Coronavirus: Are Companies Prepared to Take Care of Their Employees?

In April 2020, the International Labour Organisation (ILO)[i] estimated that in the second quarter of 2020 there will be a 6.7% decrease in working hours globally (approximately 195 million full-time employees), primarily in the sectors hardest hit by the Coronavirus pandemic: food service, manufacturing and retailing.

Tackling the Climate Crisis: Mobilizing the Transition

As we mark the 50th Anniversary of Earth Day, we highlight the need for a collective effort in order to combat the impacts of climate change. In this blog, we explore the important role that investors play in mobilizing the transition to reduce emissions and how sustainable solutions can support this.

Climate Action, Human Health and Responsible Investing

This year, we mark Earth Day under a pandemic. To date, casualties of the novel coronavirus include more than 170,000 deaths, ongoing disruptions to healthcare systems and a deep economic downturn. As we face the first global recession in a decade, Earth Day – the theme of which this year is climate action – serves as a reminder for investors to reflect on how their investment activities relate to social and environmental health concerns.

The Quest for Supply Chain Resilience: Where Business Sense and Thriving Rural Communities Meet

In this blog post we highlight the need for living income and living wages to build resilient supply chains and resistance to shocks such as the current COVID-19 pandemic. We explore the important role that investors play and how engagement efforts contribute to progress.

Coronavirus: Human Capital Management During and After the Pandemic

The coronavirus pandemic has been sudden and significant. The transition from business as usual to crisis response has meant that daily routines are no long routine and future planning is in a state of constant revision. We are learning new ways to source essential goods and connect with people. The same applies to companies. While truly exceptional, the pandemic illustrates the importance of proactive business planning and robust risk management systems, with companies’ ability to respond to shocks and adapt to changing circumstances being tested profoundly.

CII Conference Reflections: Emerging Social Issues to Watch for in 2020

Following the Council of Institutional Investors Conference, we highlight two emerging social issues that were top of mind for active investors, Cyberthreats and Human Capital & the Future of Work, and discuss how partnering on engagement can drive long-term value.

Coronavirus and the Localization of Supply Chains

One of the lasting impacts of the COVID-19 pandemic will surely be a transformed understanding of supply chains. As we touched on in earlier posts[i] in our coronavirus blog mini-series, we expect the pandemic to catalyze a range of efforts by management teams to better understand the vulnerabilities of their supply chain. While executive teams closely track their tier 1 suppliers, many are unaware of the full scope of their global supply chain. Bain & Co recently estimated that up to 60% of executives have no knowledge of the items in their supply chain beyond the tier 1 level.[ii]

5G and Industry 4.0: Enabling Efficient and Resilient Infrastructure

There is significant hype associated with the rollout of 5G networks, which is largely tied to the incredible data transfer speeds 5G capable networks can offer. However, speed is only part of the equation. Beyond speed, key attributes of 5G also include lower latency, reduced cost per gigabyte and larger connection volumes. 5G, unlike previous network technology, will be software-defined, enabling networking functionality to be flexible and adaptable over time.[i] As a result, 5G is anticipated to create a new digital backbone to power future infrastructure needs – a topic we explored in Sustainalytics’ report, 10 for 2020: Creating Impact Through Thematic Investing.

Coronavirus: Flattening the Misinformation Curve

In February 2020, the WHO Director-General Tedros Ghebreyesus said misinformation about COVID-19 is just as dangerous as the virus itself. “We are not just fighting an epidemic; we are fighting an ‘infodemic.’ Fake news spreads faster and more easily than the virus and is just as dangerous.”[i]

Coronavirus: Assessing the Effectiveness of Government Responses

Since the World Health Organization declared the COVID-19 outbreak a pandemic on March 11, global stock markets have seen losses not experienced since the 2008 financial crisis.

EU Sustainable Finance Action Plan: Final Taxonomy Report Published and Other Developments

The highly anticipated final report by the TEG (Technical Expert Group) on the EU Taxonomy was published in early March, followed by a stakeholder information session. You can read our blog post on last fall’s developments here.

Coal Investments: Up in Smoke?

Growing public concern over climate change is pushing investors to increasingly assess how their portfolios are pivoting to a low carbon economy. Because of its large carbon footprint, the coal industry is a prime target of environmental activism and divestment campaigns, and it is becoming the investable hot potato few want to hold.

Coronavirus: Risk and Opportunities in the Healthcare Industry

With this blog, we continue our mini-series on the novel coronavirus and some of the related impacts that we see developing in specific industries and for specific ESG issues.

German Corporate Governance Standards Overhauled

The legal and regulatory foundations of Germany’s corporate governance system are being overhauled in the form of far-reaching changes to the German Stock Corporations Act (AktG) and the German Corporate Governance Code (Kodex). As a result, institutional investors should expect enhanced transparency from German issuers, as well as stronger rights enabling them to effectively exercise their stewardship responsibilities. The reform reflects both the transposition of the EU Shareholder Rights Directive II (SRD II) into domestic law and a corresponding Kodex revamp, both aiming to incorporate governance features that are more typically associated with Anglophone jurisdictions.

Coronavirus, oil prices and ESG: three takeaways for investors

Monday’s rout of the global equity market has left investors reeling. Major benchmarks including the S&P 500, FTSE 100 and the DAX were down well over 7%. In Canada, the commodities heavy TSX Composite shed over 10%.

Shipbreaking: Clean Shipping in Deep Water

Cleaner shipping has been a trending topic particularly since the International Maritime Organization (IMO) declared that 2020 will mark the “beginning of a decade of action and delivery” for the shipping industry.[i] A key approach to cleaner shipping is for companies to renew their fleet with more environmental-friendly vessels. However, this approach triggers an obsolescence of older vessels and increases shipbreaking activity. In Sustainalytics’ 10 for 2020 report, we mention the issue of shipping practices with large environmental impacts including shipbreaking practices which we will explore more in depth in this article.

Chilean Aquaculture: Expansion into Troubled Waters?

In November 2019, as part of the Sustainable Seafood Engagement, Sustainalytics visited Chile to learn more about the country’s rapidly growing aquaculture industry. Commercial salmon farming has developed quickly in Chile over the past two decades, and today the country is the second largest producer of seafood in the world. Although salmon is not a native species to Chile, the climate in the southern part of the country (zones 10 and 11) offers excellent conditions for farming activities. Farmed salmon now represents the country’s second largest export and the industry provides thousands of jobs for people living in some of Chile’s most remote communities.[i] Despite this economic success story, the industry also faces environmental and social challenges which may cause investor risk. These risks may become more pronounced in the future, as the sector now looks to expand deeper into biodiversity hotspots.

Infographic - Creating Impact Through Thematic Investing

In this year’s edition of our 10 for series, we put an environmental, social and governance (ESG) lens on 10 investment themes that may offer investors an opportunity to create a positive social and environmental impact through the equity market. The trends we identify are driven by corporate initiatives to scale new technologies, improve social conditions, conserve ecosystems and mitigate climate change.

Plastics - A Material Issue for Investors

The plastic waste issue is currently one of the fastest growing environmental topics on the political and business agenda. Plastic is a vital product to the global economy; however, the way it is being produced and managed is unsustainable, especially at the use and after‐use phases. The carbon footprint and emissions associated with plastic production along with the issue of the environmental and potential health impacts of plastic waste are a matter of growing concern for investors. In light of the environmental, social and financial challenges, the linear “take, make and dispose” approach cannot continue. The alternative is a circular economy approach, which focuses on maximizing resource value, making resource use more efficient and extending product value during use.

South Africa and ESG Risk

A Case Study On November 1, 2019 Moody’s cut its rating outlook for South Africa from “Baa3 stable” to “Baa3 negative,” putting the country’s bonds on the cusp of junk status after several harbingers of a potential downgrade.[i] Earlier this year, the World Bank and the International Monetary Fund cut their 2019 growth forecasts for South Africa to around 0.8%, while the Institute of International Finance warned that the country’s public debt could grow to 95% of Gross Domestic Product (GDP) by 2024.[ii] The other two big credit rating agencies (CRAs) – Fitch and S&P – downgraded South Africa’s credit rating to sub-investment grade back in 2017, citing a deterioration in the country’s public finances.[iii]