The cost of damaging biodiversity; Investors want banks to step up before COP26

The ESG Insider newsletter compiles news and insights on environmental, social and governance developments driving change in business and investment decisions. Subscribe to our ESG Insider newsletter and listen to the "ESG Insider" podcast on SoundCloud, Spotify and Apple Podcasts.

The collapse of a number of biodiverse ecosystems could hurt global GDP by $2.7 trillion annually by 2030, the World Bank warned in a new report. The loss of such things as wild pollination, the provision of food from marine fisheries and timber from native forests in certain locations would be especially financially harmful to Sub-Saharan Africa and South Asia, the report found.

Meanwhile, a group of investors that collectively manage about $4.2 trillion in assets has written to 63 of the world's largest banks, calling on them to demonstrate their climate credentials by making new commitments before the United Nations 2021 Climate Change Conference, COP26, in November, including to pledge to protect and restore biodiversity. The letter was organized by the U.K.-based sustainable investment nonprofit ShareAction and was addressed to such banks as JPMorgan Chase, Deutsche Bank and Standard Chartered.

In this week's newsletter, we also dive into a new report by 451 Research into how 30 technology trends are playing out across each of the environmental, social and governance dimensions of ESG. And we examine transmission challenges associated with building offshore wind, as well as how the steel industry may need government support to decarbonize. In the latest ESG Insider podcast, we look at how ocean health could be the new frontier for ESG investing. Among the guests we interview for that episode is the grandson of famous ocean explorer Jacques Cousteau.

Chart of the week

Top Stories

451 Research Report - ESG and Technology: Impacts and Implications

The report digs into more than 30 important technology trends and how they fit in the ESG space. These technologies are influencing the ESG agenda in different ways, to varying extents and at different speeds. Some issues, such as the sustainability of data centers, are clearly having a major bearing on ESG strategies today. But others are much more subtle, and their potential impacts will play out in the longer term.

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US steelmakers may need government intervention to lead green steel trend

As the U.S. steel sector wrestles with conflicting priorities on climate change and trade, some in the industry believe it may need government support to cross the cumbersome cost threshold for curbing carbon emissions. Worldwide demand for low-carbon steel is poised to grow as major economies including the U.S. prepare infrastructure stimulus policies geared to rejuvenate their pandemic-stricken economies while investing in the deployment of cleaner energy systems and greener transportation networks. However, observers and steel executives have predicted steelmaking will be one of the most difficult economic sectors to decarbonize because of the financial risks associated with investing in greener steel assets, despite being considered integral to infrastructure plans.

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Podcast

How Cousteau's grandson is bringing oceans to ESG investors

More than 50 years ago, explorer Jacques Cousteau introduced millions of viewers to the marvels of the undersea world. In 2021, the ESG world is increasingly focused on biodiversity, and the oceans are a big part of that picture. In this week's podcast episode, we interview Cousteau's grandson, Philippe, the co-founder of a nonprofit called EarthEcho International that works on ocean health. We also hear from Doug Heske, CEO of impact investing company Newday Impact that has teamed up with Philippe to promote ocean restoration, especially among younger investors. And we interview fund manager Paul Buchwitz from one of Germany's largest asset managers, DWS, about how the company is aiming to address ocean-related risks while tapping into new investment opportunities offered by ocean restoration projects.

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PE managers find benefit in adopting virtual practices

Private equity is "the ultimate people business," said Richard Howell, managing partner and head of the PAI Partners' investor team, and long-term partnerships are "built inevitably by human contact." However, the online-only communication prevalent during the pandemic has resulted in some efficiencies in the private equity process, and virtual meetings are emerging as a permanent supplement to in-person engagement.

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US offshore wind boom entangled in transmission debate

As the Biden administration pushes ahead with offshore wind development in the U.S., the burgeoning industry is confronting an issue of growing importance: how to build the huge amount of electric cabling needed to deliver all that power from the sea to the onshore grid. The U.S. wants to install 30 GW of offshore wind parks by the end of the decade, more than all of Europe has built to date. But some in the industry are sounding alarms that it may fall short of that target if federal agencies, states and grid operators do not coordinate on transmission plans.

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Upcoming Events

G20 Venice Conference on Climate
G20
July 11
Venice, Italy

Plotting the Journey to Net Zero for Investment Managers:
The Steps, Opportunities, and the Pitfalls
S&P Global
July 15
Virtual

Climate Week NYC
Climate Group
Sept. 20 - 26
New York City

UN Biodiversity Conference
Oct. 11
Kunming, China

The European SDG Summit 2021
CSR Europe
Oct. 11-14
Online

COP26
United Nations Climate Change Conference
Oct. 31-Nov.12
Glasgow