VW announced it would shut at least three of its German plants, axe tens of thousands of jobs and slash pay by 10%. This is notable because VW is the powerhouse of Germany which typically has been the EU’s industrial engine – meaning jobs, meaning unions, meaning political might. But this is more than a VW story. It is a story of how the energy transition – the transition from pollutive to non-pollutive forms of economic operations – is upending the global order of established industries. It is the story of the hard tradeoffs we have to make in our effort to cut carbon emissions.

In this episode we explore that new world and what it means for the auto industry; an industry many countries and states rely on for their economic driver.

A key aspect of controlling climate change is the energy transition. We bring in experts from MSCI ESG Research and Cohen & Steers to see what progress has been made and to discuss the associated risks and opportunities.

Investors looking to identify leaders and laggards in the auto industry may need to look beyond pure CO2 reductions or even company-declared EV targets and focus more on how companies are managing the tradeoff between emissions and economics.  

No clear guidance presently exists on ESG and climate reporting for derivatives. Using input from market participants, regulatory guidance and a survey of existing research, we propose a framework for more transparent reporting to include derivatives. 

The development of corporate sustainability disclosure frameworks is well underway in APAC, but the absence of standardized and harmonized frameworks may result in misaligned disclosures across markets, posing challenges for companies and investors. 

This week, we are returning to five stories we have already covered to see what progress has been made (if any!): The Adani Group and its attempt to address a short seller report that questioned the group’s governance that led to a massive loss in market share; the United Auto Workers strikes and the continued struggle in the auto industry; the Inflation Reduction Act and the trillions of dollars of capital is supports; what the EPA’s methane rule has done for the gas industry in the US; and how Exxon has changed after having three seats of its 12 member board taken by over by Engine No. 1, an activist investor worried about carbon emissions.

The demands made by the United Auto Workers (UAW) to the big three auto companies in the US are varied and touch on every part of ESG. But what may loom largest is the ongoing transition to electric vehicles that will change how a massive industry operates and employs its millions of workers. We discussed what the strikes mean for the future of the auto industry, and why the UAW is fighting an uphill battle as its industry changes.

There is a considerate environmental cost to e-cigarettes. The critical metals that make up their batteries are more likely to be found in landfills than recycling facilities. Not only does this pose a problem for the environment but regulators are starting to take notice. In this episode, we discuss the environmental problem of e-cigarettes and what may be done to address it. Then, we discuss the ambitious new regulation on tail pipe emissions by the US Environmental Protection Agency that might be the most ambitious air quality regulation ever.

Not many industries are as important as the automobile industry is to developed economies. At the moment, it is going through a change we haven’t seen in a century as it shifts toward electric vehicles and companies work to lower their emissions. In this episode, we discuss what the biggest changes have been to the auto industry so far in 2022 and where it may to go.

As biodiversity loss accelerates, companies and investors are under increasing pressure to act. But turning data into decisions is trickier than it seems. And after a bumpy ride for the EV start-up, ELMS files for bankruptcy and rings a cautionary governance bell.

We draw on our consultation with owners and managers of long-short portfolios to recommend best practices for fund-level ESG and climate reporting. 

Matching scope 3 emissions with a bank’s loan book has been elusive. But recent pressure from inside and outside the banking industry may soon change that – then will come the truly hard questions. And although recent SPAC-merger listings have unlocked ready capital for EV startups, it’s left investors with more questions than answers.

A USD 1 trillion deal is scheduled to be signed into law by US President Biden on Monday, November 12. The deal, in the White House’s words, is imperative for the US to meet its commitment to reduce U.S. emissions by 50-52% from 2005 levels in 2030, create a 100% carbon pollution-free power sector by 2035, and achieve a net-zero economy by 2050. It allocates funds toward updating the US transportation system, its energy infrastructure, its climate resiliency, and its water system. We discussed how these plans move from the political stratosphere to the more habitable land of economic stimulus.

The APAC region is one of the richest in terms of ESG opportunities, such as renewables and electric vehicles, yet also one of the highest risk areas, with pollution and supply chain risk in abundance. The good news? Some of the highest risk markets in APAC have seen some of the biggest improvement in ESG scores in the past three years. We talk about what this means. And then we discuss what would happen to global emissions if everyone in the world drove electric vehicles for a year.