In preparation for Climate Week on September 19th, we explore a few ESG themes that increased in management commentary and news coverage over the past week within our Safeguard platform: the EU votes on deforestation measures, the transportation sector braces for strikes and hydrogen carbon capture technology aims to break through to industrials.
This week we take a look at our ESG Safeguard platform as we get ready for the upcoming Climate Week that kicks off on September 19th. There are many threads from our Climate Week Webinar, including deforestation and unions impacting businesses, that we would like to explore further in this week’s write-up.
This week the EU voted for more stringent measures to ban products produced on land that has been deforested since 2019. This will impact companies like JBS (JBSS3:BR) who have already had recent issues with grocers like Carrefour (CA:FR) over these issues, but also impacts many other commodities besides cattle. Other goods like cocoa, rubber, lumber, corn, and soy to name a few, will be subject to scrutiny from these new measures. Additional countries may pass similar laws in the coming months if this continues to be a problem, putting many companies with agricultural supply chains at risk if they are not prepared.
There has not been a national rail service stoppage since 1992. Human Capital has become increasingly important in recent years, and now labor issues have reached the railways. Norfolk Southern (NSC), CSX (CSX), and Union Pacific (UNP) have all been mentioned on our platform in the past 7 days in relation to the impending strike.
It is interesting to note that much of the discontentment around the possibility of a labor stoppage has to do with scheduling and working conditions rather than pay. Rail-workers say the ongoing issues have been exacerbated by employees leaving the industry for more stable jobs, not for better pay. A national rail shutdown would bring already strained supply chains to a breaking point.
UPS (UPS) is also facing a separate labor stoppage and is already planning on hiring temporary workers for the holiday season.
On a more positive note FuelCell Energy (FCEL), a company involved primarily in hydrogen, mentioned in their recent Earnings Call they already rolled out commercial-scale carbon capture solutions for select clients, making them one of the few publicly traded companies with their own carbon capture technology.
In the wake of these recent developments, we will continue to monitor them as they evolve and build on the changing ESG trends we have seen this year. During Climate Week we will examine what kinds of commitments companies are making, how they compare to last year, and if they align with the matters that are most pressing for their given industry.
The market isn’t interested in another ESG story. Investors want to understand what companies are actually doing—what companies are investing. What commitments are they making towards these investments, and what milestones are they reaching? This data needs to be in real time, not just from stale annual CSR reports. This webinar, featuring our materiality dataset, demonstrated how investors can cut through the greenspeak to understand what companies are actually doing when it comes to ESG for Climate Week 2022. Watch Recording
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This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.
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