Earth Day Edition - ESG and Climate News

Earth Day 2022

Earth Day began as a nationwide protest 52 years ago today in response to environmental degradation. Two events, specifically the Santa Barbara oil spill and the Cuyahoga River fire , catalyzed the largest protest in American history of 20 million people. Personally, it had a significant impact on one 9-year-old boy and established the direction of my career.?

My colleague Kristina Wyatt and I shared our thoughts on why this Earth Day is different in a Fast Company article today .

There are similarities between the first Earth Day back in 1970 and today’s protests against climate inaction. Just like today, a war was destabilizing the world, there was civil unrest, and environmental apathy, yet courageous people took to the streets to warn of environmental disasters.?

The awareness raised by the Earth Day protest morphed into a political movement and, in the same year the Environmental Protection Agency (EPA) was founded, the Clean Air Act and the Clean Water Act became law. This record of effective activism has no parallel - the momentum started on Earth Day 1970 saved countless lives and benefitted generations.

With every subsequent Earth Day, the awareness of environmental issues has grown, and so has the polarization. Maybe it's because pollution was more obvious in 1970, or maybe we have become more apathetic, but today’s threats are greater than ever before, yet we seem less able to come together on solutions.?

The NPR podcast - Throughline - does an excellent job of telling the story of the people who started the Earth Day movement, what motivated them, and what happened as a result. Fifty years from now, I hope my grandchildren will thank today's activists for their courage to demand climate action.?

Invest in our Planet

The theme of this year’s Earth Day is “Invest in our Planet.” It’s a call to action for the world's business leaders to invest in the global transition to a low carbon economy. And many are already listening. This week, Amazon announced it extended its position as the world’s largest corporate buyer of renewable energy and the world’s largest investor, BlackRock, predicted an “investment boom” in renewables .

Following the seismic announcement of the Glasgow Financial Alliance for Net Zero (GFANZ) - a coalition of 450 financial firms managing more than $130 Trillion committed to “net zero” - comes this week’s news of the first science-based global standard for financial sector net-zero targets . This will enable financial institutions to set net-zero targets that are consistent with achieving a net-zero world by 2050.

Green Heroes

Earth Day is a time to celebrate green heroes of the past and present like the five in this article , and for environmental volunteerism at events such as beach clean-ups. You can find opportunities to participate at the official Earth Day site .?

Earth Day also highlights the power of grassroots action . Earth Day events and protests are now held in over 190 countries and bring together more than 1 billion people, making it the world’s largest environmental movement .

Last week’s newsletter focused on civil disobedience that broke out around the world after the latest?IPCC climate report - including NASA climate scientist Peter Kalmus who was arrested after he chained himself to a JP Morgan Chase building. This week a video of his emotional plea for action went viral . In another high-profile protest, activist Angus Rose ended his 37-day hunger strike protesting climate inaction when his actions forced UK members of parliament to listen to a briefing by a climate scientist.

Beware Earth Day Greenwash

In addition to environmental celebrations and protests, Earth Day has also become an opportunity to greenwash. It can be hard for the average citizen to fact check all of the green pronouncements made on Earth Day, so here is a handy guide to tell if a company is greenwashing .

With the backdrop of Earth Day claims - greenwashing and genuine - a recent study featuring both Apple and Amazon, gave an overall A-grade to only three of 55 companies (Microsoft, PepsiCo, and Ecolab) on progress toward their net zero efforts - unfortunately most companies in the ranking received poor climate grades.?

Biden’s Earth Day

President Biden has taken fire from his base for his stalled climate agenda . His moves in response to surging fuel prices and the war in Ukraine, have put his entire climate legacy at risk . Biden is looking to use the lead-up to Earth Day as a podium to highlight the administration's climate change accomplishments . This week, they added one more when President Biden reversed a Trump-era policy by restoring a bedrock environmental law to require climate impacts be considered and local communities have input before federal agencies approve highways, pipelines and other major projects.?

States take the Lead

US States are not waiting for Federal action. California, for instance, wants to lead not just the United States but the world in climate action . The infamous smog in LA was a potent symbol of environmental degradation, fueling the first Earth Day. Since then California’s air is much cleaner and the state routinely sets the national and global mark for stringent environmental policies.?

California’s vast size and unique ability among America’s states to set its own standards for vehicle emissions has led the auto industry to move quickly to improve fuel efficiency and tailpipe emissions. It was also the first state to enact a carbon reduction policy back in 2006 and now the legislature is moving fast on the new Climate Corporate Accountability Act , which will be tougher than the recently proposed SEC rule.?

While these regulations are tough on polluters, they have been an incubator for innovation. California broke a clean energy record on April 3rd by providing 97% of their energy needs from renewable sources.?

California is not the only state taking the lead on climate change. New York has embarked on one of the most ambitious climate laws in the nation . And, Iowa is taking advantage of its “wind belt” by leveraging gusty winds to benefit its local economy and generating 57% of the state's energy by wind power - the highest in the country.

Yet, in the polarized politics that defines the United States at the moment, other states are going in the opposite direction. In a delaying tactic, the Attorneys General from 21 Republican states banded together to request a 60-day extension to file comments on the SEC climate disclosure proposal so they could “confirm whether the proposed new requirements are duplicative, contradictory, or otherwise problematic—as the States expect them to be.”?

In an ironic twist, one of the reddest of these states - Texas (also the state with the highest emissions) - is investing $29 billion in a plan to save its coast from climate change related storms and higher sea-level rises . And to confuse things further, even deep blue (green?) Oregon invested $5.3 billion in oil and gas .

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Notable news of the week

• Mastercard links employee compensations to ESG performance . As part of a growing trend of linking sustainability to compensation, Mastercard will begin including achievement of the company’s ESG goals in the calculation of bonus pay for all employees.
• Grapes for wine can now be grown in Norway . Climate change is driving the typical habitat for grape growing north and south to the poles, which means people in the Nordics can now make their own wine.?
• A recent morning show in the UK brought a scene from “Don’t Look Up” into reality . In a “life imitates art” moment, the show hosts brought up benign talking points while the young climate activist spoke scientific facts as to how much danger we are in from climate change.
• Researchers claim Scope 3 disclosures are hindering progress on emissions . Two influential accounting experts claim that the practice of industry-averaging to measure Scope 3 encourages greenwashing and discourages climate action.?

Notable podcasts

• In this week's S&P Global ESG Insider podcast , the hosts talk with Karen Fang, Global Head of Sustainable Finance at Bank of America, about how one of the largest U.S. banks is approaching sustainability challenges. They dig into the challenges of Scope 3 climate accounting. Specifically, why Bank of America says Scope 3 emissions are the biggest challenge for banks.?
• This week’s ClimateTech with Kentaro podcast features Steve Ellis Co-Managing Partner of The Rise Fund. The Rise Fund was founded by leading global investment firm TPG, in partnership with Bono (yes U2 Bono) and Jeff Skoll. Kentaro talks to Steve about the mission and leadership team at The Rise Fund, what climate tech solutions they are tracking, and how they are driving large-scale positive impact through their portfolio companies.

Notable events

• City Week 2022 , the UK’s annual gathering of the international financial services community, is taking place from April 25-27 in London, UK. I will be speaking on a panel with ISSB chair Emannuel Faber on the 25th. Other 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 .
• This year's Energy Tech Summit , in Warsaw, Poland will be a hybrid in person and virtual event. The annual Energy Tech Summit hosts top global energy and mobility investors, entrepreneurs, and government leaders at an exclusive three-day event. You can buy tickets for this event here .