April 1, 2022 - ESG and Climate News

In a surprising turn of events, climate change is finally under control, the war in Ukraine is over and authoritarian governments are collapsing around the world. By now you know this is just an April Fools message, but it is nice to dream.   

Building on the momentum from last week’s historic proposal from the US Securities and Exchange Commission (SEC) aiming to integrate climate disclosures into financial reports, this week brought more major news about the development of international standards for disclosure of ESG information.

ISSB drops two new draft standards and aligns with SASB

The International Sustainability Standards Board (ISSB) published two draft standards for consultation. The exposure drafts on climate and general sustainability-related financial disclosures will be available for comment until July 29th, 2022. The ISSB aims to release the final standards by the end of this year. This is a huge step forward in bringing the alphabet soup of sustainability reporting standards under one unified standard.

The ISSB also announced  plans to build on the Sustainability Accounting Standards Board (SASB) industry-based Standards and leverage SASB’s industry-based approach for its own standards development. This was no surprise to industry watchers as it had been previously announced that SASB (now merged into the Value Reporting Foundation) would merge with ISSB this summer. 

A few of the unanswered questions are:

1. How does this week’s announcement that the ISSB will build on SASB’s approach square with last week’s announcement that ISSB will work with the Global Reporting Initiative’s (GRI) standards board which has a very different approach?
2. How will the ISSB standards work with EU’s sustainability standards that are also under development? The EFRAG (European Financial Reporting Advisory Group) - the body developing these standards - announced this week that it too will launch a consultation by the end of April.
3. How is the ISSB doing all this work before it has named its Board members and established its standards development process?

If your head is spinning you are not alone. Sadly, these overlapping announcements and consultations seem to be creating more confusion than clarity.  

OK ‘Doomer’

Those who are tired of the constant drumbeat of bad news are instead sharing positive climate news and communicating how people can take action. Some climate advocates call this more positive climate stance “OK Doomer” - a reference to the ‘OK Boomer’ label that Gen Z’ers and millennials use to criticize older generations.

This NYT article highlights some of this positive climate action through eco influencers like Alaina Wood who relays climate wins and is debunking extreme climate fatalism on TikTok. Another climate advocate under the “eco-tok” group, which has over 200 million views, is using his 1.4 million follower platform on TikTok to promote environmental and climate action as fun.

This climate optimism and passion for driving change among today's youth is not restricted to social media posts. The ‘OK Doomer’ cadre are also seeking  careers that help tackle climate change. And, while some seek careers with meaning, students in seven continents marched against climate inaction in the first Fridays for Future action since COP26.

Building on the climate of optimism

Last week’s monumental SEC climate disclosure proposal showed just how far we have come, as measuring climate performance took another step from activism into the mainstream. The SEC’s proposal is just one crest of a wave of climate optimism, as new natural and technological solutions are being discovered daily.  

A new study revealed that, of the world's sources of energy generation, 38% were clean energy, and for the first time, 10% were from solar and wind. The report concluded that it is now “imminently possible” that solar and wind could grow by approximately 20% each year, in line with what is needed to keep global temperatures under 1.5C. 

The good news doesn’t stop there. In fact there is a web page devoted to positive climate news - delivering a daily stream of good climate news to counterbalance doom-scrolling through climate negativity. 

Biden is not giving up

The Biden administration is still attempting to make good on its ambitious climate agenda that has been stalled in the Congress. The President’s most recent $5.8 trillion budget request includes a total of $45 billion for climate action, almost tripling the 2021 spending. The budget included $11 billion for developing nations to fight climate change. Like all policies in the polarized politics of the US, these provisions face an uphill climb in Congress. This NYT newsletter does a good job of assessing the pluses and minuses of Biden’s budget from a climate perspective.

Something Fishy Going On

The world’s oceans and ocean floor sediment are the earth’s biggest carbon sinks. With over 50 times more carbon than the atmosphere, the oceans' carbon sequestration properties remove about a quarter of the carbon dioxide produced each year by human activity. And while some researchers try to work out how we can increase the oceans’ sequestration properties, other studies are revealing that trawling for fish is releasing as much carbon as air travel. 

Notable News of the week:

• Warren Buffet’s Berkshire Hathaway still remains to be a laggard in climate action. They were one of eight companies to get the lowest possible score in the influential analysis from Climate Action 100+ group. 
• The growth in popularity of crypto coins has seen a huge amount of energy being used to mine the coins; Bitcoin alone uses as much energy as the country of Belgium. Campaigners have discovered how one change can reduce Bitcoin’s carbon footprint 99% by changing the mining method.
• The continuing war in Ukraine is sending unforeseen shockwaves through the globe, and is accelerating climate emergencies in the horn of Africa. Over reliance on Russian and Ukrainian wheat is threatening famine in an area unable to support its food needs due to climate stress.

Notable Podcasts:

• Drilled, a true-crime format podcast about climate change hosted by award-winning investigative journalist Amy Westervelt, features news on climate in the courts. In the most recent episode, Amy explored how Ecuador became the first country to include the rights of nature into its constitution.
• In this week’s ClimateTech with Kentaro podcast episode, Kentaro was joined by Josh Green. Josh is the COO  and co-founder of leading ESG data management platform Novata. They chatted about purpose and how Josh determined his as a founder, why Novata decided to focus on private markets, and the problems the company is solving for. 

Notable Events:

• On April 4, I will present on ESG, Climate, and Supply Chain Sustainability Strategies at Morningstar's AgFintech & Sustainability Symposium in Chicago. The symposium will be a deep dive into ESG measurement, supply chain transparency and climate risk mitigation driving sustainability practices in the agriculture and food sectors from a public and private investment perspective.
• And, I will be speaking On April 6 at the NAEM Tech 22 conference in Fort Worth.  The TECH 22 conference will explore new disclosure realities, climate risk management, broader stakeholder scrutiny, increased pressure for operational efficiencies — these challenges and more are facing today's EHS&S leaders.
• Persefoni’s COO and Co-founder Jason Offerman will be speaking at FT’s Energy Source Live event in Houston, Texas. The event features industry CEOs, thought leaders, energy innovators, policymakers, investors and our world-class FT journalists to hear their expert insights.