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In a new episode of That Made All the Difference, Savita Subramanian, head of ESG Research, BofA Global Research, explains why ESG factors are critical to why some companies succeed and some fail.
"I think 10 years from now, we won't even call it 'environmental, social and governance,' or ESG investing. We won't call it sustainable. It'll just be part of investing," she says.
This weekend, world leaders will open the COP26 climate summit, the UN's annual climate change conference, in Glasgow. Some insist this event is crucial to the multinational fight to limit the effects of climate change; others dismiss it as a circus that will feature politicos, protesters and celebrities competing for attention – one that's long on lofty promises and short on substance.
What's on the agenda?
Political leaders and negotiators from more than 120 countries will gather to talk about two big subjects. First, how to reduce the heat-trapping carbon emissions that scientists warn can inflict catastrophic damage on millions of people. This is where they'll offer their "nationally determined contributions," diplomatic jargon for their updated promises on their climate goals. Second, how to help poorer countries pay for adaptation to the climate damage that's already unavoidable.
The stakes rose this week with the release of a UN report that says the world is on track for a rise of 2.7 degree Celsius in average global temperature above pre-industrial levels over this century. The planet has already warmed by about one degree Celsius. In 2015, leaders agreed to limit that rise to 1.5 degrees.
But COP26 also brings together scientists, political activists and others to plot innovative strategies they hope can pressure both political and business leaders to show more progress in both these areas.
There are many reasons why climate progress is difficult.
Reducing emissions will demand economic sacrifices that no one is eager to make. To meet the targets agreed to in the Paris Climate Accord in 2015, all countries need to reduce carbon emissions to net zero, putting no more carbon into the atmosphere than they cut, by 2050. That requires an historic financial investment in new forms of energy that reduce or eliminate carbon emissions.
It's not easy to agree on how burdens should be shared. "Why should we make big sacrifices," ask emerging powers China and India? "The industrial revolutions in America and Europe created these problems. Why should we stunt our growth to clean up your mess?" "True enough," Europeans and Americans respond, "but you're both emitting so much carbon these days that we can't solve the problem without you."
Poorer countries ask, "What about us? We didn't create or exacerbate this problem, but rising sea levels and dangerously erratic weather patterns threaten our future. Who's going to pay for that?
The climate change challenge is global, but the politics that limit solutions remain mainly national, and politicians tend to prioritize the need to boost growth and win elections over long-term, global commitments.
As a result, summit promises must be taken with a mountain of salt. These annual summits began in the early 1990s, but there was no major agreement until the Kyoto Protocol in 1997, and that deal fell apart after the US Senate refused to ratify the treaty.
Soaring economic growth in China and India have multiplied the carbon emissions pumped into the atmosphere.
In 2015, the Paris Climate Accord brought new pledges for emissions reductions to reach the net-zero target, but newly elected US president Donald Trump immediately withdrew the US from the commitments it made in that agreement. Though Biden pledges that America and its climate ambitions are back, no one knows what will happen after the next US election.
In addition, world leaders pledge only to meet specified targets. They don't have to explain exactly how they'll hit them. And they know that future leaders will be seated at the table when the bill arrives for payment. Their pledges are referred to as legally binding, but no one can force powerful polluting nations to honor their commitments.
So, why should we care about COP26? There will be no single historic breakthrough at this gathering, for all the reasons above. But the global scientific consensus is that climate change cannot be ignored, and progress matters, even if promises are only partly kept. These are annual meetings (the pandemic postponed the 2020 gathering until now) and any step in the right direction is far better than no progress at all.
COP26 is especially important because negotiators will be working to hash out details for the so-called Paris Rulebook, a new set of rules on how progress is reported and how carbon markets can be created that allow the buying and selling of emissions reductions among countries.
Over the two weeks of this summit, we'll write in more detail about what is and isn't happening, and we'll assess the conference's final statement to judge just how many incremental steps forward have actually been taken.
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Less than a year after the world started putting COVID vaccines into people's arms, most regions have immunized at least half their populations, but Africa still lags behind. With industrialized nations hoarding jabs and the COVAX facility faltering, barely five percent of the African population is fully vaccinated.
Some enterprising South African scientists are now making a bold bid to change that, with an experiment that could benefit not only Africa's 54 nations and billion people, but the entire world: Afrigen Biologics and Vaccines, a Cape Town-based startup, has developed a plan to reverse-engineer Moderna's mRNA shot and manufacture it for priority distribution on the continent.
How are they going to do it? The ingredients in Moderna's vaccine "recipe" are mostly publicly available — the trick is to figure out what to do with them. It's like having all the ingredients and measurements to bake a cake, but only vague instructions for each step.
Given that the Moderna vaccine was developed with US taxpayer money, lawyers are still figuring out which aspects of the process belong solely to the company. But that may be moot for now: the company says it won't sue, leaving Afrigen apparently in the clear to go ahead.
Cloning an mRNA vaccine would be a huge win for South Africa. It would be the equivalent of the moon landing in terms of accomplishment and prestige for a nation that too often grabs headlines for all the wrong reasons. Moreover, the project is backed and funded by the World Health Organization, so if the code is cracked, the formula would be made available to all as a public good across the whole continent and the wider developing world.
A highly effective yet affordable jab that can be manufactured anywhere could be a game-changer to stop more contagious COVID variants from emerging where the population is still unvaccinated. What's more, the sky's the limit when it comes to mRNA's potential to create vaccines against other diseases endemic to Africa such as Ebola, less infectious but way deadlier than COVID.
But don't get too excited just yet. The startup says it'll take up to a year to reverse-engineer Moderna's jab. Also, getting the formula right is only one piece of the puzzle. Afrigen would then need to figure out how to mass-produce, store, and deliver the vaccine around a continent with often poor infrastructure, not to mention getting raw materials at a moment when global supply chains are already stretched thin.
There's a political angle too. In the US, the Biden administration wants Moderna to sell more vaccines to COVAX at cost, and is facing growing criticism for treating the company with kid gloves after ignoring Biden's call to boost production for low-income countries despite Uncle Sam being Moderna's research sugar daddy.
Meanwhile, public health advocates are urging the National Institutes of Health to force Moderna to give up its secret sauce, and calling out the US government for paying lip service to waiving patents and global vaccine equity while not pushing the drugmakers harder to share their tech or prioritize supply for countries with low vaccination rates.
Technically, the Biden administration has some leverage because the White House bankrolled Moderna's vaccine research through the NIH and Operation Warp Speed. But twisting Moderna's arm would be a hard sell for the US government, traditionally reticent to meddle with Big Pharma and with little to gain (politically at home) from vaccinating other countries.
Moderna, for its part, says that right now it's better for the company to expand production itself than to share its tech because scaling up production in Africa will take too long. More broadly, it's also playing a longer game of aiming to dominate the post-COVID mRNA manufacturing landscape along with Pfizer.
No one knows if reverse-engineering mRNA COVID vaccines will work, but then again no one's tried before. Still, the upshot is that there's a huge opportunity despite uncertainty about the science, the business of producing the jab, and the politics behind it all.
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Hard Numbers: Moscow's lockdown, Brazil's economic woes, US troops in Taiwan, US' sluggish growth
October 28, 2021
11: Hit by a massive new COVID wave, Moscow has issued an 11-day lockdown of schools, businesses, and all "non-essential" services. Russia is now one of the countries hardest hit by the pandemic, having recorded 400,000 deaths by some estimates. Russia's high rate of vaccine skepticism isn't helping.
7.75: Brazil's Central Bank raised interest rates to 7.75 percent Wednesday – the highest level in twenty years – in order to clamp down on pandemic-fueled inflation. Brazil's flailing economy is just one of several big problems facing President Jair Bolsonaro as he struggles in the polls ahead of next year's presidential election.
1: Taiwan's president Tsai Ing-wen confirmed for the first time this week that US troops are stationed on Taiwanese soil to help protect the island from Chinese aggression. This revelation comes as relations between Taiwan and China are at their lowest point in decades after Beijing recently sent a record number of military jets into Taiwanese airspace.
2: The US economy grew by a sluggish 2 percent in the third quarter of this year compared to 6.7 percent in the previous quarter. Economists had warned that growth would contract – a lot – amid recent supply-chain disruptions and a decline in consumer spending.
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Marietje Schaake, International Policy Director at Stanford's Cyber Policy Center, Eurasia Group senior advisor and former MEP, discusses trends in big tech, privacy protection and cyberspace:
Has Russian behavior in cyber changed after President Biden and President Putin's meeting earlier this year?
Well, unfortunately, we see ongoing assertiveness and aggression from the Russian side, targeting the US government, but also US tech companies. And the fact that there is so little accountability probably keeps motivating. Shortly before the Russian elections, Apple and Google removed an app built by opposition parties, to help voters identify the best candidate to challenge Putin's party. The company sided pressure on their employees in Russia, but of course, the pressure on the Russian population is constant. And after these dramatic events, the silence from Western governments was deafening.
What about US companies being targeted by attackers from Russia?
Well, it is a very inconvenient truth that the very companies whose software we all rely on is not secure enough to withstand these attacks. And again, the lack of accountability of attackers is a problem. Intelligence gathering currently does not violate international law and is rarely met with sanctions, even if the consequences of breaching systems, can be significant throughout an ecosystem. There is a legal vacuum and a political vacuum, in clarity around what is and is not acceptable. So, a combination of state accountability, and corporate liability standards are needed, to change the status quo.
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No government today has the toolbox to tinker with Big Tech – that's why it's time to start thinking of the biggest tech companies as bona fide "digital nation states" with their own foreign relations, Ian Bremmer explains on GZERO World. Never has a small group of companies held such an expansive influence over humanity. And in this vast new digital territory, governments have little idea what to do.
Watch this episode of GZERO World with Ian Bremmer: Big Tech: Global sovereignty, unintended consequences
The US President is stumped on what to dress up as. World leaders including Xi Jinping, Vladimir Putin, and Jair Bolsonaro weigh in.
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Right now, only one region of the world is reporting an increase in new daily COVID cases. Here's a hint: it's one of the places where vaccines are, for the most part, easiest to get.
It's Europe. According to the World Health Organization, the region last week notched a 7 percent uptick in new daily infections, the third week in a row that infections rose there.
Much of that comes from Central and Eastern Europe, which is currently mired in its worst COVID outbreak to date. Home to just four percent of the world's population, the former Eastern Bloc is now racking up 20 percent of all new cases each day.
Russia, Ukraine and Bulgaria have in the past three days all reported their highest daily numbers of infections and deaths since the start of the pandemic.
Romania, where funeral parlors are now running out of coffins, leads the world with 22 daily COVID deaths per million people, followed closely by neighboring Bulgaria and eleven other Eastern European countries in a row.
Governments in the region, once hailed for their early action to "flatten the curve," are yet again imposing fresh restrictions on businesses, schools, and entertainment venues. Latvia recently went back to an almost full lockdown. Russia has ordered most businesses and schools to close for a full week beginning October 30, with some regions of the country starting already.
Part of the story is that vaccination rates throughout the region are still low. While three-quarters of all EU adults are fully vaccinated, those numbers fall off a cliff as you move eastward. In Romania it's barely 36 percent, while Bulgaria's mark is still below 25 percent. In Russia, which developed one of the earliest COVID vaccines, Sputnik V, just 32 percent of the population has been fully immunized. In Ukraine, it's 16 percent.
And it's not because there aren't enough jabs in stock. Despite early hiccups with securing vaccines, the EU now has more than it needs. Russia now makes its own supply in large quantities. Ukraine is a partial exception here, as the country's fractious politics have hampered its ability to buy and distribute shots.
But the region's problem isn't supply, it's demand — or, more specifically, it's vaccine hesitancy.
EU surveys find that rates of vaccine hesitancy are much higher in Eastern Europe. A recent EU poll found that just 31 percent of Bulgarians were keen to get the shot, and fewer than half of Slovaks, Croatians, and Latvians were with them. Other countries like Romania are in the 50s, but that's far off the overall EU mark of 59 percent, or the Western European countries which are almost all above 70. Surveyed separately, Russia had one of the highest rates of vaccine skepticism in the world, as does Ukraine.
Why is this happening? Not coincidentally, public trust in government is also markedly lower in Eastern Europe, where democracies are in general younger and less well established, than in Western Europe.
It's hard to draw a direct link between trust in government and willingness to take a vaccine — but in countries where people generally don't believe what their governments tell them, it's harder for those governments to convince people that vaccines are safe and important.
Moreover, political turmoil in some of the worst-hit places isn't helping: Romania's government collapsed after a no-confidence vote earlier this month, and Bulgaria is heading next month into its third election of the year, in a vote where new coronavirus restrictions are shaping up to be a salient issue.
Upshot: Unlike in earlier waves of the pandemic, most of Eastern Europe has the tools to grapple more successfully with COVID-19. But political bickering, weak trust in government, and high skepticism about the jabs are proving to be an endemic condition of their own.
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