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Issue #82: A weekly update on responsible investment.
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\\ Weekly Insights \\
UN PRI, one of the most influential organisations in ESG and Responsible Investment announced this week that its CEO, Fiona Reynolds will be stepping down. Reading her statement on the matter, it is remarkable learning just how much that key organisation has grown. She shares:
“When I first joined the PRI at the beginning of 2013, we were only 37 staff and had just over 1,000 signatories to the Principles. Fast-forward nearly nine years and the PRI is now supported by over 170 staff and we are getting ready to celebrate reaching 4,000 global signatories, collectively representing more than half the world’s institutional assets.”
Did you hear that… More than HALF the world’s institutional assets!
Why is she leaving? As she so eloquently puts it, we have all seen that those of us who have chosen global lives, the trade-offs with lack of travel have become more and more. She shares:
“With the ongoing closure of borders… The trade-offs of not being able to spend time with my family (In Australia), or even being able to reach them if I needed, have simply become too high for me.”
Who will be the next to lead this fantastic and influential organisation? They are currently recruiting for Fiona’s replacement.
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\\ People in ESG to watch \\
- Kathy Matsui: Kathy Matsui is the former Vice-Chair of Goldman Sachs Japan & founding General Partner at MPower Partners. Kathy recently launched MPower Partners Fund LP, Japan’s first ESG-focused Global Venture Capital Fund.
- Shaheen Contractor: Shaheen Contractor is an ESG Research Analyst at Bloomberg LP. Shaheen’s role includes analysing #ESGrisks and opportunities. Shaheen recently delivered a presentation on ESG integration & trends in a webinar on ‘The Future of Sustainable Investing.’
- May J: May J. is Managing Director and European Head of Sustainable & Impact Banking at Barclays Investment Bank. May has been at Barclays for just under 19 years and took over as Head of Sustainable & Impact Investing in 2019.
- Lareina Yee: Lareina Yee (she, her) is a Senior Partner and Chief Diversity and Inclusion Officer at McKinsey & Company. She leads McKinsey’s research initiative on Women in the Workplace and their series Race in the Workplace.
- Lisa Jackson: Lisa Jackson is the Vice President of Environment, Policy, Social Initiatives at Apple. Formerly the Environmental Protection Agency administrator under the Obama Administration, Lisa is now helping to make Apple’s supply chain and products #carbonneutral by 2030.
\\ Top Stories \\
Sustainable Investing Boom and Net Zero Pledges Drive ESG Talent War
The push for businesses to be run more sustainably is driving a surge in demand for professionals with environmental, social and governance expertise, according to consultants and recruiters. Demand for ESG experts is booming across professional services, including at management consultancies, boutique advisory firms and property companies. But, companies face rising competition in attracting and retaining ESG-focused staff as more companies and fund managers commit to cutting their carbon footprint and place a greater emphasis on non-financial performance.
Britain’s steel industry faces up to climate challenge
In the UK, steel is the biggest industrial emitter of carbon dioxide. The Climate Change Committee, the government’s independent advisory group, has suggested steel production needs to be “near-zero” emissions by 2035 — a hugely ambitious target. However, domestic steel producers have struggled to stay competitive compared to cheaper alternatives as viewed above. Now they face the additional burden of cleaning up their emissions. The potential costs are eye-watering and cannot be met by industry alone. Chris McDonald at the Materials Processing Institute, a steel research group, estimated that to make green steel a reality would require £6bn-£7bn of investment on sites themselves, on top of supporting infrastructure.
Ex-Goldman’s Kathy Matsui Starts ESG Venture Capital Fund
Kathy Matsui, former vice chair of Goldman Sachs Japan, launched a venture capital fund to help startups enhance environmental, social and governance values. MPower Partners Fund will focus on investing in growth- to late-stage Japanese startups, with the rest going into earlier-stage firms overseas in areas like healthcare, fintech and sustainability. Matsui retired at the end of last year from Goldman Sachs, where she was known for her so-called womenomics research that influenced government policy on female labor participation.
G7 Supports Moves Towards Mandatory Climate Reporting
Discussing the need to mobilize trillions of dollars of private sector finance, and to “green” the financial system on the road to meeting the nations’ net zero commitments, the G7 communique said: “We support moving towards mandatory climate-related financial disclosures that provide consistent and decision-useful information for market participants and that are based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, in line with domestic regulatory frameworks. Investors need high quality, comparable and reliable information on climate risks.”
Don’t divest dirty businesses, Deutsche Bank and BlackRock CEOs say
Public companies shouldn’t go green by divesting their dirty businesses because in the end this doesn’t have an impact on the overall carbon footprint. Instead, companies should clean up their operations to be more friendly to the environment. Larry Fink, chief of asset manager BlackRock, challenged the view that it is good when companies sell their dirtiest assets, particularly given those assets might then be less available to public scrutiny. Divestment doesn’t change the world, Fink noted. “It just goes from a transparent organization to an opaque organization that is not going to get us to where we want to go as a society.
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\\ Research Feature \\
Americans Support ESG Objectives but Unfamiliar with Term
- 84% consider how a company treats its employees when becoming a customer
- 81% say a business’ impact on its local community matters
- Despite valuing its goals, 64% are unfamiliar with the term “ESG”
Three-quarters of U.S. adults care about a company’s impact on the environment when making purchase decisions, and 68% say the same of efforts to promote diversity and inclusion in a company’s workforce and customer base.
While most Americans support the broad objectives associated with ESG initiatives, they remain largely unfamiliar with the term itself, first coined by business leaders, institutions and academics and now discussed in boardrooms across the globe.
Other interesting reading:
The double-materiality concept. Application and issues.
This paper considers the appropriateness of the EU’s double-materiality concept and how it can be used with the GRI approach to materiality. It draws on academic research that investigates how double-materiality and materiality in sustainability reporting are implemented and the benefits and challenges of doing so.
“Robust identification of material impacts of an organisation on sustainable development must be the starting point to determining sustainable development risks and impacts on the financial statements. Research findings are clear — organisations tend towards prioritising financial materiality.”
Swiss Sustainable Investment Market Study.
This paper breaks down exactly what is happening in the sustainable investment market in Switzerland as the market moves completely mainstream.
How much has the market grown in Switzerland?
\\ Leading Across ESG \\
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