Welcome back. The Office of the Comptroller of the Currency plans to release guidance for large banks about how to manage the financial exposure created by climate change. On Wednesday, the acting head of the agency shed a little light on the OCC's thinking about how that could be achieved. 

Acting comptroller of the currency Michael Hsu said the guidance would be consistent with the principles discussed in international forums such as the Network for Greening the Financial System, a network of central banks and financial supervisors. He also said banks should be screened for climate risk as part of their periodic stress tests, although the OCC doesn't administer those tests. 

Mr. Hsu was speaking at WSJ Pro’s Sustainable Business Forum. We have more takeaways from the event below. 

Also this week: Terracycle under scrutiny; ADM wants to track farm carbon; COP26 takeaways. 

📅 We're taking a break next week for Thanksgiving. The Sustainable Business newsletter will be back in your inbox in December. 

💬 Engine No. 1 on pushing for change. Christopher James, founder of the firm whose climate-focused activist campaign led to a strategy shake-up at Exxon, said he hopes the idea of investor engagement, as opposed to divestment, is gaining momentum.

"I think divestment early on was incredibly important," he said. "But I think that what's really going to be sustainable, what truly affects change, is engaging with companies.”

On recent reports about Exxon abandoning certain oil and gas projects, Mr. James said: “We don't know what's going on inside the boardroom. We read in The Wall Street Journal like everybody else.”

💬 Scaling climate tech. Jonah Goldman, managing director at Breakthrough Energy Ventures, said increasingly abundant capital for risky climate-tech ventures is helping the sector mature, even as the risk of a setback for investors remains. Breakthrough Energy, backed by Bill Gates, specializes in renewable-energy and energy-storage investments. 

"These are super capital intensive projects, they have super-high technical risk, and they return over a very long time...those are not things that venture capital tends to be particularly good at doing," Mr. Goldman said. "At some point, I think some people might get spooked, but the scale capital is there."

💬 CSOs should stay focused. Some sustainability executives overstep their bounds by proposing too many ideas to their superiors, said Jeffrey Hogue, chief sustainability officer at Levi's. He said executives should be able to demonstrate with data that an initiative will have a business or reputational benefit.

“There's a lot of work to be done in this area across corporate strategies and it's really difficult to bring 20 to 30 different things to the table at one time,” Mr. Hogue said. 

💬 Rewiring supply chains. Jason Blake, sustainability chief at PepsiCo Beverages North America, said looking for suppliers that can help deliver Pepsi's sustainability goals has forged new commercial relationships. 

"Often supplier relationships can be very transactional in nature. I buy, you sell, we negotiate price one way or another," he said. But Pepsi's efforts to prioritize the resilience of its supply chain is also "an opportunity for us to elevate, you know, some key supplier relationships to be more strategic."

—Dylan Tokar, Kimberly Chin, Mark Maurer, Dieter Holger. 

TerraCycle partners to change recycling labels. Amid a backlash over plastic waste, TerraCycle has grown fast by signing up companies that pay it to collect and recycle packaging and single-use products. Its labels appear on packages for products such as Gerber baby food, Febreze air freshener and Burt’s Bees cosmetics.

But the recycling startup has been accused of misleading shoppers about the scope of its recycling initiative. A nonprofit that campaigns against plastic waste filed a lawsuit this year alleging that consumers weren’t told about limits on TerraCycle programs that meant their waste might not get recycled. As part of a new settlement, TerraCycle and several consumer-products companies—including Procter & Gamble and Coca-Cola— agreed to notify consumers if there is a limit to how many people can sign up to the program due to funding constraints. They also agreed not to label products that are part of TerraCycle’s program as “100% recyclable.”

ADM eyes farm carbon data. Archer Daniels Midland announced a partnership with agricultural-technology firm Farmers Business Network aimed at making it easier to track the carbon footprint of crops from the planting stage. The grain giant also made an undisclosed investment in FBN's latest fundraising round, which was led by Fidelity. It valued the startup at $3.9 billion. 

For ADM, the investment provides access to FBN’s cloud-based data software, which tracks spatial data from farm machinery and other data provided by farmers to shed light on their crops' carbon footprint. Tracking the carbon footprint of crops grown by farmers that sell their grains to ADM, combined with emissions data from ADM’s own processing, would give the company’s customers a better idea of the total environmental impact for their grains. 

A qualified success, executives say. As well as a forum for political horse-trading, the United Nations climate conference in Glasgow functioned as a giant trade show that gave business leaders an opportunity to discuss the climate agenda with their peers. The summit resulted in little that will change conditions for companies overnight, but executives left Scotland with more clarity about government support for the energy transition, the future of carbon trading and sustainability reporting standards.

🎁 Newsletter extra: Natural gas group moves to standardize use of offsets. Big gas companies have backed shared practices for the use of carbon offsets, a move aimed at creating transparency in the small but growing market for fossil fuels marketed as carbon-neutral.

This week, the International Group of Liquefied Natural Gas Producers, or GIIGNL, approved recommendations for how companies should offset emissions and disclose information on liquefied natural gas cargos that they describe as emission neutral. The association has more than 80 members, including Royal Dutch Shell PLC, TotalEnergies SE and BP PLC. 

The framework says companies should offset the emissions from the entire lifecycle of liquefied natural gas, including when it is burned by customers, and disclose the kind of offsets they use, such as tree planting or wind-and-solar projects that displace coal. It suggests companies have an independent auditor check the claims and only use offsets that are verified by a reputable third party.

GIIGNL Secretary General Vincent Demoury said companies are more focused on cutting their emissions than offsetting them. “It’s high time that companies disclose the actual offset strategy,” he said. GIIGNL also prefers the term “greenhouse-gas-neutral,” which encompasses methane, a warming gas generated by the natural gas industry.

—Dieter Holger

In the money. Coal power plants are running at full tilt in parts of Europe and enjoying a rare bout of massive profitability. This shouldn’t be happening🔒 under Europe’s climate policies, but a natural-gas shortfall has led to a scramble to fill the gap. 

Jeremy Grantham, co-founder of investment firm Grantham Mayo Van Otterloo, is doubling down on green investing, even as he says bubbles are likely in the short term. (Bloomberg) 

With a new lending program, China's central bank is taking bolder action than its Western peers to support renewable energy. (Reuters) 

Public-relations firm Edelman says it wants to make climate change a focus of its business, but is resisting pressure to sever ties with big oil. (Axios) 

Growing demand, entrenched interests and a sense of historical injustice lie behind India's coal dependency. (Economist)

New European Union investing benchmarks measure companies' carbon intensity relative to enterprise value, rather than revenue. An index provider said that will introduce volatility and enable greenwashing. (IPE) 

Rolls-Royce's plans for a fleet of mini nuclear power plants got the go-ahead thanks to backing from France's billionaire Perrodo family, one of a string of bets on atomic power. (Financial Times)  

German journalists found that Nike was grinding up brand-new returned sneakers at a recycling center. The company said the “vast majority” of shoes returned to the company are resold. (Fast Company) 

Like other auto makers, Toyota is betting on electric cars. But it is unusually bullish on hydrogen fuel cells. (Reuters) 

From "regenerative" to "degrowth," here are the fashion industry's favorite buzzwords at COP26. 

We would like to hear your tips, suggestions and feedback.

This newsletter was written by Ed Ballard.

Contact the WSJ ESG research team at ESGresearch@wsj.com