarter compared with $87bn in the first quarter, representing a 62 per cent drop". South Korea and Taiwan still make up 10.8% of ESG funds in the region whilst China and Japan account for 6.3% of such funds. The usual suspects were to blame for the downturn such as concerns over a possible global recession, inflationary pressures, rising interest rates and the conflict in Ukraine. Though net inflows did plummet in the second quarter they still fared better than the broader market. Sustainability-themed ETFs in Asia doubled their total collective assets to $10.5bn during 2021, however, this initial success was followed by numerous similar ETF's in China which has led to failed launches. ETF's have been popular in China for investors to put forth ESG's to reach investors, the popularity of which have been heavily influenced by the government's commitment to economic transformation with green characteristics. "Given this backdrop, we wouldn’t be surprised to see more ESG/thematic ETF launches that ride on any latest economic development or regulations".
Can Global Water Investors be Held to Account?
by Lorcan Lovett, Dominic Rushe & Sum Lok-kei 30th November 2022
In Malaysia the YTL Corporation is synonymous with high-speed trains, phone networks, luxury resorts, land development and manufacturing cement. Few would make the connection between YTL and water supplies in the South-West of England. In 2002, the bust US energy trader Enron sold 100% of Wessex Water to YTL Power International, a YTL Corp subsidiary, for about £545m plus £695m of Wessex debt. The Malaysian company saw this investment as a chance to expand into Europe whilst its chairman, Francis Yeoh, saw yet more possibility. Yeoh has remarked on the "real premium transparent, coherent regulatory framework, where the rule of law is the order of the day". His preference for operating in nations such as the UK, Singapore and Australia is evident as he is not subject to the cultural and political formalities of nations such as Malaysia. Unfortunately, Mr. Yeoh has remained elusive and evasive when confronted with questions surrounding the pollution of English waters often passing the buck to the UK based staff.
BlackRock, the world’s largest asset manager and a company that oversees a portfolio of investments worth more than $10tn, has begun to show concern over the environment due to its chair and chief executive Larry Fink. Fink is an important proponent of 'stakeholder capitalism', an idea that successful businesses take responsibility for employees, customers, partners, society and the environment, and not only this quarter’s profits. This approach is not about politics or even about an ideological agenda but about mutually beneficial relationships that allow a business to prosper. Most of BlackRock’s equity holdings are held through funds that track stock market indexes by buying shares in the companies which has led to them becoming major shareholders in the English and Welsh water utilities market. Though BlackRock does engage with the companies it invests in such as Severn Trent, United Utilities and Pennon to improve long-term value by taking into consideration ESG risks and opportunities which could offer such value. However, there have been reports and allegations out to BlackRock of environmental damage by its investments and their response feels very copy and paste; "As a minority investor on behalf of our clients, we engage with publicly listed UK water companies on governance and material sustainability risks. It is not, however, the role of minority investors to direct these companies – this role is the responsibility of their management teams with appropriate board oversight, and as determined by their regulator.”
Li Ka-shing, the richest person in Hong Kong, and CK Hutchison Holdings’ former chair is known for his rags to riches story. Today, he is the most influential businessman in Hong Kong and his self-made reputation is woven into the economic growth of the region. CK Hutchison Holdings is active in about 50 countries, employing more than 300,000 people worldwide, the corporation operates in 52 ports in 26 countries. Among its various interests is Northumbrian water in England which in 2021 was fined £500,000 for sewage pollution. In the summer of 2022 CK infrastructure sold off a 25% stake in the company to the New York listed private listed equity firm KKR for £867m. Both Li Ka-shing and CK Hutchison were approached to answer if they felt they had a responsibility for the water system and the English public and neither chose to reply.
Net Zero Pledges Rendered Obsolete as Big Banks Fund New Oil and Gas
by Tom Espiner 14th February 2022
In an act that surprised few and disappointed many HSBC, Barclays and Deutsche Bank are continuing to back new oil and gas despite having signed up to become a part of a green banking group. This has inevitably drawn criticism as banks should be implementing policies to demand green plans from fossil fuel firms before providing funding especially after publicly espousing their commitment to achieving environmental goals.
Experts have made clear that we must limit average global warming to below 1.5° and to achieve this we must get to net zero by 2050. As part of this the International Energy Agency has said there should be no new oil and natural gas fields. Big banks continue to spend billions of dollars on oil and gas expansions even when they are part of Net Zero Banking. "HSBC put an estimated $8.7bn (£6.4bn) into new oil and gas in 2021, while Barclays put in $4.5bn, and Deutsche Bank loaned $5.7bn… The fossil fuel giants receiving the funding included Exxon Mobil, Shell, BP, and Saudi Aramco". Though this is a drop from 2020, however, this wasn't some moment of environmental enlightenment but simply a shift in focus for banks to provide pandemic-related loans. Unfortunately, the Covid-19 slowdown was not long lived as since joining the Net Zero Banking Alliance last year "24 big banks have provided $33bn for new oil and gas projects, with more than half of that amount ($19bn) coming from four of the founding members - HSBC, Barclays, BNP Paribas and Deutsche Bank". This has raised doubts about the bank's commitments to the green transition and whether their green claims are living up to their actions. What they fail to recognize is that either way, value will be destroyed for energy companies, banks and their investors. "If oil and gas demand decreases in line with 1.5C scenarios, prices will fall and assets will become stranded. On the other hand, if demand does not fall enough to limit global warming to 1.5C, the economy will suffer from severe physical climate impacts".
Though HSBC, Barclays and Deutsche Bank have all spouted the usual climate conscious rhetoric and implement some loosely designed policies there is an international consensus that significant investment in oil and gas is still needed in Paris-aligned scenarios with some estimates as high as $11tn through to 2050. Though banks are expanding their spending in EV charging, convenience, renewables, hydrogen and bioenergy, this is still not even close to rivaling the spending on oil and gas which is evidence that banks are not prioritizing the green transition over profit.
How Can We Define 'Ethical Investing'?
by Nicole Haddow 20th February 2022
Companies across the globe are facing new challenges as customers and shareholders put them under pressure to ensure their investments are ethical and sustainable. Now, questions are arising over how we define what's ethical?
Ethical investment is very much on the rise as people become more aware of how their investments impact on the environment and also the potential financial benefits they can provide. Sustainable, environmentally friendly and socially conscious businesses are often making some of the greatest contributions to securing our future and yet to date there is no set definition of what constitutes 'ethical'. With no set regulations for what is 'considered' ethical both companies and investors are left trying to navigate the market to figure out what the basic standard is. Ethical screening still remains relatively subjective and are determined by fund managers and financial advisors who will screen prospective companies based on their unique established ethical expectations. Even when investing independently, it would be up to you as the investor to decide which ethical criteria are non-negotiable and what's acceptable. To help give you an idea of how ethical investments are screened here is a list of how this may be carried out;
Negative screening: "The negative screening process involves putting companies through assessments to find out if they’re invested in things that people broadly deem unethical". Companies are unlikely to pass this ethical hurdle if they produce addictive substances and/or engage in poor labor practices. This is one of the most basic forms of screening that ensures your investment portfolio will not include companies you are staunchly opposed to.
Positive or ‘best-in-class’ screening: "This involves seeking out companies that have good social and ethical values, such as a zero-carbon-emissions policy, a gender-diverse board and exemplary treatment of staff in the production of goods and services". This in essence means searching out companies that can continue to make a profit while doing the right thing and maintaining ethical standards. This form of screening does not necessitate a company doing everything right, however, they will still need to meet the criteria of a given investor. Companies that perform well in a positive screening process often make a tangible difference to environmental or social outcomes and usually come from areas such as healthcare, education and renewable energy.
Minimum standards or ‘norms-based’ screening: "This approach uses the minimum standard of company, government or international standards". Depending on which minimum standard is chosen the ethical criteria can vary widely. For example they could be based on the Ten Principles of the UN Global Compact which covers topics such as "Human rights (non-compliance in human rights abuses), Labour (recognition of the right to collective bargaining and elimination of compulsory labour and child labour; elimination of discrimination), The environment (precautionary approaches to environmental concerns, environmental responsibility and the development of environmentally friendly technologies) and Anti-corruption". Once again though this form of screening is immensely subjective upon the interests of a company which could be more concerned with gender equality, vegan and animal-friendly investments etc. but retain an overall goal of meeting set ethical goals.
Sustainability investing: This is an environmental approach which actively seeks out funds or investment programmes focused on clean water programs, renewable energy, infrastructure, recycling, waste management amongst many other important sustainable development areas.
Environmental, social and governance (ESG) investing: ESG covers environmental, social and governance screening principles and requires a good bit of leg work to see how good a company's governance is. This type of screening will require "reading through company reports, understanding the financial situation and continuing to keep track of the company’s activity once you’ve invested". ESG sits on a wide spectrum with some companies scraping by with the basics of paying the nominated award wages and leaving a recycling bin next to the printer. Whilst others will show a greater commitment to ESG. The important part here is to be comfortable with the massive spectrum and the various places on which each company can fit.
Impact investing: This type of screening is all about looking to see physical results from your investments. This can come in many formats such as improved transport and infrastructure, schools or hospitals but can also involve improved social outcomes locally or internationally. Overall, it is about both seeing a return on your investment whilst hopefully seeing actual results.
Turning Waste Into Cash; Entrepreneurial Innovations of 2022
by Business Insider 16th June, 7th July, 27th July & 2th December 2022
How Skateboards Become $400 Bowls: Two brothers in Calgary, Canada, turned their love of skateboarding into a business upcycling skateboards into bowls and furniture.
Meet The Woman Who Turns Trash Into High-End Furniture That Costs Thousands: Construction waste makes up about a third of all dry waste in New York City. However, about 95% of it is recyclable. This company in Brooklyn is trying to mitigate the damage by manufacturing furniture almost entirely with this waste stream.
How People Profit Off India's Garbage: India has more people and produces more garbage than nearly every other country in the world. Many make a living off that waste, from ragpickers to entrepreneurs. Join us as we look at how they turn trash into shoes, tiles, teddy bears, and more.
Meet 8 Young Founders Turning Trash Into Cash: Young investors and entrepreneurs across the world are coming up with new ways to deal with waste. These businesses are paving the way for a new generation of creative solutions to our trash problem.
Pico Analytics Sustainability Spotlight!
by Kate Martin 25th November 2022
This section of our Newsletter is where we here at Pico Analytics shine a spotlight on one of those businesses, initiatives, positive news stories or people that are paving the way for sustainability and a more eco-friendly future. In this edition we thought we would follow up on the Veganuary initiative and take a look at some of those popular sustainable vegan companies who are investing in sustainability and working hard to be both transparent and accountable;
Pip & Nut: This company's motto is 'nut butter done better' and they are truly living out their ethos. In 2013, Pip, founder and CEO, started making peanut butter at home and selling it at outdoor markets across the UK. Over the years she has developed the company and her plethora of products have hit the shelves of supermarkets such as Sainsbury's and Selfridges keeping customers happy with their sustainable products and future plans. They have linked their plans to the UN Sustainable Development Goals (SDG's) and are working hard to align themselves with global sustainability priorities. To this end they have set up some goals they wish to achieve by 2024 such as ensuring that 100% of nuts (are) sourced from CASP (California Almond Sustainability Programme) or other sustainable sources, to have donated 200,000 jars of nut butter to food banks, to deliver a carbon roadmap that enables them to meet carbon reduction commitments by 2030 and be carbon neutral by 2022, to be 100% plastic free, and industry recognized as being one of the best companies to work for by focusing on wellbeing, learning and development and diversity and inclusion. As part of their long term vision, they will go further by becoming leaders in environmentally sustainable nut sourcing and embed baseline environmental standards across all their suppliers, to support communities living with food poverty across the UK, to be net zero by 2040, to reduce their use of virgin materials as much as possible, using recycled materials instead. If this was not enough none of their nut butters or sweet treats use palm oil and they only use ethical chocolate from family run suppliers who support Colombian farmers and their communities. Best of all they are completely vegan!
Well & Truly: This relatively new company has started appearing on the shelves of Tesco's, Sainsbury's, Waitrose, Ocado, John Lewis, Amazon and even British Airways offering a range of crunchy crisps and delicious chocolate bars. What makes this company special is their ethos of protecting the planet. It was not enough that their products be vegan and gluten free, they also decided to go a step further and commit to sourcing cocoa responsibly. Starting from the seed their cocoa is grown on land that is nurtured by growing a wide variety of plants between the cocoa trees such as coffee, bananas and plantains which keeps the soil fertile and stops it from becoming too tired from the traditional monoculture agriculture. Once the cocoa is ready to be harvested in Colombia it goes through the entire transformation process into chocolate bars in the same nation as opposed to being exported as a raw material. This provides more jobs, which are also paid fairly. Finally, the company chose to use oat milk instead of dairy milk to reduce their carbon footprint in comparison to traditional milk chocolates.
Jealous Sweets: In 2010 Taz and Imran left the corporate world and chose to start up a new kind of sweet company. After seeing a market packed with rubbery gelatine-packed sweets, synthetic flavours, artificial colours, and ghastly packaging the two began innovating and Jealous Sweets was born. With a commitment to building a sustainable business which will help instead of hurt the environment they created sweets that are 100% plant-based, gluten-free, and free from palm oil, artificial colours, and synthetic flavours. Bringing back all the childhood favourites such as jelly beans, gummy bears and fizzy worms but without the level of guilt that consuming sweets once had. All their packaging is recyclable, whilst their products are mindfully portioned using earth-safe ingredients. Today their products are available in Asda, Holland & Barrett, Amazon and Ocado.
Rude Health: Another relatively new company, Rude Health started up in 2015 making alternatives to milk. Today they produce everything from almond to oat to soya to coconut based drinks and have worked hard to put sustainably first. Their packaging is made from 88% recycled materials, their product is 100% free from palm oil and they donate 5% of their profits to charity. Though it can be easy to criticize dairy alternative manufacturers such as Rude Health the company has worked hard to ensure their almond milks are sustainable by working closely with farmers to ensure organic practices and have conciously chosen to produce a more expensive product as opposed to producing a cheap product with a harsher trade off on the environment.
