TheParis Agreementof 2015 was the first international accord to set the explicit goal of limiting global warming to1.5 °C above pre-industrial levels. Prior agreements like the Kyoto Protocol focused on emissions reduction targets but did not establish this specific temperature goal. The Glasgow Climate Pact built on the Paris Agreement's framework but did not originate the 1.5 °C target.

The underlying principle of the corporate governance code in most markets is "comply or explain." This principle mandates that companies either comply with the established governance guidelines or explain why they have not done so. This approach allows for flexibility while encouraging transparency and accountability in corporate governance.
Flexibility and Adaptability: The "comply or explain" approach provides companies with the flexibility to adapt the guidelines to their specific circumstances. If a company believes that a certain recommendation is not suitable for its situation, it can choose not to comply, provided it explains the reasons for this decision.
Transparency: By requiring companies to explain their non-compliance, this approach promotes transparency. Stakeholders, including investors, can assess the company's governance practices and make informed decisions based on the explanations provided.
Encouragement of Best Practices: This principle encourages companies to strive towards best practices in governance, while allowing for deviations when justified. It balances the need for high standards with the recognition that one size does not fit all.
Reference:
MSCI ESG Ratings Methodology (2022) - Discusses the principles of corporate governance codes and highlights the "comply or explain" approach as a common standard in various markets.
ESG-Ratings-Methodology-Exec-Summary (2022) - Provides insights into how corporate governance codes are designed to promote transparency and accountability through the "comply or explain" principle.

The European Green Deal's primary goal is to make the EU climate neutral by 2050 (Option A), meaning:
Net-zero greenhouse gas emissions by 2050.
Massive investment in renewable energy and clean technology.
Option B (55% emission reduction by 2030) is an intermediate milestone, not the main goal.
Option C (€372 billion mobilization) refers to the EU Recovery Plan but is not the core objective.
Reference:
European Commission: The European Green Deal (2020)
EU Climate Law & Fit for 55 Package
PRI Overview of EU Green Finance Policies

Screening on a relative basis would most appropriately be used to construct a balanced and diversified portfolio. This approach involves comparing companies within the same industry or sector and selecting those that perform better on ESG criteria relative to their peers.
Relative Comparison: Screening on a relative basis allows investors to identify the best-performing companies within each sector or industry, ensuring a balanced approach across different segments of the market.
Diversification: By selecting top ESG performers from various industries, investors can maintain a diversified portfolio while still adhering to ESG principles. This helps in spreading risk across different sectors.
Sector-Neutral: This approach ensures that the portfolio is not overly concentrated in specific sectors, which can happen with thematic investing or absolute screening. It allows for sector-neutrality, maintaining exposure to a broad range of industries.
Reference:
MSCI ESG Ratings Methodology (2022) - Discusses the benefits of relative ESG screening for constructing diversified portfolios.
ESG-Ratings-Methodology-Exec-Summary (2022) - Highlights the importance of maintaining diversification while applying ESG criteria in portfolio construction.

Japan'sCorporate Governance Code(updated in 2021) requiresat least two independent non-executive directorson corporate boards. This reflects efforts to enhanceboard independence and investor protection, especially in companies withhistorically high insider control.
By contrast,UK and South Africangovernance codesrecommendboard independence but do not mandate a specific number.
Reference:
Japan Corporate Governance Code (Financial Services Agency, 2021)
UK Corporate Governance Code (FRC)
King IV Report on Corporate Governance (South Africa)