Week 25: Abortion ruling is a violation of human rights

In this issue: ▸ Everybody is looking for something ▸ Abortion ruling a historic setback ▸ ESG implications of abortion ruling ▸ Far behind on energy transition ▸ G7 to invest in gas ▸ And much more

Dear all,

Sweet dreams are made of this. Who am I to disagree. I travel the world and the seven seas. Everybody's looking for something. Some of them want to use you. Some of them want to get used by you. Some of them want to abuse you. Some of them want to be abused. Everybody's looking for something. 

Eurythmics’ lyrics still deliver. They are intriguing to listen to, both confirming and questioning. Yes, everybody is looking for something, and that something seems to be more and more unclear. A fuzzy, foggy, far-away thing. Inflation, wars, food-crisis, migration, climate crisis, water shortages, political polarisation, socio-economic injustice. A giant setback in our collective development is becoming more and more obvious, tangible, almost physical. 

Huge leaps of development over the last 50 years have in some cases been erased in the course of couple of years. Russian President Vladimir Putin's officials are hinting at nuclear Armageddon. China has become increasingly assertive. A global food crunch is on the way, oil prices are spiking, and a global economic slowdown and a cost-of-living crisis is looming. 

Climate change aspirations are also being confounded and supply chain problems are hobbling hopes of a post-pandemic return to normality. It seems appropriate to ask what is really going on and why, and even more how we can revert this dreadful tragedy unfolding in front of us.

Abortion ruling a historic setback

Your body is your temple. You have the right to your body, what happens to it, and what you want to do with it. Your body does not belong to the state, or religion, or politics, or the economic system. Your body is yours. 

For decades women around the world have fought, and still do, to have a right to their own bodies. If that would have been the quest for men instead, we would have had several nuclear wars and revolutions by now. Unfortunately, the female quest for human decency, to have the right to your body, has in last two days got a severe and I would say historic setback.  

The Supreme Court has ruled that there is no constitutional right to abortion in the US, upending the landmark Roe v Wade case from nearly 50 years ago in a rare reversal of long-settled law that will fracture reproductive rights in America. Joe Biden called the ruling a “tragic error” and the Republicans celebrating it “wrong, extreme and out of touch”. 

At least 26 states are expected to ban abortion immediately or as soon as practicable. The Republican attorney general of Texas, Ken Paxton, celebrated the ruling and said: “Abortion is illegal here.”

The Dobbs decision is one of the most consequential in generations. It will have profound, immediate and enduring consequences for tens of millions of women and other people who can become pregnant. Ripple effects could play out over decades. 

“Even if it’s not completely unprecedented it’s extremely rare,” said Mary Ziegler, a visiting professor of constitutional law at Harvard Law School, professor at the University of California, Davis School of Law and a historian of abortion. “It’s also extraordinary to do something like this so quickly, with no kind of advance notice.”

ESG implications of abortion ruling

Access to safe abortion services is a human right. Under international human rights law, everyone has a right to life, a right to health, and a right to be free from violence, discrimination, and torture or cruel, inhuman and degrading treatment. 

Human rights law clearly spells out that decisions about your body are yours alone – this is what is known as bodily autonomy. Forcing someone to carry on an unwanted pregnancy, or forcing them to seek out an unsafe abortion, is a violation of their human rights, including the rights to privacy and bodily autonomy.  

If you look at this from ESG investment angle things becomes very heavy rather quickly. With this decision by the Supreme Court in the US, Human Rights of women are no longer respected and as such it should have a significant impact on the ESG ratings of the US sovereign bonds. 

On a company level it becomes even more delicate from an ESG perspective for US based companies in the 26 states that will ban abortion. How will US companies uphold human rights for their female employees? Will this have an impact on the valuation of these companies, many of them employing hundreds of thousands women in their operations. 

Some of America’s largest companies moved swiftly to protect their employees’ access to abortion after Friday’s Supreme Court decision to end the constitutional right to an abortion in the US. The moves are likely to deepen an expanding rift between conservative Republicans and corporate America. 

Disney, JP Morgan, Levi Strauss and Microsoft were among the companies to tell the staff that they would cover employee travel expenses for abortions in light of the Supreme Court’s decision to strike down the Roe v Wade ruling.

How will EU companies operating in the US protect their employees’ human rights? 

This will be a big question for ESG investors going forward and especially for ESG rating agencies. How do we measure and assess an obvious breach of human rights by companies and how will this be managed by companies? Will this mean that US companies will be downgraded in ESG ratings? More is to come on this tragical setback. 

What about UN and a firm response from democratic leaders around the world about this historical human rights breach, now legalised in US? Silence it is, so far.

The world is far behind on energy transition

It is a “world on its knees” right now, regardless where you turn your gaze. 

The “worrying” disparity in clean energy investments between the advanced economies and the developing nations was put into the spotlight this week. The latest International Energy Agency world energy outlook report released last week said that while global clean energy investment had increased since the Paris climate accord was adopted in 2015, the “weakness” of clean energy investments across the developing world was “one of the most worrying trends”. 

“Much more needs to be done to bridge the gap between emerging and developing economies’ one-fifth share of global clean energy investment, and their two-thirds share of the global population,” the IEA said. 

The IEA cited scarce public funds, highly indebted state-owned utilities and a worsening global economic outlook as factors that made it more difficult for developing economies to invest in clean energy projects. 

The agency advocated for financial and technical support, including concessional capital, private sector capital, and inflows from international carbon markets, as “crucial” for closing the gap. 

The IEA also warned that global investment levels in the power sector over the past three years had fallen short of the level needed to meet countries’ climate pledges, and would lead to a failure to meet the net zero global emissions target by 2050 that is required to curb climate change. 

The IEA estimated global investment into power in 2022 totalled about $975bn, versus an annual requirement of $1.2tn to achieve countries’ stated policies, and $2tn to reach net zero. Power investments in emerging market economies needed to grow at a compound annual growth rate of 25 per cent to reach net zero levels, the IEA said – or twice the pace of advanced economies. 

We are not there. We are far from there, very far. As it looks, we are still looking for something. Energy should be in the front line of the world’s push for sustainable development, but the investment data reveal a harsher reality.

Read more here. 

G7 to invest in overseas fossil fuel projects 

The Paris Climate Agreement should officially be dismantled. It simply does make sense to use it anymore. 

Germany is now pushing for the G7 nations to walk back a commitment that would halt the financing of overseas fossil fuel projects by the end of the year, according to people familiar with the matter. That would be a major reversal on tackling climate change as Russia’s war in Ukraine upends access to energy supplies. A draft text shared with Bloomberg would see the G7 “acknowledge that publicly supported investment in the gas sector is necessary as a temporary response to the current energy crisis.” 

The caveat in the proposal is that such funding is done “in a manner consistent with our climate objectives and without creating lock-in effects.” The text remains under debate and could change before G7 leaders hold their summit in the Bavarian Alps starting Sunday hosted by Chancellor Olaf Scholz. The UK opposes the proposal, two of the people said. A German government spokesman declined to comment. 

That’s all for this week. Everybody's looking for something. Have a great “looking for something” week”!

Kind regards,
Sasja