Last January, BlackRock CEO Larry Fink wrote in his annual letter to CEOs that “sustainable investing is the strongest foundation for client portfolios going forward,” and all seemed right in the world as Sustainability was about to take its rightful place as one of the most important investment criteria there is. Coming from BlackRock, which is the world’s largest investment firm with $8.68 trillion in managed assets, this was huge news.
Unfortunately, he nor we could have known that a global pandemic would materialize and change the way we work, the way live and, yes, even the way we invest. Suddenly Sustainability would have to wait—or so it seemed.
But like a chunk of ice abruptly being dislodged from a glacier because of warmer temperatures, as Fink wrote, there was a “tectonic shift” taking place right before our eyes. Even Fink was surprised. Instead of there being less of a focus on climate change and Sustainability because of COVID-19, there was actually more enthusiasm than ever from the investment community for helping to protect the planet—and, of course, the potential for return on investment. Much more actually.
In his 2021 letter to CEOs, Fink wrote that there were $288 billion investments in sustainable assets, which was a 96% increase over the previous year. “I believe that this is the beginning of a long but rapidly accelerating transition,” he wrote, “one that will unfold over many years and reshape asset prices of every type.”
So why did climate change and Sustainability become a much more viable investment option? Fink said he believes it’s because COVID-19 provided “such a stark reminder of our fragility” and how one major event—and climate change certainly qualifies—could have a profound effect on the world we live in.
Not surprisingly, BlackRock even issued its first Sustainability Accounting Standards Board (SASB) and Task Force on Climate-related Financial Disclosures (TCFD) reports last year and advised all companies to report their Sustainability data because that level of transparency is not only good for the shaping of a healthier world but also it is a good piece of information for investors, too.
After all, the goal of reporting is to hold companies accountable as they work to reduce greenhouse gas emissions while helping to prevent further catastrophic global warming events.
Sphera has been helped numerous companies along their Sustainability journey, including Aptar, a consumer dispensing and packaging company headquartered in Crystal Lake, Illinois. Aptar, a CDP 2020 Climate A List company, used Sphera to support its climate-related risk and opportunity assessment and the corresponding financial impact quantification using TCFD methodology. “This disclosure enabled us to provide our stakeholders with valid proof of our environmental performance,” said Dr. Michele Del Grosso, Aptar’s global program manager for sustainability, in a written statement.
It’s clear that environmental, social and corporate governance (ESG) reporting is what your investors, peers and consumers really want. As we work to stave off future climate change, the time is right to change the world through a Digital Transformation.