All Things Sustainable

New U.S. President Joe Biden has made climate change a priority and is setting the nation on a much more sustainability-focused path than his predecessor. Just days into his term, Biden had already has taken dozens of executive actions, including rejoining the Paris agreement on climate change and ordering a review of rules the Trump administration finalized in the last days of its term. In the latest episode of S&P Global podcast ESG Insider, we talk to experts about what the change of administration and the inherent regulatory uncertainty mean for sustainability-minded companies and investors. We hear from Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility. ICCR, a global coalition of institutional investors, engages with corporations on a wide range of ESG issues. Zinner said climate-minded investors take the long view and ignored the Trump administration's deregulatory agenda in the expectation that the pendulum would eventually swing back in their favor, which it now has under Biden. We talk to Alex Bond, one of the regulatory leads at the Edison Electric Institute, a trade group for investor-owned electric utilities in the U.S. Bond said the sector has been focused on climate for years and that utilities, like investors, take a long-term view. And we interview former bank regulator John Geiringer, who said that the tone in the financial sector was already shifting to take climate risk more seriously, even before the administration change. Photo source: Getty Images

In this final episode of 2020, we'll talk with experts about what key ESG themes they expect to unfold in 2021.

State Street Global Advisors' EMEA Head of ESG Investment Strategy Carlo Funk outlines the firm's ESG priorities for the year ahead, while proxy advisory firm Glass Lewis' Director of ESG Research Courteney Keatinge describes why COVID-19 will continue to be a key theme behind shareholder engagement in 2021.

Trillium Asset Management CEO Matt Patsky talks about the continued need for robust data and how the incoming Biden administration could establish disclosure requirements.

And we hear from Jeff Hales, who chairs the Standards Board at the Sustainability Accounting Standards Board, or SASB. He talks about how COVID-19 altered the way companies and investors think about human capital management issues like worker mental health and paid sick leave. As a result, SASB is considering changing the way it measures human capital management in its industry-specific sustainability standards. Photo credit: Getty Images/Nora Carol Photography

This special pre-Thanksgiving episode puts a spotlight on the meat industry that is supplying the turkeys and other poultry, pork, fish, and beef products many Americans will be feasting on for the holiday. The meat industry has been hard hit by COVID-19, as the pandemic has exposed frailties in everything from supply chains to production processes and associated greenhouse gas emissions levels to worker safety. In the episode, we talk with Jeremy Coller, the founder of the industry activist group Farm Animal Investment Risk & Return, or FAIRR, about these weaknesses. Coller also discusses progress his group and investors have made in convincing companies to tackle these risks, and the continued challenges the sector faces. Photo credit: Getty Images

U.S. financial regulators need to step up in the fight against climate change, according to one of their own.

Rostin Behnam, a commissioner at the U.S. Commodity Futures Trading Commission, talks to ESG Insider, an S&P Global podcast on environmental, social and governance issues, about a report released in September by a panel of nearly three dozen Wall Street, energy and sustainability executives and experts. In the report, the CFTC's Climate-Related Market Risk Subcommittee concluded that climate change poses a "major risk" to the stability of the American financial system and the broader economy.

"U.S. financial regulators need to recognize this risk and move urgently and decisively to address" climate change," Behnam says in the episode.

The landmark report included more than 50 recommendations calling on lawmakers and financial regulators across the U.S. to address climate risk. It has already sparked new conversations about the relationship between the financial industry and climate change.

Oregon Senator Jeff Merkley, a Democrat, introduced legislation Oct. 21 that would ban financial companies from making new investments in fossil fuels, while citing the report from the CFTC subcommittee. And the New York Public Service Commission recently noted the CFTC panel's findings when discussing whether to require annual reports from major electric and gas utilities on their climate-related risks.

"Climate change is not linear in many respects," Behnam said. "It's not comparable to a traditional financial analyst's work when they evaluate public companies or risk more generally. So we have to, both the public sector and the private sector, adapt to climate change over the years. Nothing is clearly predictable. We do have a sense that climate change will get worse if we don't change our patterns."

Photo source: Busà Photography via Getty Images

Pictured is Pamela Sutton-Wallace and her two daughters. In this episode, we bring you an exclusive interview with Pamela Sutton-Wallace, a healthcare executive at a New York City hospital that is one of the largest in the U.S. She took on the role just weeks before the pandemic turned the city into a coronavirus hotspot. Sutton-Wallace shares her decades of personal and professional experience as a leader in the healthcare industry while raising her children. She tells us how she expects the coronavirus will change family leave policies. She talks about the guidance she gives to women looking to advance in their careers while balancing demands of childcare and caring for aging relatives. And she discusses the demands on the "sandwich generation" — adults caring for an aging parent who are also raising children or supporting them financially. Sutton-Wallace has two college-age daughters and her own mother lives with her. This is the second in a two-part series in which ESG Insider explores the ways corporate America is responding to COVID-19 and finding ways to retain employees. In the first part, we discussed research into gender, parental leave and family caregiving policies in the U.S. private sector, which S&P Global conducted in partnership with AARP.

In this special episode of the ESG Insider podcast, we explore how corporate America is responding to COVID-19 with new policies for employees caring for children and elderly relatives. S&P Global partnered with AARP to research how leave policies are evolving in the U.S. private sector as part of S&P Global's #ChangePays initiative, which produces research about the benefits of increasing women participation in the work force. In the episode we unpack that research, which found the pace of change has accelerated rapidly amid the pandemic. We also hear from women who are on the ground balancing childcare, virtual schooling and elder care alongside demanding careers amid the pandemic. The episode features interviews with Pamela Sutton-Wallace, an executive at New York-Presbyterian, one of the largest hospitals in the U.S.; Microsoft Corporate Vice President Rani Borkar; S&P Global Market Intelligence President Martina Cheung; and Arjuna Capital co-founder Natasha Lamb.

Duke Energy Corp. President, CEO and board Chair Lynn Good sat down for an exclusive interview just hours after the electric utility company held its first ESG investor day on Oct. 9.

Lynn talked to ESG Insider, an S&P Global podcast about environmental, social and governance issues, about Duke's evolving climate strategy. She also explained how the company is handling social issues ranging from racial tensions to working with customers who are struggling to pay their electric bills during the pandemic.

At the ESG investor day event Duke announced several new initiatives including a methane emissions target, a climate-focused executive compensation metric and efforts to craft "principles for environmental justice."

In the latest episode of the ESG Insider podcast, Lynn took a deeper dive into the compensation metric and environmental justice principles. She also defended the company's decision to build more natural gas plants despite having a net-zero emissions target.

Lynn said that technologies such as battery storage are not where they need to be to make up for performance gaps in solar and wind. Therefore, "we see a need to use natural gas" to meet those needs — "probably in the medium term," , she said. But Lynn added that the company will continue to test that assumption as technologies develop.

Lynn also said heightened racial tension in the U.S. is prompting Duke to reexamine diversity.

Duke is "turning our attention into more rapid progression of minorities and women into the company into leadership in a way that this event has really catalyzed our good intentions to encourage us to move as quickly as we can," Lynn said.

Photo source: Duke Energy

Illinois and California have passed new corporate racial diversity laws to prod publicly traded companies to embrace racial diversity on their boards. In this episode of ESG Insider, an S&P Global podcast about environmental, social and governance issues, two of the lawmakers behind the bills explain why the move was needed and could have ramifications beyond their state borders. "Companies are responding to the public shame and making changes," Illinois State Representative Chris Welch said, explaining how the 2019 state law he sponsored requiring companies to report on their race metrics will be effective. "Public shaming works." In the U.S., the national dialogue has turned to race in 2020. Following the death of George Floyd while in police custody, companies have paid more attention to systemic racism and diversity in their own ranks. Investors are also increasingly talking about this topic as a human capital management issue. While the Illinois law does not mandate companies be racially diverse, it directs them to publicly disclose the racial, ethnic and gender diversity of their boards of directors by the end of this year. And then, starting in March 2021, the University of Illinois will publish a report card evaluating how companies are faring, which Welch said will be used to name and shame companies that are not up to snuff. "Everyone appreciates collecting data and making further decisions based on that data," Welch said. "I think this is going to become model legislation that you'll see in other states." California has also taken action to promote corporate board diversity. In the episode, we interview California Assemblyman Chris Holden, who co-authored a law passed in September of this year that expands the state's diversity requirements for the boards of publicly traded companies to include people who identify as being a part of a racial minority, an Indigenous community or the LGBTQ community. Holden said that companies should have no trouble finding qualified director candidates and noted that studies have shown companies with diverse boards generally perform better. The California law also includes a disclosure mandate. Specifically, it requires the California Secretary of State to track and publicly report compliance with the law as well as levy fines for noncompliance.

The coronavirus has slammed the retail sector and caused many companies to go out of business. But the pandemic has been a catalyst for growth at Walmart Inc., one of the world's largest retailers. The company's e-commerce sales jumped 97% in the second quarter as consumers hibernated at home and relied increasingly on online shopping. That growth also means an expanding carbon footprint.

In this special Climate Week episode of ESG Insider, an S&P Global podcast, we talk to Walmart's chief sustainability officer, Kathleen McLaughlin. She says the company is making significant strides toward the goals of Project Gigaton, its initiative to eliminate 1 billion metric tons of greenhouse gases by 2030. Walmart has enlisted more than 2,300 of its suppliers, including Unilever, Johnson & Johnson and Fruit of the Loom, to cut greenhouse gas emissions.

"Our goal is to rewire the way that supply chains function so that the production of the products that all of use every day is actually sustainable," McLaughlin tells ESG Insider.

Photo source: Walmart

Companies that lobby against climate-friendly laws and policies are putting the overall goals of the Paris Agreement on climate change at risk and have a "weak recognition of the challenges ahead," Jan Erik Saugestad, CEO of Norway's largest private investment firm Storebrand Asset Management AS, said in an exclusive interview.

In the latest episode of ESG Insider, an S&P Global podcast about environmental, social and governance issues, Saugestad talked about the new climate policy Storebrand Asset Management, a subsidiary of insurer Storebrand ASA, announced in August.

Many banks and asset managers have announced plans to divest from carbon-intensive companies or cease financing certain fossil-fuel projects and companies, but Storebrand took its divestment strategy a step further. The Norwegian investment firm, which has more than $90 billion in assets under management, opted to exit investments in companies that it judged to have lobbied against climate change policies.

The companies it divested from for alleged anti-climate lobbying practices include Exxon Mobil Corp., Chevron Corp. and Southern Co.

Under its new policy, Storebrand also will no longer invest in companies that earn over 5% of their revenues from coal or oil sands, although Saugestad in the interview noted his firm has made some exceptions to that rule. The asset manager also plans to increase capital flows into low-carbon, climate-resilient and transition companies and provide clients with a range of sustainability and low-carbon funds to help them decarbonize their portfolios.