A Change is Gonna Come: Sustainable Investing Progress
Too often we are overwhelmed by negative news stories and seeming lack of progress. We forget that small actions and our everyday choices compound. This is what movements are made of. It is the small choices that grow to become change. When the odds seem stacked against us, let us remember how far we have come, and that every dollar we spend or invest has an impact. Consider the following news:
Mentions of ESG and sustainability are being made on thousands of corporate earnings’ calls
Environmental, social and governance issues have been discussed on about a fifth of calls across the world, highlighting the importance of sustainability. PIMCO analyzed earnings call transcripts of about 10,000 global companies between May 2005 and May 2021. From May 2005 to May 2018, environmental, social and governance (ESG) mentions hovered between 0% to 1% of calls. By 2019, mentions rose to 5%, and by May 2021, it was 19%.
Blackrock is starting to take action
I am not claiming Blackrock is a leader in sustainability, but I was glad to see that BlackRock more than doubled its support for shareholder proposals this year. It has supported efforts to oust corporate directors and force reporting on greenhouse gas emissions, lobbying and diversity. This is significant as Blackrock manages $9 trillion in assets and owns more than 7% of shares on the S&P 500. This year, BlackRock voted with shareholders 35% of the time, up from 17% a year ago. Blackrock has a ways to go, but this is progress.
In the words of Bill McKibben, "big oil had a bad day"
May 26th, was a day to remember for climate activists. A court in the Netherlands ordered Royal Dutch Shell to dramatically cut its emissions over the next decade—a mandate it can likely only meet by dramatically changing its business model. This was followed by 61% of shareholders voting for Chevron to cut Scope 3 emissions, which include emissions caused by its customers burning its products. This is notable because oil companies are willing to address the emissions that come from their operations, but, not for scope 3 emissions. Lastly, the most powerful proof of change came from ExxonMobil officials announcing that shareholders had (over the company’s strenuous opposition) elected two dissident candidates to the company’s board, both of whom pledge to push for climate action.
ESG assets continue to grow
Lately, multiple news sources have been touting the size of the growing ESG industry. One even claimed that sustainable investments now account for more than a third of global assets. While this is an overstatement, mostly due to greenwashing, the fact is that sustainable investments continue to grow. Again, this is progress.
“It's been a long, a long time coming. But I know a change gonna come. Oh, yes it will”
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 https://www.marketwatch.com/story/mentions-of-esg-and-sustainability-are-being-made-on-thousands-of-corporate-earnings-calls-Mentions%20of%20%E2%80%98ESG%E2%80%99%20and%20sustainability%20are%20being%20made%20on%20thousands%20of%20corporate%20earnings%20callsNumber%20of%20mentions%20earnings%20calls  https://www.politico.com/newsletters/the-long-game/2021/07/20/blackrock-throws-its-weight-around-493653  https://www.newyorker.com/news/annals-of-a-warming-planet/big-oils-bad-bad-day