Money’s what I want
Published: 21 June 2021 | No comments yet
The Net-Zero Asset Owner Alliance is sitting on top of a pile of $5 trillion
That line from Randy Newman’s song probably resonates for most graphics businesses, as well as their supply chains. Money is vital to keep businesses going, but it is also coming to the forefront of efforts to tackle climate change. We have long argued that environmental impact mitigation and sustainability will only move up the agenda if there is a financial interest in such moves, so the UN’s Net-Zero Asset Owner Alliance is good news. For the majority of firms in the graphics business this will basically be a very big yawn. But as consolidation continues apace in the printing and publishing industries, especially as the pandemic bites deeper, large companies looking for large investments should take heed.
The idea behind the Net-Zero Asset Owner Alliance is ultimately to increase investment in climate change mitigation efforts across industries. The Alliance has called on asset managers, people who make investments in big companies, to collaborate. The organisation sits on top of some $5 trillion and has committed to move all of these investments to investments with net-zero GHG emissions by 2050. The goal is to reduce risk for “market segments that for now do not have the appropriate risk-return profile”. The good news is in the “for now” bit, but the bad news is that the graphics industry’s “risk-return profile” as it relates to climate change mitigation is definitely not yet robust.
This will impact business economics in the printing and publishing sectors, because asset managers will be selective about how they prioritise investments. This includes into printing companies, their suppliers and manufacturers. As investment companies such as OpenGate Capital and Black Rock move more aggressively into this industry, we can expect greater sensitivities to meeting the Alliance’s interests.
UN’s Environmental Programme Finance Initiative Head Eric Usher said, ‘The accelerating climate crisis … means it is now even more imperative that blended capital is delivered in a climate-smart and net-zero-compatible manner.’ Members of the Net-Zero Asset Owner Alliance are now working with a select number of asset managers to develop packages that support the project’s initiatives and that fit the needs of institutional investors. These are expected to range between $300 million and $500 million and will be open to Alliance members and nonmembers. How this will affect an industry being hammered by the pandemic is not certain. What is certain is that when the money people get involved, change is inevitable. The graphics sector has a chance to up its game in climate change mitigation and to thrive.
– Laurel Brunner
This article was produced by the Verdigris Project, an industry initiative intended to raise awareness of print’s positive environmental impact. This weekly commentary helps printing companies keep up to date with environmental standards, and how environmentally friendly business management can help improve their bottom lines. Verdigris is supported by the following companies: Agfa Graphics, EFI, Fespa, Fujifilm, HP, Kodak, Miraclon, Ricoh, Spindrift, Splash PR, Unity Publishing and Xeikon.