Bloomberg Businessweek published a report this week outlining the problem with ESG investing. It’s a lengthy analysis with lots of facts and figures, so I thought it would be worthwhile to summarize its major findings.
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Meet MSCI: the ESG matchmaker
MSCI is the world’s premier ratings company for environmental, social and governance (ESG) designations. It’s the ESG equivalent of Moody’s for insurance ratings.
MSCI has become the de-facto standard for smacking “sustainable” on any investment fund. The impact of sustainable investing has suffered as a result.
What’s the problem with MSCI ESG ratings?
According to Bloomberg’s report, MSCI ratings don’t accurately measure the impact of a company on the Earth. Rather, their ratings measure the impact of the Earth on a company.
It’s a powerful distinction that has damning effects on the real-world impact of ESG ratings. And it’s a method that MSCI openly boasts as a logical indication for relevant stakeholders.… Read the rest
If you want to decarbonize the economy, carbon offsets don't work. Here's why.
Despite doubling in price the last 18 months, carbon offset prices are cheap (relative to the cost of reducing emissions). Carbon offsets should and will be much more expensive. For now, because they're so cheap, carbon credits act more like a marketing tool than a social good.
The little secret?
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The scoop: Food takeout and delivery accounts for considerable waste. About 29% of all greenhouse emissions come from packaging. And food takeout uses a lot of packaging.
The problem w/ takeout packaging: *orders burrito* Let me wrap that in foil for you. Here are plastic utensils and paper napkins wrapped in plastic. Oh, and three packs of ketchup + hot sauce. And a paper bag was placed in a plastic bag. Salt and pepper packets no one's eaten since the 90s? Take it. *eats with hand*
Facts and figures:
- Finding the best material is complicated. One study found that Polystyrene/EPS Foam had a 7-28% lower environmental impact than aluminum and a 25% to six times lower impact than Polypropylene.
- Plastic waste impacts over 700 marine species
Sustainable packaging solutions: Reduce and reuse. Recycling (in this context) is kinda BS. Buy in bulk. Use creative alternatives on the go. Shop at restaurants that use sustainable plant fibers or limited packaging. If you have a good relationship with your local food business, talk to them about affordable options.
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The scoop: You can’t improve what you can’t measure. An organization must accurately measure GHG emissions and carbon footprint to improve its environmental sustainability outlook.
Here’s an interesting set of stats:
99% of F500 companies report being “sustainability-conscious” or mention it as a priority in their goal statements.
A little over 60% made commitments to reduce emissions with varying degrees of comprehensiveness. A common goal is to reach carbon neutrality by 2050, yet most companies don’t have decarbonization roadmaps or intermediary reduction targets.
And less than 15% set long-term and short-term reduction targets in line with corporate standards derived from the latest climate science.
These numbers tell a straightforward story. Sustainability gets a lot of lip service, but most businesses haven’t invested time and money into this objective. Creating a carbon footprint baseline is a high-impact first step in any organization’s sustainability journey, and this exercise achieves diverse goals within profitability and risk management.
Emissions accounting terminology may seem complex, but by the end of this article, we’ll find that the foundations of GHG emissions accounting are relatively intuitive. It’s just a matter of breaking up different impact areas of an organization into smaller, digestible bites.
Dig deeper → 5 min