ESG Essentials: Biden funds clean energy and new Planet Tracker report

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Mooo-ving money from plants to livestock

New research from Nature Food has revealed that the EU pumps four times more money into animal farming than growing plants. Despite efforts to transition to more sustainable food systems, more than 80% of public funds in 2013 were allocated to farmers of animal products.

The funding of livestock, such as through the EU’s Common Agricultural Policy (CAP), means that resources are being allocated to processes that use significantly more land and resources compared to plant-based agriculture, perpetuating environmental degradation and social harm.

With such detrimental impacts of animal agriculture on wildlife and climate change becoming increasingly apparent, there is growing pressure on the EU to implement more stringent regulations and support systems that promote sustainable farming practices and facilitate a just transition to healthier diets for both people and the planet.

Biden’s billions to clean energy

The Biden administration has allocated $6 billion to fund projects aimed at decarbonising and modernising the US industrial sector, focusing on high-emission industries such as aluminium, cement and steel. 

These projects are expected to reduce CO2 emissions by 14 million metric tonnes annually once completed, addressing a significant portion of US emissions. This funding signals the potential financial opportunities available to the private sector if Biden is reelected in November. 

The funding marks a significant step towards achieving the Biden administration’s climate goals, following recent announcements targeting decarbonisation across various sectors. Notable initiatives include support for renewable energy projects, clean energy solutions on former mining land, subsidies for the hydrogen industry, and measures to improve building insulation and heating efficiency, all aimed at accelerating the transition to a low-carbon economy.

Apparel industry flooded by water-related risks 

A recent report from Planet Tracker has identified water-related risks as a significant threat to apparel brands and retailers, particularly those in North America. 

The report examined 29 top brands and found 15 had reported their water usage to CDP, showing management teams in the apparel industry are paying attention to the issue. It also identified that 26% of disclosing apparel companies had set water-related targets, but stressed the need for more companies to set science-based targets in line with the SBTN’s guidance on corporate stewardship of fresh water. 

Investors rarely discuss this topic in the public domain; only 1% of mentions regarding water-related risk have been recorded. But with water stress on the rise, investors in the apparel industry are urged to include it in their due diligence and investment decisions. 

Figure above is taken from the Planet Tracker report

Investor group launches new corporate human rights data initiative

The Church Commissioners for England, Aviva Investors and Scottish Widows have launched an initiative to improve the quality of corporate human rights data available to investors. Building on the Corporate Human Rights Benchmark, the new Investor Initiative on Human Rights Data (II-HRD) seeks to better inform investors’ stewardship and voting decisions. 

II-HRD aims to enhance the availability and comprehensiveness of corporate human rights data accessible to investors. It focuses on achieving universal coverage of listed companies’ efforts in implementing human rights due diligence and their policy-level commitments. Additionally, it seeks to foster industry-wide alignment in evaluating the presence of and responses to breaches of corporate norms. The initial target companies will be big ESG data providers such as MSCI, Bloomberg and Morningstar-Sustainalytics. 

Human rights risks are quickly moving up the investor agenda. This new initiative will enable investors to take action on human rights, driving inclusive economies and long-term value creation. 

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