ESG

Lego, the world’s largest toy manufacturer, has built a reputation not only for the durability of its bricks, designed to last for decades, but also for its substantial investment in sustainability. The company has pledged US$1.4 billion to reduce carbon emissions by 2025, despite netting annual profits of just over $2 billion in 2022. This commitment isn’t just for show. Lego sees its core customers as children and their parents, and sustainability is fundamentally about ensuring that future generations inherit a planet as hospitable as the one we enjoy today. So it was surprising when the Financial Times reported on Sept. 25, 2023, that Lego had pulled out of its widely publicized “Bottles to Bricks” initiative. This ambitious project aimed to replace traditional Lego plastic with a new material made from recycled plastic bottles. However, when Lego assessed the project’s environmental impact throughout its supply chain, it found that producing...

Over recent months there has been an orchestrated pushback against investors and insurers who integrate the risks of climate change into their business models. That pushback – emanating from Republican-led states – is having an impact on how companies speak publicly. But whether it will affect their efforts to respond to climate change is less clear. The latest targets have been global insurance companies, and their responses offer some insight. Under pressure, several major insurers, including AXA, Allianz, Lloyd’s and Swiss Re, have pulled out of a United Nations-organized alliance committed to a global goal of net-zero emissions by mid-century. There’s a word for companies going quiet in the face of orchestrated attacks: “greenhushing.” But while the insurers’ departures from the alliance might look like a victory for politicians and political donors who want to delay action on climate change, the companies say leaving doesn’t...

The Federal Reserve raised interest rates again on May 3, 2023, by a quarter point, making it the Fed’s 10th rate hike since March 2022 in an ongoing fight to tame inflation. These rate hikes have been reverberating through the economy, raising prospects of a recession amid heightened concerns about the fragile state of banks. The rate hikes are also rattling sustainability-focused investing, better known as ESG investing. The trend toward ESG investing, which puts pressure on companies to meet environmental, social and governance benchmarks, has almost redefined asset management over the past decade. ESG funds today are a multitrillion-dollar market. However, the high uncertainty around interest rates today, along with the prospects of a looming recession and a political backlash, has put the future of ESG investors at a crossroads. I specialize in sustainable finance, and my recent work has documented the impact that tough economic times can have on ESG investing dema...

To meet today’s global sustainability challenges, the corporate world needs more than a few chief sustainability officers – it needs an army of employees, in all areas of business, thinking about sustainability in their decisions every day. That means product designers, supply managers, economists, scientists, architects and many others with the knowledge to both recognize unsustainable practices and find ways to improve sustainability for the overall health of their companies and the planet. Employers are increasingly looking for those skills. We analyzed job ads from a global database and found a tenfold increase in the number of jobs with “sustainability” in the title over the last decade, reaching 177,000 in 2021. What’s troubling is that there are not enough skilled workers to meet the rapid growth in green and sustainability jobs available. While the number of “green jobs” grew globally at a rate of 8% per year over the last five...