TBLI Weekly - March 4th, 2025
Robert Rubinstein
Leading Sustainable Investment Advisor | 25+ Years of Experience. Sustainable Finance Thought Leader of the Year
Your weekly guide to Sustainable Investment
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Procuring a Fix to the Climate Crisis /w Bob Willard
Three things that people will learn from this podcast:
Bob Willard is a leading expert on sustainability justifications, reporting frameworks, and sustainable procurement. Bob applies his business and leadership experience from his 34-year career at IBM Canada to engage the business community in proactively avoiding risks and capturing opportunities by using smart environmental, social, and governance (ESG) practices.
Over the last 22 years, he has given more than 1,700 presentations to corporate, government, university, and NGO audiences. He has authored six books: The Sustainability Advantage (2002), The Next Sustainability Wave (2005), The Sustainability Champion’s Guidebook (2009), The New Sustainability Advantage (2012), Release 1 of the Future-Fit Business Benchmark (co-authored, 2016), and the Sustainability ROI Workbook (2017). He has published two white papers: “7 Bold Strokes to Save our World” (2020) and “The 21st Century Sustainable Enterprise Force Field” (2021). ?
Big banks abandoned a voluntary climate alliance. Now, critics are calling for new laws.
By:?Joseph Winters - Grist.org
Environmental groups say state and international policymakers must step up to stop fossil fuel financing.
In the lead-up to Inauguration Day, all six of?the United States’ largest banks?backed away from a United Nations-sponsored climate initiative amid attacks from conservative lawmakers and regulators.??
Bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley, and Wells Fargo left the Net Zero Banking Alliance between December and January in what was perceived to be a concession to right-wing criticism of so-called ESG — decision-making driven by environmental, social, and corporate governance considerations. Nineteen Republican attorneys general had issued “civil investigative demands” to those banks in 2022, demanding that they turn over information about their ESG practices. They argued that the alliance was beholden to “the woke climate agenda” and that it violated antitrust laws.
While the banks’ exodus from the alliance certainly looks like a setback for the banking sector’s climate progress, environmental advocates say it is a reminder that voluntary initiatives have never been sufficient to drive the sector’s?decarbonization.
“There are other levers that we can use to hold banks accountable,” said Allison Fajans-Turner, a senior energy finance campaigner at the nonprofit Rainforest Action Network, which publishes an?annual report?on how much money banks commit to fossil fuel projects. In light of the Trump administration’s pro-oil and gas agenda, she said that over the next four years activists and policymakers will have to keep the pressure on and, critically, push for stricter legislation at the state and international levels.
“It is quite clear that major U.S. banks will not police themselves,” she added.
The Net Zero Banking Alliance, or NZBA,?launched in 2021?under the aegis of the United Nations Environment Programme Finance Initiative and has about 140 members after the six American banks — and?four Canadian ones?— exited. The alliance asks member banks to commit to achieving net-zero greenhouse emissions across their operations and “lending and investment portfolios” by 2050, and to set intermediary emissions reduction targets for 2030 and every five years thereafter. It also asks banks to disclose their annual emissions, and sets some recommendations to limit the application of carbon offsets toward banks’ climate goals.
However,?much like the Paris Agreement to limit global warming, the NZBA relies on voluntary participation and compliance, and does not have any enforcement authority. It’s been criticized for not asking enough from its members, which are allowed to participate even if they continue underwriting the expansion of oil and gas infrastructure. U.N. proposals that would tighten its requirements — particularly around financing of fossil fuels?— faced?strong opposition?from recently departed banks like JP Morgan and Bank of America.
Even some of the NZBA banks themselves have acknowledged the alliance’s limitations in the face of government inaction. In 2023, Amalgamated Bank’s chief sustainability officer, Ivan Frishberg,?told the business publication Responsible Investor?that NZBA signatories were “being left alone at the altar” as governments around the world failed to legislate a transition away from fossil fuels. GLS Bank, based in Germany,?quit the alliance that same year?in protest of other NZBA members’ support for fossil fuel projects in Africa.
Wells Fargo declined to comment on the rationale behind its departure from the NZBA. Goldman Sachs said it had made “significant progress” on its net-zero goals but did not explain why it left the alliance. The other four recently departed banks did not respond to inquiries from Grist.?
Unlike voluntary initiatives, governments have the authority to ensure that banks live up to their stated climate promises and to push them to do more. At an event in New York City last November —?notably, even before the NZBA shakeup — the former deputy secretary to the U.S. Treasury, Sarah Bloom Raskin, suggested that states should take on this role.
States “have a unique opportunity to lead,” she said, noting the incoming presidential administration’s hostility to climate action. At the time, California had already?passed two laws?requiring large businesses, including banks, to report their greenhouse gas emissions annually and disclose their climate-related financial risks biannually. Those laws recently survived a legal challenge from the U.S. Chamber of Commerce, and New York state lawmakers?introduced similar bills?in January. A Democratic state representative in Illinois introduced a?disclosure bill?last month.? Read full article?
Japan battles largest wildfire in decades
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More than a thousand people have been evacuated near forest of Ofunato in northern region of Iwate
More than a thousand people have been evacuated as?Japan?battles its largest wildfire in more than three decades.
The flames are estimated to have spread over about 1,200 hectares (3,000 acres) in the forest of Ofunato in the northern region of Iwate since a fire broke out on Wednesday, according to the Fire and Disaster Management Agency.
“We’re still examining the size of the affected area, but it is the biggest since the 1992 wildfire [in Kushiro, Hokkaido],” an agency spokeperson said.
That fire burned 1,030 hectares, the previous record. About 1,700 firefighters were being mobilised from across the country, the agency said.
Aerial footage from the public broadcaster NHK showed white smoke billowing up and covering an entire mountain.
Local police found the body of one person who had been burned, while more than 1,000 nearby residents have been evacuated and more than 80 buildings had been damaged as of Friday, according to the Ofunato authorities.
The cause of the blaze remained unknown.
Two other fires were also burning on Saturday, one in Yamanashi and another elsewhere in Iwate.
There were about 1,300 wildfires across Japan in 2023, concentrated in the February to April period when the air dries out and winds pick up. The number of wildfires has declined since the peak in the 1970s, according to government data.
Ofunato has had only 2.5mm (0.1 inches) of rain in February – far below the previous record low for February of 4.4mm in 1967.
Last year was Japan’s hottest since records began, mirroring other countries as ever-rising greenhouse gas emissions fuel the climate crisis.
Development banks seek to bolster energy transition, as headwinds strengthen?
By: Ian Lewis - Impact Investor
Financing for climate change initiatives and a just transition just got harder with the return of Donald Trump to the White House, but development banks meeting in South Africa resolved to step up efforts to help close the funding gap. The role of public development banks (PDBs) in ensuring momentum behind efforts to stem global warming, while also ensuring a just transition, is more important than ever: that was the overriding message to come out of the?Finance in Common Summit?(FICS) in Cape Town, the annual meeting of a global network of PDBs.
The expected withdrawal of the US from international climate change talks under president Donald Trump, his decision to suspend US international aid and the paring back of aid budgets and public spending across other rich nations provided a difficult backdrop for the 26-28 February meeting.?
Delegates were keen to stress that the energy transition was still unstoppable, but that PDBs had an important part to play in making the case for and enabling both public and private sector investment in pursuit of climate and development goals, ahead of the?COP30 climate change talks?in Brazil later this year.?
“We really need to up our game in terms of our narrative, because what we hear out there in terms of counter-narrative is really not serving us well,” Mafalda Duarte, executive director of the Green Climate Fund said at the event.
Duarte said the climate community needed to do more to show that climate change measures were supportive of economic and social development, rather than working against it.
Audrey Rojkoff, regional director for Southern Africa at Agence Fran?aise de Développement (AFD) and the summit’s secretary-general, emphasised the link between climate investment and social and economic development.
“Investing in human capital is certainly a prerequisite for sustainable growth, just like any infrastructure project,” she told delegates.?
She noted that a €400m public policy loan made by AFD to support the just transition dimensions of a wider financial package in support for South Africa’s energy transition away from coal was the largest policy-based financing in AFD’s history.???
“More importantly, this amount has been qualified as climate finance and this is?really interesting, because it shows how we are progressing from climate finance to transition finance. It’s more and more difficult to draw a line between what is climate finance and what is development finance,” she said.
Avoiding past mistakes
Ambroise Fayolle, vice president at the European Investment Bank responsible for climate finance, said policymakers needed to focus on avoiding past mistakes when handling the social impacts of the energy transition.?
“There will be no energy transition if it is not just, and that means we need to find ways to finance projects that will allow the energy transition to be just inside Europe,” he said
Fayolle focused on the need to avoid repeating the mass unemployment and social disruption caused by the closure of coal mines across Europe over recent decades, due to the lack of investment in??jobs and infrastructure in affected areas. To that end, the European Union’s Just Transition Mechanism – a mix of grants, loans and investment mobilisation launched in 2020 – is ploughing billions of euros into urban regeneration, renewable energy and other infrastructure.
Crispian Olver, deputy chair of South Africa’s Presidential Climate Commission, said that at a time when there were?significant headwinds for investors and many companies were rowing back on their diversity, equity and inclusion initiatives in response to similar moves by the US government, it was important to restate the business case for the just transition.
He said labour market productivity would ultimately depend on social support mechanisms put in place to help people adapt to the changing economic opportunities triggered by the energy transition.
“If you’re wanting an effective workforce for the future, you need to be investing in them. So, there are strong economic spin offs from it, and very importantly, it’s integral to the political economy of the transition in each of our countries. Basically, governments are going to get thrown out of office, and transition policies are going to be overturned if we’re not taking everyone along with us. So, the very sustainability of this transition rests on it being just,” he said.
Speakers also acknowledged that development institutions had under-delivered in terms of channelling finance effectively towards climate change mitigation and adaptation.???
At the?COP29??climate summit in Baku, there was disappointment that countries only agreed to provide $300bn (€288bn) a year in grants and low-interest loans from public institutions to the developing world by 2035 to combat climate impacts and speed the energy transition. That was well below the $1.3trn a year widely agreed to be required, even if it did represent an increase from the pre-existing $100bn target.?
Luiz Gabriel Todt de Azevedo, chief strategy of the Inter-American Development Bank’s IDB Invest arm said he shared the frustration, but that the focus should be on directing the funds that are available more efficiently than has been the case so far.?
“I think our goal for COP30 should not necessarily focus on getting a higher amount, but being able to clearly define how we’re going to deliver on what we’ve got. If we can do that, then I think it’s going to be a much easier case to make to donors, policymakers and governments that we can achieve $1.3trn,” he said.
New initiatives
The event also provided a platform to launch various new??initiatives in support of climate change measures and the just transition.??
These included the launch by?South Africa-based impact investment manager?Summit Africa of its Private Equity Fund II, with a $20m investment from British International Investment. The fund will invest in small-to-mid market companies in the financial services and infotech sectors in South Africa and the Southern African region to promote?financial and digital inclusion, create jobs and improve diversity.
Summit plans to raise another R400m-500m (€20m-26m) from local and international institutional investors, before it starts deploying capital. The target fund size is R2.5bn.
Meanwhile, AFD and the Global Energy Alliance for People and Planet (GEAPP) said they would work together to mobilize up to $5m of technical assistance to support local financial institutions in accelerating clean energy access in Africa.?This will start with a $1.3m pilot of technical assistance grants from GEAPP, backed by lines of credit from AFD.
The organisations said the initiative was a response to growing support for Mission 300, the World Bank and African Development Bank’s plan to deliver affordable and sustainable electricity to 300 million people in Africa by 2030.
Bill McKibben on Climate Activism in the Age of Trump 2.0
By?Elizabeth?Kolbert -?Yale Environment 360
Activist Bill McKibben says Americans upset by the Trump administration’s gutting of U.S. climate efforts need to move beyond despair. In an interview with?e360, he talks about rethinking the role of protest, the global push on clean energy, and why he sees reason for hope.
In the first six weeks of the new Trump administration, it’s become clear that the president intends to undo not just Joe Biden’s environmental legacy, but an entire generation’s worth of action on climate change. The administration has announced it is withdrawing from the Paris Agreement. It has frozen Inflation Reduction Act grants, stopped issuing permits for offshore wind development, and declared an “energy emergency” to boost fossil fuel production. The White House appears to be preparing to go after the Environmental Protection Agency’s 2009 “endangerment finding,” which undergirds EPA regulations on greenhouse gas emissions, while cutting EPA spending by 65 percent.
How should environmentalists respond? Activist and author Bill McKibben has been a leading voice on climate change since 1989, when he published?The End of Nature, the first book on the subject aimed at a general audience. McKibben spoke to?e360?contributing writer Elizabeth Kolbert about the urgency of the moment, the role of protest, the future of clean energy, and where he sees glimmers of hope.
Elizabeth Kolbert:?If you care about the future of the planet, what do you do at a time like this?
Bill McKibben:?I think it’s fair to despair a little bit. I mean, we should acknowledge what a remarkable moment it is that the government of the most powerful country on Earth, at least for the moment, is rejecting flat-out the science that’s been developed over many decades, often by scientists working for the government, about the single most dangerous thing that’s ever happened in human history. And the level of irresponsibility, indeed just craziness, is off the charts.
The Inflation Reduction Act [the Biden administration’s signature climate law] represented the first significant act by the U.S. Congress to deal with climate science. It was a far from perfect bill, but powerful in many ways. So powerful that the fossil fuel industry needed to do what it could to shut it down and to shut down the energy transition to the extent that it could. And hence, the oil industry spent unprecedented sums of money — the number I saw most recently was?$455 million?— on the last election cycle.
I’d say the two slight saving graces are, one, as the U.S. retreats from leadership here, there are others, especially the Chinese, who have been stepping up to fill this vacuum. I have a lot of problems with the Chinese government and don’t particularly look forward to their hegemony. But on issues around energy, they’ve been more responsible than we have and built out most of the world’s clean energy at this point.
And the second saving grace is that though they can delay this energy transition, they can’t stop it. It’s rooted in the simple fact that we now live on a planet, as of the last three or four years, where the cheapest way to produce energy is to point a sheet of glass at the sun. And that won’t change. So, Americans may be denied some of the fruits of that technological revolution, and it will be delayed in ways that make the climate crisis far worse, but it’s not as if [the Trump administration] has complete control of this situation.
Kolbert:?The moratorium that the Biden administration put on export permits for liquefied natural gas was a big climate win. You were very much a part of that. But now Trump seems to be using the threat of tariffs to get countries to increase their liquefied gas imports from the U.S.
McKibben:?This scares me a ton. It’s one thing for us to derail our own energy future, and it’s another to try and derail everybody else with what is essentially a shakedown. My guess is that it’ll work in the short run, and it’ll backfire in the long run. Europeans have figured out in the wake of the invasion of Ukraine that it was foolish to be dependent on the good graces of Vladimir Putin for their energy supply. Anyone who puts themselves more under the thumb of Donald Trump than they need to is a fool.
Kolbert:?You’ve indicated you are worried about civil disobedience as a form of climate activism, because instead of looking at a night in jail, people might now be looking at a year or more of jail, as some activists in the U.K. have gotten.
McKibben:?I think that we need to continue to use all the tools that we have, and we will. But I do think that at the moment civil disobedience of the sort that we’ve been doing a lot of in recent years is unlikely to be particularly effective. I think that the Trump-MAGA world welcomes resistance of that kind. They like those kinds of fights. It energizes them. They’re cruel, and cruelty really is their kink in a lot of ways.
We’re gearing up to do this big national day of action in September. It’s called?Sun Day. I think it’s going to be a huge celebration of possibility. And I think that that’s more dangerous right now to the MAGA agenda. They depend on people staying in a fearful crouch, convinced that whatever they have is under threat from somebody. And the idea of Sun Day, instead, is that we’re on the edge of this extraordinary possibility for solar. I’m excited about figuring out how we do huge parades of e-bikes, and inaugurate dozens of community solar farms, and have thousands of Americans opening their homes so their neighbors can see their heat pumps. And get millions of people who already have solar panels to put a green light in the window that night to tell everybody that they’re powered by the sun.
I sense in everyone’s despair and upset — all of which is completely justified and correct — a sort of hunger for some kind of joyful possibility, for something to rally around as well as stuff to rally against. Read full Interview ?https://mail.tbligroup.com/emailapp/index.php/lists/cm138dw4qa9f1/unsubscribe
AI and impact investing: a powerful partnership or risky bet?
While AI can help figure out key metrics in impact investment, building data centres requires huge amounts of natural resources which can swing the balance in a negative direction.
As the tentacles of artificial intelligence (AI) reach further into the finance sector, they will surely touch the largely bespoke world of?impact investing. Values-driven investors and their advisers are just beginning to consider the potential of this encounter, for good and for ill. There are several key questions which they are starting to ask themselves.
Will more analytically informed climate investments accelerate climate change? Can AI tools create perfectly tailored impact portfolios? Can AI data fill the gaps in impact measurement? Will values-driven clients leave their advisers for bots? If that last question sounds hyperbolic, see?this?New York Times article about a woman who fell in love with her AI boyfriend.
Ask ChatGPT how AI will influence impact investing, and it will generate a robust list of benefits: improved data analysis, better impact measurement, enhanced risk management, optimised portfolios and predictive insights. Those upsides are all plausible, but so are a host of related downsides, which go unmentioned by the bot. Both sides deserve consideration.
Environmental impact
AI applications can increase energy efficiency and provide essential data for climate action. For example, the Climate Trace coalition is using AI and machine learning to determine exactly where greenhouse gas emissions are coming from and identify high-impact targets for reduction.
At the same time, AI is a voracious consumer of natural resources. As the UN Environment Programme?points out: “The proliferating data centres that house AI servers produce electronic waste. They are large consumers of water, which is becoming scarce in many places. They rely on critical minerals and rare elements, which are often mined unsustainably. And they use massive amounts of electricity, spurring the emission of planet-warming greenhouse gases.”
Big tech companies are?investing billions?in cleaner data centres, and perhaps that will tilt the balance in AI’s favour, but right now, some question the ethics of incorporating AI into any aspect of impact investing.
Investment decisions
AI tools can efficiently construct portfolios matched to investors’ priorities, analyse existing portfolios for risks and performance against impact goals, and perhaps even model performance in the case of a ‘black swan’ event.
AI’s data analysis capabilities could also provide a valuable check on investment decisions and generate insights that refine or challenge conventional standards and assumptions. AI could help figure out the factors most important to making certain types of ventures successful, or at least evaluate investments in a less biased fashion than the all-too-common approach of: “We know the leader of this venture and they’re great, and so they’ve probably got their house in order.”
That’s the optimistic case. Alternatively, AI investment analyses could embed current biases more deeply by giving them the sheen of quantitative proof. And if AI leads to cookie-cutter decision making, innovation will suffer. To mitigate these risks, we need transparency from AI providers about the modelling, datasets, assumptions and limitations embedded in their tools. And ideally, users should be able to set their own parameters.
Fulbright Scholar at the Kennedy-Center for Performing Arts
2 天前https://youtu.be/_w0u3SB8elQ?si=hltNnA4Oawhb8CxQ