J.P. 摩根-全球投資策略-ESG投資2021：更快、更深、更廣-2021.5.13正文版

GlobalResearch

13May2021

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ESGESGinvestinginvesting2021:Going2021:faster,Goingdeeper,broaderfaster,deeper,broader

ESGandSustainabilityResearch

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Seepage141foranalystcertificationandimportantdisclosures,includingnon-USanalystdisclosures.

J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.

JoyceChang

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KimberlyHarano

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JPMorganChase’sApproachtoEnvironmental,SocialandGovernance

AtJPMorganChase,environmental,socialandgovernance(ESG)mattersareanimportantconsiderationinhowwedobusiness,includingourcorporategovernancesystems,riskmanagementandcontrols,humancapitalmanagement,approachtoservingclientsandcustomers,supportforlocalcommunities,andmanagementofourphysicaloperations.

Equallyimportant,webelievecompanieslikeourshaveanobligationtoputtheirbusinessestoworkforalloftheirstakeholders.Forourfirm,thismeansweareleveragingourbusinessandpolicyexpertise,data,capitalandglobalpresencetohelpdriveaninclusiverecovery,expandaccesstoeconomicopportunity,andacceleratesustainabilityandclimatesolutions.

InOctober2020,weannouncedourcommitmenttoalignourfinancingportfoliowiththegoalsoftheParisClimateAgreement.Tostart,wehavedevelopedtargetstoreducethecarbonintensityinourOil&Gas,ElectricPowerandAutoManufacturingportfoliosby2030,andwearepubliclysharingdetailsaboutourprocessandmethodologyformeasuringandtrackingourprogress,calledCarbonCompass.

Wearealsohelpingourclientsexecuteontheirsustainabilitystrategies,decarbonizeandraisecapitaltodevelopandscalenew,greenertechnologiesandindustries.In2020,wefacilitatedmorethan$220billionintransactionsthatadvancesustainabledevelopment—andweaimtofinanceandfacilitateanadditional$2.5trillionmoreoverthenext10years.Inaddition,weareworkingtoadvanceeffectivepolicydevelopmenttoaddressclimatechangeandsustainabledevelopment.Forexample,aspartofouractivesupportforpricingcarbon,in2020JPMorganChasejoinedtheClimateLeadershipCouncil.And,thefirmachievedcarbonneutralitywithinitsoperations,includingsourcingrenewableenergyfor100percentofitsglobalpowerneeds,forthefirsttimein2020andwillmaintainthiscommitmenteachyeargoingforward.

Inaddition,weareharnessingourexpertiseinbusiness,policy,andphilanthropytoaddresskeydriversoftheracialwealthdivideandprovideeconomicopportunitytounderservedcommunities,especiallyBlackandLatinxcommunities.Buildingonourexistinginvestments,in2020JPMorganChasecommittedanadditional$30billion—whichwillincludeloans,equityanddirectfunding—overthenextfiveyearstoadvanceracialequity.Wearealsoredoublingoureffortstobuildamoreequitableandrepresentativeworkforcewithinourowncompany.

Theeventsof2020—theglobalpandemic,asocietalreckoningwithsystemicracismandtheincreasinglyvisibleeffectsofclimatechange—underscorewhyunderstanding,anticipating,andeffectivelymanagingESGmattersiscriticaltodeliveringonourmissiontoserveourclients,customers,andcommunities.Now,morethanever,astrongfocusonESGisabusinessimperative—andakeydriveroflong-termbusinesssuccess.Wewillcontinuetoprovideupdatestoourstakeholdersonourefforts,andweinviteyoutolearnmoreat/ESG.

2

JoyceChang

GlobalStrategicResearch

(1-212)834-4203

J.P.MorganPerspectives

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13May2021

KimberlyHarano

(1-212)834-4956

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ContributingAuthors

Long-termStrategy ESG&SustainabilityResearch

JanLoeys SajalJain

jan.loeys@ sajal.jain@

J.P.MorganSecuritiesLLC J.P.MorganIndiaPrivateLimited

JapanEquityStrategy

EuropeanEquityResearch

RyotaSakagami

EuropeanMetals,Mining&Steel

ryota.sakagami@

PatrickJones

JPMorganSecuritiesJapanCo.,Ltd.

patrick.jones@

LatinAmericaandBrazilEquityStrategy

J.P.MorganSecuritiesplc

EmyShayoCherman

CEEMEAOil&Gas

emy.shayo@

AlexComer

BancoJ.P.MorganS.A.

er@

AsiaPacificEquityResearch

J.P.MorganSecuritiesplc

UtilitiesandEnvironmental

AngelinaGlazova

StephenTsui,CFA

angelina.glazova@

stephen.tsui@

J.P.MorganBankInternationalLLC

J.P.MorganSecurities(AsiaPacific)Limited/J.P.Morgan

EuropeanCapitalGoods

Broking(HongKong)Limited

AndrewWilson

Infrastructure,Industrials&Transport

andrew.j.wilson@

HanFu

J.P.MorganSecuritiesplc

han.fu@

EuropeanOilandGas

J.P.MorganSecurities(AsiaPacific)Limited/J.P.Morgan

Broking(HongKong)Limited

ChristyanFMalek

ASEANTMT

christyan.f.malek@

J.P.MorganSecuritiesplc

RanjanSharma,CFA

MatthewLofting,CFA

ranjan.x.sharma@

matthew.lofting@

J.P.MorganSecuritiesSingaporePrivateLimited

APACDataDrivenResearch

J.P.MorganSecuritiesplc

JocelynADsouza,CFA

AnuragRajat,CFA

jocelyn.dsouza@

anurag.rajat@

J.P.MorganIndiaPrivateLimited

J.P.MorganSecuritiesSingaporePrivateLimited/J.P.

MorganSecurities(AsiaPacific)Limited

EuropeanConsumerGoodsandBeverages

KoreanAutos

CelinePannuti,CFA

SMKim

celine.pannuti@

sangmyeong.kim@

J.P.MorganSecuritiesplc

J.P.MorganSecurities(FarEast)Limited,SeoulBranch

EdwardHockin

USEquityResearch

SoftwareTechnology

SterlingAuty,CFA

sterling.auty@

J.P.MorganSecuritiesLLC

Internet

DougAnmuth

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J.P.MorganSecuritiesLLC

BryanM.Smilek

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J.P.MorganSecuritiesLLC

CoryACarpenter

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DaeKLee,CFA

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J.P.MorganSecuritiesLLC

KatyAnsel

katy.ansel@

J.P.MorganSecuritiesLLC

NeerajSKookada,CFA

neeraj.s.kookada@

J.P.MorganIndiaPrivateLimited

AlternativeEnergy

MarkStrouse,CFA

mark.w.strouse@

J.P.MorganSecuritiesLLC

IntegratedOils

PhilGresh,CFA

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J.P.MorganSecuritiesLLC

JohnMRoyall,CFA

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J.P.MorganSecuritiesLLC

JapanEquityResearch

edward.hockin@

LatinAmericaEquityResearch

JapanMachinery,Environmental

J.P.MorganSecuritiesplc

LatAmRetailandHealthcare

JosephGiordano

TomohikoSano

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tomohiko.sano@

BancoJ.P.MorganS.A.

JPMorganSecuritiesJapanCo.,Ltd.

EugeniaCavalheiro

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BancoJ.P.MorganS.A.

LatinAmericanFinancials

YuriRFernandes

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J.P.MorganSecuritiesLLC

3

JoyceChang

GlobalStrategicResearch

(1-212)834-4203

J.P.MorganPerspectives

joyce.chang@

13May2021

KimberlyHarano

(1-212)834-4956

kimberly.l.harano@

ContributingAuthors

DomingosFalavina

domingos.falavina@J.P.MorganSecuritiesLLC

GuilhermeGrespan

guilherme.grespan@BancoJ.P.MorganS.A.

MarlonMedinaRobles

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J.P.MorganCasadeBolsa,S.A.deC.V.,J.P.MorganGrupoFinanciero

LatinAmericanUtilities

MileneCarvalho

milene.carvalho@BancoJ.P.MorganS.A.

HenriquePeretti

henrique.peretti@J.P.MorganSecuritiesLLC

LatinAmericanTransportation&UtilitiesFernandoAbdalla

fernando.abdalla@BancoJ.P.MorganS.A

LatAmFood&BeveragesandAgribusinessLucasFerreira

lucas.x.ferreira@BancoJ.P.MorganS.A.

EmergingMarketEconomics

KatherineMarney

katherine.v.marney@J.P.MorganSecuritiesLLC

JessicaMurray

jessica.x.murray@J.P.MorganSecuritiesplc

GlobalIndexResearch

JarradKLinzie

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LydiaHarvey

lydia.harvey@

J.P.MorganSecuritiesplc

RupertRink

rupert.rink@

J.P.MorganSecuritiesplc

GlobalCreditResearch

EuropeanCredit

ElaKurtoglu

ela.n.kurtoglu@J.P.MorganSecuritiesplc

USCredit

VirginiaChambless,CFA

virginia.chambless@J.P.MorganSecuritiesLLC

KevinLKwan

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J.P.MorganSecuritiesLLC

TarekHamid

tarek.x.hamid@

J.P.MorganSecuritiesLLC

ArjunChandar

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J.P.MorganSecuritiesLLC

LatinAmericaCorporateResearchSeanViscount

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J.P.MorganSecuritiesLLC

AlejandraAndrade

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AsiaCorporateResearch

SooChongLim

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J.P.MorganSecurities(AsiaPacific)Limited

VarunAhuja,CFA

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J.P.MorganSecurities(AsiaPacific)Limited

QuantitativeCreditResearch

ShivamGhosh

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J.P.MorganSecuritiesplc

EuropeanCreditStrategyandDerivativesResearch

SaulDoctor

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J.P.MorganSecuritiesplc

FixedIncomeResearch

SecuritizedProductsResearch

JohnSim

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J.P.MorganSecuritiesLLC

AkshitRJaisinghani,CFA,FRM

akshit.r.jaisinghani@J.P.MorganSecuritiesLLC

AlexD.Kraus

alexander.d.kraus@J.P.MorganSecuritiesLLC

NickMaciunas

nicholas.m.maciunas@J.P.MorganSecuritiesLLC

AniGelashvili

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J.P.MorganSecuritiesLLC

KaustubS.Samant

kaustub.s.samant@J.P.MorganSecuritiesLLC

SanjanaPrasad

sanjana.t.prasad@

J.P.MorganSecuritiesLLC

ChongSin

chong.c.sin@

J.P.MorganSecuritiesLLC

CrystalLin

crystal.lin@

J.P.MorganSecuritiesLLC

RishadAhluwalia

rishad.ahluwalia@

J.P.MorganSecuritiesplc

HeatherARochford

heather.a.rochford@J.P.MorganSecuritiesLLC

InternationalABSandCoveredBondsMeghanCKelleher

meghan.c.kelleher@J.P.MorganSecuritiesplc

SurajDey,CFA

suraj.dey@

J.P.MorganSecuritiesplc

USFixedIncomeStrategy

PhoebeAWhite

phoebe.a.white@

J.P.MorganSecuritiesLLC

HenryStJohn

henry.stjohn@

J.P.MorganSecuritiesLLC

ColinWPaiva

colin.w.paiva@

J.P.MorganSecuritiesLLC

WilliamWWade

william.walter.wade@

J.P.MorganSecuritiesplc

4

JoyceChang

GlobalStrategicResearch

(1-212)834-4203

J.P.MorganPerspectives

joyce.chang@

13May2021

KimberlyHarano

(1-212)834-4956

kimberly.l.harano@

TableofContents

Executivesummary

6

ESG2021:Goingfaster,broader,deeperafterBiden’sEarthDaySummit

7

Biden'sClimateSummitbringsalignmentofglobalgoals

Biden’sEnvironmental&Energypolicies:Onthewaytomeetinghiscampaignpledges

18

BoldpledgesbutnoroadmapfromBiden’sEarthDayClimateSummit

23

COVID-19acceleratessecularstagnationandraisesthesocialcostofcarbon

28

MainstreamingSustainableFinanceDisclosureRegulationintheEU–ArevolutionforESGinvesting

32

MajorinvestmentsforJapan’senvironmentalpoliciesandESGinvestingsetinmotion

38

HurdlesforEMSovereignESGStrategies:Conceptsandmisconceptionsinanunchartedworld

42

NavigatingGreenhouseGasEmissionsData:Buildingtrustinthedatasources

47

2030isthenew2050:IsHydrogenthesolutionfortheenergytransition?

Oil&Gas:ExtendingJPMEnergyTransitionScorecardtotheUSmajors

54

US:AlternativeEnergytobenefitfrompotentialgovernmentstimulus

58

Hydrogen:a(R)evolutioninneedofrealism

60

ChinaHydrogen:Potentialtoreplicatethesuccessofwind/solarpower

63

Korea:Hydrogentodrive2050carbonneutrality

67

Gazprom,CCSandEurope:Reversingflowsandsolvingproblems

70

‘E’becomingmorefinanciallymaterialandbroadeningbeyondclimatechange

EuropeanConsumerGoods&Beverages:Climatechangemitigationahottopic,gettinghotter

73

UKCapitalGoods–Astructuralwinnerwithanopportunitytocatch-up

76

Deforestation:Movingfromsustainabletofinancialmateriality

78

BrazilianWaterUtilities:Notallwaterisunderthebridge

82

ACOVID-19legacy:Theriseofthe'S'andthe'G'

ESGandActivism–Asignofchangingtimes

86

Danonecorporategovernanceunderthespotlight

89

ESGInvesting:Introducingthe‘HumanCapitalFactor’

90

CybersecurityDeepDive–Howthemarketunderestimatescyber-attackrisks

94

Internet:Mega-CapESG:RegulatoryHeadwindsOvershadowSubstantialInitiatives;AMZN,FB,GOOG/

LDrivingChange

100

ASEANTelcos:Improvingshareholderreturnsbyrealigningmanagementincentives

102

GenderEqualityinLatAmHealthcare:Lackinginseniorrepresentation

103

ManagementCompensationinLatAmHealthcare:Linkingtovalueforshareholder

105

SantanderBrasil:ESG–Microfinancedrivessocialimpactwithprofitability

107

ESGinvesting:OpportunitiesandChallenges

ESGQ:ESGInvesting–Shorttermvulnerabilities,longtermopportunities

108

ESGalphainDMcreditandgrowingmomentuminEM

116

ESGSecuritizedProducts:Demandoutstripssupply

128

Appendix

136

5

JoyceChang

GlobalStrategicResearch

(1-212)834-4203

J.P.MorganPerspectives

joyce.chang@

13May2021

KimberlyHarano

(1-212)834-4956

kimberly.l.harano@

Executivesummary

Biden'sClimateSummitbringsalignmentofglobalgoals

TheBidenClimateSummitsendsaclearmessagethattheUShasraiseditsambitionstojoinandleadaglobalalliancetoaccelerateclimateaction.

First100daysofBidenadministrationacceleratesclimateactionsatboththedomesticandgloballevelsbutlacksaroadmaporclearfinancingplansdespitethehighcostestimatesforUSinaction.

EUremainstheleaderininstitutionalizingESGwithSustainableFinanceDisclosureRegulation(SFDR)fosteringtransparencyinESGintegrationpractices.

EMisincreasingclimatechangeengagementbutfaceshugehurdlestoadaptationandmitigation,giventherelianceontheutilizationandexportoffossilfuels.

‘E’becomingmorefinanciallymaterialwithgrowinginterestinAltEnergy

COVID-19continuestoacceleratechangeas2030isthenew2050asDMcountriesaremovinguptimelinestodecarbonize,withgrowinginterestinAlternativeEnergy,especiallyHydrogen(H2)…

…butwecautionthatrealismisnecessaryonthedemandsidegiventhechallengestoH2adoption,particularlyrelatedtocost,transportationandstoragechallenges.

RegulationismovingfasterinallgeographieswithEuropeclearlyinthelead,asESGfundstherearelikelytobecomethemajorityoffunds,whileAsiaandtheUSarecatchingupthroughlocalizedinitiatives.

ESGreportinglagsmarketdemand,anddataqualityandthelackofaglobalreportingstandardforcorporatedisclosuresraisetheriskofgreenwashingandremainmajorconstraintstoinvestment.

ACOVID-19legacyistheriseofthe'S'andthe'G'

ESGadoptionisoccurringatthecompanylevelacrossallsectors,notjustthemacrolevel,asCOVID-19hasbroughtincreasedfocusonthe‘S’andthe‘G’andincreasedshareholderactivism.

Integrationofsustainabilityissuesintodisclosurescouldtransformbusinessmodels,andweextendanalysistothe‘humancapitalfactor’andcybersecurityrisks.

ESGinvesting:OpportunitiesandChallenges

LongexcessreturnsfromESGQcontinuetooutperform,andassetsbenchmarkedtotheJESGIndexSuiteincreasedby25%in1Q21alone,andnowexceed$30bn,despiteweakreturns.

DemandforESGfixedincomeproductexceedssupplywithbest-in-classESGissuersinDMcreditgeneratingalpha,butmixedperformancebyEMESGissuersandgreenbondsYTD.

WealsointroduceaJ.P.MorganGreen&SocialthematicscreenerandanAsiaex-JapanSecuritySoftwareScreentohelpinvestorsidentifycompaniesthatwillbenefitfromBiden’sgreenrecoveryproposalsandcompaniesthatgeneraterevenuefromcybersecurityproductsorservices.

J.P.MorganPerspectivesbringstogetherthematicandstrategicviewsacrossJ.P.Morgan’sGlobalResearchfranchise.Inthisreport,wediscussthelatestdevelopmentsinESGinvesting,includingthereturnofUSambitionstojoinandleadaglobalalliancetoaccelerateclimateactionandgrowinginterestinAltEnergy,mostrecentlyHydrogen.WeassesstheregulatorylandscapeandstandardizationanddatachallengesthatpersistasCOVID-19hasacceleratedtheriseofthe‘S’andthe‘G’pillars.Wehopethisserieswillbothinformandfosterdebateonevolvingeconomic,investmentandsocialtrends.

–JoyceChang,ChairofGlobalResearch

6

JoyceChang JanLoeys

(1-212)834-4203 (1-917)602-9440

joyce.chang@ jan.loeys@

KimberlyHarano

(1-212)834-4956

kimberly.l.harano@

ESG2021:Goingfaster,broader,deeperafterBiden’sEarthDaySummit

TheBidenClimateSummitsendsaclearmessage,ifnotadetailedroadmap,thattheUShasraiseditsambitionstojoinandleadaglobalalliancetoaccelerateclimateaction.

COVID-19continuestoacceleratechange,and2030isthenew2050asDMcountriesaremovinguptimelinestodecarbonize,withgrowinginterestinAltEnergy,especiallyHydrogen(H2)…

…butwecautionagainstover-optimismgiventhecost,storageandtransportationchallenges.

EUremainstheleaderininstitutionalizingESGwiththeSustainableFinanceDisclosureRegulation(SFDR)fosteringtransparency.

EMisincreasingengagementbutfaceshugehurdlesgivenitsrelianceontheutilizationandexportoffossilfuels.

Weextendanalysistothe‘humancapitalfactor’andcybersecurityrisksgiventheincreasedfocusonthe‘S’and‘G’pillars.

Regulationismovingfasterinallgeographies,withEuropeleading,whileAsiaandtheUSarecatchingupthroughlocalizedinitiatives.

AssetsbenchmarkedtotheJESGIndexSuiteincreasedby25%in1Q21aloneto$30bn,despitemixedperformancetostarttheyear,andshouldsurpass$45bnbyyear-end.

DemandforESGfixedincomeproductexceedssupplywithbest-in-classESGissuersinDMcreditgeneratingalpha,butmixedperformancebyEMESGissuersandgreenbondsYTD.

ESGfactorsarebecomingmorefinanciallymaterialandESGadoptionisoccurringatthecompanylevel,notjustthemacrolevel.

ESGdatasourcesaremovingawayfromdisclosingESGrisktowardscapturing‘intentionandbehavior,’andintegrationofsustainabilityissuescouldtransformbusinessmodelsacrossvaluechains,whichishighlightedbyourequityanalystsacrossregions,sectorsandcompanies.

/briefing-room/statements-releases/2021/04/22/executive-summary-u-s-international-climate-finance-plan/

GlobalStrategicResearch

J.P.MorganPerspectives

13May2021

BidenClimateSummitbringsaglobalandsynchronizedapproachtoclimateaction

Americaisback.Culminatingthefirst100daysofhisadministration,theBidenEarthDayClimateSummit(April22-23,2021)sentaclearsignalthattheUSintendstoassumeagloballeadershiproleonclimatechangeactions—placingitatthecenterofeconomic,nationalsecurityandforeignpolicypriorities—forthenextfouryears.AfterrejoiningtheParisClimateAgreementearlierthisyear,theBidenadministrationisembarkingonagame-changingUSplatformthatincludessweepingpledges,suchasreducingcarbonemissionsbyatleasthalf(versus2005levels)by2030.TheUSgoalsarenowmoreinlinewithmeasuresthattheEuropeanUnionandUKputintolaw,withtheEUcommittingtoreducenetgreenhousegasemissionsbyatleast55%versus1990levelsby2030,whiletheUKwillreduceemissionsby78%versus1990levelsby2035.With40leadersacrosstheworldattendingthesummit,CanadaandJapanjoinedinacceleratingpledgestodecarbonize.Emergingmarketscountriesalsooutlinedclimateambitions,ifnottargets,withChinawelcomingtheUS’sreturntoamultilateralclimategovernanceprocessandreiteratingitspledgeforChina’semissionstopeakbefore2030andtoachievecarbonneutralityby2060.TheWhiteHousealsoasserteditsinternationalleadershiprole,notingthat85%ofglobalemissionscomefrombeyondUSborders,andoutlinedaUSInternationalClimateFinancePlanwiththegoaltodoubleitsannualclimatefinancingtoEMcountriesby2024,tobetterequipEMcountriestotackleclimatechangeissues,subjecttoCongressionalapproval

1

(seeHeckerandDubourgformoredetailsonBiden’s

EnvironmentalandEnergyagenda

andthe

Climate

Summit

).

TheBidenadministration’sannouncementsfollowayearofremarkablemomentumforESGadoption,acceleratedbythepandemic.Attheonsetofthepandemic,therewasariskthatthegreatercompetitionforresourceswoulddetractfromtheESGagendaassomecharacterizedESGasaluxuryappropriateforboomingeconomies(seeJ.P.MorganPerspectives:ESGandCOVID-19:FriendsorFoes?,J.Changetal.,18May2020).Lookingbackoverthepastyear,COVID-19actedasa‘reallife’stresstestthatdemonstratedtheresilienceofESGstrategiesthroughacrisisasthe

7

JoyceChang JanLoeys

(1-212)834-4203 (1-917)602-9440

joyce.chang@ jan.loeys@

KimberlyHarano

(1-212)834-4956

kimberly.l.harano@

pandemicendured.2020endedwiththeUSandChinamakingindividualpledgestoreach“NetZero,”joiningtheEuropeanUnion,andsignalingthatallmajoreconomieswouldtakeaglobalandsynchronizedapproachtoaddressingclimateaction.COVID-19alsobroughtoncollectivedemandforchangeandabroadeningoffocusbeyondthe“E”factor,andtowardspandemicresiliencyandstakeholdercapitalism,representedbythe“Sand“G”factors(seeJ.P.MorganPerspectives:BuildBackBettertoBoostESG,J.Changetal.,16December2020,J.P.MorganPerspectives:NotBusinessasUsual:TheRiseofStakeholderism,J.Changetal.,5October2020,andJ.P.MorganPerspectives:ESGandCOVID-19:FriendsorFoes?,J.Changetal.,18May2020).During2020,momentumforESGinvestingacceleratedwiththeestimateduniverseofESGassetsdoublinginsizetonearly$7.2trn,whileassetstrackingJ.P.Morgan’sJESGindicesalsodoubledtoreach$24bn,andtheJESGindicesoutperformedbaselineindicesby~40bps.In2021,themomentumforESGinvestingcontinuestoaccelerateasmajoreconomieshavemovedupthetimelinestodecarbonize,withstrongESGinflowsseenYTD.

However,thesimplisticESGtradesanddefinitionsforESGinvestingareoverasESGreachesanageofmaturityasHeckerandDubourgnote(see6thGlobalESGConference:Keytakeawaysfromtheagendasessions,30March2021).Theabsenceofaglobalstandardfornon-financialreportinghasraisedfearsthatgreenwashingcouldsetbackmaterialsustainabilityinitiatives.Corporatedisclosuresarestillvoluntaryandoftenbackward-looking,anddatalimitationsareraisingtheriskofgreenwashingasstandardizationandcontrolofESGreportinglagmarketdemand.Thedominanceofthe“E”willremaingiventhechallengestosourcingconsistentandreliable“S”and“G”datametrics.TheevidencethatESGconsiderationscanmakeadifferencetoacompany’scostoffundingandthatESGinvestingcanofferinvestorsasuperiorrisk-adjustedreturnremainsnascentandmixed,particularlyforemergingmarketsasESGdisclosureratesarehighestamonglarge-cap,developed-marketlistedcompanies.EMcountrieswillcontinuetolagDMpolicyinitiativesgiventheirrelianceontheutilizationandexportoffossilfuels.TheperformanceofESGindicesandstrategieshasbeenmixedtostarttheyear.WhileESGQ(JPM’sproprietarystockselectionmodelforpickingstocksinaresponsibleway)outperformedoverthepastyearthroughFebruary,withlongexcessreturnspostedoverthepast1,3,6and12-monthhorizons,forthepast6months,long/shortreturnshavestruggledasshortsbeatthelongs

GlobalStrategicResearch

J.P.MorganPerspectives

13May2021

(

Chaudhry)

.Similarly