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Issue #77: A weekly update on responsible investment.
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\\ Weekly Insights \\

I have said many times in this newsletter “ESG is mainstream.” However, this week marks the first time I have seen an extremely mainstream sign of ESG’s rising influence: An A-List celebrity has aligned themselves to a specific company’s stated E, S and G goals.

DraftKings, a sports-wagering company, appointed supermodel, Gisele Bündchen (wife to the seven-time NFL Super Bowl champion quarterback Tom Brady) as an advisor to the company’s environmental, social and governance issues. While Bündchen has a long history as an Environmental Activist, I view this as a significant appointment as it could mark the first of many high profile engagements between celebrities and companies on ESG topics.

What objectives has DraftKings made off the back of this announcement?
First of all they stated an objective to plant 1 million trees by April 22nd 2022 and second of all they paired the release of their inaugural ESG report. They also communicated significant new corporate objectives in terms of fighting global sustainable development challenges.

Is it good or bad that celebrities are getting involved with ESG?
I have mixed feelings in terms of what celebrity appointments could mean for the credibility of the ESG industry. On the one hand, if more high profile people push for sustainability run companies it could help widen the awareness of E, S and G topics. On the other hand, it could hurt ESG’s already struggling reputation problem that ESG is simply a marketing scheme and is primarily green washing. I would love to hear some readers thoughts on this or if there are any other examples of celebrities connecting themselves to ESG topics!

\\ Nossa News \\

We pitched at Barclays Techstars New York Demo Day!

Thank you to the hundreds of people who turned into our demo day pitch. If you missed it, check out what we are up to at Nossa Data and our vision for the future. Watch our pitch.

What we are writing!

How to talk to the capital markets about ESG and corporate purpose?
Our team really enjoyed interviewing Brian Tomlinson, Director of Research at the CEO Investor Forum. Check-out our discussion.

Reach Out!

\\ Companies Making Statements \\

  • Allbirds — A free carbon calculation tool for the entire fashion industry. Check out this great resource provided by Allbirds!
  • Balderton Capital — VC Firm Balderton Capital continues to communicate and share about how they aim to reach their Sustainable Future Goals. Follow their progress.

\\ Top Stories \\

The ESG movement needs help from the IMF and World Bank

Last week Norway’s $1.3 trillion wealth fund announced it may no longer invest in assets from the developing world, also known as the “emerging markets,” in order to comply with a new proposal that seeks to tighten environmental and ethical standards in its investments. While cutting off financing to developing countries may increase their portfolio’s environmental, social, governance (ESG) scores, it would be a missed opportunity for the planet.
The Hill.

Alphabet to Introduce Executive Bonuses Partly Tied to ESG Goals

Alphabet Inc. said it will create a bonus program for senior executives that’s partly based on their performance in supporting environmental, social and governance goals. The program will begin in 2022, the company’s Chairman John Hennessey wrote in an annual proxy filing. ESG goals “have long been a key part of Alphabet and Google’s work,” he added in a letter to shareholders. Hennessey also addressed diversity and workplace harassment in the letter, saying the Alphabet board agreed on a series of “principles and improvements” that incorporated input from employees and stockholders. Bloomberg.

5 things you need to know about the future of ESG reporting

Regulators are quickly jumping in to address the lack of common reporting standards in ESG reporting. In the U.S., the Securities and Exchange Commission (SEC) recently asked for comments on 15 questions around requiring more ESG disclosures. In Japan, the Financial Services Agency (FAS) announced in January it would embark on a similar path. In Europe — where ESG disclosure has been required for more than five years — there are new recommendations aimed at making these reports more useful for investors.
Fast Company.

ESG rush opens opportunities for betting against the angels

The ESG phenomenon is unquestionably one of the most powerful forces in markets at the moment, with investment groups locked in a frenzied game of one-upmanship, each competing to take ESG more seriously than the next — or at least appear to do so. Setting aside the moral imperatives, the commercial rationale is clear: ESG funds have attracted about $340bn over the past two years, according to EPFR, almost twice as much as the rest of the stock fund universe combined.
Financial Times.

The stark environmental impact of Bitcoin
Bitcoin consumes a staggering amount of energy. According to the Cambridge Bitcoin Electricity Consumption Index, the entire Bitcoin network consumes more energy annually than countries such as the Netherlands, the Philippines and Switzerland. As Bitcoin’s price rises, so does the energy consumption. This makes it a serious environmental threat. The reason why Bitcoin is so carbon intensive is because of the ‘mining’ process used to transact it. First, highly sophisticated computers solve extremely complex mathematical problems to produce new bitcoins. Specialist ‘miners’ then verify the legitimacy of bitcoin transactions on something known as the blockchain. Fidelity.

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\\ Weekly Report Feature \\

SASB and Market Principles: Sustainability-Linked Financing
SASB & KKS Advisors

Top 5 Sectors and Raising Debt Through Sustainability-Linked Loans

Sector

Percent of all SLLs issued

Utilities

14%

Transportation & Logistics

9%

Chemicals

7%

Industrial Other

6%

Food & Beverage

5%

What kind of sustainable loan structures are there?

Read the full article.

Why is Corporate Virtue in the Eye of the Beholder? The Case of ESG Ratings
Despite the rising use of environmental, social, and governance (ESG) ratings, there is substantial disagreement across rating agencies regarding what rating to give to individual firms. As what drives this disagreement is unclear, we examine whether a firm’s ESG disclosure helps explain some of this disagreement. We predict and find that greater ESG disclosure actually leads to greater ESG rating disagreement.
Read the paper.

\\ Leading Across ESG \\

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Julianne

Julianne Sloane
Co-founder of Nossa Data
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