The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Calvert disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Calvert are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. References to individual companies for Engagement or Research purposes are provided for illustrative purposes only and may not be representative of the results of all of Calvert’s engagement efforts. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

Topic Category
Content Type
The article below is presented as a single post. Click here to view all posts.

By John StreurChairman, Calvert Research and Management

Washington - Recent headlines have publicized that ESG data lacks the quality serious investors seek in order to make accurate long-term investment decisions. But this is not news to Boston University, where a unique and powerful program known as Impact Measurement & Allocation Program (IMAP) has been in place since 2020 for the purpose of solving the ESG data problem. On October 7, Maria Salerno, executive director of the Calvert Center for Responsible Investing, and I joined a diverse and skilled group from academia, civil society, the student body, corporations, venture capital and investment managers in Boston to share critical thinking focused on corporate statements or commitments to reduce carbon emissions.

Calvert is involved as part of our global collaborations to advance transparency for the purpose of improving capital market infrastructure and security price discovery. These are critical aspects of capital allocation decisions required to support voluntary market-led solutions across democratic capitalist systems.

Before going any further, I want to share two passionately expressed points from the event.

  1. Enthusiasm that we are on the cusp of technology and operational breakthroughs that can make massive improvements in our global energy and industrial systems coupled with intense frustration that political issues have severely blocked progress in order to protect entrenched interests.
  2. This quote from a legal scholar, "I do not think people in the rich world understand that the climate crisis will have devastating impacts on them and their families in their lifetimes; they seem to think this crisis will mostly happen to other people in other parts of the world, and because they are rich, they will avoid the destruction."

Key Takeaways

IMAP will curate the session and share more information in the coming weeks, but here are the findings that made the biggest impression on me:

  1. There was strong agreement that the collective "we" who have been working for decades to help corporations make critical changes needed to prevent severe climate change outcomes are not getting the job done.
  2. Speakers expressed significant skepticism on the effectiveness of corporate carbon emissions reduction goals set by CEOs who will be long gone before the real reductions are supposedly going to materialize and who have no financial skin in the game.
  3. The concept of "normalized failure" emerged as a significant concern. It may become the norm for corporations to fail to meet, or even set, goals designed to achieve carbon emissions reductions at the rate needed to prevent global warming above 1.5 degrees Celsius. If you are in the herd and the herd runs off a cliff, is that acceptable?
  4. We heard no one advocate for avoiding investments in high-carbon-emitting companies. Instead, there were deeply informed discussions about the critical need to develop viable plans to help companies access new technologies to improve and transition to a low-carbon future. Everyone understood that the high-carbon emitters of today across energy, steel, cement, mining, transport and industrial are the very companies we depend on to build an entirely new renewable energy system and provide energy that sustains society today and in the future.
  5. We saw an intense focus on the work being done-including across IMAP-to harness new information-gathering systems to access ESG data directly from sources across companies, satellites, government agencies, civil society and innumerable capital market signals and sources. Machine learning, neural networks and data science were in use across projects.
  6. Attendees were optimistic that despite the challenges, we have catalyzed real-world change. The same collective "we" that has not gotten it done yet are capable of improvement and can use the type of tools being developed at IMAP to accelerate to real-world positive change.

In addition to the phenomenal leadership of Boston University IMAP, I want to recognize Susan Fournier, dean of Questrom School of Business at Boston University, for her commitment to the event and depth of insight into the issues.

Finally, this was a big boost for "in-person" and diverse events. There was an incredible energy and passion, resulting in free-flowing knowledge, critical thinking and the sharing of different perspectives. It was a real privilege to be part of this event.

Bottom line: The October 7 discussions at IMAP featured a clear push for transparency, especially into the details of heavy greenhouse gas emitters. The need is significant because that information will allow investors, innovators and entrepreneurs to better understand the size of the opportunity to create and bring new technology to help these industries.