ESG, which stands for environment, social and governance, is a set of nonfinancial criteria that community-minded and bottom-line investors alike are increasingly using to value businesses.
Companies are adding ESG targets and updates on reaching them to their financial statements, where they also record revenues and profits, to help guide socially conscious investors.
ESG data such as how much pollution a company emits, or how it affects water quality, also helps all types of investors identify material risks and growth opportunities in the future.
“What is going to happen in the next few years, and it’s starting now, is a giant reformation of global capitalism,” according to Andrew Zolli, vice president of impact initiatives for U.S. satellite imagery operator Planet.
“Where these kinds of factors are measured and they work to inform the cost of actions — whether it’s the price of the stock, whether it’s the creditworthiness of a municipal bond or whether it’s just the cost of a particular corporate behavior.”
Environmental criteria as part of ESG assess a company’s impact on nature, encompassing anything from its contribution to greenhouse gases in the atmosphere to the treatment of animals.
Social concerns the relationships with people, inside and outside the company, in the communities where the business operates.
Governance involves issues such as executive pay, shareholder rights and the representation of employees.
Within these are subsets where a company can choose to go into more depth — if it chooses to report ESG targets at all (this is all still voluntary).
For example, there are typically three ‘Scopes’ for tracking greenhouse gases, noted Stephane Germain, CEO of Canadian emissions-focused satellite operator GHGSat.
“Scope 1 is the direct emissions from the company’s own facilities, so if you’re Amazon it’s the emissions from your trucks for example, Germain said.
Scope 2 emissions relate to a company’s energy consumption, such as the energy used by Amazon’s data centers.
“They would want to know what proportion comes from renewable sources versus nonrenewable, or coal versus oil,” Germain said.
Emissions from a company’s supply chain fit into Scope 3, where considerations such as what materials a business buys would kick in.
Typically floating around ESG goals are targets for achieving ‘Net Zero’. This means companies will cut their CO2 emissions as much as possible, and then offset any they still emit with carbon capture projects that take it out of the atmosphere.
As with ESG, companies decide the intensity of the Scope for their Net Zero ambitions.
One of the challenges with ESG is standardizing these metrics so investors can easily compare data from company to company.
This is partly why moves to standardize — and potentially mandate — reporting disclosures from the U.S. Securities and Exchange Commission (SEC) financial regulator are so important.
Regulators are playing catch-up with businesses and the financial markets that are quickly adapting to the growing importance of ESG.
U.S. fund manager BlackRock, which accelerated the ESG trend when it decided to include the standards when evaluating which companies to invest in, recently placed a bet on its own targets when it secured a $4.4 billion credit facility. BlackRock will pay its banks more in interest to borrow the money if it does not meet its staff diversity goals.
Sustainable investments grew in the U.S. to more than $17 trillion — one in three dollars invested in assets under professional management in the country — at the start of 2020, according to a biennial report nonprofit US SIF released in November.
This represents a 42% increase from $12 trillion at the start of 2018, according to the group, which promotes sustainable investing.
This article originally appeared in the April 19, 2021 issue of SpaceNews magazine.
Voyager acquires majority control of XO Markets
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Voyager Space has completed the purchase of a majority interest in commercial space holding company XO Markets.
Revealed in December 2020, the transaction also includes XO Markets subsidiary Nanoracks. It involves the infusion of significant growth capital into the business.
The financial details of the deal remain undisclosed.
Nanoracks provides low-cost, high-quality solutions required for satellite deployment, along with basic and educational research in over 30 countries.
The company has already launched more than 1,000 projects to the International Space Station, as well as the Bishop Airlock on the SpaceX CRS-21 mission on SpaceX’s Falcon 9 rocket.
Nanoracks is also working on its long-term Space Outpost Program for private space platforms.
Voyager chairman and CEO Dylan Taylor said: “In the last year, the space industry has undergone a rapid evolution with demand for commercial space services reaching record highs.
“Innovative companies like Nanoracks are continuing to drive this transformation forward with first-of-their-kind technologies like the Bishop Airlock.
“We look forward to working with Jeffrey and his team as Nanoracks continues to push the envelope of what’s possible in the years to come while benefiting from the full support of our integrated model.”
Last month, Voyager completed the acquisition of The Launch Company, which specialises in the development of the systems, hardware, and processes to accelerate NewSpace companies to orbit.
In line with the NewSpace mission, Voyager recently inducted former Nasa administrator Jim Bridenstine to chair its advisory board.
After Chinese rocket reentry, DoD calls for countries to ‘behave responsibly’
DoD spokesman: Countries that conduct activities in space should share information about those activities, especially when they put people at risk.
WASHINGTON — Less than two days after parts of an uncontrolled Chinese rocket fell into the Indian Ocean, the Pentagon said allowing a large booster to free fall toward Earth is “irresponsible behavior.”
“We want to see everybody who are actors in space do so in a responsible, deliberate way that’s mindful of the safety of all our citizens here on Earth,” Defense Department spokesman John Kirby told reporters May 10.
Debris from the roughly 30-meter-long, five-meter-wide empty core stage of China’s Long March 5B fell into the Indian Ocean May 8. The uncontrolled reentry prompted international concern over whether it might land in a populated area.
Kirby said countries that conduct activities in space should share information about those activities, especially when they put people at risk. “It important, for the safety of everybody who uses the space domain to communicate, and to improve situational awareness,” he said. “We want everybody to behave responsibly and to ascribe, at the very least, to some internationally accepted norms of behavior.”
Former NASA administrator Jim Bridenstine said May 10 the Long March 5B episode is another reminder that the United States needs to step up diplomatic efforts to compel China to change its behavior.
This is the latest of several instances where China has acted irresponsibly, Bridenstine said during a Heritage Foundation virtual event.
When China in 2007 shot down its own weather satellite “it resulted in orbital debris that today we’re still dealing with. Of course, this wasn’t a unique event with the Long March 5B,” Bridenstine said.
He recalled a similar episode in May 2020 when pieces from another Chinese Long March 5B core stage landed on the Ivory Coast, causing damage to buildings.
“Look, there has to be responsible behavior in space, it’s critical that we use the elements of diplomacy to compel good behavior,” Bridenstine said.
From a national security standpoint, he said, it’s even more concerning that China could be deploying hardware in space that the United States might not be able to track.
“What concerns me most is not a rocket body that everybody knew about, was watching and paying attention to,” he said. “But what are the things we can’t see, like cubesats, that we don’t know about?”
The Space Force, he said, needs to step up its capabilities to monitor outer space. “We have to be really good at space situational awareness,” he added. “A rocket body launched from China that everybody knows and sees, yeah, that’s a problem from a public policy perspective, but that’s not what concerns me when you think about the threats in space that would be nefarious in nature.”
Inmarsat heading to administrative court over Dutch 3.5 GHz auction
TAMPA, Fla. — Inmarsat is pivoting to an administrative court in its battle to stop the Netherlands from auctioning 3.5 GHz spectrum, which the British satellite operator says it does not want to cede to bandwidth-hungry 5G networks.
Inmarsat had sought an injunction in a civil court to stop the Dutch government’s plan to sell the frequencies, which it uses for maritime safety services, to terrestrial 5G providers next year.
A hearing was scheduled May 11 at The Hague District Court, but was canceled after the Dutch government published its National Frequency Plan (NFP) April 30.
“The publication of the National Frequency Plan does not change Inmarsat’s position and we will continue to oppose the amendments to the NFP by the Dutch Government, which are unnecessary and put lives at risk,” an Inmarsat official said in an emailed statement.
There is not yet a date for the administrative court hearing in Rotterdam.
The Dutch Ministry of Economic Affairs & Climate Policy was unable to comment before this article was published.
The government is keen to release more 5G-suitable spectrum as other European countries are ahead in next-generation network deployments.
Inmarsat will have to move a ground station in Burum, in the northern part of the Netherlands, if the country gives wireless operators full use of the frequencies.
“Inmarsat is committed to the Netherlands and to continuing to provide essential, free of charge maritime safety services from Burum,” the company official added.
“Contrary to the mistaken belief of the Dutch Government, these services can continue without affecting future 5G telecoms services in the northern Netherlands. We will continue to defend safety of life at sea services against the unnecessary position of the State.”
The Dutch government has said wireless operators will be able to use 3.5 GHz spectrum for 5G in September 2022 if it auctions it early next year.
Inmarsat says it would take longer to transfer the frequencies.
Orbcomm gets no offers after contacting more than 50 potential buyers
TAMPA, Fla. — Satellite operator Orbcomm said May 10 it did not get any alternative proposals in its 30-day “go-shop” period, which followed private equity firm GI Partners’ $1.1 billion acquisition offer.
The company, specializing in connecting industrial monitoring devices, said it engaged with more than 50 parties that it thought might be interested in a deal.
New Jersey-based Orbcomm is now under “no-shop” restrictions, limiting its ability to find alternative deals as the GI Partners transaction moves toward closing in the second half of 2021.
The sale, which will take Orbcomm off the Nasdaq stock exchange, still requires shareholder and regulatory approvals.
Raymond James analyst Ric Prentiss downgraded Orbcomm’s shares to ‘underperform’ from ‘strong buy’ after its fruitless search for an alternative deal.
Orbcomm reported revenues down to $63.7 million for the first three months of 2021, compared with $66.2 million for the corresponding period in 2020.
Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, fell to $13.5 million compared with $13.7 million.
However, the company also added 50,000 net subscribers, and said product sales increased 1.1% to $25.9 million compared with the first quarter of 2020. Product sales were up 5.1% compared with the last quarter of 2020.
“We’re pleased with our first quarter results with Revenues coming in as expected while navigating through a global component supply shortage,” Orbcomm CEO Marc Eisenberg said in a statement announcing the results April 29.
“We’re continuing to see customer demand return to normalized levels as evidenced by the 87,000 devices we shipped in the quarter. This resulted in year-over-year and sequential growth in product sales. With the integration work now behind us, we believe the Company is well-positioned to capitalize on strong tail winds in the industrial IoT market.”
The fast-growing market for connecting IoT (internet of things) sensors is attracting a flurry of startups, looking to deploy low-cost solutions with relatively inexpensive satellites.
Orbcomm is locked in a regulatory tussle with one of these companies, U.S.-based startup Swarm Technologies that is sharing its spectrum to expand internationally.
Orbcomm is challenging a letter from the U.S. Federal Communications Commission (FCC), sent March 10, that aimed to clarify how they will share Very High Frequency (VHF) spectrum.
The 28-year old company said the letter is procedurally and substantively defective, calling on the FCC to rescind and review it.
Silicon Valley-based Swarm, which got its FCC license in January 2019, said the move aims to confuse international regulators and slow down its expansion.
The FCC has yet to weigh in since Swarm responded April 26 to Orbcomm’s petition.
Meanwhile, Luxembourg startup OQ Technology said May 10 it has ordered a second satellite from NanoAvionics to connect IoT devices to 5G technology.
Lithuania-based NanoAvionics will build, integrate and operate a 6U nanosatellite called Tiger-2 for a launch this year.
“Tiger-2 is an example of a NewSpace startup breaking barriers and racing with time to get to orbit within a few months, while using an agile approach to quickly deliver 5G connectivity,” OQ Technology founder and CEO Omar Qaise said in a statement.
OQ Technology has a multi-launch deal with ride-share specialist Spaceflight.
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