ESG Essentials: ASCOR, fossil fuel subsidies and ESG at BlackRock

ESG CommsESG EssentialsLeave a Comment

A new update to ASCOR may change how investors assess governments for the better

A new update to the Assessing Sovereign Climate-related Opportunities and Risks (ASCOR) project’s assessment framework is being planned for Q4, a move ESG Investor argues could bring “a new era of investor engagements with governments” 

The ASCOR project, an investor-led initiative, hopes to provide a tool for investors with independent data on 25 countries’ climate performance, as well as material climate risks and opportunities. 

According to Carmen Nuzzo, Executive Director of the Transition Pathway Initiative, the new update will also allow investors to track national progress against climate change commitments made at the Paris Agreement, otherwise known as National Determined Contributions (NDCs). 

This new data could be crucial in driving capital towards areas of particular need and away from bad climate actors – both of which will be vital for the transition more broadly.

$7tn in subsidies funnelled to global fossil fuel industry according to IMF

A new report from the IMF has revealed that almost $7 trillion in subsidies was sent to global fossil fuels industry in 2022. These amounts to $13 million a minute according to a Guardian analysis and come as many oil companies announce record profits of billions.

Many of these subsidies came from government efforts to prevent the rising costs of oil and gas being passed onto consumers, an effort that in many instances has only had modest success

Speaking to the Guardian, Ian Parry of the IMF said that cutting these subsidies should be the “centrepiece of efforts over the next few years to get on track with limiting global warming to below 2C”. Without significant effort to move capital towards renewable energy, managing emissions in the energy sector could be exceedingly difficult.

BlackRock has supported notably fewer ESG proposals this year according to new analysis

In a new report released by BlackRock, the fund revealed that it had supported a mere 7% of investor resolutions related to climate, the environment and social considerations in the 2022-23 proxy season, a far cry from the 21% they supported in 2021-22. 

BlackRock has been under intense political scrutiny over its ESG stances, especially in the US, where Republicans have repeatedly tried to restrict public money on the state and federal level from going to funds associated with ESG. 

While some investors have taken a bullish stance, many senior figures have distanced themselves from ESG, including Larry Fink, CEO of BlackRock, who has argued that the term has become “weaponised”

Reporting from Axios argued however that rather than completely eschewing ESG, funds and companies are choosing to more carefully pick their battles to avoid intense partisan scrutiny. ESG as a sector continues to grow rapidly despite these attacks, but large funds stepping back from ESG issues may deter some in the sector.

New York Times analysis shows groundwater levels in the US at record lows

Groundwater aquifers, critical for the US agricultural sector and millions of households across the country, have reached dangerously low levels in much of the US. Having monitored 84,544 wells, this analysis found that 4 in 10 sites had hit all-time lows in the last decade since records began in the 1980s, with 2022 being the worst year for these sites. 

While this depletion had many causes, primary among them were overuse by humans in commercial, industrial and residential use, as well as climate change, which reduces the amount of water available to be absorbed. These underground sources of water take thousands of years to replenish, and many may become permanently depleted at current usage levels.

The analysis cited many experts who argued that the depletion of groundwater will have severe effects, from increasing the occurrence of property destroying sinkholes to rendering vast swathes of the country, including fast growing population centres in the southwest virtually unlivable for humans and inhospitable to commercial agriculture. 

For investors, this data should be concerning, given that agricultural exports from America form a large part of the global food system.

Leave a Reply

Your email address will not be published. Required fields are marked *