[ChatAction] [Chat People] What recommendations can you make?
Elsie Maio
elsiemaio at soulbranding.com
Wed Aug 31 22:39:12 MDT 2022
Hi Stan and Every Other Wonderful Person in this community,
With the great morass of world conditions, and the US paralyzed by the
fossil fuel industry and other vested interests, it has become very
important for me to discern the most promising inflection points for
change. Focus helps my sanity and resilience.
One person who consistently cuts through the miasma of 'current events'
is Sasja Beslik. You may know him, or he may even have spoken on
Humanity Rising. If not, please check him out. If so, it may be useful
to catch up on his latest insights.
He was an investigative journalist, refugee from the Balkan Wars, emigre
to the Nordic countries, headed up the Sustainable Investing section of
a major, progressive bank, and issues an essay each Sunday that never
ceases to open my eyes.
He is fresh, relevant and compelling, and fired up for the
transformation of business and finance for the good of humanity. In
tangible terms.
Below is a link to Sasja's LinkedIN profile and latest article.
With love, Elsie
---
Elsie Maio
Founder/CEO
Humanity, Inc/SoulBranding℠ Institute
+1 212 505 0404
www.soulbranding.com [1]
LinkedIN [2] @soulbrand [3]
Webinar for investors seeking impact + alpha: _THE FLIP SIDE OF ESG
RISK_ [4], with
* Peter Fusaro, Clean Tech Investing Guru, Partner Head of ESG +
Impact AV Group, Wall St Green Summit [5];
* _TIME_ Hero for the Planet, William McDonough;
* Joan Lamm-Tennant founder of BlueMarble Micro, stabilizing the
income of small-farm holders with fintech sponsored by reinsurance
giants. Video here [4].
Tough love for Jamie Dimon as The Golden Rule reboots: interview [6] for
book _Activist Brands_
Phil Kotler, the economist and 'father of modern marketing' cites our
leadership in Values-Based Corporate Transformation in _his recent
autobiography [7]_
-------- Original Message --------
SUBJECT:
Week 34: Is it over?
DATE:
2022-08-28 05:46
FROM:
Sasja Beslik via LinkedIn <newsletters-noreply at linkedin.com>
TO:
Elsie Maio <elsiemaio at soulbranding.com>
Want to listen to the newsletter instead? You can do so here. Dear all,
This...
[8]
NEWSLETTER ON LINKEDIN
[9]
ESG on a Sunday [9]
The best ESG related stories from the past week [9]
[10]
Sasja Beslik [11]
Senior Executive in Sustainable Finance, author of "Where the Money
Tree Grows" (2021) and the weekly newsletter "ESG on a Sunday" [11]
Open this article on LinkedIn to see what people are saying about
this topic. Open on LinkedIn [12]
[13]
WEEK 34: IS IT OVER?
_Want to listen to the newsletter instead? You can do so __here_ [14]_._
Dear all,
This week, a man sitting next to me in the subway proclaimed with a
calm, low voice: "It is over."
He was reading one of the articles about the worst drought in Europe in
the last 500 years. A small article on page 3 or 4. The top news, taking
up all the space on the front page, was about the upcoming elections in
Sweden. More specifically, it was about the fact that the second biggest
political party in Sweden has Nazi-roots. In Sweden.
We looked at each other for a brief moment in silence. He flipped
further and went on to read something else. The subway train continued
to move its metal body through the dark tunnels underground. It is over.
The words left me paralyzed for a moment while the rest of the people in
the wagon continued flipping through their phones, like any other day.
Early morning, tired faces, sleepy looks. Maybe he was right.
What made my angry as I resurfaced from the subway and onto the streets
was this feeling that we are not even trying to put up a fight when we
see that we are losing. Millions of people in Europe are affected by the
alarming climate crisis, and most likely this is just the beginning.
Calm and unaware, like animals lined up for slaughter, we are moving
through our own precious real or digital realities, shrugging our
shoulders. What can we do. What can we possibly do. Freedom is just a
another word for when you have nothing left to loose. Our
intersubjective, we. Maybe he was right, the man on the subway.
Still, at least we can put up a fight. "An appeaser is one who feeds a
crocodile - hoping it will eat him last," Winston Churchill said. I
think we can do better.
PUTTING UP A FIGHT
And still there are those who are trying to put up a good fight.
Federated Hermes, a champion of environmentally friendly investment
strategies, is coming under increasing pressure to explain its
sponsorship of a coalition of senior US public officials that opposes
action on climate change.
Three Danish pension fund clients [15] of Federated Hermes are demanding
to know why it agreed to act as a gold sponsor for the State Financial
Officers Foundation, a Republican group that has threatened to remove
state pension assets from financial companies that do not support fossil
fuel industries. The foundation, which draws support from senior elected
financial officers from 23 US states, has lobbied aggressively against
Biden administration policies aimed at slowing global warming and
opposed proposals by US regulators to introduce new climate risk
disclosure standards for institutional investors.
The clash highlights a tension between approaches to ESG standards on
both sides of the Atlantic. Support for stricter ESG standards across
the corporate sector has been much stronger among investors based in
Europe than in the US where opposition to action on climate change is
widespread among Republican party supporters.
In response to growing criticism of its sponsorship of SFOF, Federated
Hermes said last week that the relationship "does not serve as an
endorsement of any organisation's particular perspective on any issue".
Sure, we actually never landed on the moon. And Elvis is, most likely,
still alive.
NOT PUTTING UP A FIGHT
US and UK financial institutions have been among the leading investors
in Russian "carbon bomb" fossil fuel projects [16], according to a new
database of holdings from recent years. Campaigners in Ukraine said
these institutions must immediately end such investments, to limit the
funding of Russia's invasion of Ukraine and to avoid climate breakdown.
Carbon bombs are fossil-fuel extraction projects identified by
researchers to contain at least 1bn tonnes of climate-heating CO2,
triple the UK's annual emissions. Russia is a hotspot, with 40 carbon
bombs, 19 of them operated or developed by Russian companies backed by
foreign finance. The companies are Gazprom, Novatek, Lukoil, Rosneft oil
company and Tatneft.
Financial institutions in the US hold almost half the foreign investment
in Russian carbon bomb companies, with 154 institutions holding $23.6bn.
The largest combination of investment and credit - $10bn - was provided
by JPMorgan Chase, which other analyses have also identified as a
leading funder of fossil fuels.
The biggest single investment in the Russian carbon bomb companies was
the $15.3bn in Rosneft held by the Qatar Investment Authority, Qatar's
sovereign wealth fund.
The UK was third in the list of investing nations, with 32 financial
institutions holding $2.5bn in investments. HSBC had the largest
investment and credit total, at $308m.
Financial groups in Japan, Norway, Switzerland and the Netherlands also
held significant investments, while Chinese and Italian institutions
provided $45bn in credit between them.
The war in Ukraine has made it really clear that when you don't care who
you're doing business with, it does translate into human suffering and
lives lost. It's also clear that we should not be investing in new
fossil fuel projects, as the International Energy Agency has confirmed.
Anybody involved in these projects should be really questioning what
they're doing.
But is it understandable why this is happening? Yes. Why? Well, the
excess, unearned profits of the oil and gas industry are astronomical.
The profits made from oil and gas were recently estimated to be around
$3bn each and every day for the last 50 years. That's $1tr a year, on
average, from the pockets of you and me into the bank vaults of
dictators and big oil. It may be the biggest shakedown in history.
THE REPUBLICAN WAR AGAINST ESG
Now onto the deserts of ESG and the Republican war against ESG and
'woke' big business.
Why aren't they winning over investors in their war against ESG and
'woke' big business?
The Republicans say the political left is using ESG to advance an
ideological agenda that wouldn't stand a chance at the ballot box. They
see ESG as part of a culture war. But the Republican backed shareholder
push amounting to so-called 'anti-woke' proposals are getting almost no
traction with voting shareholders.
Why? Well, it's pretty simple. ESG is not a culture war. It's not
politics. ESG is a way to steer business and the financial system so it
operates according to the real world.
"The Republican view on ESG is political hyperbole that seeks to
marginalize and vilify the ideas that companies should focus on creating
value for all stakeholders, address diversity and pay equity issues
affecting their workforce, and take steps to alleviate the risks of
climate change to their businesses," Jon Hale, Morningstar's director of
ESG Research for the Americas, recently wrote [17].
TWITTER, MUSK AND WHAT PEOPLE GET WRONG ABOUT ESG
To fulfil the potential of ESG, investors must understand that company
executives also have a conflict of interest with their diversified
shareholders. Naming this conflict is not an ethical judgment; it simply
describes a market economy that channels savings to thousands of
individual businesses competing for capital, talent, and margin.
But we need to identify the inherent conflict so we can design
mechanisms to address it. Recognizing the conflict is also critical in
responding to the accelerating political pushback against ESG investing.
With the support of corporate lobbyists, lawmakers in a number of states
have passed legislation that will hamper the ability of institutional
investors to use ESG risk assessments in their investing practices, or
even invest with managers that use ESG criteria.
Highlighting the divergent interests of corporate managers and their
diversified shareholders will help explain why such legislation is so
dangerous to investors. Refocusing investors on portfolio impacts may
require that they demand individual companies in their portfolios make
decisions that reduce enterprise value - even over the long term.
This runs counter to the "doing well by doing good" narrative that ESG
activists cling to, as well as the ethos of an ecosystem that equates
success with financial outperformance. But to maintain a market economy
that does not violate critical social and environmental boundaries,
shareholders must insist that each company account for all of the costs
of its activities, including those costs that it can externalize.
Elon Musk's attempt to purchase Twitter is an excellent example of this
conundrum. Even though the offered price might have provided
shareholders with the best value, the sale of a critical social media
platform to one individual with very particular economic and other
interests may have threatened the integrity of the public square. And
because the economy depends on healthy public discourse, ensuring that
Twitter is a positive social force long into the future is likely more
financially material to the diversified shareholders of Twitter than is
receiving a premium for their shares today.
Yet no ESG investors made this case or sought to condition support of
the transaction on public-square protections. Because this critical "S"
interest runs contrary to maximizing financial returns at Twitter, the
ESG community has remained largely silent, even as the company tries to
force Musk to follow through on his agreement in Delaware Chancery
Court. As long as investors focus on enterprise value alone, they will
repeat this mistake and will miss the opportunity to secure long-term
portfolio value.
You can read more on this here [18].
THE TYPICAL GREENWASHING PLOYS
As I've written about many times before, greenwashing is alive and well
in the ESG industry. This trend undermines all the good efforts and will
have unimaginable negative effects. So how do you spot it? What are
typical greenwashing ploys?
Of particular concern are fund names that refer to ESG, sustainable
investing, responsible investing, socially responsible investing, and
similar ESG terms that are not aligned with the actual investment
strategy being used.
Likewise, there are many funds holding themselves out, promoting,
selling, and marketing their fund product or adviser services as
ESG-focused. They are capitalizing on large and growing investor demand
for these products, as evidenced by the dramatic rise in assets managed
according to several types of ESG approaches.
Because ESG-related terms are not standardised and lack widely
recognized meanings, such terms and related ESG sales hype can have
several different interpretations and provide little or no clarity or
specific information to investors when choosing a fund.
This inconsistency in terminology and lack of transparency makes it far
too easy for an adviser to tout its "climate saving" credentials.
Here's a very good article [19] describing latest ESG greenwashing
developments in the US.
OTHER STORIES
Higher returns? A key question for ESG investors is of course if they
can expect to earn higher returns on sustainable investments? That
particular question you can find some answers to in this article [20]. I
don't want to spoil the findings, so let's just say... it depends.
ESG loans. Finally, the story of ESG loans. Companies that get loans
with an ESG label but no immediate sustainability targets are a worrying
new trend [21], according to BNP Paribas SA. It works like this: You get
a corporate graded loan on the back of ESG, so you can report it and
make your employees and clients aware of the greatness of you deep
commitments to make a world a bit better. You don't set any targets, but
it looks good.
That's it for this week. I wish you all a great putting-up-the-fight
week!
Kind regards, Sasja
_____
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[1] http://www.soulbranding.com/
[2] https://www.linkedin.com/in/elsiemaio/
[3] https://twitter.com/soulbrand
[4]
https://www.brighttalk.com/webcast/17363/376418/the-flip-side-of-esg-risk-3-ways-the-majors-create-new-streams-of-value
[5] http://www.wsgts.com/agenda
[6]
http://www.activistbrands.com/soul-branding-an-interview-with-elsie-maio/
[7] https://www.amazon.com/dp/0990576760
[8]
https://www.linkedin.com/comm/feed/?midToken=AQFzsV4L4ksm-A&midSig=0LaNJF_claBGo1&trk=eml-email_series_follow_newsletter_01-header-37-home&trkEmail=eml-email_series_follow_newsletter_01-header-37-home-null-7cydf%7El7d5cmbw%7Ezq-null-neptune%2Ffeed&lipi=urn%3Ali%3Apage%3Aemail_email_series_follow_newsletter_01%3BMLuTVD8CSJ6gIFtHgA06gQ%3D%3D
[9]
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[10]
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[13]
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[14] https://esgonasunday.substack.com/p/week-34-is-it-over
[15] https://www.ft.com/content/381e2693-2d66-4f02-abdc-0aa8d5a97201
[16]
https://www.theguardian.com/environment/2022/aug/24/uk-and-us-banks-among-biggest-backers-of-russian-carbon-bombs-data-shows
[17]
https://www.morningstar.com/articles/1107716/cutting-through-the-nonsense-around-esg
[18]
https://www.institutionalinvestor.com/article/b1zh8gsv8hssjh/From-Meta-to-Twitter-What-Everyone-Gets-Wrong-About-ESG-And-Why-It-Matters
[19]
https://www.nasdaq.com/articles/greenwashing-and-the-mis-selling-of-esg
[20]
https://www.unpri.org/pri-blog/should-investors-expect-to-earn-high-returns-on-sustainable-investments/10339.article
[21]
https://www.bloomberg.com/news/articles/2022-08-25/esg-loans-with-no-targets-are-a-worrying-trend-q-a-with-bnp#xj4y7vzkg
[22] https://esgonasunday.substack.com/
[23]
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[25]
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[26]
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