The REP Wrap: Governance is biggest ESG risk for companies, study shows
Poor governance is the most reliable indicator of ESG-related financial risk for listed companies, according to MSCI analysis of thousands of corporates. The data firm found key issues on governance to be most useful in predicting “large drawdowns” of share price in seven of the 11 sectors assessed. For the remaining four, including materials and the energy sector, environmental and social factors were more significant.
US companies are staying quiet about cost-effective energy efficiency initiatives in case they get accused of pursuing sustainability. That’s according to a report published this week by GlobeScan, which summarised the views of CSOs across the world. Going region by region, the paper outlines the key experiences, tensions and learnings that sustainability execs discussed during roundtables in different locations. “In the US, some companies have been discouraged from talking about successful money-saving partnerships on energy reductions because it makes them appear to be ‘promoting ESG’,” GlobeScan revealed. This risks slowing down companies’ ability to scale such solutions, it added.
Japan released the final version of its sustainability reporting standards on Wednesday. The Sustainability Standards Board of Japan (SSBJ) unveiled the standards, which are aligned with those of the International Sustainability Standards Board and anticipated to form the basis of mandatory reporting.
German logistics giant DHL beat its 2024 climate target, according to its latest annual report. The group aimed to emit no more than 34.9m tons of CO2e during the year, and came in at 33.77m. Declining transport volumes were partly responsible, DHL admitted, but it reduced 1,584 kilotons of CO2e through concerted decarbonisation measures – mainly the use of sustainable aviation fuels, the electrification of the pick-up and delivery fleet, and the use of renewable energies in buildings.
Academics at the University of Oxford have analysed climate transition plans in the aviation sector, as part of a project to assess companies across hard-to-abate sectors. The latest study is based on data from 84 airlines, representing 75% of the industry’s global emissions.
A review backed by the UK government has made 10 recommendations for how SMEs can embed sustainability into their business models in ways that drive profitability, innovation and long-term growth. The Willow Review, launched in November, makes “simple” recommendations such as switching to sustainable materials.
Researchers in Sweden have calculated that the EU would need up to 60% of the world’s supplies of critical metals in order to fulfil its current plan to transition to net zero. The Swedish Environmental Research Institute and academics from Uppsala University teamed up to look at current definitions and interpretations of climate neutrality, with a big focus on EU legislation.