I got 99 problems

Hello and welcome to the Strawman - the daily climate newsletter that’s like those ten minute grocery delivery apps, but if they delivered memes and weren’t wildly overpriced! We got you.

We’ve covered a tonne of stuff about ESG on this newsletter from regulatory requirements to corporate (in)action. If anything’s clear, it’s that we’re not doing enough. In 2021, the UK government announced that they were making it mandatory for financial institutions and listed companies to disclose their transition plans to Net Zero and we are way behind.

Today’s news is no different - a recent report from EY found that only 5% of of FTSE 100 companies have published credible decarbonisation plans. In other words, 95 of the 100 most valuable public companies in the UK don’t give two hoots. They got their interns to make the plans and hit publish - the Strawman ain’t happy about it.

The Source of Corporate (In)action

The challenge lies in the incentives, as always. The reality is that most of these large listed companies don’t have the expertise or bandwidth to put together these plans. Normally they hire large consultancies (like EY!) to help them put this stuff together. Now it’s starting to make sense why EY is on their case.

Beyond the government task-forces and new regulation, the other side of the equation is that most of these companies don’t have sufficient stakeholder pressure to take action. We’re asking them to change the way they work from beginning to end but they don’t believe it’s going to impact their bottom-line. As a result, these big companies end up in a game of chicken - everyone’s waiting for the next person to do something.

Slow and Steady Across the Pond

The situation is not much better in the U.S.. In fact, a Columbia University study found that companies who received investment from ESG funds did worse than those that didn’t. Yep, you read that right. Analysts believe that this is because ESG changes can only come from stakeholder and customer pressure and the resultant market demands. In other words - throwing money at the problem isn’t enough.

At the core, all of this is a massive blame game. Governments and regulators are trying to push investors and corporations but corporations don’t seem to do anything unless their customers force them. It’s a massive blame game and at some point we’ll be at the last straw. (ba dum tss)

Until next time,

The Strawman