The Republican Party’s opposition to environmental, social, and governance (ESG) investing is advancing further with the House of Representatives holding a hearing today to examine financial institutions’ approach to ESG. This hearing, led by Republicans with strong financial backgrounds, is expected to be more thoughtful than previous ones. However, given that Democrats control the Senate and White House, any attempts to legislate against ESG will likely fail. In this week’s newsletter, we will provide a comprehensive report on these developments from Washington, including the behind-the-scenes lobbying efforts related to ESG.
Also, in today’s newsletter, Simon delves into the International Energy Agency’s (IEA) latest report on critical minerals. Meanwhile, Kaori looks into shareholder concerns about antibiotic resistance and how they are voicing these concerns at companies.
For those in New York this week, Gillian and I will be speaking at a Nikkei event on the UN Sustainable Development Goals. Additionally, on Thursday, I will be participating in a webinar hosted by the law firm Ropes & Gray about the ESG backlash and what investment funds can do to address it.
Key takeaways from the IEA’s report on critical minerals:
1. The report suggests that there is promise in the project pipeline for meeting the demand for critical minerals. If all planned mining and processing projects in this space materialize, it could supply two-thirds of the critical minerals needed to achieve net-zero targets. However, approval delays and cost overruns pose significant challenges to these projects.
2. The demand for lithium is growing exponentially compared to other critical minerals. The IEA projects that lithium demand will increase sevenfold by 2030 if the world is to achieve net-zero emissions by 2050.
3. The concentration of mining and refining of critical minerals in a few countries is a major concern. Over 70% of the world’s cobalt comes from the Democratic Republic of Congo, while China dominates global rare earth metal extraction and processing. Although there are some signs of increased diversification in extraction, processing concentration is expected to persist.
4. Sustainability is a pressing issue in critical mineral production. The report highlights that major companies in this industry have made little progress in reducing emissions intensity and improving resource quality. Water withdrawals at critical mineral production sites have also increased substantially. Buyers of critical minerals have a role to play in driving sustainability improvements by prioritizing high standards in sourcing decisions.
5. Start-up funding in the critical minerals sector is increasing. Despite the decline in venture capital investment last year, young companies in this space raised $1.6 billion, with battery recycling start-ups being particularly popular.
Shareholders are increasingly concerned about antibiotic resistance, particularly in the fast-food industry. Investor pressure has led companies like McDonald’s to disclose information on their antibiotic usage and adherence to World Health Organization guidelines. A group of 71 investors representing $15.2 trillion in assets is now calling on fast-food restaurants, including McDonald’s, KFC, Pizza Hut, and Burger King, to disclose their antibiotic usage and reduction targets. This initiative, led by the FAIRR investor network, aims to hold these companies accountable and will publish company assessments in 2024. Investors are motivated by the need to comply with upcoming regulations and address the systemic risks posed by antibiotic resistance.
In conclusion, the Republican Party’s scrutiny of ESG investing continues, but legislative attacks are unlikely to succeed. The IEA’s report on critical minerals highlights both promising developments and challenges in meeting demand. Shareholders are turning their attention to antibiotic resistance, pushing for greater transparency and action from companies.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
