Christopher Siewierski’s Post

Fantastic news!

Mind the gap. https://lnkd.in/e4xrumu9

The Reuters Responsible Business Summit, taking place in New York this week, is my first sustainability-focused event. I had the pleasure to meet Judith Wiese and hear directly her perspective on the formulation and execution of Siemens’ #DEGREE framework, including the KPIs that represent our ambition. This is a decisive decade for climate action and we face difficult trade-offs. While we have to remain competitive and not compromise on what we deliver to our customers and partners, we are values-driven and in firm pursuit of social justice and equity objectives embedded in climate action. We aim to achieve this through responsible, data-driven strategy and (technology) focused execution. I look forward to tackling this challenge with my colleagues and partners, including Richard Madeira from Siemens Smart Infrastructure, whom I had the pleasure of meeting today.

https://lnkd.in/et79TYZa TLDR version: the SEC is requiring enhancements and standardizations to climate-disclosures to help investors make more informed capital allocation decisions. This is a good thing. I went down the rabbit hole on this one and started reading comments submitted to the SEC on this topic. Criticisms appear focused on issues such as duplication with similar (but also dissimilar) regulations in California, cost of compliance and reasonableness of implementation deadlines. One other criticism that resonated with me is the absence of a requirement for companies to describe the role of board and management in overseeing and implementing climate‐related lobbying. Then I focused on comments from investors and asset managers. I thought they would have a balanced perspective because they would benefit from more reliable and comparable climate-related information but would also bear the costs of compliance by the issuers. Based on the reading, I am under the impression that investors are united that this regulation passes the cost-benefit test by a wide margin. But then why do some politicians oppose it? Hint: go back to the paragraph above. I will add that this helps to level the playing field for companies headquartered in Europe - a region that (in my view) leads in climate-related policy, governance and, quite often, technology. When competing outside of Europe, however, the cost of compliance with European laws and regulations (and in our case with even more ambitious internal targets) is a competitiveness drag from a purely financial perspective. Perhaps the information that will be available to investors will lead to objectively verifiable data about shareholders value premium created by making and delivering on ambitious climate-related pledges. And while there may be some merit in questioning the existence of this premium today, we're not far from a time when Greta's generation will be making asset allocation decisions. Get ready.