Green

UN Sustainable Development Goals: How Companies Stack Up

Published

2 years ago

March 16, 2021

Dorothy Neufeld

Sustainable Development Goals

The UN SDGs: How Companies Stack Up

Environmental, social, and governance (ESG) investing witnessed a breakthrough year in 2020 with the most fund inflows on record.

Importantly, for companies that are judged according to ESG metrics, one way to track their progress is through their alignment to the UN Sustainable Development Goals (SDGs).

Established in 2012, the UN SDGs are a blueprint for creating a more sustainable future by 2030 that have been adopted by 193 countries worldwide.

As investors and stakeholders pay closer attention to sustainability concerns, this graphic from MSCI breaks down how companies stack up according to their alignment to the UN SDGs.

How Were Companies Measured?

To track companies net contribution to the UN SDGs, companies were scored by their positive or negative contribution to each of the 17 goals.

The 17 UN SDGs are designed to achieve three primary objectives by 2030:

Protect the planet
End poverty
Create prosperity and peace for all

Specifically, the framework centers on a discussion paper that was developed in partnership with the OECD in 2018. Company policies, operations, products and services, and practices are analyzed according to reported and publicly available information.

Tracking the Alignment of Companies

Across a universe of 8,550 companies in the MSCI All Country World Index, constituents were measured from strongly aligned to strongly misaligned to the UN SDGs.

	Sustainable Development Goal	Strongly Aligned	Aligned	Misaligned	Strongly Misaligned
1	No Poverty	0	892	155	32
2	Zero Hunger	24	234	30	0
3	Good Health and Well-being	0	315	141	29
4	Quality Education	8	31	52	0
5	Gender Equality	0	1092	9	0
6	Clean Water and Sanitation	17	325	36	10
7	Affordable and Clean Energy	43	639	109	587
8	Decent Work and Economic Growth	25	1269	52	17
9	Industry, Innovation, and Infrastructure	68	844	137	9
10	Reduced Inequality	0	828	127	31
11	Sustainable Cities and Communities	0	0	167	19
12	Responsible Consumption and Production	115	855	150	598
13	Climate Action	27	594	95	587
14	Life Below Water	0	36	151	92
15	Life on Land	0	0	128	17
16	Peace and Justice Strong Institutions	0	135	241	27
17	Partnerships to Achieve the Goal	0	401	152	22

Source: MSCI ESG Research LLC as of August 11, 2020

Broadly speaking, companies fell mostly in the middle—roughly 38% were aligned while almost 55% were misaligned or neutral. Meanwhile, just 0.2% of companies were strongly aligned to the UN SDGs.

Overall, one of the most strongly aligned goals was Responsible Production and Consumption, with 115 companies meeting this criteria. Specifically, these include companies that are building sustainable infrastructure, energy efficiency, or creating green jobs.

Interestingly, the worst performing goal was also Responsible Production and Consumption, with over five times as many companies (598) strongly misaligned. Along with this goal, both Climate Action and Affordable and Clean Energy each had over 500 companies strongly misaligned.

UN SDGs: A Sector Focus

Unsurprisingly, SDG-alignment varied widely according to company sectors.

Educational companies, for instance, represented the highest level of alignment to Gender Equality. Meanwhile, 18% of 425 utilities companies assessed ended up aligning with Clean and Affordable Energy goals.

As one would expect, the energy sector lagged behind. In 2020, fossil fuels were a key source of revenue for 91% of the companies in the energy business. In fact, just three companies derived over 50% of their revenues from green alternatives: REX American Resources, Renewable Energy Group, and Verbio.

A Call to Action?

Despite the growing wave of interest in ESG investing, the reality is that progress to meet the UN SDGs has been slower going than expected.

However, a greater number of individuals, stakeholders, and activists are sounding the alarm. Today, over 3,000 signatories representing trillions in assets under management have committed to the UN Principles of Responsible Investment, which has established six key actions for ESG investing. Now, many companies are required to report their ESG disclosures in Europe.

Along with these key markers of progress, investors can move the dial by tracking a company’s alignment to sustainable development goals.

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Environment

Visualizing the Flow of Energy-Related CO2 Emissions in the U.S.

A look at the flow of energy-related CO2 emissions from the sources that generate energy to the sectors that use it.

Published

2 days ago

March 30, 2023

Selin Oğuz

Visualizing the Flow of Energy-Related CO₂ Emissions in the U.S.

This was originally posted on the Decarbonization Channel. Subscribe to the free mailing list to be the first to see graphics related to decarbonization with a focus on the U.S. energy sector.

In 2021, U.S. carbon dioxide emissions from the generation and consumption of energy reached 4.9 billion tonnes.

To better understand how various energy sources and their end-uses contribute to carbon emissions, this graphic visualizes the flow of energy-related CO₂ emissions in the U.S. using carbon flow charts by the Lawrence Livermore National Laboratory.

What are Energy-Related CO₂ Emissions?

Energy-related CO₂ emissions refer to the release of carbon dioxide as a result of the combustion of fuels to produce energy. They arise through the direct use of fossil fuels for transport, heating, or industrial needs, as well as the use of fossil fuels for electricity generation.

To provide some context, non-energy-related CO₂ emissions are those that result from industrial chemical reactions, deforestation, and agricultural activities.

As the largest contributor to carbon emissions, however, energy-related CO₂ emissions account for approximately 85% of all emissions in the U.S. which we will now explore in more detail.

U.S. Energy-Related CO₂ Emissions in 2021

Followed by a pandemic-driven decline in 2020, energy-related carbon dioxide emissions in the U.S. increased by 325 million tonnes in 2021, marking the largest-ever annual increase.

Energy Source	CO₂ emissions in million tonnes, 2021	% of total energy-related emissions
Petroleum	2,223	45.7%
Natural Gas	1,637	33.7%
Coal	1,003	20.6%
Solar, Wind, Nuclear, Hydro, and Biomass	0	0%
Total	4,863	100%

When we follow the CO₂ emissions from the above fossil fuels to their end uses, transportation and electricity generation stand out as the biggest contributors.

In 2021, these two sectors accounted for more than 68% of all energy-related emissions in the country, roughly emitting 3.3 billion tonnes of CO₂.

End-Uses	CO₂ emissions in million tonnes, 2021	% of total energy-related emissions
Transportation	1,801	37.0%
Electricity Generation	1,537	31.6%
Industrial Uses	965	19.8%
Residential Uses	321	6.6%
Commercial Uses	239	4.9%
Total	4,863	100%

When it comes to transportation, petroleum accounted for 97% of emissions, largely due to motor gasoline and diesel consumption. On the other hand, coal and natural gas made up 99% of CO₂ emissions related to electricity generation.

Due to its high carbon intensity, coal’s contribution to power sector emissions may also be of particular interest. As the share of coal rose from 20% to 23% in the U.S. electricity mix in 2021, electricity emissions from coal also increased for the first time since 2014.

Naturally, this shift raised the overall energy-related CO₂ emissions in 2021. It also caused a 4% hike in the carbon intensity of the country’s electricity.

Lowering Emissions

To avoid the impacts of climate change, many countries and companies are working towards decarbonization across all sectors, which can largely be facilitated by reductions in energy-related carbon emissions.

Accounting for nearly 70% of all energy-related CO₂ emissions, transportation and utilities can be important pillars in these efforts.