In this edition, we look at what the Ukraine war tells us about ESG, as well as a status update on finance's response to the climate crisis.
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Russia's invasion of Ukraine exposes the ESG industry as reactive, not proactive
Russia's invasion of Ukraine has starkly exposed the limitations of ESG in its current form, placing the moral imperative on government regulators to shape the future of responsible investing.
We are proud to announce that Singlife with Aviva has appointed Matter to provide sustainability insights for their investment decisions and reporting needs
“Singlife with Aviva serves a significant proportion of Singapore’s population so it is natural for us to act as more than an insurer or a financial services provider. We must be a responsible steward of the funds we manage. Gaining more insights into the sustainability profile of our investments is a key part of that stewardship”, says Kim Rosenkilde, Group CIO of Singlife with Aviva.
Alternative perspectives on sustainability from some of the most important voices in the space
Responsible Investor survey suggests global banks are the biggest laggards on climate action, RI survey suggests
To mark Earth Day, RI were prompted to undertake a survey on finance and climate after reports that decision makers in financial institutions were not aligned with the urgency, or in some cases the need, for climate action.
The results make for sobering reading:
45% of respondents "were not confident that most senior managers in their organisation fully understood the risks that climate change poses to businesses and the economy."
93% "encountered negative attitudes to climate action among decision-makers within their own organisation or elsewhere in the financial sector"
Almost one-third of respondents said they had encountered climate change scepticism in the financial sector, "likely in senior roles".
These findings indicate that at the levels where it is most important, the industry is not unilaterally driving towards a greening of the financial system.
Latest IPCC report pulls no punches on the financial industry's climate response
The latest report from the International Panel on Climate Change painted an equally bleak picture on the financial sector's contribution to climate change mitigation. It describes a "persistent misallocation of global capital".
Christa Capp, an author on the report, speaking to RI points to estimates that financial flows are three to six times lower than the level needed by 2030 in order to limit global warming to below 2C.
Capp also highlights the need to also increase focus on climate adaptation, in addition to mitigation, especially in developing countries, which are hardest hit in terms of investment gaps.
Ultimately, it is also the responsibility of policymakers to send out strong enough signals to start channeling investment in the right direction. The good news, Capp concludes "is that we have enough capital in the world to close the climate financing gaps, we just need to mobilise more financing in a positive direction for the planet."
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