Surprise jump in global coal production capacity; Large ESG funds beat the market

The ESG Insider newsletter brings together news and information on environmental, social and governance developments driving change in business and investment decisions. Subscribe to our ESG Insider Newsletter and listen to the ESG Insider podcast on SoundCloud, Spotify and Apple podcasts.

Global coal-fired generation capacity increased for the first time since 2015 thanks to a surge in the development of coal-fired power plants in China, according to a new report released this week.

The pace of building new factories in China is well below the boom that took place in 2015 and 2016, but coal-fired development in China has accelerated “as provinces use coal proposals to boost their economies to following the economic downturn from the COVID -19 pandemic, ”the report from the nonprofit Global Energy Monitor revealed.

“The growth was made possible by the central government, which relaxed restrictions on new coal-fired power plant permits and increased lending to grow the national economy, including for coal-intensive megaprojects,” he said. added the group.

The findings follow another report from environmental organizations that showed fossil fuel funding plummeted in 2020 as the COVID-19 pandemic halted demand and production. At the same time, overall bank financing for the fossil fuel industry remained higher than in 2016, the year following the signing of the 2015 Paris Agreement on climate change.

“The general trend in fossil fuel financing over the past five years is still definitely going in the wrong direction, reinforcing the need for banks to put in place policies that lock in the decline in fossil fuel financing in 2020, lest “They won’t return to the status quo. in 2021,” warned the report, sponsored by the Rainforest Action Network, BankTrack, the Indigenous Environmental Network, Oil Change International, Reclaim Finance and the Sierra Club.

Podcast

State Street Global Advisors expects data ‘revolution’

In the last “ESG Insider “ podcast, we interview the co-directors of asset management at State Street Global Advisors. They tell us about the themes the company has focused on in thousands of shareholder engagements in 2020, such as the response to COVID-19, supply chain resilience, and racial and gender diversity. They say the latest is about to make a “revolution” next year. They also talk about emerging themes they are engaging with in the 2021 proxy season, such as governance of environmental issues.
-Listen SoundCloud, Spotify and Apple podcasts.

Ben Colton and Rob Walker, Co-Heads of Asset Management at State Street Global Advisors

Source: State Street Global Advisors

Graph of the week

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Best Stories

ESG funds beat the S&P 500 in the first year of COVID-19; how 1 fund reached the top

S&P Global Market Intelligence analyzed dozens of major exchange-traded funds and ESG mutual funds from March 2020 – the month the World Health Organization officially declared COVID-19 a pandemic – to March 2021. We have found that during this period, the vast majority outperformed the S&P 500. Critics of ESG investing often question whether the strategy can deliver superior returns. But ESG fund managers have said their focus on non-traditional risks has led to portfolios of companies that have so far been resilient during the COVID-19 downturn.

Fossil fuel funding drops in 2020 amid COVID-19, environmental groups say

In 2020, 60 of the world’s largest commercial and investment banks funded the fossil fuel industry $ 750.73 billion, up from $ 823.68 billion in 2019, but more than $ 709.23 billion in 2016. Investors and regulators are increasingly concerned about long-term climate risks, fearing that if industries like coal and gas become obsolete, financial institutions will end up with stranded assets. As a result, lenders have adopted policies aimed at phasing out fossil fuel financing and aligning their lending with the Paris Agreement.

Pressure to act on carbon emissions threatens growth of China’s coal sector

The easing of restrictions on new permits and increased government loans for large coal projects have fueled a boom in Chinese coal projects aimed at boosting the economy in the wake of the COVID-19 pandemic. Although coal consumption continues to increase in China, industry watchers expect that a global energy transition will require substantial changes to the sector in the years to come.

Environment

Biden’s infrastructure plan, new technologies considered key to the energy transition

China steps up efforts to reduce carbon emissions from steel and aluminum industries

Southern expects to reach net zero ‘well ahead’ of 2050 target

Social

Amazon faces backlash in Europe as workers union vote rolls out in US

Investcorp and Xponance Partner to Support Diverse Women-Owned Asset Managers

Union miners issue strike notice at Warrior metallurgical coal operations

Governance

G-20 watchdog to recommend roadmap to tackle climate-related financial risks

Yellen-led FSOC to focus on climate risks and hedge funds

Major auto and tech companies back moratorium on deep seabed mining

ESG indices

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Events to come

GreenFin 21
GreenBiz
April 13-14
Online

Bloomberg Green Summit
Bloomberg
April 26-27
Online

RI Europe 2021
Responsible investor
June 14 to 18
Online

The 2021 European SDG summit
CSR Europe
October 11-14
Online

COP26
United Nations Climate Change Conference
November 1 to 12
Glasgow

Questions or suggestions? Contact the ESG News team of S&P Global Market Intelligence at [email protected]


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