‘Water’ We Doing to the Planet?
It’s clear we need to think about water and climate change policies at the same time. But, it’s not that cut-and-dried. As water access becomes increasingly scarce for many, others are being inundated with too much.
To quote Ben Franklin: “when the well runs dry, we know the worth of water.” The American West is experiencing its worst drought in 1200 years and nearly 60% of the US is currently in a severe drought. As human-caused warming worsens we can no longer assume our water sources are indefinite. The good news is that a new study found that desalination — the process of removing salt and other minerals from seawater — can be cheaper and powered by renewable solar-power.
In contrast to the ‘megadrought’ in the West, a study released on Tuesday indicates that the US will likely see a century's worth of sea-level rise in the next 30 years. The East and Gulf Coast communities will be hit hardest.
Water also plays a huge role in mitigating climate change. The oceans are a more effective carbon sink than trees and help stabilize the climate.
One Standard to Rule Them All
The quest for a universal ESG accounting standard continues. My colleague Bob Eccles and co-author Bhakti Mirchandani’s article in the Harvard Business Review called on companies to support the new International Sustainability Standards Board (ISSB) to deliver one global standard for ESG reporting. The ISSB will do for sustainability reporting what the International Accounting Standards Board (IASB) does for financial reporting - align the world one method for accounting and disclosure. The article lists two things that companies can do to help the ISSB succeed:
Be an active participant in the standard-setting process.
Move aggressively to adopt said standards.
Divestment is Dumb, Engagement is Smart
Despite net zero pledges, big banks are still pumping billions into oil and gas. A recent ShareAction report found that 24 banks that are members of the Net Zero Banking Alliance funded oil and gas projects to the tune of $33 billion. Campaigners targeted Credit Agricole; a French bank that had previously won praise for its climate stance and is now under fire for financing coal projects.
In response, these banks claim their investments are aligned with their net zero ambitions and that engaging with oil and gas companies is essential in the energy transition. This article explains how divestment of “dirty shares” simply shifts them to private investors and does nothing to solve the issue. The article echoes Larry Fink’s 2022 letter to CEOs: that sincere green investors should hold onto their “dirty shares'' and work with their portfolio companies to reduce emissions.
Biden in a Bind
President Biden has been blocked from achieving climate victories of late and is facing increased scrutiny. His most significant climate wins are rejoining the Paris Agreement, his executive orders to decarbonize the Federal government, and the climate measures in the new infrastructure law.
But, with the “Build Back Better” bill stymied in congress, the courts blocking ‘the social cost of carbon’ metric for oil and gas drilling on public land and the Administration greenlighting more drilling than Trump did in his first year, President Biden’s climate legacy is at risk.
The long anticipated carbon disclosure rule from the Securities and Exchange Commission (SEC), will be a strong addition to the Administration's climate change agenda. But, as we reported last week, the SEC has delayed this rule due worries over litigation. Even as Senator Warren applied pressure to get the rule finished, this article (WSJ paywall) explains why the difficulties in measuring and reporting “scope 3” has the SEC struggling - using Apple as an example, the company’s scope 3 emissions are 475 times larger than its scope 1 and 2 carbon footprint.
With the strong possibility of Republicans taking control of Congress in the midterm elections, time is running out for Biden to make his mark on climate change.
I know it was Valentine's, but…
Flowers spreading rapidly in Antarctica is not normal. A recent study of Antarctica's two native flowering plants found they have increased more rapidly since 2009 than in the previous 50 years combined. The primary reason cited for this growth is rapidly rising air temperatures – further evidence of the effects of warming on the fragile polar ecosystem.
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Here is some additional need to know news items of the week:
Morningstar has removed the ESG tag from over 1,200 funds representing over $1 trillion in assets after an analysis revealed they weren’t delivering on their stated goals. The findings feed into concerns that the fund industry is fraught with greenwashing.
The SEC is receiving pushback from companies that have been scrutinized by the regulator for more information about the business risks of climate change. The companies argue all material information is included in their annual 10-Ks.
The head of Boston Consulting Group has said he wants to hire climate activists to work for the consultancy as they try to increase their fees from helping firms reach net zero ambitions.
Persefoni has partnered with business data and reporting solutions provider Workiva. Through the partnership, companies will be able to integrate their financial and greenhouse gas emissions data within their regulatory reports.
The 2022 GreenBiz event was a whopping success with more than 1,300 people turning out in person! Congratulations and…Happy Birthday Joel Makower.
Missed last week's ESG & Climate News? Check it out now and stay in the know: February 11, 2022.