The diversity of investors in renewable energy has increased, opening up the pre-existing range of investment opportunities in renewables to greater scrutiny of risk and return. Renewable energy is not an asset class in itself but is a sub-category within several asset classes. Key risks which may need to be computed into the APT model are: price interaction with fossil fuel technologies, complexity of storing renewable-derived commodities, unknown future risks of renewable technologies, the capital-intensive nature of renewable “real estate”, the differing levels of commercial readiness of renewable technologies, regulatory volatility in the jurisdictions in which renewable energy projects are based.
Universal Basic Income (UBI) has shifted from a radical agenda to a relevant policy proposal, especially since the pandemic · UBI could have positive environmental impacts, such as reducing status-based consumption and facilitating more sustainable food practices · UBI must be introduced in a way that complements other policy shifts towards environmental protection and social justice
Understanding the “S” component in ESG has posed challenges which are important to overcome. Using and integrating existing and upcoming technologies into supply chain analysis is a key recommendation for improving analysis of Social issues in ESG Rating agencies will play an important role in verifying Social impacts which are financially material, amplifying the existence of double materiality in reporting social and environmental issues
In the past few years, there has been a strong increase in ESG reporting requirements around the world. ESG stands for Environmental, Social, and Governance. They are a set of standards for a company's operations that have become a popular way to indicate a firm’s sustainability performance. There are various issues reported by companies under each of the three pillars, comprising a variety of metrics. The environmental criterion considers how companies manage their environmental impact and use resources. Some of the factors include greenhouse gas emissions, water use, land-use, biodiversity, pollution management, and climate change adaptation. Social criteria focus on how the company fosters its people and engages with the wider society. Examples of social criteria include workforce diversity and inclusion, community engagement, customer satisfaction, and human rights. Governance considers the company’s internal system of practices and policies. Factors include business ethics and code of conduct, risk governance, supply chain management, and tax strategy.
‘Carbon trading’, ‘emissions trading’ or ‘carbon markets’ refer to an approach to reducing greenhouse gas emissions, which turns the right to emit greenhouse gases into a commodity with economic value. This approach is called a ‘cap and trade system’, in which a ‘cap’ or upper limit on greenhouse gas emissions is chosen, and then an accordant number of permits is distributed among emitters (any companies in the industries targeted by a system). Emitters can only emit the amount of CO2eq (CO2 or equivalent) specified by the number of permits they have, else they receive a financial penalty. The cap is designed to limit emissions, whilst the ‘trade’ part of the mechanism is implemented for economic reasons.
Understanding the contribution of corporations to the climate crisis is essential to implementing measures to reduce greenhouse gas emissions.