Analysis: Company valuations and climate strategies are poles apart ReutersAnalysis: Company valuations and climate strategies are poles apart ReutersAnalysis: Company valuations and climate strategies are poles apart Reuters
Impact Investing Forum 2022
London. Dec 07-08, 2022.
View of the Neurath coal power plant near Cologne, Germany, November 5, 2021. REUTERS/Wolfgang Rattay/File PhotoLONDON, Nov 24 (Reuters) – Companies in the most polluting sectors that have invested in climate action often find themselves valued below peers that have been slower to do so, highlighting the difficulty of getting shareholders to back sustainability.Investors have poured more than $30 trillion into environmental, social and corporate governance (ESG) strategies, data from the Global Sustainable Investment Alliance showed. Read more However, the demand for sustainable investment is still high. Pro-climate analysts worry that the U.N.’s climate talks this month did not do enough to alleviate the pressure to prioritize profits. Read more An analysis of companies worldwide by Kearney management consultancy in November, as well data by Credit Suisse Group AG published April (CSGN.S), showed that companies that reduced their emissions in areas where it was costly and received strong government support were valued less than those that emit more. “Investors want climate leadership. They want tangible transition plans. But at the same time, they only want to reward companies that can achieve this without sacrificing returns,” Betty Jiang from Credit Suisse, Credit Suisse’s head for U.S. ESG Research, said. This is especially true after the failure of the United Nations to send a clear message that global warming can be controlled at 1.5 degrees Celsius (2.7 Fahrenheit) at its Glasgow talks. “There is no clear line of sight between climate investment and its impacts,” said Anthony Cowell, head of asset management at KPMG Islands Group. Anthony Cowell, head, asset management at KPMG Islands Group, stated that green (investment) portfolios are not yet equivalent to a green planet. The discount in the rest of the world is even greater – 41%. Deladerriere stated that there is no correlation – no valuation bonus – for having an ESG score in general or a high ‘E” score in particular. Are you penalized for being a bad person? Unfortunately, this is not the case in the short-term. “ENERGY, MINING” The energy and mining sectors are dominated with risks that can impact valuation. However, there is evidence that those sectors that are leading in decarbonising are not being rewarded. BP Plc (BP.L) is a climate leader with a top 4STAR TPI level. Freeport-McMoRan spokeswoman said that the company had made “significant progress” on climate change over the past two years and is committed to “integrating our climate initiatives into our long-term business plans.” Freeport-McMoRan spokeswoman said that the company has made “significant progress” in climate issues over the past two years and is committed “integrating our climate initiatives into long-term business plans.” As climate change becomes a more important issue for regulators and markets, some corporate directors believe boards will take stronger action as more investors give them credit. “Every company wants (sustainability to be) done quickly and easily, because it’s a shorter ROI on investment,” Orlando Ashford, a director of boards at companies such as Perrigo and Array Technologies. Ashford stated that while it may take more time to incorporate sustainability into your business’s structure, it is not a fad.
Additional reporting by Jessica DiNapoli, New York
Editing by Greg Roumeliotis, Barbara LewisOur Standards: The Thomson Reuters Trust Principles