In my many years of working on ESG issues I have developed expertise in a number of key areas. To make sense of the complexity in these areas, and to convey the relevant insights to others, I typically try to capture the essence in a picture: a One-Slide-Powerpoint-Presentation.
I’ve done a lot of thinking about the sense & nonsense of emissions disclosure rules. I don’t have the definitive answers yet, but I do think I have the definitive questions. Thinking about these questions will allow you to decide whether emissions disclosure is a great idea (and deserve an A), a bad idea (and deserve a D), or a terrible idea (and deserve an F). Which of course also depends on your goal: better investment risk management? reducing emissions? selling emissions measurement services and data? selling ESG/green funds? The questions are categorized in four different frames of thinking: “Accuracy”; “Attributability”; “Agency” and “Distraction”. If you come up with any answers – let me know!
“He is much more interested in getting on with the job than deciding whether the job is worth getting on with.” This is what John Maynard Keynes said about the economist Jan Tinbergen. For me, this sums up the state-of-ESG: we’re all awfully busy getting on with “the job”. Which is mostly the stuff in the Labeling column. While we could be much more impactful if we spend more time deciding whether “the job” is worth getting on with: thinking what we actually want to Enable. Of course things are not this binary; most ESG activities and initiatives will be somewhere on a spectrum. Still, I hope you’ll agree that today we’re too far to the left. And that we need to move to the right. And hopefully we’ll end up somewhere in the middle.
Active ownership (engagement & voting) is often the best tool investors have to have ‘impact’, by holding corporate management to account and engaging with them on strategic and ESG issues. Also, if done well, active ownership can contribute to financial returns. However, many pension funds, insurance companies and asset management firms struggle to get this right. In this slide I distill 10 key insights on how to organize active ownership well from an influential academic paper.
The market for ESG Funds has grown exponentially over the last few years, but with the growth we have not seen a clear consensus on what constitutes a ‘genuine’ ESG or impact fund. And rather than making things simpler, the EU Sustainable Finance Disclosure Regulation (SFDR), with its article 6, 8 and 9 classification, has perhaps made things more confusing, for asset owners, consumers and asset managers alike. The “Conviction & Narrative” framework can help: for (prospective) clients of ESG Funds it sets out the questions to ask an asset manager. For asset managers, it sets out the things you need to think about and prepare for if you’re launching an ESG Fund and want to avoid being accused of ‘greenwashing’.
Blended finance – where public investment ‘catalyzes’ or ‘mobilizes’ private investment – is an often overlooked tool in the impact investment toolbox. This is despite decades of evidence that blended finance approaches are critical to scaling solutions to societal challenges. In this slide I discuss the “why” of blended finance. But I can also help governments, development banks, asset owners or asset managers with the “what” and the “how”.
I’ve been following the academic research on ESG, sustainable finance and impact investing for years. I decided to capture, in one slide, which ESG approaches actually ‘work’, judging by the evidence. This also requires taking into account that different people have different motivations, or objectives, in turning to ESG approaches. The findings have implications for investors – they come with three strategic options.
“Net Zero” is everywhere. And, generally, that’s a good thing, because it is a neat shorthand, and reminder, of the action we urgently need to take to address climate change. Corporations and investors have also embraced Net Zero, but often in a way that is suboptimal. I can help you understand what needs to happen to get the global economy to net zero, what that means for your organization, and what pitfalls you should be aware of should you want to commit to “Net Zero” as well.
Often, corporate executives tell me “Yes, we are an ethical company and of course we want to be sustainable. But somebody please just tell me what that means – what should we actually do!?” This ESG “5×5” Matrix helps you develop an ESG action plan, based on the 5 themes that are material for most businesses across industries, and taking into account 5 “signals”: regulation, litigation, clients, employees/investors and activism.