Resource Center

In this month’s overview of all things sustainable finance, we look at the shifting global market, ponder the potential impact of the EU green bond standard, and highlight gender-based KPIs in sustainability-linked finance instruments.

The telecom industry is exposed to several Material ESG Issues, including Data Privacy and Security, Business Ethics, Human Capital and Product Governance. Product Governance issues in the telecom industry include service quality, maintaining reliable, high-speed networks, and responding to customer billing concerns.

Data centers play a critical role for many technology and telecom companies and for their supporting servers, digital storage equipment and network infrastructure for data processing and storage. Data centers require high volumes of water directly for cooling purposes and indirectly, through electricity generation. Morningstar Sustainalytics’ recent activation of the Resource Use Material ESG Issue (MEI) within its ESG Risk Ratings recognizes water risks of data centers.

The Clean Power Plan was created using a directive from the Clean Air Act that enabled the EPA to set emission limits for air pollutants based on the best available technology to reduce emissions. The EPA aimed to cap carbon emissions and curb greenhouse (GHG) emissions by changing the composition of the existing operational power generation assets by forcing the closure of coal plants through strict emission caps, resulting in a system-wide transition to renewable energy.

In this month’s rundown of all things sustainable finance, we look at shifting regulations for investors, issuers and service providers, how issuers can measure the impact of their GSSS bonds, and the growing spotlight on biodiversity in financial markets.

The increasing urgency of the climate crisis has resulted in most investors demanding for more information about the extent to which their investments and portfolios are aligned with the 2°C Paris Agreement target. A recent Environmental Finance Report indicated that 90% of investors regard impact reports as ‘crucial’ and yet 75% of them said that current impact reporting practices are ‘inadequate’ and the lack of impact reporting deterred them from making further investments.

A self-proclaimed “free speech absolutist”, Musk has criticized what he views as excessive moderation on online platforms, indicating his desire to ease Twitter’s content moderation policies and only remove content deemed illegal by governments.

In this year’s recent thematic research report by Sustainalytics, An ESG Lens on Blockchain and Public Equities, we assessed how a small but growing number of companies in resource-intensive industries, such as utilities, mining and semiconductor manufacturing, are developing blockchain solutions as part of their strategy to address environmental risks related to carbon emissions, water withdrawal, and responsible sourcing.

Maritime shipping is the most common mode of transport for global trade, with around 80-90% of the volume of international trade in goods carried by sea. Complex supply chain challenges around the world made 2021 an exceptionally challenging year for retailers, exacerbating global inflation. Still, it was also very profitable for ocean carriers and containership owners.

Join Morningstar Sustainalytics to discover emerging best practices for evaluating key impact metrics of portfolio companies and better understand your investments’ environmental and social impacts.

Learn about how tying executive compensation to ESG performance can enhance a company’s accountability and transparency, the challenges organizations are facing, the types of metrics firms use for ESG-linked compensation programs, industries and regions with high pay-link adoption, steps to make your company’s program credible and transparent, and more.

This Morningstar Sustainalytics report uncovers significant ESG risks facing the mining industry, with an emphasis on resource nationalization.

Transport electrification is at the forefront of the international climate transition agenda. Because of this, global demand for cobalt is projected to grow fourfold by 2030, which raises the question, are mineral supply chains robust enough to fuel a sustainable EV revolution?

How do companies initiate the process of tying executive compensation to ESG metrics? The second part of our Q&A with Sustainalytics' resident expert.

Europe is facing two major crises—an energy crisis, worsened by Russian energy supply disruptions and the challenge of tackling climate change. Renewables have the potential to accelerate EU's energy independence and reduce emissions. Still, there is also an urgent need to secure an adequate energy supply, especially in the coming winter months when heating demand increases. In the short-term, many EU countries are turning to other fossil fuel producers in the Middle East OPEC+ and the US, as well as domestic coal production. For firms deciding which energy projects to invest in, they face a complex question: are energy supply disruptions advancing the EU’s transition to a lower-carbon economy and its energy independence or furthering the continent’s dependence on fossil fuels?

To protect a company’s reputation and economic position, its employees play an essential part in organisational risk mitigation strategy by demonstrating consideration for systemic business risk, taking accountability, and being willing to escalate concerns. Companies with a strong, ethical corporate culture have much to gain—improved employee performance, morale, and retention, and in the long run, bolstering the bottom line.

Can sustainability-linked compensation advance ESG goals? The first part of our Q&A with Sustainalytics' resident expert tackles this and a few other interesting questions.

The various interpretations of the sustainable investment definition introduced by the SFDR and leveraged in MiFID II leave many market participants unsettled, having to decide between approaches that have different benefits and limitations in the short to medium term.

The ethical implications of lethal autonomous weapons systems (LAWS), often referred to by their dramatic moniker ‘killer robots’, have long been a topic of interest. Until recently, debates about LAWS were relegated as hypothetical, with the technology assumed to be under development and out of reach. Such assumptions may be due for reevaluation, and while a firm conclusion is yet to be drawn, it is worthwhile presenting them to the ESG investment community.

As a global leader in second-party opinions (SPOs) of sustainable bonds and loans, Sustainalytics maintains a unique vantage point to observe how the market has changed. Here are some noteworthy developments.