A Week in Review of Global Responsible Investments News

Written By Adrienne Lawler

In this Week's Edition:

  • Sustainable Finance: EU taxonomy faces criticism, green bond issuance surges, and sustainable finance regulations tighten globally.

  • Renewable Energy: Major investments in solar and wind power, advancements in energy storage, and the growing role of green hydrogen.

  • Social Impact: Focus on affordable housing initiatives, inclusive finance, and efforts to combat human trafficking and modern slavery.

  • Climate Action: Adaptation and resilience take center stage, carbon capture technologies gain traction, and investors push for corporate climate action.

Sustainable Finance

Renewable Energy

  • Solar and Wind Power Surge: Major investments continue to flow into solar and wind energy projects globally, driven by falling costs, supportive policies, and growing demand for clean energy. (Source: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2022/Mar/IRENA_World_Energy_Transitions_Outlook_2022.pdf)

  • Energy Storage Advancements: Advancements in energy storage technologies, such as batteries and pumped hydro, are critical for enabling the transition to renewable energy. Investors are increasingly focusing on energy storage solutions to address the intermittency of solar and wind power. (Source: https://www.bloombergneF/)

  • Green Hydrogen Gains Momentum: Green hydrogen, produced using renewable energy, is gaining momentum as a clean fuel for various applications, including transportation, industry, and power generation. Investors are pouring funds into green hydrogen projects, recognizing its potential to decarbonize hard-to-abate sectors. (Source: https://www.hydrogencouncil.com/en/)

Social Impact

  • Affordable Housing Initiatives: The lack of affordable housing is a pressing global challenge. Impact investors are increasingly focusing on affordable housing projects, providing capital for the development and preservation of affordable housing units. (Source: https://www.jpmorganchase.com/impact/jpmc-impact-stories/investing-in-affordable-housing)

  • Inclusive Finance Expands: Access to financial services is crucial for economic empowerment and social inclusion. Investors are supporting initiatives that expand access to financial services for underserved communities, including microfinance, mobile banking, and financial literacy programs. (Source: https://www.cgap.org/)

  • Combating Human Trafficking: Investors are increasingly recognizing the importance of addressing human trafficking and modern slavery within their portfolios. They are engaging with companies to ensure ethical supply chains and supporting organizations that work to combat these human rights abuses. (Source: https://www.un.org/en/global-issues/human-trafficking)

Climate Action

  • Adaptation and Resilience: As the impacts of climate change become more severe, investors are prioritizing adaptation and resilience measures. This includes investing in infrastructure that can withstand extreme weather events, supporting climate-smart agriculture, and developing early warning systems for natural disasters. (Source: https://gca.org/)

  • Carbon Capture Technologies: Carbon capture, utilization, and storage (CCUS) technologies are gaining traction as a way to reduce greenhouse gas emissions. Investors are funding the development and deployment of CCUS technologies, recognizing their potential to play a crucial role in achieving net-zero targets. (Source: https://www.globalccsinstitute.com/)

  • Investor Pressure on Climate Action: Investors are increasingly pressuring companies to take ambitious climate action, setting science-based targets, disclosing climate-related risks, and transitioning to low-carbon business models. This engagement is crucial for driving the systemic change needed to address the climate crisis. (Source: https://www.cdp.net/en)

Regional Highlights

  • North America: The US Inflation Reduction Act is driving significant investment in clean energy and climate solutions. Investors are also focusing on social impact initiatives, such as affordable housing and racial justice.

  • Europe: The EU's sustainable finance taxonomy and Sustainable Finance Disclosure Regulation (SFDR) are shaping investment strategies, with a strong emphasis on climate action and ESG integration.

  • Asia: China's commitment to carbon neutrality is driving significant investment in renewable energy and green technologies. Investors are also focusing on social development and poverty alleviation in the region.

  • Emerging Markets: Investors are increasingly recognizing the potential of emerging markets to contribute to sustainable development, with a focus on renewable energy, financial inclusion, and climate adaptation.

Looking Ahead

The past week has highlighted the growing momentum of sustainable investing and the increasing alignment of capital with the SDG goals. As the world grapples with urgent challenges like climate change, social inequality, and biodiversity loss, investors have a critical role to play in driving positive change.

By embracing responsible investment practices, engaging with companies, and supporting innovative solutions, investors can contribute to a more sustainable and equitable future for all. The journey towards achieving the SDGs is a collective one, and the investment community has a powerful opportunity to lead the way.

Disclaimer: This newsletter is intended for informational purposes only and does not constitute investment advice. The information provided herein is based on publicly available sources and is believed to be reliable, but its accuracy cannot be guaranteed. Investors should conduct their own research and consult with their financial advisors before making any investment decisions.

Adrienne Lawler
Next

The Cost of Exclusion: Missed Opportunities When DE&I Is Absent from Portfolio Construction