Welcome to a new era of ESG and sustainable finance

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Adapted from the premiere issue of GreenFin Weekly, a free e-newsletter focusing on trends in ESG and sustainable finance. Subscribe using this sign-up page.

What a moment to launch a newsletter on ESG and sustainable finance. The topic has become front and center in sustainability and finance circles and, suddenly, in Washington, D.C.

A vast ecosystem is in play. Investors have awakened to the notion that how companies manage environmental and social issues is nearly as key to their risk profile and profitability as are financial fundamentals. Banks and insurers are factoring climate risk and social issues into their products and portfolios, accelerating a shift that’s been gearing up for years. Companies are warming to a world of deeper transparency and disclosure demands by investors, lenders, customers and others, and are trying to keep up with the dynamic world of standards and frameworks with which they’re being asked to comply.

Oh, and it’s the dawn of a new U.S. presidential administration that sees virtue in assertive action on a range of social and environmental issues.

We’re entering a new era, one in which companies are less able to hide behind their pronouncements and good intentions.

We’re entering a new era, one in which companies are less able to hide behind their pronouncements and good intentions. Accountability is the new watchword. Action, not announcements, is the currency.

The arrival of Team Biden itself promises to be a game changer. By the time you read this, we already may have learned about some of the incoming president’s first moves in this arena. Suffice to say that the new administration’s ambitions are significant — and the expectations could not be higher. After years of spinning wheels and grinding gears, there’s renewed hope for moving forward.

All of this is bringing new players to the table — those inside organizations whose remit up to now hadn’t included such things as climate risk and human rights. Those in finance, investor relations, government affairs and risk management are grappling with new kinds of disclosure, increased investor scrutiny, new regulatory regimes and stepped-up activist pressures (not to mention media enquiries) around a host of nonfinancial issues. Investors, for their part, are similarly finding themselves swimming in uncharted waters.

Even job seekers are starting to scrutinize the ESG data of prospective employers.

GreenFin Weekly

We’ve been covering many of these topics for years on GreenBiz.com. Now, we’re stepping things up, elevating ESG and sustainable finance across our portfolio, starting with this newsletter and the GreenFin 21 conference in April as well as through webcasts, podcasts and many other things we do.

Each week, a member of GreenBiz’s stable of journalists will take the helm of GreenBiz Weekly on a rotating basis, offering a fresh perspective on ESG and sustainable finance, and point to key stories from across the Web. We won’t cover everything — just the important things.

Here are just a few storylines we’ll be following in this newsletter:

  • The convergence of standards: This is No. 1 with a bullet. The mélange — some would call it a morass — of ESG standards and frameworks has been a problem for years. Now, various efforts to align these disparate approaches aim to create harmony from this chaos. But even these harmonization efforts are competing with one another. Which one(s) will win out? It’s an open field.
  • The secret life of ESG data: How it’s compiled and deployed isn’t always clear. As such data is used for everything from assessing creditworthiness to determining where the next generation of talent wants to work, understanding the data itself — how it is compiled and used — will be critical. It’s time to bring ESG out of the black box.
  • The growth of sustainability-linked finance: Another year, another record in the issuance of green bonds, climate bonds, sustainability bonds and others, as well as sustainability-linked loans. But issuing such bonds can be fraught with complexity. How are companies managing? We’ll take you behind the scenes.
  • Investor expectations on DEI: As diversity, equity and inclusion issues have grown inside companies, investors are struggling to understand how to assess company actions. Black Lives Matter, #MeToo and other social movements are seen as both risks and opportunities for companies, and large institutional shareholders are starting to weigh in.
  • Nature on the balance sheet: Biodiversity is an emerging area of investor interest and concern and is being integrated into ESG disclosures. What should companies be doing to prepare?
  • The role of boards: Getting boards of directors on board with ESG issues is no small thing, and many boards aren’t prepared to provide adequate guidance and oversight. What are the competencies boards need to have? What are some key policies boards are adopting?

That’s just a taste. As I said, it’s a fast-growing, ever-changing field. There’s no shortage of topics — and we’re just getting started.

We look forward to joining you on this journey each week as we uncover and analyze new topics, interesting people, insightful reports, emerging trends and other useful resources to help you and your team move forward.

To subscribe to GreenFin Weekly, published Wednesdays, click here.

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