Earnings season is underway, so our efforts this week highlight three ESG developments that are standing out among management commentary when analyzed within our contextual NLP tools: Supply Chain, CleanTech and Human Capital.
As we get ready for another round of Earnings Calls, we at Amenity want to highlight ESG trends we have seen discussed in the market and from our own contextual NLP data. Over the first half of the year we used trending topics to examine what ESG themes have grown in prominence.
From an Environmental standpoint we were on the lookout for themes that impact supply chains like waste and recycling along with newer developments in low-carbon technology. On the Social and Governance side, themes around Human Capital and Diversity remain prominent, specifically, how companies are addressing benefits, unionization, and fostering an inclusive culture.
Earnings calls are a great way to see how companies view the world, because they are planned ahead of time and are a chance for management to show investors what they view as the most important items. Amenity aims to highlight a wide range of sentences that our technology surfaces in order to demonstrate how these themes are appearing each week in Earnings Calls this quarter.
Supply chains continue to be a major focal point as the war in Ukraine and inflation limits access to raw materials and goods. Also, earlier this month India banned single-use plastic, so we are already seeing examples of companies becoming more serious about environmental action in this arena after a mandate.
“And also, the recycling rate, the amount of sourced aluminum scrap that we use is up quite a bit in the last quarter to 35%, again, an all-time high record, and quite a bit up from the reference year also in that case.”
“We're making good headway on our announced existing investment programs, and we have also announced a new program for an $52 million investment in recycling in the Americas.”
“By 2023 we want to create a deforestation free supply chain in palm oil”
“We have taken a target to achieve zero emission in operation by 2030”
“And by 2025, 100% of our plastic packaging is going to be reusable, recyclable or compostable.”
As energy independence takes a newfound importance in Europe, countries are becoming more aggressive towards ramping up renewable energy capacity. Earlier this month, Germany signed a law pledging to have 80% of electricity produced by renewable energy for 2030. This means opportunities for offshore wind and solar power developers across Europe. Energy scarcity and rising fuel costs is also a business case for companies to reduce their energy consumption and resource use, from a pragmatic standpoint.
“To recap, the first one is that we have a very ambitious plan to minimize our emissions, our carbon emissions, both in our own operations by 90% in five years, but also to work towards what's called a net zero value chain 2040.”
“But there is no doubt that wind power is here to stay and it will increase especially in offshore wind.”
“On the picture on the top right, you see me together with a whole bunch of other people receiving the first dumper made out of Swedish carbon-free steel, which is one milestone towards less Scope 3 emissions.”
“We also announced that we've joined the Partnership for Carbon Accounting Financials, which will accelerate our efforts to measure and disclose finance emissions.”
“In the Baltic countries, lending for solar panels was three times higher in May than the same month in 2021.”
“Secondly, we will decarbonize our business, keeping our equity greenhouse emissions below 4 kilograms per barrel and cutting Scope 1 and 2 emissions by 50% by 2030 and offset the remaining emissions to achieve net zero the same year.”
As inflation continues to rise, companies are having to consider employee compensation and overall job satisfaction. Many companies have faced issues over the past two years on compensation and benefits in the form of strikes and labor organization, most notably, today in the ongoing Starbucks unionization saga. Other companies have faced outright scandals and lawsuits for poor workplace practices and behavior towards women and minorities. Companies are starting to address these matters, and are including them as material discussion topics in earnings calls.
“Focusing on diversity, equity and inclusion, we also increased the share of women in senior leadership positions from 27% in 2020 to 29% in 2021, with the goal of reaching 33% in the future.”
“Our minimum wage will increase to $22 per hour effective October 1st.”
“On the diversity side, 36% of our newly recruited managers were women.”
Lastly, we share some examples of how we view events in our Earnings Call Document Viewer which we use to share the quotes mentioned in this article.
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Amenity Analytics is the industry leader in providing insights from unstructured text by using Natural Language Processing (NLP) assisted by Artificial Intelligence (AI) and Machine Learning (ML). Amenity’s NLP system is a sector-agnostic, language-dependent tool for quantitative text analysis that is deployed across the financial services industry and beyond.
This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.
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