The volume of ESG regulation is flagged as a deterrent while investors say they are increasingly after sustainability information.
By Silvia Pavoni, Editor, Sustainable Views
Silvia Pavoni
Editor
Sustainable Views
Welcome back to Sustainable Views.
On the menu today, we have some fresh research suggesting UK investors are shunning start-ups when these lack systems to support sustainable growth. The study, commissioned by online retail giant Amazon, points to issues with supply chain and waste management responsibilities, as well as with early-stage ventures lacking the right technology and knowledge to act sustainably.
Some may roll their eyes at such findings coming from a group that has been criticised for its own sustainability practices, particularly when it comes to working conditions. Amazon has naturally also a vested interest in promoting how it can make those start-ups more appealing to investors. Though it stresses that the study was conducted independently, the group released the findings in the same breath as announcing a new cohort joining its sustainability accelerator programme.
Still, the research fleshes out a number of interesting points. First, as you’ll see in the piece, it says that good sustainability credentials can lead to a 15 per cent valuation premium. That’s not something to ignore.
Second, the volume of ESG regulation is flagged as a deterrent while investors say they are increasingly after sustainability information. A more granular analysis of this point seems beyond the scope of the Amazon research, but it is certainly something to consider – in the UK and beyond.
After so many tweaks and updates, aren’t rules aimed at forcing the disclosure of that very information moving in the right direction? Are they fit for purpose or just a drag on companies as well as their backers? As always, do let me know your thoughts.
Also today, we look at another side of finance as the Institute for Energy Economics and Financial Analysis has found that the number of financial institutions pledging to divest from coal has doubled since the middle of 2019, replicating the same progress achieved over the previous six years.
However, the IEEFA also notes that the world’s three largest asset managers, BlackRock, Vanguard and State Street, “have either formulated weak coal exit policies or have no policy at all”.
Lastly, the University of Oxford's sustainable finance initiative says additional investments of €512bn in heat pumps and renewable energy could see Europe end its dependence on Russian gas by 2028.
The Oxford Sustainable Finance Group points to green tech subsidies, employment skills, supply chains, transmission capacity and permitting as required policy measures to achieve this.
Until tomorrow.