Stada — ESG QuickTake (9fin)

TLDR: Stada has taken steps towards reduced emissions in 2021 thanks to investment in renewable energy. 

Stada performs well in terms of occupational health and safety (OHS) but gender diversity trails peers. 

In terms of governance, Stada has Russian exposure, lacks a cyber security strategy and does not view data security as a material risk. Attempts to engage suppliers on human rights and environmental issues are evident but there are gaps. 

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Fedrigoni — ESG QuickTake (9fin)

TLDR: Fedrigoni’s pulp production certificate relies on a widely-used - but criticised - process. Water stress is also a factor in many sites. It has a near term SBTI target but lacks a net zero target, unlike peers.

Some key measures (total injury frequency rate and lost time injury frequency rate) have shown improvement but the reporting method is unorthodox.

Despite an extensive Code of Ethics, few employees have been trained on it, and tax investigations remain an issue. 

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EnQuest — ESG QuickTake (9fin)

TLDR: outstrips regulatory requirements on reducing operational carbon emissions. However EnQuest doesn’t report scope 3 emissions or target them for improvement and so avoids responsibility for mitigating carbon released through the use of its products (the vast majority of emissions). 

It has made initial steps towards the development of low-emission technologies but there is no record of capex allocation for this, and no concrete action has been taken.

It performs well on ethnic diversity compared to peers. It also performs better on health and safety metrics than peers. However, there have been a number of health and safety incidents inherent to the industry.

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News & Stories Followed by 9fin’s ESG team

Enviva plunges after Blue Orca short report dubs 'latest ESG farce' (update) (12/10/2022)

Enviva fell 12% on Wednesday following a short seller report by Blue Orca Capital. Enviva's (EVA) claims to be a pure-play ESG company is "nonsense on all counts," according to Blue Orca, "a product of deranged European climate subsidies which incentivize the destruction of American forests so that European power companies can check a bureaucratic box." The company responded via a press release denying the report’s findings.

Steelworkers Union Approves Contract With Cleveland-Cliffs (12/10/2022)

The United Steelworkers union has ratified a four-year contract with steelmaker Cleveland Cliffs. Cleveland-Cliffs and United Steelworkers agreed to a 20% increase in hourly wages over the life of the newly ratified contract. However, the union remains divided with United States Steel. The union’s negotiations with the steel industry follow an explosion in steelmakers’ profits.

Anti-ESG Can Be Good Business (11/10/2022)

Bloomberg columnist, Matt Levine, weighs in on the growing anti-ESG movement humorously arguing that one “way to signal that you are authentically anti-ESG is by having bad governance, since “governance” is right there in the name of the thing you (and your investors) are against.”

Government drops appeal over net-zero High Court ruling (13/10/2022)

Jacob Rees-Mogg has dropped plans to appeal against a High Court ruling that found the government’s plan to reach net zero was unlawful as the strategy would not allow the UK to reach net zero. The business secretary’s decision means the government must now draw up a new net-zero strategy by March.

Passive investment in green bonds ‘is a mistake’ (12/10/2022)

In an interview with Insight Investment, RI found that Insight rejects 25% of labelled bonds as not being sustainable. Insight's EM portfolio manager, Simon Cooke, called on the need for active assessment and warned against passive allocation. Cooke feels that issuers are not necessarily misleading but are “pushing the boundaries around what should be considered green.

Half of DNSH criteria face usability challenges, warn EU taxonomy advisers (12/10/2022)

The Platform on Sustainable Finance (PSF) finds that the EU taxonomy’s Do No Significant Harm (DNSH) is “not recommendable from a usability perspective, with 41% of the requirements depending on EU-only legislation and 9% stating “ambitions that cannot be assessed.” Last month the members of the PSF staged a walkout accusing the European Commission of interfering with the group's work and acting against scientific evidence.

ISSB on Track to Finalise Standards in Q1 2023 (12/10/2022)

At ESG Risk and Investment Asia 2022, it was announced that the IFRS-led sustainability disclosure standards would be released by Q1 2023. The IFRS created ISSB at COP26 and combines a variety of sustainability reporting frameworks.

Anti ESG ‘God Bless America ETF’ has launched (12/10/2022)

A new anti-ESG ETF launched on Tuesday titled The God Bless America ETF (NYSEARCA:YALL). The fund “eliminates companies that, in the Sub-Adviser’s assessment, have emphasised politically left and/or liberal political activism and social agendas at the expense of maximising shareholder returns.”

Product hints, tips and updates

SLB & SLL data: Did you know you can track and compare a wide range of features for all HY sustainability-linked and green bonds here (you can do the same for loans here). (Please note that these links are for 9fin clients. If you would like an introduction to 9fin's screeners or a trial, please complete your details here.)

New company data: 9fin’s ESG team will upload 101 additional levfin companies on Monday 17th. We currently track 14 ESG metrics linked back to source docs and individually analysed and checked for irregularities before uploading. To find out more about our ESG Company Data click here. We have produced a report with our initial insights into the first 250 companies uploaded. Clients can read the full report here. If you are not a client but would like a copy, please complete your details here.