ESG Essentials- NZAOA calls for unleashing sustainable finance

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Plastic industry sustainability plans ‘all wrapping and no substance’ without exec pay ties to ESG goals, new Planet Tracker report finds

New Planet Tracker research reveals that many plastic companies have very little ties between the success of their ESG goals and executive pay, casting doubt on their commitment to their stated sustainability goals.

The report “Plastics – Executive Compensation” analysed 39 leading plastic players including ExxonMobil, Saudi Aramco, Costco and Mars, and found almost all (95%) lack a sufficient tie between executive pay and sustainability factors, with nearly half (41%) having no link at all. 

Planet Tracker calls these companies’ sustainability policies into question, stating these are “all wrapping and no substance” if senior management is able to make insufficient progress towards sustainability goals and still receive maximum pay.

The NZAOA calls policymakers to task urging them to unleash sustainable finance

The UN-Convened Net-Zero Asset Owner Alliance has released a call to action for policymakers, urging them to remove current barriers preventing the economy from reaching net zero by 2050. 

The group wants governments to reduce financial support for fossil fuels, increase subsidies and tax breaks for clean energy, pass green-friendly regulations and introduce new carbon pricing tools. This could help unlock up to $275 trillion in decarbonisation investments by 2050, while a lack of the required support could cost global GDP up to $6 trillion per year.

The report arguing for an enabling policy environment was published just as Sunak announced his decision to roll back key parts of the UK’s green agenda, highlighting the damaging effects such a move will have on an economy’s ability to decarbonise.

FAIRR finds regenerative agriculture claims by Big Agrifood “lack clear goals”

“The Four Labours of Regenerative Agriculture”, published by FAIRR has found that the embrace of regenerative agriculture by some of the world’s biggest food suppliers is marred by a lack of clear goals and definition. 

Jo Raven, director of thematic research and corporate innovation at FAIRR was interviewed by Bloomberg, saying of the 79 agrifood companies assessed by FAIRR, “The majority… are just talking about regenerative agriculture… There is yet to be any clear targets around that. And, of course, targets are important from the accountability perspective.”

Without clear targets and definitions, the claims of these large companies are very difficult to substantiate, which could lead to accusations of greenwashing – which will be increasingly damaging in an intensifying regulatory environment.

EU rules bring toughest crackdown yet on greenwashing in marketing

The EU recently announced rules, due to come into force in 2026, that will greatly restrict the use of a range of environmental marketing phrases such as “climate neutral” or “eco” unless companies can provide evidence to substantiate their claims. 

These new rules will mean that companies can no longer use offsets as evidence that a product is carbon neutral – a change that the FT argues will make the EU “the toughest region of the world in terms of its approach to green claims made to the public”. 

The EU has long sought to clamp down on the practice of greenwashing, where companies have used vague language and marketing tricks to falsely or misleadingly claim green credentials, which can confuse consumers and investors alike. 

These rules will have a substantial impact on companies across the EU, forcing some to entirely re-evaluate their marketing strategies.

BlackRock closes ESG related funds as sustainable fund liquidations triple in 2023


Following news that BlackRock has supported far fewer ESG investor proposals this year, news has also emerged that it plans to close two large sustainable emerging market bond funds worth $55 million. It is contributing to a growing trend of sustainable and ESG fund closures, which have tripled since 2022 and represent more closures than in the past three years combined. 

According to Alyssa Stankiewicz, Associate Director for Sustainability Research at Morningstar, these closures can be attributed to multiple factors, including underperformance and growing anti-ESG rhetoric that has had an impact on demand. 

Recently Gunther Thallinger, Chairman of Allianz SE and the Net-Zero Asset Owner Alliance, stressed the importance of putting politics aside when it comes to ESG in his piece for The Hill. He argued that “while we may disagree on a whole number of cultural and political issues concerning the financial world, the reality is that climate change cannot be one of them.”

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