Chief financial officers at companies including

Anheuser-Busch InBev SA,

Ford Motor Co.

and

Verizon Communications Inc.

are calling on other executives to make sure their businesses help fight poverty and climate change.

A group of CFOs on Monday published a framework to help guide companies’ decision-making in areas such as corporate finance and investing to support the United Nations’ Sustainable Development Goals. These goals, adopted in 2015, include ending poverty by 2030, taking action against climate change and improving access to clean water.

The CFOs are urging other finance executives to allocate their companies’ resources to projects that support the development goals and expand their set of funding instruments to include green bonds and other sustainability-oriented tools, executives said.

“Because of the seats we sit in within our companies, us being seen as supporting it…makes people take a second look and say, ‘Hey, maybe there are things we can do,’” Verizon CFO Matthew Ellis said.

The telecommunications company last week issued a $1 billion green bond and said it would use the proceeds to support four of the U.N.’s 17 goals in areas such as clean energy and economic growth. Verizon plans to invest in solar and wind facilities to power its networks.

Investors increasingly take interest in environmental, social and governance issues. Funds that pursued sustainability targets in their investment strategy during the first half of 2020 attracted $20.9 billion in net new assets from investors. That is roughly on par with the whole of 2019 and about four times as much as in 2018, according to

Morningstar Inc.,

a ratings company. Morningstar analyzed 334 U.S. funds in its tally.

Fernando Tennenbaum, chief financial officer of AB InBev.



Photo:

In our previous article, we focused on how the world’s poorer citizens are most vulnerable to the globe’s most dangerous crises: COVID-19 and climate change. The people at most risk of contracting COVID-19 – low-income individuals, women, workers dependent on working in the informal economy, and racial and ethnic minorities – are also the same citizens that are most at risk due to the climate crisis. Reaching true social equity will require a focus on both addressing climate risks and ensuring some level of finance is available to all.

Social equity requires a focus on long-term recovery

The past several months of the COVID-19 pandemic can tell us a lot about how to address climate risks, and importantly how to do so in ways that can achieve social equity.  A strong post-COVID-19 recovery could be a unique policy and investment opportunity to address both climate resilience and equity issues by squarely incentivizing, or even mandating, the financial sector to fill what has otherwise been a gap in financing in order to create resilience for the most vulnerable.

Many policy makers are thinking through practical ways to action this right now. For example, a recent OECD report on Green COVID Recovery recommends “integrating environmental sustainability and socioeconomic equity” in policy packages – by, for example, lowering labor taxes concomitantly with raising taxes on pollution – in order to build long-term resilience, boost the prospects for social equity, and mitigate the regressive effects of environmental policies.

In addition, the IMF has been supporting this idea by promoting a “smarter, greener and fairer” recovery. As the current IMF Managing Director, Kristalina Georgieva, has stated, “We cannot turn back the COVID-19 clock, but we can invest in reducing emissions and adapting to new environmental conditions.”

However, how exactly sustainable and equitable

JPMorgan Chase & Co. is planning to set emissions targets for its financing portfolio, joining other massive banks in bringing climate goals to its lending activity.

The biggest U.S. bank will establish goals to be achieved by 2030 for each each industry in its portfolio, starting with oil and gas, automotive manufacturing and electric power. It will begin announcing the targets next year.

JPMorgan is also working to achieve a net-zero carbon footprint for its own operations starting this year as part of a broader commitment to align its activity with the 2015 Paris climate agreement. Morgan Stanley had pledged to eliminate the net carbon emissions generated by its financing activities in three decades.


The changes send a signal that JPMorgan is thinking more seriously about its role in fighting climate change. The bank has been under increasing pressure from environmental activists to divest from the fossil-fuel industry. In February, the firm said it would tighten its financing policy and pledged to stop advising or lending to companies that get the majority of revenue from the extraction of coal.

In May, a shareholder resolution requesting that the firm issue a report outlining how it intends to reduce greenhouse-gas emissions associated with its lending business received support from 49.6 percent of shareholders — just missing a majority threshold, according to the preliminary tally. The bank has also replaced Lee Raymond, the former Exxon Mobil Corp. boss, as lead independent director of its board after nonprofit groups and some large investors pushed to remove him due to his track record on climate change.

The Rainforest Action Network said the bank’s new policy is a “welcome step forward” but “falls short,” according to Patrick McCully, climate and energy director of the group. “If

BlackRock, the world’s biggest money manager, made headlines early this year when it pledged to prioritize climate change in its investments and pare down its coal holdings.

But environmentalists say the company has failed to make good on this promise in a series of shareholder proposals at annual meetings this year.

Led by influential Wall Street player Larry Fink and overseeing some $7.3 trillion in assets, BlackRock in January vowed to take action to address climate change and sustainable development, raising the hopes of environmentalists.

“We applauded BlackRock for its statement at the beginning of this year…. and we acknowledge that they have taken some steps in that direction,” said Ben Cushing, who leads the Sierra Club’s financial advocacy campaign.

“But clearly it has not translated into fast-enough, or bold-enough action.”

BlackRock CEO Larry Fink leads the world's biggest money manager, which has defended its record of pushing for greener policies in corporations BlackRock CEO Larry Fink leads the world’s biggest money manager, which has defended its record of pushing for greener policies in corporations Photo: AFP / Ludovic MARIN

Part of the skepticism comes from BlackRock’s response to shareholder proposals to require companies to take action on the environment.

BlackRock supported only 13 percent of the green-oriented resolutions in 2020, down from 20 percent in 2019, according to Proxy Insight, which tracks global shareholder voting.

A September report from non-governmental organization Majority Action said the New York financial giant backed only three of 36 resolutions on climate change in proxy votes of S&P 500 companies.

And though BlackRock signed on to Climate Action 100+, a global investor engagement initiative, the company supported just two of 12 resolutions presented by the coalition.

BlackRock holds shares in numerous large companies, including Apple, Facebook and Exxon Mobil, as well as ConocoPhillips and Nike.

Cushing said BlackRock could make a big difference if its actions match its rhetoric.

BlackRock has been criticized for not living up to its rhetoric on the environment BlackRock has been criticized for not living

The business district in Brussels, Belgium. 

Photographer: Jasper Juinen/Bloomberg

The European Union wants to at least double the pace of renovation of homes and offices over the coming decade in a bid to save more energy and meet stricter climate goals under a sweeping green overhaul.

The Renovation Wave strategy, to be unveiled by the European Commission on Wednesday, will outline steps needed to accelerate upgrades of more than 200 million existing buildings — including insulation and change of heating equipment — at a cost of nearly 300 billion euros ($355 billion) per year, according to draft EU documents seen by Bloomberg News.

Explore dynamic updates of the earth’s key data points

Buildings account for more than a third of EU greenhouse-gas emissions, and improving their energy efficiency is a prerequisite for Europe to meet its Green Deal goal of becoming the world’s first climate-neutral continent by the middle of this century. The EU regulatory arm in Brussels has a policy of not commenting on documents before they are made public.

“Building renovation represents an enormous opportunity not only for emissions reductions, but also economic growth and improved health and well-being,” said the Buildings Performance Institute Europe think-tank in Brussels.

The commission wants to increase the average rate of energy renovation to 2% per year by 2030 from the current 1%, according to the EU documents. That would mean upgrades of 35 million buildings over the next 10 years, a move that would not only benefit the environment but also create as many as 160,000 green jobs.

The initiative will be financed through the EU economic recovery program and various support instruments, including incentives for private investment. The commission wants to focus on cutting emissions from heating and cooling, tackling the most leaky buildings and