Building resilience: How can businesses thrive amid ESG and climate challenges?

As we navigate the evolving landscape of sustainability and climate change, recent developments underscore the profound impact these forces are having on businesses globally.

The UK’s announcement to propose a law regulating ESG raters and Goldman Sachs’ decision to withdraw from the Climate Action 100+ coalition highlight a critical juncture in sustainable finance. Both moves reflect a growing tension between the need for transparency and the pressures of political dynamics.

In the UK, the proposed regulation aims to enhance transparency in ESG ratings, addressing inconsistencies and the lack of clarity that have long plagued the sector. This initiative is expected to boost growth and support a cleaner economy, ensuring that companies, especially in critical sectors like defense, are not unfairly penalized by opaque ratings. This regulatory shift presents an opportunity for businesses to gain clearer insights into their ESG performance, potentially attracting more sustainable investments.

Conversely, in the United States, Goldman Sachs’ exit from Climate Action 100+ amid political backlash underscores the challenges businesses face in navigating political pressures. Republican lawmakers have raised concerns about potential antitrust violations, questioning the collective push for companies to reduce their carbon footprints. This move, along with similar exits by other major investment firms, signals a shift in how businesses engage with climate initiatives.

These developments highlight a critical intersection of regulation, political influence, and corporate responsibility. For businesses, the path forward involves balancing these pressures while striving to meet sustainability goals. The UK’s regulatory approach offers a framework for greater transparency and accountability, which can enhance investor confidence and drive sustainable growth. On the other hand, the political dynamics in the US present a challenge, pushing businesses to develop more independent and innovative strategies for sustainable investing.

How can businesses balance the pressures of political dynamics with the urgent need to address climate risks and opportunities?

Updates of the week

This week, I’m thrilled to share an exciting update about Reuters IMPACT at Sustainability USA in New York. We have two distinguished speakers confirmed:

• Ali Zaidi, Assistant to the President and National Climate Advisor, White House
• Christiana Figueres, former Executive Secretary, UNFCCC

The IMPACT stage will be the platform where we challenge leaders on climate action, exploring where we stand and where we need to go. This is particularly timely with the upcoming elections. We look forward to seeing you there!

Other leaders confirmed for Reuters IMPACT & wider Sustainability USA stages in New York:

• Ali Zaidi, Assistant to the President and National Climate Advisor, White House
• Christiana Figueres, former Executive Secretary, UNFCCC
• Polly Trottenberg, Deputy Secretary, U.S. Department of Transportation
• Rob Bonta, Attorney General, State of California Department of Justice
• Sanda Ojiambo, Assistant Secretary-General, United Nations Global Compact
• Brad Lander, Comptroller, NYC Office of the Comptroller
• Rohit Aggarwala, Commissioner of the New York City Department of Environmental Protection & Chief Climate Officer, New York City
• Andrew Steer, CEO, Bezos Earth Fund
• Eleni “Lenio” Myrivili, Global Chief Heat Officer, United Nations Human Settlements Programme (UN-Habitat)
• Elizabeth Seager, Member of the Board-ISSB, IFRS
• Mary Ellen Iskenderian, President and CEO, Women's World Banking
• Curtis Ravenel, Senior Advisor to the Co-Chair & Vice Chair, Glasgow Financial Alliance for Net Zero (GFANZ)
• Lauren Riley, Chief Sustainability Officer, United Airlines
• Carlos Ruiz, Chief Operations Officer, North America, L’Oréal Groupe
• Michael Okoroafor, Chief Sustainability Officer, McCormick & Co.
• Stewart Lindsay, Chief Sustainability Officer, Campbell’s
• Jon Hixson, Chief Sustainability Officer, Yum! Brands
• Ivan Frishberg, Chief Sustainability Officer, Amalgamated Bank
• Shaun Castle, Chief Operating Officer, Paralyzed Veterans of America
• Kim Marotta, Global VP, Environmental Sustainability, Suntory Global Spirits

Leaders confirmed for Reuters IMPACT and the wider Sustainability Europe stage in London:

• Jim Skea, Chair, IPCC
• Connie Hedegaard, Chair of the Round Table on Sustainable Development, OECD // Former EU Commissioner for Climate Action, former Danish Minister for Climate and Energy and Environment
• Dr James Richardson, Interim Chair and Acting CEO Climate Change Committee
• Hein Schumacher, CEO, Unilever
• Jesper Brodin, CEO, Ingka Group I IKEA
• Linda Jackson, CEO, Peugeot
• John Neal, CEO, Lloyd’s of London
• Laura Clarke, CEO, ClientEarth
• Archana Jagannathan, Chief Sustainability Officer Europe, PepsiCo
• Ulrike Decoene, Chief Sustainability Officer, AXA
• Richard Barker, Board Member, ISSB
• Thomas Dodd, Team Leader, Sustainability Reporting, European Commission
• Marcello Arona, CEO, AXA Investment Management UK
• Rasmus Bessing, Managing Director, ESG Investing & Co-CIO, PFA
• Catherine Dolton, Chief Sustainability Officer, IHG Hotels and Resorts
• Roel Van Poppel, Chief Sustainability Officer, Ofi
• Antoine Sautenet, Chief Sustainability Officer, Michelin
• Anke Ehlers, Managing Director International Sustainability, Aldi
• Jay Doyle, Chief Procurement Officer, ITV
• Anna Turrell, Chief Sustainability Officer, Decathlon
• Heather Buchanan, CEO, Bankers for Net Zero

Now booking: Reuters IMPACT Studio

In addition to the live journalism interviews at Reuters IMPACT, we recently announced the Reuters IMPACT studio which will run concurrently to the overall events in both London (30th September) and in New York (7th October).

In a bid to help organisations, and businesses communicate their climate leadership beyond the stage, the Reuters IMPACT studio will provide an unrivalled platform for companies to showcase their climate ambitions, their thought leadership, innovative technologies & solutions and to a worldwide audience. Through exclusive Studio interviews, messages can reach millions via Reuters.com and our social channels.

Case study: Heikki Vepsäläinen. President, Large Motors and Generators at ABB joined the Reuters IMPACT studio recently – please feel free to listen in here.

Get in touch here if you are interested in being involved in the Reuters IMPACT studio

What else has caught our eye this week:

• Insurers paid out a record-high 1.4 billion pounds ($1.78 billion) in claims in the UK during the second quarter, primarily due to weather-related catastrophes such as fires and flooding, the Association of British Insurers said – read more here
• BHP, Rio Tinto and Qantas will invest a total of A$80 million ($52.7 million) as early-stage investors in an Australian carbon credits fund that aims to invest in land reforestation projects, according to statements from the fund and the companies – read more here
• Banco BPM has set medium-term emissions targets for 2030 in some of the most carbon-intensive sectors it lends money to, as part of its plan to achieve net-zero financed carbon dioxide emissions by 2050, the Italian bank said – read more here
• Australia and New Zealand said they would provide A$42.6 million ($28.05 million) for Pacific Island countries, which span millions of kilometres of ocean, to store humanitarian aid in the region to prepare for increasing climate disasters – read more here
• Britain said it would propose a law next year to regulate raters of company environmental, social and governance (ESG) performance, whose benchmarks help channel billions of dollars into sustainability-focused investment funds – read more here
• Companies are increasingly turning to voluntary carbon markets (VCMs) to buy and sell carbon credits to achieve their decarbonization goals as part of their overall environmental, social, and governance (ESG) strategies. While VCMs can help individuals, businesses, and nonprofits to offset their carbon emissions, their nascency and lack of an established regulatory framework have led to a disordered marketplace with questionable credits – read more here

That’s it for today, I hope you have a lovely week ahead of you.

Best,

Jon

Jon Harman

Senior Sector Head

Reuters Events

+44 (0) 20 7375 7238

Jon.Harman@thomsonreuters.com