Our monthly spotlight on the latest in values-aligned investing across Wall Street and the world.
ESG IN THE NEWS
Show Me The Standards. Through its Sustainable Finance Disclosure Regulation, the European Union continues to hone its final rules for how asset managers disclose their approach to integrating sustainability in their investment process. Meanwhile in the U.S., the SEC has announced they will propose rules by the end of the year, targeting not only how investment products properly advertise any of their ESG attributes but how corporations disclose their own operational risk exposures related to climate change.
Al Gore Gets Optimistic. In a recent interview, Generation Investment Management chairman Al Gore said he’s getting more optimistic on climate change, thanks to growing investment in solar and wind, falling costs for electric vehicles, growth of clean technology investments, political support for climate action, and a boom in ESG investing. Mr. Gore also warned against corporate greenwashing of long-term targets set decades into the future and well past the tenure of management teams or political leaders.
Corporate Earnings Calls Turn Green. ESG mentions on earnings conference calls rose from 5% in 2019 to 19% in May 2021, according to a recent report by PIMCO. The rapid increase is attributed to increased institutional and retail investor demand for ESG investment options, leading to higher accountability for company behavior related to earth, people, and corporate integrity issues.
VALUES IN ACTION
Earth: Nucor Pledges to Cut Greenhouse Gas Emissions. Nucor is the largest steel producer, with annual production exceeding 25 million tons. In its recently filed sustainability report, Nucor pledged to cut GHG emissions 35% by 2030. This is the company’s first emissions reduction target. At this time, Seeds has no direct exposure to the steel industry.
People: Ralph Lauren To Link Pay With Progress. Ralph Lauren recently announced plans to tie executive pay to sustainability goals. In addition to environmental and product sustainability goals, the company is targeting 20% of its global leadership from underrepresented racial and ethnic groups by 2023. NKE, which is targeting 45% women in leadership positions by 2025, is held in certain Seeds portfolios.
Corporate Integrity: Jeff Bezos Steps Down. On July 5,Jeff Bezos stepped down as CEO of Amazon as part of a planned succession process. Bezos will continue to lead strategic initiatives as “Executive Chair.” In his final letter to shareholders, Bezos said, “We are going to be Earth's Best Employer and Earth's Safest Place to Work." Amazon has recently been under scrutiny for the treatment and pay of its 1.3 million employees. Seeds does not own AMZN stock because of concerns over employee welfare and the company’s large carbon footprint.
Denmark-based Ørsted (OTC-DNNGY) is the largest developer and operator of offshore wind projects. Seeds added Ørsted to certain portfolios in February 2021. The company has 11.3 gigawatts (GW) of installed renewable energy capacity, including 7.6 GW of offshore wind. Ørsted is targeting 15 GW of offshore wind capacity by 2025. Ørsted is building 2,200 MW of offshore wind capacity along the New Jersey coastline. Additional project awards to build more windfarms may be a catalyst for DNNGY shares. The company’s carbon emissions total 17-18 million metric tons per year, but the company plans to be carbon neutral in its operations by 2025. In addition, Ørsted is driving gender equality with a goal to reach 22% women in executive leadership by 2023 (up from 20% in 2020).
The financial services industry is embracing diversity and inclusion practices as both better for business performance and to reach their diverse consumers. Today, only 1 in 5 financial advisors is a woman, though we expect this number to grow going forward. In the near future, advisory firms may be required to disclose gender and racial diversity in their workforce, according to potential new regulation from the SEC’s Asset Management Advisory Committee (AMAC). Firms that have already embraced the need to build diverse and inclusive workforces have an advantage in the market.
- Seeds CEO Zach Conway is featured on Get Real! TV about how advisors can use Seeds to simplify and integrate ESG strategies into client portfolios.
- As the World Opens, Crypto, Board Changes, And Company Actions Capture Investor Attention in Seeds Investment Quarterly Report.
To learn more, contact the Seeds team at email@example.com or visit our website at www.seedsinvestor.com.
Seeds Investor LLC ("Seeds") is a Registered Investment Advisor ("RIA"), located in the State of New York. Seeds provides investment advisory and related services for clients nationally. Seeds will maintain all applicable registration and licenses as required by the various states in which Seeds conducts business, as applicable.
This document is for your private and confidential use only, and not intended for broad usage or dissemination. Past performance is no guarantee of future returns. Nothing contained in this publication shall be construed as to make a representation or warranty, express or implied, regarding the advisability to invest in or include companies in investable universes and/or portfolios. Opinions shown in this publication are solely those of Seeds and may not be accurate or complete. Seeds does not get any compensation from linking to news articles and does not take any responsibility for the accuracy of such articles or information therein.
*Holding examples mentioned are for illustrative purposes nd may or may not represent actual holdings in an individual’s personalized Seeds Portfolio. Investors are to refer to their financial advisor or custodian for a list of actual holdings.
Seeds began managing advisory client assets March 23, 2020. Although this material is based upon information the advisor considers reliable and endeavors to keep current, the advisor does not assure that this material is accurate, current or complete, and it should not be relied upon as such. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. All investments include a risk of loss that clients should be prepared to bear. The principal risks of the advisor’s investment services are disclosed in the publicly available Form ADV Part 2A.