Exchange Traded Funds (ETFs) are booming, synthetic ETFs are re-surfacing and semi-transparent ETFs have recently emerged – but their structures hide entrenched deforestation risk from investors. Planet Tracker identifies the key decision makers for each instrument in the growing ETF universe and calls for specific actions from index providers, ETF sponsors and investors to eliminate hidden deforestation risk in their holdings or indices.
Unilever PLC - Climate Transition Analysis
Planet Tracker’s latest analysis of CA100+ companies reveals that Unilever’s current emissions mitigation strategies are falling short of a 1.5°C pathway, missing emission targets set by the Science-Based Targets initiative (SBTi) by 45% when it comes to total GhG emissions, leaving it on track for a 2ºC warming scenario by 2030. The consumer goods giant is exposed to overall financial risk of 42% of its current three-year annual operating profit by the end of the decade, around USD 4.4 billion.
Financial Markets Roadmap for Transforming the Global Food System
Planet Tracker has issued the largest combined analysis of its kind based on company activity pinpointing exactly how and where investor action should be targeted for urgent food system transformation before 2030. Planet Tracker’s six priority actions for financial institutions would cut global emissions by 20%, and the food system’s footprint by 60% – saving 10 gigatonnes of CO2e, equivalent to double US’ current emissions and producing an estimated economic benefit of over USD 1.5 trillion.
PepsiCo Inc. (PEP:US) – Climate Transition Analysis
PepsiCo’s transition plan fails to align the company with its goal of a 1.5°C pathway by 2030. The food & beverage giant is exposed to a potential financial risk of USD 4.4 billion per year, by the end of the decade, or 42% of its three-year annual operating profit. PepsiCo is on a path to miss crucial targets set by the Science-Based Targets initiative by 58% while their current emissions trajectory and sparse data reporting aligns the company with a 2°C warming scenario by 2030.
40 financial institutions are responsible for funding a methane footprint that could exceed 500 Mt CO2e – nearly as big as the CO2 emissions of Saudi Arabia. Hot Money names the 20 investors and 20 banks currently financing the methane-generating activities of fifteen leading meat and dairy companies worldwide, identified in terms of equity ownership, bond ownership and bank lending.
The Coca-Cola Company (KO:US) Climate Transition Analysis
The Coca-Cola Company (Coca-Cola), the world’s largest producer of non-alcoholic beverages is currently on track for a +2°C scenario by 2030, according to the latest report from the financial think tank, Planet Tracker. While the company has taken positive steps to promote sustainability practices, failure to disclose quantified mitigation actions and the required investment, as well as the lack of an overall Net Zero commitment, could cause it to miss the crucial 1.5°C alignment by 2030.
Danone S.A. (BN:FP) Climate Transition Analysis
This report from Planet Tracker finds that leading French multinational food and beverage manufacturer, Danone S.A., is on track for a 1.5° warming scenario – on the proviso that Scope 3 Upstream emissions are sufficiently reduced. Danone is performing well in terms of governance, with high incentives for management tied to Net Zero objectives, as well as supplier engagement. The company is less advanced on its customer engagement and association with groups with a negative position on climate.
Destroying Brazil's AirCon
This report (the successor to No Rain on the Plain (2021), look at the effects of deforestation on the Brazilian economy and society at large, with a focus on agriculture, energy, productivity, health and transport. Sovereign bond investors exposed to Brazilian bonds, and equity and credit investors and banks exposed to domestic Brazilian companies or companies linked to Brazil through their supply chains, not to mention all their stakeholders, will soon suffer the direct effects of Brazil’s climate becoming more hostile.
Nature Dependent Exporters
This report classifies world exports into those dependent on nature – both renewable and non-renewable and those which are not, divides countries into high, medium and low nature dependent exporters and examines countries with high dependency, by looking at common characteristics based measures such as credit ratings, GDP per capita, economic inequality, food security, soil erosion and climate resilience.
Nestlé S.A. (NESN:SW) Climate Transition Analysis
Nestlé, the largest company in the food and beverage industry, is not currently investing enough in its upstream supply chain activities to achieve Net-Zero by 2050. Despite providing a detailed disclosure of its main CO2e sources and a broad Net-Zero Roadmap, Nestlé would need to invest at least USD 3.2 billion in its upstream activities to align with 1.5°C by 2030 (compared to its current USD 1.3 billion upstream abatement plan).
12 soy traders that control 89% of soy exports from the Paraguayan and Argentinian Gran Chaco, who are failing to prevent soy-driven deforestation in the region. The current level of deforestation is creating significant risk for these traders and other companies in the supply chain due to the associated CO2 emissions.
No Rain on the Plain
Deforestation is driving a negative feedback loop in Brazil, which is increasing risks for investors in Brazil’s sovereign bonds, as well as for equity and debt investors supporting companies across Brazil’s economy.
Online Retail Investors: Can't see the wood for the trees!
This report from financial think tank Planet Tracker reveals the challenges that retail investors face in identifying sustainable/ESG investment products across a portfolio of investment websites and portals.
Cattle are More than just Beef
Despite accounting for less than 9% of global agriculture’s market value in 2016 – compared to 22% for the meat industry, dairy is an important sector in both developed and emerging markets’ economies. 2016 estimates from the FAO suggest that a quarter of all farms worldwide keep at least one milking animal, which might include cows, goats, buffalo and/or sheep with dairy-related employment from farm to fork in the hundreds of millions.
From Drought to Fires to Downgrade Risk
New South Wales Faces Long-Term Credit Risks as Natural Infrastructure is Threatened
Financial Accounting in the Agriculture Sector
From Natural Capital to Accounting to Valuation – Commentary on IAS 41: Agriculture.
Scope for Improvement: Accounting for food loss and waste in Scope 3 reporting
Reported Scope 3 emissions by 12 publicly listed European food retailers account for 44% of total emissions in the European food retail sector in 2018.
Building Back Better: a Marshall Plan for Natural Capital: Reversing the decline in Sub-Saharan African GDP in Nature-Based Tourism Sector from COVID-19
Today, a global plan to support Sub-Saharan African (SSA) economies to increase social, economic and environmental resilience is needed, in light of the systemic shocks that we already know await us through climate impacts and now COVID-19 and its detrimental impacts on conservation funding.
Growing for Profit
Planet Tracker’s benchmark analysis of 37 funds in the food and agriculture sectors demonstrates that asset managers need to understand that, for their food and agriculture equity funds to be successful, they must measure, manage and monitor the natural capital risks in their investments by aligning these with sustainable food and agriculture systems to improve investment performance.