April 15, 2022 - ESG and Climate News

Will it be different this time?

With last week’s dire warnings from the Intergovernmental Panel on Climate Change (IPCC) report still reverberating, world leaders' made the predictable, if regrettable, choice to re-embrace fossil fuels in light of soaring fuel prices caused by the war in Ukraine .?

We have seen this before. Despite the lofty promises to address the looming climate crisis, tangible actions are shelved or reversed when more urgent matters take center stage.? To some extent, this is understandable.? Humans are notoriously bad at considering long-term consequences - especially if? there are pressing matters at hand - no matter the magnitude of those consequences.??

In the late 1960s, psychologist Walter Mischel and his colleagues at Stanford University conducted the marshmallow experiment with four- and five-year-old preschool children.? The researcher told the child that he was going to leave the room and that if the child did not eat the marshmallow while he was away, they would be rewarded with a second marshmallow. However, if the child ate the marshmallow they would not get a second marshmallow. Most picked the immediate reward.? (Interestingly, subsequent studies showed the kids who waited became more successful adults).??

The point is, we are terrible at thinking long-term.? Since we cannot predict what will happen in the future, we make choices that benefit us in the short term.???

But maybe, just maybe, that is changing when it comes to climate.? A group called Scientist Rebellion sent over 1200 scientists protesting in streets of 26 countries - with some being arrested.?

The scientists were joined by groups, such as the Extinction Rebellion who shut down Lloyds of London, the world’s largest insurance marketplace, in response to Lloyd's support of fossil fuel projects. Protesters also glued fliers and themselves to the Shell’s headquarters in London , and in Washington DC, they shut down the I-395 freeway.

One small step for man

Among those breaking the law is NASA scientist Peter Kalmus, who along with three other scientists, chained himself to the JP Morgan Chase building in Los Angeles to draw attention to the bank’s status as the largest financier of the fossil fuel industry. His point is that we are stuck in “a global bystander effect” and that more people should engage in climate disobedience.?

Climate activism is not radical

The climate activists claim nonviolent civil disobedience is their last resort as nothing else is working . The global demonstrations were fueled in part by last week’s strong rhetoric from UN Secretary-General, Antonio Guterres: “Climate activists are sometimes depicted as dangerous radicals. But the truly dangerous radicals are the countries that are increasing the production of fossil fuels."

Even the judges presiding over court proceedings for arrested activists have been swayed by the cause.? One judge praised the Insulate Britain Protests, saying “They have inspired me and personally I intend to do what I can to reduce my own impact on the planet, so to that extent, your voices are certainly heard.” ? The judge said the protesters had “no doubt” been acting in a way they believed was “morally right” but had still committed a criminal offense and handed down fines of ￡120 to ￡200.

Just Stop Oil

Can breaking the law be morally right? According to a member of the youth activist group Just Stop Oil : “there is a need to break the law, so we are not guilty of greater crime.” The group claims they will keep up their civil disobedience until they “all are jailed.”

In Elizabeth Cripps’ opinion piece in The Guardian, she argues that law-breaking, in this case, is morally defensible . When governments do not hold up their side of the bargain, we not only can, but possibly should break some laws peacefully and publicly on principle.

Just Stop Oil is not the only youth group taking action with an aim to protect their future. Another inspiring group is taking a different approach: sixteen young people are suing the state of Montana in a first of its kind climate case to make it to trial. Their complaint is the prioritization of fossil fuel interests over their future. A decision by the court in favor of the 16 plaintiffs could have sweeping implications across the country, setting limits on the subsidies and other protections enjoyed by oil and gas interests.?

A recent study showed why climate activism is so important to today's youth, with 8 out of 10 teenagers believing that climate change will significantly impact their lives , including where they live and whether to have kids.?

Net zero is the new bottom line

Highlighting the crucial role of the finance sector in funding the transition to a low carbon economy, the Science Based Target Initiative (SBTi) published new guidance providing financial institutions with a foundation for setting and assessing net zero commitments. The guidance comes ahead of the new standard they are set to release in 2023 , to bring the clarity and scientific basis the sector needs to align with net-zero by 2050.?

Another climate milestone was achieved this week as the Partnership for Carbon Accounting Financials (PCAF) exceeded its goal of 250 signatories by the end of 2022 . This new accounting standard estimates the carbon impact of several categories of financial transactions.? It has been rapidly adopted by the finance industry in the last couple of years, growing by 350% in 30 months.

Notable news of the week:

• Deloitte announced a $1 billion investment in global Sustainability & Climate practice . As part of its commitment to sustainability, Deloitte is set to invest heavily in sustainability education programs, research, and thought leadership.
• Donors pledge $41 million for permafrost research . The 6-year study will look to better understand the effects of permafrost thawing while also supporting the Alaskans affected by the melting. Permafrost is estimated to contain around twice as much carbon as the atmosphere, but it remains uncertain exactly how much and at what pace emissions will be released as it thaws.
• Intel is set to fundamentally change how computer chips are made to meet its net zero goal. Creating semiconductor chips uses chemicals such as perfluorocarbons, which are up to 9,200 times more potent than CO2. Intel aims to substantially reduce its emissions by changing this manufacturing process.
• Google has announced plans to operate on 24/7 carbon free energy in all of its data centers by 2010 . This means that Google will operate every hour on carbon-free electricity from a near-by, regional grid.

Notable podcasts:

• This week’s ClimateTech with Kentaro podcast features SYSTEMIQ Capital’s Irena Spazzapan and Georgina Fleming. SYSTEMIQ Capital is a London-based venture capital firm that backs early-stage climate entrepreneurs to accelerate their growth and impact. Their discussion centered around how to tackle systems change, and the partnership needed among policymakers, businesses, finance, and civil society, to make economic systems sustainable.?
• This week, the NYT’s The Daily podcast titled ‘Biden’s Climate Shift’ , discusses Biden’s u-turn on his climate ambitions to reduce fossil fuel use. Soaring fuel prices, record-setting inflation and Russia’s invasion of Ukraine has led the Biden Administration to reverse course and encourage more oil and gas extraction to help curb energy prices.
• On April 12th’s edition of The Economist’s podcast , Vijay Vaitheeswaran, Catherine Brahic, and Oliver Morton discussed the recent IPCC report and whether, amidst the war in Ukraine and a worsening energy crisis, limiting warming to 1.5C is still possible.?

Notable events:

• The Bloomberg New Energy Finance Summit (BNEF) will occur from April 19-20 in NYC. Its focus is on the role of capitalizing the technology to mitigate climate change and build a more sustainable future. Speakers include leaders from the private sector and international governmental leaders focused on energy and climate change.?
• Responsible Business USA will take place from April 19-20 in New York. The event will focus on enabling businesses, financial institutions, and governmental agencies to build blueprints aligning business models and value chains with the goal of combating and mitigating climate change. You can register for the event and read more here .
• City Week 2022 , the UK’s annual gathering of the international financial services community, is taking place from April 25-27 in London, UK. Key topics include climate transition for developing economies, a net zero global financial system, the Paris Agreement’s implications for financial portfolios, and climate change policies. You can register for the event here .
• The Sustainable Investment Forum is hosting its 5th annual conference in London this year, with the first part on April 26. The forum will center on increasing momentum towards a net zero global economy, the implications of COP26, natural capital risk, responsible investing, and net zero finance. You can register for the event here .
• Bloomberg Green Summit is an upcoming event on April 27. The virtual event is a big one on the sustainability calendar, convening top climate leaders to create solutions and drive actions that will shape the future of our planet. It's a true thought leadership experience operating at the crossroads of sustainability, design, culture, food, technology, science, politics and entertainment. You can register for the event here.