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ESG

Delivered September 23, 2019. Contributor: Hillary O.

Goals

Notable movements in relation to players and products in the ESG category, to what extent the buzz around climate change in the media and general public has affected the ESG conversation among businesses and investors, the history of Blackrock and Pimco in relation to ESG, any famous portfolio managers or executives both companies have, their reputation and competitive advanatage in the SRI / ESG spacenotable adverstising of both companies in relation to ESG within the last 12 months -including the number of followers they have on their main social media pages, topline messaging related to their ESG / SRI offering, PR coverage related to ESG, and major events sponsored.

Early Findings

NOTABLE MOVEMENTS

  • Currently, large companies in the US are "increasingly talking up environmental, social and governance factors on earnings calls." 
  • According to the WSJ, 24 US companies "in S&P 500 mentioned the acronym “ESG” on earnings conference calls between June 15 and Sept. 14, double the number that cited the term in the first quarter." 
  • This trend is even more significant among US financial companies.
  • Recently, "Delta Air Lines Inc. talked about eliminating single-use plastic products from its airplanes and lounges" while BlackRock mentioned that "sustainable ETFs are a strategic growth area."
  • Companies like BNY Mellon, on the other hand, are expanding their ESG initiatives, BNY Mellon recently expanded its "ESG Analytics offering by integrating fixed income scoring for corporate bonds." 
  • Blockchain and cryptocurrency were recently found to be useful technologies for ESG risk management. Sustainalytics found that they can be used as "to enhance ESG risk management in supply chain transparency, data protection and energy efficiency." Large US companies like Walmart and IBM have already "teamed up to test the potential of blockchain to track and enhance supply chain transparency."
  • Other disruptive technologies such as AI, bug data, and robots are increasingly been used by more companies to "reduce the amount of time and manpower needed to sift through the news events and relevant facts required to make informed ESG investment decisions." 

CLIMATE CHANGE BUZZ

  • Due to the increased discussion around climate change by major celebrities, large US firms, and younger Americans, ESG is now being implemented more and ESG topics are "triggering a wide range of changes in the economy." Some of these changes include:
  • The US transportation industry is predicting the "growth of electric vehicles from 3 million today to 125 million by 2030."
  • The US food and agricultural sector is "introducing new technologies to increase yield in water scarce areas" while the building sector "has gone from 5% new construction being green certified in 2005 to 38% today. " 
  • The backlash against "single-use plastic entering the ocean has catalyzed leading chemical companies and plastic manufacturers to invest in innovation and recycling infrastructure. For example, SC Johnson has committed to make 100% of its plastic packaging recyclable, reusable, or compostable by 2025." 

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