1.

Did you know that heading to work on a day when the temperature exceeds 90°F (32°C) may lead to as much as a 50% increase in the likelihood of serious injury compared with a cooler day in the 60s (16°C)? The injuries are not from heat stroke but chiefly from accidents such as falling off a ladder. Or that when temperatures soar, professional athletes become more prone to mistakes, students’ underperform on exams, and our moods dampen more than they do at the end of the weekend? In his book “Slow Burn: The Hidden Costs of a Warming World,” R. Jisung Park, assistant professor at the University of Pennsylvania, shows how climate change costs us in ways both seen and unseen. “The costs of the slow burn may in aggregate be larger than the headline grabbing climate disasters,” Park writes, adding that “by looking differently at everyday phenomena we thought we understood, we can begin to appreciate the subtle social disparities that arise in a warmer world.”

Read an excerpt of the book here. We learned about Prof. Park’s work as well as that of other innovative researchers, thanks to a recent convening of the Wharton ESG Initiative.

2.

How can companies communicate their work on sustainability without putting themselves at risk? Or maybe it’s better to say nothing at all?  These are top-of-mind questions for many companies today that Shannon Fitzgerald O’Shea tackles in a recent Harvard Business Review article: “A Bad Communication Strategy Around Sustainability Can Leave You Legally Exposed.” O’Shea offers tactics to consider for the way forward, including “Be honest, and recalibrate expectations if needed.” That would seem to make sense, as no one has all the answers. Especially with challenges as complex as climate change, we should value the collective learning that can come from companies’ willingness to share lessons from initial failures.

Read here.

3.

More food for thought on the do’s and don’ts of communicating sustainability goals: What happens when companies miss (or walk away from) climate targets? Not much, according to academics Xiaoyan Jiang, Shawn Kim and Shirley Lu in “Limited accountability and awareness of corporate emissions target outcomes.” Nearly one-third (31%) of emissions targets set by companies that ended in 2020 “disappeared,” without the company ever disclosing the outcome, find the authors, who report that among 420 companies that either failed to hit their reduction targets or whose targets disappeared, just three (FedEx, Heinz, and Gildan Activewear) received negative media coverage after disclosing their failure. Much of the commentary so far on these findings has focused on the lack of reputational penalty for companies. We as researchers, however, are keen to dive into follow-up questions, such as how many companies revised their targets, to align with new standards for target-setting, for example?  We look forward to more discussions to come.

Read here.

4.

The peril of wildfires on par with those we’ve just seen in Los Angeles County threatens lives and livelihoods globally, notes Katie Towey, a researcher with MSCI’s Climate Risk Center, on the ESG now podcast. Twenty-nine percent of companies in the U.S. generate at least 30% of their revenue in areas of the country that face even higher wildfire risk than the fire-affected region in L.A., according to MSCI’s analysis. Furthermore, Towey notes that fire is only one of a series of intertwined risks that companies and investors confront as the world continues to warm, citing flooding in southeastern Spain, Hurricanes Helene and Milton in the U.S., and record heat across the globe. “All of these extreme weather events may seem like they could be independent of one another,” she says, “but a warming world impacts nearly all types of extreme weather globally.”

Listen on Apple or Spotify.

5.

You may not know it from the headlines, but nearly three-quarters (73%) of U.S. institutional investors expect the market for sustainable investing to grow over the next two years, political headwinds notwithstanding, according to the latest edition of US SIF Foundation’s “Report on US Sustainable Investing Trends 2024/2025.” The biennial report finds climate change and the clean energy transition to be the dominant sustainability theme, based on a survey of investors from 265 institutions. Overall, 12% of the USD 52.5 trillion in U.S. assets under management were explicitly marketed or identified as sustainability-focused investments at the start of last year, while nearly 80% were covered by stewardship policies. And those are just the top-line results. The 75-page report includes more than three dozen exhibits ranging from a snapshot of sustainability regulation and fund rules globally (Chart 1 and Figure 8, respectively) to a review of anti-ESG shareholder proposals over the past decade (Figure 26), and a taxonomy of greenwashing (Figure 27) and the rise of “greenhushing” (Figure 28). It’s a treasure trove of information that sheds light on how sustainable investing is faring in the U.S. today.

Download the report here.

_____

Sign up here to receive the latest insights from the MSCI Sustainability Institute. Our newsletter in your inbox each month.