This site uses cookies to improve your experience. To help us insure we adhere to various privacy regulations, please select your country/region of residence. If you do not select a country, we will assume you are from the United States. Select your Cookie Settings or view our Privacy Policy and Terms of Use.
Cookie Settings
Cookies and similar technologies are used on this website for proper function of the website, for tracking performance analytics and for marketing purposes. We and some of our third-party providers may use cookie data for various purposes. Please review the cookie settings below and choose your preference.
Used for the proper function of the website
Used for monitoring website traffic and interactions
Cookie Settings
Cookies and similar technologies are used on this website for proper function of the website, for tracking performance analytics and for marketing purposes. We and some of our third-party providers may use cookie data for various purposes. Please review the cookie settings below and choose your preference.
Strictly Necessary: Used for the proper function of the website
Performance/Analytics: Used for monitoring website traffic and interactions
Although we’ve promised to introduce a cap on energy sector emissions, this cap will not address Scope 3 emissions (those up and down a company’s supplychain), which account for around 88% of total emissions from the oil and gas industry.
Strandedassets Speaking later with ESG Investor , Lord Deben stressed that strandedassets – when investment assets become liabilities – will present a significant challenge for investors in the transition to a low-carbon economy. It’ll be a mess.”
Asset managers must recognise that degrading ecosystems directly impact markets, supplychains, and long-term returns. As environmental conditions deteriorate, sectors such as agriculture, forestry, and fisheries face growing disruptions, translating into financial losses, operational instability, and declining asset values.
The evolving climate drives physical risks—damaged or strandedassets and business-interruption costs from severe weather events. For example, one provider calculates a company’s physical risk based solely on its headquarters location, despite its global supplychain stretching across far-flung manufacturing locations.
to Asia or Europe has higher carbon intensity than local coal use due to the leakage of methane – a powerful warming agent – throughout the LNG supplychain, but particularly during shipping. Cornell University ecosystem scientist Robert Howarth recently concluded that LNG exported from the U.S.
Or that slashing regulation means being more competitive, even though a fossil fuel-led race to the bottom exposes our economies to insecurity, instability and strandedassets. There is a better story to tell one rooted in both present market realities and a vision of a liveable and prosperous future.
Build more investor confidence in green infrastructure projects The greatest fear that many investors have around investing in green infrastructure projects is that they become “strandedassets.” To prevent this, governments must make a long-term commitment to a green energy source such as hydrogen or nuclear.
Its difficult to know which chemicals are being used in different products for specific applications, and then the fate of such chemicals in the supplychain and the ability to trace where theyre ending up. There is a big question around the transparency and disclosure of chemical additives, she said.
Financial institutions that start with managing their own footprint and supplychains will deliver limited climate impact compared to aligning their balance sheets to lower emissions investments that embed resilience and minimize their exposure to strandedassets.
They’re about addressing the major risks that financial markets and companies face as a result of the changing climate—the supplychain disruptions, the diminished worker productivity, the damage to corporate infrastructure and the communities businesses operate in. Risks that continue to escalate. This year, a record $1.8
Scope 3 is set to be the big issue beyond the energy sector this year, as shareholders and regulators seek greater clarity along the corporate supplychain. As Carbon Tracker notes, ExxonMobil doesn’t even include Scope 3 emissions in its projections.
For example, Brazilian meatpacker JBS has set science-based climate targets and are aiming to have full supplychain traceability by 2025. It’s part of our fiduciary duty to be at the forefront of efforts to scale up and re-allocate capital.
European renewable energy asset holders and investors must rapidly re-evaluate their strategies and business models, faced with inflationary and supplychain pressures, alongside ongoing regulatory uncertainty driven by the energy crisis. Those failing to do so will find the risk of strandedassets to be high and rising.
The Global Plastics Treaty is being negotiated with the principles of a ‘just transition’ in mind, meaning impacts on employees, communities and supplychains will be considered, while the final round of discussions will also continue talks on how it will be financed.
For financial institutions such as banks, insurance companies and investment managers, scope 3 emissions from supplychains and lending/investment portfolios are often more complex than for other industries. A simple example is that of a financial investment in a mining company.
Guidance highlights the vital role of protected areas as a conservation tool, warning against the risk of strandedassets. Since location and supply-chain data are usually only partially available, we are aware that we need to progress in our understanding of potential exposure to protected areas.
“Physical risk represents an increasingly severe risk for investors, with the escalating climate and natural capital crisis leading to elevated risks of damage from extreme weather events, supplychain disruptions, strandedassets, productivity impacts, insurance unaffordability, just transition impacts, and potential economic instability,” said Robyn (..)
In a letter to the Commission, WindEurope explained how low volumes of permitted projects have impacted Europe’s wind turbine manufacturers and wider supplychain. Increasing gas infrastructure must be avoided to avert dangerous climate impacts and strandedassets.”.
Adapting to the shift from only 1% of the high seas being protected to two thirds of the ocean that lies outside of national boundaries becoming protected will have impacts on business models that are dependent on exploiting ocean resources, both directly and through supplychains.
For business, investments in fossil fuels are now far riskier because the market expects them to become strandedassets in the foreseeable future. The companies that best collaborate with their supplychains to develop solutions that can become widely adopted, will be the winners on this race to zero.
These plants are expected to operate for decades and risk becoming “strandedassets” if they retire early. Supplychain businesses and employees : Coal-fired power generation and mining operations often support a network of local businesses and employment within their supplychain, from coal transportation to electricity delivery.
Warwick Thompson says it is vital to reduce reliance on fossil fuels to minimise the risk of strandedassets. “The government needs to ensure the right policy landscape and incentives are in place in the economy for private finance to flow to the right areas, and away from the continued expansion of fossil fuel production,” he says.
Nature is at the base of every supplychain. For now, business understanding and disclosure of nature risk – both from investee firms’ direct operations and along their supplychains – is patchy at best, with firms in the APAC region lagging global peers. Ecosystem services are absolutely critical to the creation of GDP.
indigenous populations), as well as working conditions throughout the supplychain (e.g. Risk is a central element in the decision to factor ESG principles into investing, as it can reduce future losses related to strandedassets. eliminating slavery and child labor). executive team, board, management, etc.),
How firms consider impacts on workers, consumers, supplychains and other stakeholder in their pathway to net zero emissions is just one element of their transition planning. This has echoes of the issue of strandedassets arising from decarbonisation of the energy supply over the past decade or so.”
Meanwhile, the US Inflation Reduction Act (IRA) , which was signed into law last year, includes direct support for port emissions reductions through electrification and will further contribute to building out the country’s domestic green ammonia supplychain through its clean hydrogen tax incentives.
“ In my experience, the positive evolution of climate awareness began around 2013-2014 when asset owners and some banks started recognising the importance of climate-related issues,” he tells ESG Investor , noting that the finance industry started to recognise that climate demanded additional attention, alongside the integration of ESG considerations (..)
This economic model is designed to increase the human capacity to deal with shocks (climate disasters, supplychain interruptions, etc). It does this by reforming markets to address real needs while factoring costs and stakeholder concerns. The resilience economy. A final model we should consider is the resilience economy.
For those firms apparently struggling to keep pace, Wiggs says investors should ask where the bottleneck is – technology, a lack of infrastructure, or supplychain issues such as a chip shortage. Supply-chain disruptions and increased battery costs are another challenge for EV manufacturers.
In a late February expos, Heatmap News pointed to the widening gap between the rapid demand growth that utility planners are projecting and the deep challenges in getting turbine supplychains up and running. Basically, we are all depending on the same supplychain, den Elzen said.
Given the diversity described above, it’s no surprise that many already see financing opportunity across the continent and its energy sector’s supplychain, as it embarks on its green transition. . How are investors currently getting involved in Africa’s energy transition? .
Investment in low-carbon industries is booming globally, opens new tab , while economies still reliant on fossil fuels are battling price volatility, strandedassets and investor uncertainty. The fastest, most secure path to long-term prosperity is through the shift to clean energy.
The Global Resilience Index launched today, will help improve the way insurers, financiers and investors measure the resilience of countries, companies and supplychains. It makes no long-term sense to continue pumping money into an asset that is already destined to eventually have no value — a strandedasset.
Should energy producers experience higher costs from carbon offsets, incur fines from excessive polluting, or face impairment charges on their strandedassets as they transform their energy mix, local shareholders that are dependent on steady dividend yields for their incomes may find their retirement plans affected.
It’s a mix of values exclusions with ESG integration that may seem odd to some, but it’s not far off from the structure of many Catholic-values funds that have been around for a long time.
We organize all of the trending information in your field so you don't have to. Join 5,000+ users and stay up to date on the latest articles your peers are reading.
You know about us, now we want to get to know you!
Let's personalize your content
Let's get even more personalized
We recognize your account from another site in our network, please click 'Send Email' below to continue with verifying your account and setting a password.
Let's personalize your content