Climate change becomes key theme in Q2 corporate earning calls

Corporate action to tackle climate change ranked among the top themes on S&P 500 companies’ Q2 earnings calls.

Why it matters: July was the hottest month on record. Last week’s UN-sponsored climate report projected the Earth will potentially cross a crucial temperature threshold less than a decade from now.

The big picture: “For corporates, meeting ESG demands from investors is becoming an increasingly formidable task, requiring sustainability reports and additional ESG headcount,” Goldman Sachs strategist David Kostin writes. 

• Investors are continuing to ask for ESG-themed investment products, including green bonds, they add.

Goldman highlighted a batch of executive comments, each speaking about their respective companies' goals to improve the sustainability of their operations.

• “Our strategy aligns with the world’s growing need for affordable, reliable and cleaner energy that is necessary for human prosperity and global economic development. ... [We] support the aim of the Paris Agreement and a global ambition to achieve net-zero emissions by 2050,” a Hess executive said.
• “We’re moving forward with investments in energy reduction, increased utilization of renewable energy and evaluation of new low-carbon technologies,” said an exec at LyondellBasell Industries. 

Among the standout remarks were those who cited specific actions and results. 

• Qualcomm: “As part of our ongoing ESG efforts, we recently started purchasing 100% renewable solar energy for our San Diego headquarters.”

• Interpublic Group of Companies: “[We] announced an action plan that consists of 3 climate roles: committing to set a science-based target; sourcing 100% renewable electricity by 2030; and joining The Climate Pledge, co-founded by Amazon in Global Optimism.”
• Caterpillar: “Our 2020 sustainability report highlights 7 new environmental, social and governance goals we’ve set to achieve by 2030. … One of these goals is to ensure that 100% of Caterpillar’s new products through 2030 will be more sustainable than the previous generation.”

The big picture: Critics of corporate greenwashing are growing in number, and shareholder support for environmental proposals is growing.

Go deeper: How climate change kills the future