Investors are connecting Climate Change to SDGs – Are you ready, New York?

March 19, 2019
By CSE

Chief Financial Officers are plagued with sustainability demands.  Investors are calling for robust corporate sustainability reporting (CSR).  Stakeholders are pressing companies to go beyond the standard ESG (environment, social, governance) approach.

Sustainability in Finance is a topic critical to New York.  One of the most challenging long-term risks, particularly from investors’ viewpoint, is climate change.  With PG&E’s bankruptcy attributed to climate change by the Wall Street Journal, financial analysts are taking heed.  Climate change risks affect volatile markets, supply chains, the urban centers where companies place factories and draw employees, not to mention the hazards to shipping and distribution conduits.

More than 400 institutional investors with US $24 trillion of assets under management encourage national leaders to consider climate change legislation.  The corporate savvy  support climate change action: Rex Tillerson, formerly of Exxon; Gary Cohn of Goldman Sachs, Disney’s CEO Robert Iger and Tesla’s CEO Elon Musk.

The need for practitioners is urgent in urban centers, leading CSE to offer their Certified Sustainability Practitioner Program, Advanced Edition 2019, in NYC early June.   More than 1000 political, corporate and academic leaders signed the “We Are Still In” declaration, pledging to help meet America’s Paris Agreement emissions target.

Investment rankings are influenced by sustainability considerations. Fitch Ratings integrated scoring system includes ESG criteria. According to Fitch, about 3 percent of a rating’s derivation is directly attributed to an ESG issue, and 19 percent is influenced by at least one ESG concern.

Companies with sustainability reports and an actively implemented sustainability strategy can mitigate long-term risks such as climate change.  Incorporating the UN Sustainable Development Goals (SDGs) can guide companies toward areas of positive, measurable impacts which stakeholders desire.

Weaknesses in the finance sector can have an important impact to SDGs 7, 8, 9 and 11 covering affordable energy, decent work and economic growth, industry, innovation and infrastructure, and sustainable cities and communities.  Sustainability due diligence for prospective investments lags, leaving opportunity for the financial houses in New York City and around the world.

CSE has incorporated the SDGs into its research, consulting and certification programs. CSE’s Sustainability Reporting Trends in North America 2018 finds that only 13.9% of companies are integrating SDGs in their reporting to stakeholders. This provides an enormous imperative for companies.  Top companies are listening!  Read more in Forbes interview with CSE.

Urban centers need an enormous influx of sustainability-trained staff.  Whether it’s accounting, auditing or research, trained sustainability practitioners are needed in every field and every discipline – banking, investment houses, watch dogs.  Key topics to the US financial corridor will be the focus of CSE’s training in New York, June 6-7, 2019.  For more information on registration, Early Bird and Group Discounts, contact CSRPerformance@cse-net.org.

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