The ESG Advocate - Kickoff Issue
In this inaugural issue of The ESG Advocate, we cover the politics of ESG, severe weather, the SEC's draft proposal, and the intersections of technology with ESG. I suspect some of these topics may dominate the first few weeks of the newsletter.
So, why The ESG Advocate? Well, at Microsoft, my title is Sustainability Industry Advocate, but ESG is really where my passion lies. I feel right at home in the uncertainty of ESG as every week, there are subtle shifts in the conversation. My goal is to keep up on the latest topics and learn together along the way.
With that, I'm proud to launch the first issue!
ESG Investing and the politics of ESG
What if investors considered their entire portfolio, not just one company? — open.spotify.com
Starting out this week, we have this episode from Breaking the Fever.
Rick Alexander, CEO of Shareholder Commons, discusses a needed shift in perspective for investors, one that considers the entire portfolio, instead of just one company. This shift just may allow the necessary ESG improvements needed in a few companies, while helping maintain financial returns. It's an interesting proposition that leads to a startling conclusion - the proposed integration of sustainability metrics into financials might actually be detrimental to change.
His whitepaper on sequimateriality is discussed, as well as an excellent rebuttal to Pence's recent WSJ op-ed about the politicization of ESG. On the latter point, he recommends leaning into the small 'p' politics of ESG instead of presenting it doesn't exist.
With Roe v. Wade Overturned, Companies Stay Silent on Abortion - The New York Times — www.nytimes.com
Speaking of politics...companies, currently trusted above governments, are grappling with the most significant issue in a generation.
"In recent years, there has been a growing expectation that companies weigh in on political and social issues." This is spot on and for Executives, this expectation represents an ESG risk across various stakeholders. How should leaders navigate the minefield of fundamental human rights, religious zealotry, and politics?
While governors of blue states are stepping up to ensure rights are protected, some companies are reiterating their commitment to care and extending offerings to pay for travel to get abortions, believing they are the last line of defense.
Out of all advice, perhaps the one piece that leaders should take away is that consistency is important.
Make no mistake, this issue hits the "Social" pillar squarely across access to healthcare, the freedom to choose, and privacy.
Climate change is too present to deny
Edgar McGregor reported a week ago, there were SIX severe weather events in the US in a single day.
🌊 Flooding and landslides at Yellowstone
⛈️ A derecho storm in the midwest
🌬️🔥Wildfires and high winds in the southwest
⚡The highest energy demand in Texas (due to heat)
🥵125M of the US under extreme heat
🌨️ Bizarre hailstorm in Mexico City (bonus)
As I talk to more and more people, these severe weather events are getting properly associated with climate change. For people in the US, this is no longer something that happens in some far-off place, although admittedly, it is exacerbated in less developed countries.
SEC's comment period ends and calls of greenwashing follow
US SEC's climate risk disclosure plan draws intense debate | S&P Global Market Intelligence — www.spglobal.com
Last week marked the close of comments for the SEC's climate risk disclosure plan draft. Now, the hard work of reviewing comments begin.
As investors seek better information to make more-informed decisions, can politics slow this down? Republicans seem to think this is a first-amendment issue, one where the government is forcing a company to disclose. On the other side, some Democrats think the draft doesn't go far enough. Right in the middle is ESG itself, which often is conflated between Socially Responsible Investing (sustainability goals) and ESG Investing (risk identification).
Of course, I have to call out Microsoft's comments on the proposal, submitted here without comment.
Blowing the whistle on ESG - Behind the Money | Podcast on Spotify — open.spotify.com
Authorities raided the offices of Germany’s top asset manager DWS Group and its majority owner Deutsche Bank recently. In this fascinating episode, we hear from former DWS sustainability officer and whistleblower Desiree Fixler, who tried to do the right thing and was summarily dismissed.
Don't miss her story on how she uncovered a poorly developed ESG scoring mechanism and greenwashing across hundreds of trillions of dollars of assets.
Technology, risk, and ESG
Microsoft's framework for building AI systems responsibly - Microsoft On the Issues — blogs.microsoft.com
I've said it before, but AI Ethics and the responsible implementation of AI are material to every company working with technology.
While access to the technology has been democratized via the cloud and the time to implementation has been shortened, developers and data-science practitioners need to ensure they aren't scaling up existing problems.
Check out our Responsible AI Standard, filled with best practices, recommendations, and goals.
The Greening of IT - Microsoft Tech Community — techcommunity.microsoft.com
More and more, I am having conversations with IT groups about their opportunities to reduce their impact, but bringing these pieces together is complex.
I wrote this piece to help IT groups understand their impact across the lifecycle of cloud migration through to software development.
Tweet of the Week
I'm thinking about this last section and decided to try a Tweet of the Week, spotlighting someone who contributes a thoughtful tweet or thread around ESG.
This week is Shanu Mathew's tweet on the difficulty in reaching Scope 3 commitments, something Accelerated and Large Accelerated Filers will need to grapple with if the SEC draft proposal is accepted, and they company made such a commitment.
