Australasian Centre for Corporate Responsibility (ACCR)

Companies that took active steps to manage and reduce their carbon emissions enjoyed less volatility in their stock prices, diminished firm-specific risks, and weren’t as sensitive to market-wide economic shocks. The reduction in total risk varied, ranging from 1.22% in Taiwan to as much as 4% in Australia. There has been a seismic shift in how business’ behaviour is seen by the market and what we’ve come to expect. It’s a kind of halo effect. Firms with better carbon credentials are seen as better positioned for market success more broadly – whether in dealing with regulatory changes, business disruptions or risks to their reputation. That can all make them more attractive to investors. The study also found that in countries with higher quality corporate governance standards – which encompasses factors such as environmental regulations, effective law enforcement and anti-corruption measures – there was a stronger relationship between carbon performance and lower levels of risk. via The Conversation https://lnkd.in/eUX24g2W

Enormous expenditure [in the transition] is not simply a cost. It’s an extraordinary investment in a new energy system, heralding profitable industries, a surplus of jobs and lower energy costs for consumers from goods like EVs and heat pumps. Also, about two-thirds of the coming trillions in spending can be redirected from the decline and fall of the fossil fuel system, by McKinsey’s accounting. Still, the needed injection of new money amounts to $3.5 trillion per year on average, roughly equivalent to half of all corporate profits worldwide, say, or a quarter of all tax revenue. Yet wealthy societies have achieved projects of comparably massive ambition before. Net-zero 2050 might be improbable, but in sheer economic terms, it’s possible. In this, there’s something resembling hope. https://lnkd.in/ek5DaPJx

We are so proud to announce that Brynn O'Brien has been named Sustainability thought leader of the year, APAC by such an esteemed judging panel at Environmental Finance. Please join us in celebrating this recognition of all of our efforts. "The incredible work undertaken by the ACCR team over the last year demonstrates that climate-focused stewardship, when done effectively, delivers positive results for shareholders and the climate - and we will continue with this critical work over the coming year," O'Brien tells Environmental Finance.

A couple of articles that may be of interest to you in this newsletter. Setu Pelz, a new recruit to ACCR, examines coal’s impact on rural livelihoods in Jharkhand. (page 18) And for those interested in the global steel value chain, Prosanto Pal and Kapil Thool, provide insights into the energy transition in India's steel sector. (page 21)

The high score from CGI Glass Lewis Pty. Limited comes despite AGL – which operates the Bayswater and Loy Yang A coal power stations in NSW and Victoria – remaining on the watch list of environmental groups such as Climate Action 100+ over its carbon emissions. Just last month, the Australasian Centre for Corporate Responsibility, which campaigns for investors to put pressure on major emitters, said AGL’s ambition on climate had been “underwhelming” since last year’s board overhaul.

If the current rate of decarbonisation persists the downward correction in global equity valuation could be as severe as 40%, according to a paper published by French academic think tank EDHEC-Risk Climate Impact Institute. EDHEC also noted that this number was a result of a relatively conservative modelling approach. However, if a “more robust” decarbonisation approach were to be taken worldwide, there could instead be only a 5-10% downward correction in global equity valuation.

While countries can start to adapt to some of the impacts, for instance with seawalls and flood barriers, and by making their infrastructure more resilient to extreme weather, if global heating is allowed to continue then the world will rapidly reach a point beyond what can be adapted to. “If we continue with business-as-usual greenhouse gas emissions, there is no adaptation that is possible. You just can’t,” Katharine Hayhoe said, in an interview with The Guardian.

Our Lead Analyst, Alex Hillman contributed to the Finding Nature newsletter considering the role of being a "maverick". "Corporations can be hot-beds for group think. Large organisations normally become large over multiple decades, so no matter how much they talk about being agile and innovative - they thrived in the world as it was, but may not thrive if the world changes. So they resist change and at times outright ignore reality. Taboo topics are often ignored. At the individual level, there’s a huge opportunity for people to take bolder stances in their careers. I’ve dealt with thousands of clever people in influential positions. It would be amazing to see more of them speaking up in their workplaces, criticising superficial and self-serving justifications for business as usual, promoting issues they care about, quitting jobs that they don’t believe in, and taking the risk of moving into different sectors or organisations that are genuinely helping. I’d love to see more institutions being bolder. Institutions, including companies and institutional investors, are hugely powerful in our society and without their support, making change is cumbersome, if not infeasible. So we need organisations to support and drive change too." Read more here: https://lnkd.in/gzFvqKDh #workplace #change #climate #ESG #groupthink

Every six hours, somewhere in the world, a shipment of liquefied natural gas controlled by a Japanese company leaves a port. These tankers, which handle a quarter of all LNG shipments, are only the tip of Japan’s increasingly dominant gas empire. With the enthusiastic backing of the government, corporate Japan now offers a complete package for countries looking to replace aging, and near-unfinanceable, coal power stations with gas: Its engineering firms will provide technology and parts, its utilities some fuel, and the banks will offer financing. Japan’s championing of gas minted it a $14 billion profit last year, while entrenching dependence on a fossil fuel as experts urge a faster shift to renewables. via Bloomberg https://lnkd.in/g575jAGy

Despite some indications of #ESG backlash, the responsible investment community continues to be robust and expanding, writes Juliana Barbosa. https://lnkd.in/eX5cbfbm Are there some trends you have noticed? ACCR is well placed to enhance your shareholder #strategy and support your climate #stewardship initiatives. Contact us to discuss further.