Week 23: Let's deal with the real world

Dear all,

I hope everyone is well and ready for a new edition of ‘ESG on a Sunday’!

Last week, we had a close look at “We” in the context of systemic changes related to the climate emergency. The divide as well as the dependency between different parts of the world, different parts of the socio-economic fabric of our societies that steers and controls our ability to evolve.

This week, we continue down the same path.

Solutions that include developing countries

One thing is clear: poor people and nations around the world will pay a far more tangible price for both action and inaction in this space, and we still don’t fully understand the kind of tectonic shifts this may create in the next two decades.

For sure, there will be benefits and there will be great business opportunities unlocking an Eldorado of wealth. It is inevitable. It is clear. It is obvious. At the same time, it is inevitable that we need to build, evolve and develop our systemic solutions to tackle inequality, socio-economic challenges, wealth distribution.

If we don’t succeed in doing so, then the climate emergency actions will be reserved for developed countries that can afford to take that responsibility and deliver solutions for their populations.

Our actions falter at our borders

Today, more than 50% of the vehicles sold in Norway are electric. That’s fantastic for reducing pollution in this country which is sparsely populated by just 5 million people.

However, it’s ironic and very telling that while delivering subsidies for EVs to support the transition, the very same country continues to drill for oil and gas.

You can find the same irony everywhere, including in Sweden, Denmark and Finland.

It’s nothing short of scandalous that governments in these countries and elsewhere are proclaiming climate action within their national borders when up to 80% of their climate impact is in fact generated in other countries (also known as “scope 3” emissions).

It indicates how our current systemic thinking around the climate emergency stumbles at every national or territorial state border.

We need cross-border pledges

The reality is of course that the climate emergency has no nationality, no race, no sexual preference and certainly no political or religious affiliation. The transition we are in will create completely new global tensions.

Nationally determined contributions (NDCs) are widely discussed and used as a way to measure how countries deliver on their pledges made some years ago. They are national, or rather territorial.

What about joint national pledges? I mean, how about for example a joint pledge between Sweden and China where Sweden delivers its part in China, the country where the majority of Sweden’s non-territorial emissions come from?

And what about a regional joint climate emergency pledge between the two biggest economies in the EU, France (nuclear) and Germany (gas)?

And how about we focus on maximal effect we can create in the next 10 years, not on symbolism? 

To electrify the Swedish vehicle fleet by 2040 is far less efficient then helping India hook off coal.

It is also far more efficient if the Nordic pension system invests all its money in a sustainable way around the world than if they impose a climate tax on flight tickets or plastic bags for its own population (while, ironically, their pension money is invested in plastic producing companies).

In India, renewable energy is not cheaper than coal

Yes, we need to lead the way, we need to show that it is possible. Our actions need to show, even if just symbolic, that we mean business. But we also need to focus on maximal effect.

Big parts of India are not even electrified, and the cheapest source of energy is coal. Yes, renewable energy is cheaper now, many say. But that depends on where you live and what infrastructure you already have in place. In places like India maybe it’s not always cheaper or even possible to easily build it.

This needs to change, we need to focus on the maximal effect in shortest period of time. Scale before symbolism. Better before perfect. 

Read more about the challenge to electrify rural households in India here.

Deal with the real world

When this report from CDP came in 2017, I thought, ok, now the world will focus on where it matters, where we can make it happen. Maximal effect in shortest period of time. Jointly, us, we, now.

What the report said? That more than half of the global industrial emissions since human-induced climate change was officially recognized can be traced to just 25 corporate and state producing entities. All the climate conferences, all the zillion reports, all the negotiations. And then it’s down to 25 corporate and state-owned entities. That is it. 100 fossil fuel producers and nearly 1 trillion tonnes of greenhouse gas emissions.

There is a real world beyond sustainability dreams and all the nice words, and we need to deal with that world.

Yes, you see their names in the report, you see the numbers, you see the implications, you see the historical emissions. You see all of that... and then what? 

Territorial vaccine strategies

The same can be said about our Covid-19 riddled realities, or what is left of them.

It would have been great to understand how it all started and where, so we know what we are dealing with. Transparency on what it is and is not, beyond geopolitical power games, baptised in the water of secrecy, distrust and betrayal.

It would also have been good to understand why different countries have so different interpretations of the various vaccine options and the consequences related to taking these.

Yeah, it would have been so good, but that is not the case.

Instead of focusing on vaccinating billions of poor people first – which would make sense for many reasons, incl. that viruses mutate easier in those countries due to more dire and stretched underlying conditions – we proclaim, in our rich world, that “we have now vaccinated 50%” of our population. Which is roughly equal to a small city in Asia. And then we wonder if we will be hit by a wave 3 and 4 and 5.

Our territorial thinking is stalling our evolution, it is hindering how we develop and tackle the challenges that go beyond nation and territory, like viruses, climate emergency and socio-economic inequality.

Many of these rich nations, including the US, UK and EU, are blocking a proposal by over 100 developing countries to be discussed at the World Trade Organisation (WTO) which would override the monopolies held by pharmaceutical companies and allow an urgently needed scale up in the production of safe and effective Covid-19 vaccines to ensure poorer countries get access to the doses they desperately need.

While more poor countries will see the arrival of doses, the amounts available mean only three percent of people in those countries can hope to be vaccinated by mid-year, and only one fifth at best by the end of 2021.

Here’s a telling fact from UN to ponder: Low-income countries have received just 0.2 per cent of all Covid-19 shots given. 

A problem for all of us

Let’s be clear: The slow uptake of Covid-19 vaccines in developing countries could create problems for the rest of the world.

Epidemiologists believe that failure to vaccinate much of the developing world could leave a large reservoir of the coronavirus circulating, giving it the chance to mutate and possibly spill over to developed countries. 

Most of the Covax shots planned for the first half of the year were to be manufactured by the world’s biggest vaccine maker, the Serum Institute of India, which has partnered with AstraZeneca PLC to make the vaccine the company developed with the University of Oxford.

The SII says its output has also been constrained by limits imposed by the US on the export of key raw materials for vaccines, an attempt by Washington to speed up manufacturing at home. 

So India produces most of the vaccines for entire world and most of India has not yet got a jab…

The sad lessons from Covid

If Covid-19 sets a precedence for how this world of ours will react and be impacted by the climate emergency, then some lessons learned are:

1. You will most likely be on your own. Me-first is the rule of thumb. It’s me, myself and I!
2. If you are poor and/or live in country that is poor you are… Well, you know the feeling ??
3. Don’t expect any help in time. Maybe when me-first is done. Only maybe, and mostly because we have democratic and human values. And because we need you to work (cheaply) for us and deliver goods we need. 
4. We in the rich 1% will do our utmost to introduce climate passports, climate tests and all sorts of administration that will allow us to travel, visit your beaches and help your economy. While you, because you don’t have a climate passport or a climate test, will be prohibited from spoiling our nice world with your climate impacted viruses.
5. We will use resources in your poor and badly functioning countries, like cobalt, copper and nickel, to produce technological solutions, and we will sell these solutions to our world. By doing so we will become even more wealthy. You on the other hand will get some aid and we will prohibit people from your countries to come to our world. We don’t have a place for aid-seekers, climate refugees and the terrible narratives you bring with you. We need resources, and we take what we need, and we give you courses in institutional development so you can learn from us.
6. We will build climate walls across the world protecting “us” while we offer longer stay-ins on nearby planets to which we travel in comfortable private spaceships offering massage, yoga and organic diet as well as executive courses in sustainability (with diploma!)

Or should we just unlearn all of this and see if we can become a more evolved species?

In other news…

Notable stories in the news this week:

• There is no shortage of money worldwide. But the money is not finding its way to where it’s most needed. Governments need to give international public finance institutions a strong strategic mandate to finance clean energy transitions in the developing world. We need to invest 7 times more in renewable energy in developing countries next 10 years. Only 7 times more…
• Investors controlling $41tn (￡29tn) in assets have called for governments around the world to end support for fossil fuels and set targets for rapid reductions in carbon emissions to limit the damage from global heating. The company I work for – J. Safra Sarasin – is one of them.
• Here are the key policy recommendations from the G7 meeting in UK last week. All of these recommendations are very ESG prone.
• The announcement that the UK government is setting up a new group to help tackle “greenwashing” is good news for everyone. Here’s a very insightful on what could be done and the balance required.
• The explosive growth of ESG investing in the past few years is creating tensions that could make life more complicated for investors. Here are five tensions facing ESG provider that will not go away.

Finally, I will recommend everyone to read Vijay Prashad’s book The Poorer Nations – A Possible History of the Global South. It’s a real eye-opener!

Also, I want to remind you to watch my bi-weekly ESG update programme on Direkt Studios.

That’s it for now. Have a great week!

Best regards, Sasja