{"id":1571545,"date":"2022-07-26T11:38:12","date_gmt":"2022-07-26T15:38:12","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1571545"},"modified":"2022-07-26T11:38:21","modified_gmt":"2022-07-26T15:38:21","slug":"return-of-coal-a-threat-to-european-companies-esg-ratings","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/return-of-coal-a-threat-to-european-companies-esg-ratings\/","title":{"rendered":"Return of coal a threat to European companies\u2019 ESG ratings"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Freturn-of-coal-a-threat-to-european-companies-esg-ratings%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1571545&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Carolyn Cohn and Christoph Steitz<\/p>\n<p>LONDON\/FRANKFURT (Reuters) \u2013     European companies turning to coal as an alternative to Russian gas face a hit to their environmental, social and governance ratings, leaving them scrambling to impress investors still vocal on sustainability.<\/p>\n<p>Despite an energy crisis following sanctions on Russia, major European investors say they will not relax their investment principles of reaching net zero targets on greenhouse gas emissions by 2050 or earlier.<\/p>\n<p>Investors increasingly use ESG ratings, developed by companies such as MSCI or Sustainalytics, to judge firms\u2019 merits. Burning coal, which puts out more carbon dioxide than alternatives like oil and gas, gives companies a black mark.<\/p>\n<p>European countries including Germany and Italy are nonetheless considering bringing back coal due to the Ukraine crisis, which has cut Russian gas flows. Some companies, such as German speciality chemicals maker Lanxess, have also said they may consume more coal.<\/p>\n<p>Companies forced by cost pressures or national policy to use the fuel could make up ground by finding other ways to burnish their environmental credentials, or by focusing on the S and G in ESG, industry sources add.<\/p>\n<p>\u201cWhen your emissions go up, all other things being equal, you are in more trouble from a ratings perspective,\u201d said Sylvain Vanston, executive director, climate change investment research at MSCI. \u201cIf you come up with a fantastic new commitment, that could counterbalance it.\u201d<\/p>\n<p>But so far, few companies have managed to find a silver bullet to counteract use of the heavily polluting fuel. Lanxess, which has previously acknowledged the hit to its carbon footprint, declined to comment on the potential impact on its ESG rating of burning more coal.<\/p>\n<p>It has however pointed out that if it prices itself out of the market, it could mean plant closures and job losses, potentially affecting the \u201csocial\u201d aspect of its operations.<\/p>\n<p>There are other options available to companies looking to preserve their ratings. David McNeil, head of climate risk at Sustainable Fitch, said the agency looks at a company\u2019s broad ESG impact when assessing it. \u201cIf a power utility is issuing a green bond, that is something we would look at,\u201d he said.<\/p>\n<p>Some companies such as Italian utility Enel have issued sustainability-linked bonds connected to their overall sustainability performance. <\/p>\n<p>Sustainability-linked bonds and green bonds, which fund specific environmental projects, have however performed poorly in recent months as the prospect of higher interest rates and a possible recession battered corporate debt markets more broadly.<\/p>\n<p>Germany\u2019s largest power producer RWE, whose CEO said last month that Germany needed to save gas in its power sector by replacing it with coal, has previously issued green bonds.<\/p>\n<p>A spokesperson for the group said RWE is still focused on expanding its use of renewable energies and hydrogen with a view to further accelerating a coal phase-out, a strategy to which its investors had given \u201cbroad approval\u201d.<\/p>\n<p>Other companies, such as Europe\u2019s top copper smelter Aurubis, also said their aim remains to decarbonise, despite the additional short-term complication of including coal in the energy mix.<\/p>\n<p>Investors insist they are similarly committed. AXA Investment Managers, Allianz Global Investors and Zurich Insurance, which between them manage $1.8 trillion in assets, all said they were keeping to their plans to cut back on coal despite the war in Ukraine.<\/p>\n<p>\u201cWe are not changing our position and we are not changing our policy \u2013 we are sticking to the course,\u201d said Zurich group head of sustainability Linda Freiner.<\/p>\n<p>So far Europe\u2019s energy crisis is showing few signs of being resolved. It remains to be seen how far either companies or investors can keep faith in the importance of long-term ESG principles like cutting out coal if the situation worsens.<\/p>\n<p>\u201cCoal throws up an energy security question that in the short term is in conflict with the decarbonisation problem,\u201d said Alex Simcox, head of ESG investment at asset manager Mondrian.<\/p>\n<p>\u201cIf you are in Germany and Russia cuts off gas, even if you are in the Green party, you should accept that the extension of coal-fired power is a pragmatic answer.\u201d<\/p>\n<p> (Reporting by Carolyn Cohn in London and Christoph Steitz in Frankfurt; Additional reporting by Ludwig Burger, Christoph Steitz and Patricia Weiss in Frankfurt, Michael Hogan in Hamburg and Marc Jones in London; Editing by Jan Harvey)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/?attachment_id=2730593\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/07\/tagreuters.com2022binary_LYNXMPEI6P069-VIEWIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI6P069-VIEWIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Carolyn Cohn and Christoph Steitz LONDON\/FRANKFURT (Reuters) \u2013 European companies turning to coal as an alternative to Russian gas face a hit to their environmental, social and governance ratings,<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1571545","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1571545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1571545"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1571545\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1571545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1571545"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1571545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}