Being Intentional
The bi-weekly newsletter from Motive, covering a wide range of topics in the area of ESG and sustainability. In this edition: COP26 Takeaways, Cloud Computing, The Business of Sustainability...
Welcome, Everyone! We’re delighted to be in your Inbox, and we hope that we’re continuing to bring you exciting and valuable information. It’s been a busy couple of weeks, so let’s get going…
It would be impossible to draft this newsletter and not talk about COP26, the United Nations “Conference of Parties” held by the United Nations Framework Convention on Climate Change. As the name implies, this was the 26th year of the conference (COP1 was in 1995).
Key Takeaways:
Twenty-three countries made new commitments to phase out coal power. Included in this list were five of the world's top coal power-using nations. (link)
India sets a 2070 target for net-zero emissions. India is currently the 3rd largest emitter of greenhouse gases, so if this holds up, it will be a significant victory. (link)
Banks and asset managers have formed the Glasgow Financial Alliance for Net Zero--representing 40% of the world’s financial assets, or $130 trillion of assets--pledging to meet the goals set out in the Paris climate agreement. Members must use science-based guidelines to reach net-zero carbon emissions by 2050 and provide 2030 interim goals. (link)
90 (and counting) countries have now pledged to slash methane emissions by 30% by 2030 as part of The Global Methane Pledge (link)
110 world leaders promise to end deforestation by 2030 (link)
The REAL key takeaway here is we are 8 (short) years away from many of these commitments coming due. Whether they are realistic or not, it’s pretty clear that there will be an immense amount of pressure to make progress in these areas. Many of these commitments are only achievable through significant contributions from the private sector, so when you read “World Leaders Commit to X” translated, that means “Governments will incentivize and de-incentivize private markets.” These contributions represent both massive opportunities for the world’s companies, as well as real-world challenges. Companies who integrate sustainability into their business will no doubt be the beneficiaries of the future incentive plan.
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What We Are Seeing
Staying on the COP26 theme, we thought it would be interesting to look at the trends around COP26 and how it compares to previous years.
We’ve been hearing and seeing so much about COP26 that we are starting to feel optimistic that we may be collectively mobilizing for a meaningful stand in adaptation and mitigation to one of the world’s most pressing challenges—climate change. But then again, sometimes we worry that everything we are hearing and seeing may be over-estimated due to the echo chambers of social media and like-minded colleagues…
Yet the data does show a reason for optimism! Up until now, the most important gathering of world leaders addressing climate change was COP21 in 2015, which resulted in the Paris Agreement. Looking at worldwide news searches, this year’s COP26 is pulling nearly 5X as much interest as the COP21 did at its peak and over 10X as much interest as the Paris Agreement upon being publicly released…and COP26 isn’t done yet!
More people than ever want to know what is happening. Climate change is no longer only of concern to scientists and activists—people care, the world is invested in this outcome.
Time for a Change
We are all big consumers of cloud computing. Granted, it’s not something we think about a lot. Still, whether you shop online, schedule a doctor appointment, or read this newsletter, you are likely using one of the three big cloud providers: Amazon’s platform, AWS, Google’s Google Cloud Platform, or Microsoft’s Azure. (@taylor links to a great open-source tool in his tweet below for people developing on one of the three cloud platforms). There are many other good platforms, but those three represent 61% of the total market, so we wanted to dig into each performance from a rating perspective.
Microsoft (RS: 19, ↑73%) (AskMotive, Microsoft’s Sustainability Site)
1.3M metric tons of carbon removal procured.
Twenty water replenishment projects funded to date.
60K metric tons of waste diverted from landfills.
Google (RS: 2, ↓54%) (AskMotive, Google Sustainability Site)
Carbon-free by 2030
Replenish 120% of the water consumed by 2030
Maximize the reuse of finite resources across operations, products, and supply chains
Amazon (RS: -7, ↓64%) (AskMotive, Amazon Sustainability Site)
Reaching net-zero carbon emissions across operations by 2040
Investing $2 billion to support the development of decarbonizing technologies & services
100% renewable energy by 2025
The Business of Sustainability
NYU Stern Report: ESG and Financial Performance (link)
This meta-study aggregates over 1000 other studies to determine a correlation between ESG ratings and corporate performance.
Key Takeaways:
Corporations’ sustainability initiatives appear to drive better financial performance due to mediating factors such as improved risk management and more innovation.
Improved financial performance due to ESG becomes more marked over longer time horizons.
(NYU Stern report: ESG and Financial Performance)
McKinsey & Company Report: Diversity wins: How inclusion matters (link)
The management consulting firm McKinsey & Company report makes the business case for increased diversity at the executive level.Key Takeaways:
The analysis found that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile—up from 21% in 2017 and 15% in 2014.
CSR Spotlight
Every week a new batch of companies are publishing their Corporate Sustainability Reports. In a new section of this newsletter, we’re spotlighting three reports we found interesting and why. CSR Reports are an excellent way to see how companies think about themselves. Click on a company’s name and view their CSR Report directly.
JetBlue (No RealScore): Read JetBlue’s CSR Report Here
“In 2020, we proudly became the first airline to achieve carbon neutrality for all U.S. domestic flights. By offsetting carbon dioxide (CO2 ) emissions from jet fuel and flying with sustainable aviation fuel (SAF)”
Levi Strauss (No RealScore): Read Levi Strauss’ CSR Report Here
“In 2020, 83% of our cotton — our most used raw material — came from more sustainable sources, and we expanded our efforts toward a circular economy.”
Lenovo (RS: 21, ↑77%): Read Lenovo’s CSR Report Here
“Lenovo’s ESG initiatives focus on supporting a resilient way forward while creating long-term value for our stakeholders and meeting their expectations.”
What We Are Saying
ESG Rating Agencies Are Not Arbiters of Truth: With the surging interest in all things ESG, the ESG rating agencies have found new authority. The problem is that ESG is becoming synonymous with ‘sustainability’…and this is wholly inaccurate. ESG rating agencies are great at what they do, but what they do is not ‘sustainability’. Corporate sustainability programs should approach with eyes wide open.