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What is ESG, the investment strategy the Republicans are attacking?



The once obscure financial term is now at the center of the Republican anti-revival crusade.

On Monday, President Biden released first veto his presidency on a measure that would repeal the Department of Labor rule that allows pension fund managers to consider environmental and social impacts in investment decisions. The strategy is more commonly known as ESG: reducing the environmental, social and governance criteria that investors can use to evaluate companies whose shares should be bought.

The vetoed resolution, led by Congressional Republicans, is the latest in a series of attacks on what GOP lawmakers are calling “awakened capitalism.” From 2021 Florida, Texas, LouisianaSouth Carolina and several other red states pulled billions of public funds from BlackRock and other ESG-backed investment companies. At least seven Republican-controlled states adopted policy and 13 others introduced bills to prohibit the application of ESG principles in public investments such as public pensions.

The rancor is likely to continue until the 2024 presidential election. Republican candidates Governor of Florida Ron DeSantisformer vice president Mike Penceand the “anti-awake” entrepreneur Vivek Ramaswami all have taken a prominent stand against ESG.

ESG has also come under fire from progressives who accuse firms of self-reporting ESG data. green wash. But despite all the political controversy, ESG is quite popular among the people who actually use this strategy: investors.

A 2021 survey fund manager Natixis found that 72% of institutional investors are adopting ESG. Companies are responding to investor interest: about 90% of companies share some ESG data with shareholders. recent poll leaders of large public companies in the United States. As of early 2022 $8.4 trillion in the US, the assets were owned by financial firms that use ESG solutions.

Perhaps most tellingly, BlackRock CEO Larry Fink has promoted the importance of ESG standards in his annual letter to CEOs With 2017 – a particular object of discontent of the Republicans. The annual report of the world’s largest wealth manager has a big impact on corporate executives and investors.

Kirsten Snow Spaulding, vice president of the Ceres Investor Network, leads the network over 220 financial institutions manages over $60 trillion in assets. She says the vast majority of investors she works with consider ESG integration to be just common sense.

“You are meeting with these analysts, right? They’re not crazy progressive, you know. These are really big people who are doing their job well,” she said.

In fact, ESG has been uncontroversial among investors since the beginning, in part because the term was coined with investors. The acronym first appeared in report for 2004 jointly developed by the United Nations Global Compact, a voluntary corporate sustainability initiative, and a group of 23 major financial institutions. The members are Goldman Sachs, HSBC, Credit Suisse and Morgan Stanley, just to name a few – not exactly what comes to mind when you think of radical liberals.

Traders on the floor of the New York Stock Exchange on March 23, 2023. Spencer Platt/Getty Images

One of the reasons for the recognition of ESG among investors is its clear alignment with the traditional goal of investing – profit maximization. While the original 2004 report paid lip service to the social case for sustainability, the report’s authors focused more on the business case for addressing ESG risks. argues Elizabeth Pollman is a professor at the Cary School of Law at the University of Pennsylvania.

In theory, investors apply the ESG criteria because they recognize that environmental and social impacts, such as climate change, will significantly impact a company’s bottom line in the long term. According to Spaulding, ESG data and risk testing is how “we ensure that investors can work through the capital markets to create long-term wealth for people.” But in practice, data is mixed on whether or not using ESG criteria really maximizes returns.

The difficulty in evaluating ESG lies in the lack of a standardized definition of the term. According to sustainable finance expert and Yale professor Carey Krosinski, one of the biggest misconceptions about ESG is that it’s a unique idea – a ready-to-use adjective that we can put in front of any financial term we think is appropriate, for example, investing in ESG or ESG firms. But ESG is not a fixed technical concept. It’s more like an umbrella, bringing together three separate but related sets of questions.

The expansiveness of ESG is one of the reasons for its success. Various actors, from asset managers to companies and insurance companies, are shaping the definition, methodology and application of ESG to best suit their individual needs. Gabriel Toomey, CEO of ESG integration consultancy Responsible Alpha, compares ESG to a bakery where “various breads, donuts and pastries come from this bakery.”

For example, there is over 600 ESG-rated companies, which companies evaluate based on their environmental, labor and management practices. Everyone uses their own methodology and as a result they tend to give different ratings. Investors can also buy products called ESG funds, which pool shares of tens to thousands of companies according to ESG ratings and other environmental and social indicators.

Critics say ESG funds and their underlying ratings misleading statements about their social and environmental impacts and are distracted from the more urgent work of climate regulation. A Bloomberg’s analysis the world’s largest ESG valuation firm, MSCI, found that the firm only measured risks for companiesrather than environmental and social risks to society. “Tackling climate risk in financial portfolios is not the same as tackling climate change itself.” wrote Tariq Fancy, renowned ESG critic and former CIO of sustainable investments at BlackRock.

“Green investing actively harms because it influences public opinion and reduces the likelihood of regulation,” he said. said New Republic.

On the right end of the spectrum, legislators in red states from Florida to Texas argue that the inclusion of ESG restrictions generates income for retirees. But while the facts say otherwise. A financial analysis by the Kansas State Budget Office found that pending legislation against ESG reduce pension contributions by $3.6 billion over the next decade. In Indiana, the losses will be $6.7 billion for the same period of time. And in Texas, researchers found that a recently passed anti-ESG law cost taxpayers roughly from $302 million to $532 million interest for eight months.

“If you limit the pool of available asset managers, it is very costly for taxpayers and retirees,” Spaulding said. As for whose interests such policies serve, “it’s definitely not retirees or taxpayers in these states,” Spaulding said.

A pulling device or drilling rig for an oil well workover in Utah with Monitor Hills and Merrimack Butts and Book Cliffs in the background. John G. Fuller/VWPics/Universal Images Group via Getty Images

Some political scientists argue that the onslaught against the ESG is just a carefully planned attempt to please the Republicans. donors. At the heart of the problem is the perceived threat that ESG poses to the oil and gas industry. It seems that the more companies and investors recognize the need to move away from fossil fuels, the more ESG opponents are stepping up efforts to protect the oil and gas sector – a huge source of lobbying for money for the Republican Party.

Millions to fund the anti-ESG movement were traced back wealthy conservative sponsors. The Wall Street Journal reports that a right-wing nonprofit organization led by Leonard Leo, leader of the conservative Federalist Society, spent more than 10 million dollars for anti-ESG activity. And large right-wing groups, including the Heritage Foundation and the American Legislative Exchange Council, better known as ALEC, have played a leading role in pushing model legislation against ESG.

However, as efforts to overthrow ESG are accumulating, this strategy is increasingly being codified in domestic and international norms. Last March, the Securities and Exchange Commission, the federal agency that regulates publicly traded companies, issued draft climate disclosure rule, will require companies to report on greenhouse gas emissions and other climate-related impacts and risks. At the global level, the International Standards Council for Sustainable Development, an independent standards-setting body, is on track to finalize similar financial reporting guide climate and other ESG-related issues by June of this year.

Proponents say the new requirements will hopefully lead to improved data and increased confidence in ESG metrics. “When we see an asset manager say, ‘I have an ESG fund, a zero net fund, or a green fund’, it gets a lot of criticism: well, wait, what does that actually mean? Spaulding said. “I do think that over time we will see stricter definitions and more transparency.”

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The Webb Space Telescope captured a dust storm on a distant planet



Researchers working with data from the James Webb Space Telescope have detected elements of silicate clouds in the atmosphere of a distant planet.

NASA said the atmosphere of the “Tatooine-like world” known as VHS 1256 b is constantly rising, churning and moving throughout the 22-hour day.

As the atmosphere constantly lifts hotter material—with high temperatures reaching 1,500 degrees Fahrenheit—and pushes colder material down, the result is dramatic changes in brightness.

“The resulting changes in brightness are so dramatic that it is the most variable planetary mass object known to date,” NASA said in a statement.


This illustration shows swirling clouds identified by the James Webb Space Telescope in the atmosphere of exoplanet VHS 1256 b. The planet is about 40 light years away and orbits two stars that are locked in their own tight rotation. Its clouds, filled with silicate dust, constantly rise, mix and move throughout the 22-hour day. (Credits: Illustration: NASA, ESA, CSA, Joseph Olmsted (STScI))

Larger particles of silicate dust in the atmosphere can look like very hot fine sand particles.

In addition, scientists have also identified the largest number of molecules at once on a planet outside of our solar system, finding water, methane, and carbon monoxide.

VHS 1256 b is about 40 light-years from Earth and orbits two stars over a period of 10,000 years.

The turbulent sky of an exoplanet is due to several factors.

FILE - Technicians lift the James Webb Space Telescope mirror with a crane at the Goddard Space Flight Center in Greenbelt, Maryland, in this photo provided by NASA April 13, 2017.

FILE – Technicians lift the James Webb Space Telescope mirror with a crane at the Goddard Space Flight Center in Greenbelt, Maryland, in this photo provided by NASA April 13, 2017. ((Laura Betz/NASA via AP, file))

It has low gravity compared to more massive brown dwarfs, meaning that silicate clouds can form and stay higher in the atmosphere. Plus, by astronomical standards, it’s a young planet; only 150 million years have passed since its formation.


While all of the features the team observed have been detected by other telescopes on other planets in the Milky Way, other research teams have typically identified only one at a time.

A research team led by Brittany Miles of the University of Arizona used two instruments known as spectrographs aboard the James Webb Space Telescope, one on its Near Infrared Spectrograph (NIRSpec) and the other on its Mid Infrared Instrument (MIRI), to observe an extensive area.  near and mid-infrared light emitted by the planet VHS 1256 b.  They plotted light across the spectrum, identifying signatures of silicate clouds, water, methane, and carbon monoxide.  They also found traces of carbon dioxide.

A research team led by Brittany Miles of the University of Arizona used two instruments known as spectrographs aboard the James Webb Space Telescope, one on its Near Infrared Spectrograph (NIRSpec) and the other on its Mid Infrared Instrument (MIRI), to observe an extensive area. near and mid-infrared light emitted by the planet VHS 1256 b. They plotted light across the spectrum, identifying signatures of silicate clouds, water, methane, and carbon monoxide. They also found traces of carbon dioxide. (Credits: Image: NASA, ESA, CSA, J. Olmstead (STScI); Science: Brittany Miles (University of Arizona), Sasha Hinckley (University of Exeter), Beth Biller (University of Edinburgh), Andrew Skemer (University of California), Santa Cruz))

“No other telescope has identified so many features at once for a single target,” said study co-author Andrew Skemer of the University of California, Santa Cruz. “We see many molecules in the same spectrum from Webb that detail the planet’s dynamic cloud and weather systems.”


The researchers reached these conclusions by analyzing data from the Webb NIRSpec and MIRI instruments, as well as observations from the Webb Early Release Science program.

Their results were published in an article in The Astrophysical Journal Letters.

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Earthquake debris could cause environmental disaster in Turkey and Syria



The earthquake that destroyed part of Turkey and Syria was a tragedy for millions of families, including mine. One of the hardest hit areas around the ancient city of Antioch is where my father’s family lived for generations. This disaster claimed the lives of thousands of people and affected millions of others. Now that the last alleged survivors have been found, the region faces many other challenges, including a huge amount of debris from destroyed buildings, roads and the like. This material is estimated to weigh up to 210 million tons– Enough to cover Washington, D.C. four feet deep or build an embankment as high as Mount Erciyesbig volcano in Turkey.

The 2017 Congressional Report garbage management as “one of the greatest challenges” on the road to recovery and rebuilding. Turkey and Syria are now facing the same problems. The sheer volume of debris from natural disasters, the desire and need for quick cleanup, and the high cost of debris removal operations can lead to many errors with dangerous consequences.

Highlights from our research on waste management planning as a key factor in reducing long-term negative effects on human health and ecosystems. Plans need to identify and prepare disposal sites, establish processing facilities and ensure guidance for residents, contractors and local governments about how to safely handle the materials they come into contact with.

Garbage collection can account for about one-third of disaster recovery costs and last for months or years. In case of mismanagement unlined landfills, rivers, coasts, or other open areas may become dumping grounds for potentially hazardous materials. This contributes to the pollution of water and soil, changes the course of rivers and poses a huge threat to the lives of people, plants and animals.

During the first 24-72 hours after a major disaster, rubble management is given priority. decorto allow access for search and rescue, evacuation, or delivery of supplies, such as by pushing debris out of the roadway. Then the focus shifts to collection – the transportation of garbage to temporary collection sites. The last stage is disposal with many aspects such as sorting and separation, recycling, landfill, incineration, etc. Decisions on how to handle waste at each stage are complex and have significant long-term social and environmental impacts. For example, the degree of sorting during clearance and collection can affect the speed of search and rescue operations, the cost and duration of wreckage management operations, and the final destination of the wreckage.

Where to place waste in the short term is an important social and environmental decision. After the earthquake in Haiti, the Rivière Grise became a dumping ground, especially for construction debris. After Hurricane Katrina, an emergency dump opened in the city. Versailles (an area in New Orleans expanded with Vietnamese refugees), and this decision caused numerous protests over environmental issues.

In Turkey, construction waste from collapsed buildings is mixed with asbestos and other harmful chemicals along with household appliances and electronics. People and environmental groups have expressed concern about the potential dangers hidden in these mountains of rubble, parts of which were threw in or near residential areas, agricultural fields, riverbeds or protected areas. Turkish government announces waste management plan mentioning segregation, recycling, reuse for construction, or proper waste disposal. However, the execution of these plans was a difficult task; government officials welcome public input if they are watching erroneous or illegal actions contractors.

There are three key steps in improving the effectiveness and efficiency of waste management activities: planning; decision making based on technologies and/or data in implementation; and supervision. To better prepare planning This process requires the participation of many organizations and experts from a wide range of fields, including geology, civil and environmental engineering, urban and regional planning, healthcare, industrial and systems engineering, etc. Run-time supervision is critical to ensure that plans performed properly or revised as needed.

Post-disaster response involves multiple stakeholders (e.g. governments, non-governmental organizations, contractors), which further highlights the importance of collaborative pre-disaster planning as well as “normal” deployment exercises under potentially plausible disaster scenarios . In short, a “systems approach” is essential given the interconnections and cascading impact of decisions, from planning to logistical support for implementation.

Data and technology can help in all aspects of waste management. For example, gazus tool developed Federal Emergency Management Agency generates risk assessments and informs planning decisions of local authorities and the Environmental Protection Agency. Debris Disaster Recovery Tool provides information on over 20,000 waste management facilities. Technology also makes it possible to collect and share data or display the state of the area to help assess the type, amount, and location of debris after a disaster. Unfortunately, such tools or technologies are not available in many vulnerable areas of the world. This is an area where cooperation between countries and governments, perhaps supported by funding agencies and coordination by non-governmental organizations, can significantly improve planning efforts and reduce the negative impact of future disasters.

For millennia, the city where my father is from has been home to a mosaic of people from many cultures and religions, and it pained me to see how it turned into to scratch. Some of the oldest relics of civilization may be lost forever. In the rush to rebuild and rebuild, waste management must take center stage and we hope it will not cause other destruction for future generations.

This is an opinion and analysis article and the views expressed by the author or authors do not necessarily represent the views Scientific American.

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