Climate Change is Snow Joke
“Winter is coming”...but not to places where we would expect it. This week, a ‘kona low’ storm brought heavy rains, flooding, and snow blizzards to Hawaii, sending the archipelago into a state of emergency. Hawaii’s climate office attributed the storm to climate change, which has made rain less frequent, but more intense, causing droughts, and creating intense flash floods. In stark contrast, Denver, Colorado, has had no snow this month, breaking its record for the latest first snowfall since records began in 1882. Furthermore, a rare winter fire in Montana destroyed dozens of homes and businesses this week, indicating that climate change is lengthening the fire season.
While some of these odd weather patterns could be attributed to La Niña, the overall trend in extreme weather is very much related to climate change. As highlighted by the National Geographic’s apt summary of 2021’s weather disasters, scientists are confident that Arctic warming is producing harsher winter storms, record-breaking floods, heatwaves, and droughts. This does not bode well for the future.
In response, some countries are attempting to manipulate the weather. A recent study showed that China used cloud seeding to successfully control the weather in Beijing for their 100th-anniversary celebration. This geo-engineering experiment has high-risk and high rewards, as it could bring rain to drought-ridden areas, but it also may further imbalance the hydrological cycle.
Biden: It’s Time to Act!
Huge news for the US as President Biden signed a series of executive orders that mandate all federal vehicles and buildings must be carbon neutral by 2050, setting a plan in motion to make 300,000 buildings and 600,000 vehicles run off clean energy. Under the orders, all electricity purchased by the US government will be from renewable sources by 2030, and all new federal vehicles will be zero-emission vehicles by 2035. Although the plan was not without its detractors, with one Wyoming Republican calling it “disgraceful,” decrying that it would negatively affect the fossil fuel industry. Executive orders are vulnerable to being undone by future administrations, but at least until January 2025, this move will have major consequences across the sprawling federal infrastructure who’s annual budget is a whopping $4.79T.
ISSB Sets the Gold Standard for Sustainability Reporting
Further indication that the IFRS foundation’s International Sustainability Standards Board (ISSB) will be the globally shared language for sustainability reporting standards came with the Corporate Reporting Dialogue dissolving to make way for the ISSB. The Corporate Reporting Dialogue was initiated to reach common ground on varying sustainability standards and frameworks, and with the formation of the ISSB, they believe their work is done.
The ISSB got another boost when Financial Accounting Standards Board (FASB) Chair Richard Jones signaled that the FASB does not plan to move into ESG reporting. Jones indicated that the ISSB adequately covers the full scope of sustainability reporting, including carbon accounting. Given the US reliance on FASB for financial disclosure standards, this announcement could tip the anticipated SEC climate reporting rule towards relying on the ISSB standards for reporting.
In the opinion of Jeffery Hales, Chair of the Sustainability Accounting Standards Board (SASB), the consolidation of these leading investor-focused sustainability disclosure organizations under the ISSB has brought unprecedented optimism about high-quality sustainability disclosure.
Here’s hoping Jeff is right because greenwashing still stands as one of the most pressing barriers between society and meaningful, accountability-based decarbonization. More than 85% of investors have said the fund management industry has a problem with greenwashing, while 81% want to see more standardization of ESG reporting globally. A new study from the UK claims greenwashing from large corporations who pay lip service to sustainability but continue to source their energy from fossil fuels. The study revealed that about a third of energy managers are not trained to procure renewable energy.
As ESG disclosure matures, it is still the ‘wild west’ of competitive data solutions. I spoke to ESG Investor this week about the newly announced ESG Book. This new ESG data platform aims to “disrupt” the market with a “free public good" data service for companies and investors. While I am impressed (and somewhat baffled) by the number of high-profile organizations attached to ESG Book, it doesn’t take away from the need to consolidate around a single global common language for ESG disclosure which we can get through ISSB. It’s also unclear how the initiative, run by a for-profit data organization, will source all the information which they plan to give away.
Another study provided a good reminder of the benefits of robust ESG programs. The survey of 480 senior executives across 13 countries revealed that 40% of companies found recruiting key talent difficult as their environmental, social governance policies were seen as ‘weak’ with only 35% stating they had fully considered the ethical and legal implications relating to ESG disclosure and commitments.
The Fossil Fuel Industry Sweats under the Pressure
It will come as no surprise that the world’s largest oil producer, Saudi Aramco, announced its staunch opposition against fossil fuel divestment this week. Amin Nasser, their chief executive, urged global leaders to continue fossil fuel investments for fear of “social unrest.” However, Nasser’s comments come at a time where growing pressure has pushed even industry laggards like ExxonMobil towards a greener future. This week the company committed to achieving net zero GHG emissions in Permian operations by 2030.
In a step towards the UK’s phase-out of fossil fuels, The Guardian reports how former UK oil wells could be turned into carbon capture sites to test the storage of captured CO2 and Hydrogen, which will be essential in a low carbon economy. The EU is also looking to further its capabilities and capture 5 million tons of CO2 each year by 2030. Meanwhile, Japan still heavily relies on coal-fired power after the Fukushima nuclear disaster in 2011, but is now considering “blue hydrogen” - a process that splits natural gas (methane) into hydrogen and carbon dioxide - for energy generation. Although this sounds promising at first, blue hydrogen uses fossil fuels in conjunction with carbon capture - a process which remains unproven from an environmental standpoint.
Climate Migrants of the four-legged variety
The animal kingdom is often forgotten about in the climate change discussion. But, with limited ways to adapt compared to humans, other species are more vulnerable to climate change. These impacts are threatening the overall biodiversity of our planet with far-reaching impacts.
In addition to these global trends, many species are being forced by a changing climate to move into new habitats, which can be disastrous for the native species. An example which may hit home for many readers is that of coyotes, who are moving closer to population centers to escape the climate change-induced droughts and wildfires, increasing confrontations with humans. And, while cattle are often maligned as a major source of greenhouse gas emissions, the latest climate change fueled floods in Canada claimed the lives of 1.3 million farm animals.
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Here are a few other headlines that you may have missed:
Warren Buffett's Berkshire Hathaway remained among the 17,000 laggard companies graded “F” for not providing any environmental data to CDP when 13,000 other companies did.
CitiGroup’s CEO said that it would be asking its clients to measure and disclose their emissions, which could determine what clients they serve in the future.
A coalition of 400 manufacturing and retail leaders from 70 countries released a review of its members’ sustainability commitments and accomplishments
Missed our previous edition of ESG & Climate News? Check it out now and stay in the know: December 3, 2021.