Time’s up. The Climate conference officially kicks off on Sunday, just in time for Halloween.
COP26 - a Climate Spooktacular?
Here’s hoping that starting on Halloween won’t add to the tension of this high stakes meeting. Comedy always breaks tension and comedian Stephen Colbert – host of The Late Show – didn’t disappoint in a recent monologue suggesting the COP start date is a “Climate Spooktacular!”. Stephen also referenced a recent poll showing that 45% of Americans don’t believe that climate change is caused by humans, wryly pointing out, “It doesn’t matter what you believe, it’s true.”
Expectations for the COP meeting are high. Amid alarm bells in the form of continuing crazy weather and dire predictions of the UN IPCC report concluding we have only a narrow window to avoid the worst effects of climate change, comes a report that outlines we are in fact off course. The Wall Street Journal covered a report from the United Nations showing the world’s emissions-reduction plans would allow far more global warming than targeted in the Paris climate accord, and some of the biggest emitters, including the U.S., aren’t on track to hit their pollution targets.
Big leaders go ghost
Even with the stakes this high, there are increasing signs that the talks may not provide the much-needed breakthrough. The leaders of both China and Russia will not attend the talks and many others, such as Brazil’s Jair Bolsonaro and Mexico’s Andrés Manuel López Obrador, are not expected to attend. The leaders of other big nations, such as India’s Narendra Modi and Japan’s Fumio Kishida, have not given concrete plans or have suggested they will attend only one of the events.
These decisions may have more to do with the pandemic than lack of interest in climate action. And, in another sign of hope, COP26 organizers said last month that over 100 “political heads of government” have confirmed their attendance.
Meanwhile, the unending cliffhanger in US politics “may” be coming to an end. While the Administration claimed they have an outline of an agreement on the massive spending plan that includes climate action provisions, it was not clear that they have the votes needed.
Private sector shoots high for a low carbon economy
Whether or not the Glasgow talks provide a political breakthrough, the private sector continues to invest in the transition to a low carbon economy. Ecosia, a rival to Google, launched a 350 million euro ($405 million) venture capital fund that will invest in the “next generation” of founders looking to tackle the issue. Quartz reported that London is one of the most promising climate tech centers in the world with the total value of climate tech tripling in a year to reach $28 billion. While a dramatic rise, London is still dwarfed by the more established startup community in the Bay Area, which boasts a climate startup ecosystem valued at a whopping $941 billion. And late this week news broke that Salesforce chief Marc Benioff and spouse Lynne will donate $200 million towards solving the climate crisis. Another $100 million will be added by the company bringing the total grant to $300 million.
Persefoni goes for gold!
And, closer to home, my own company - Persefoni - announced a record-breaking funding round at $101 million. The announcement included some interesting new product features and partnerships, but broke ground by offering state of the art climate accounting tools for free. As the old saying goes: “what gets measured, gets done!” Making these tools available for free will allow access for millions of small businesses that make up most of the economy. It is an honor to work for a company that is actively and aggressively working to solve the climate crisis. And I could not resist unveiling our new website and video released along with these announcements.
ESG and getting into the thick of it
While carbon measurement and tools are essential, they rely on good accounting and disclosure standards. ESG and carbon standards have long been a sore spot. The Financial Times published an excellent feature on “Navigating the Thicket of ESG Metrics.” The article points out that the problem for ESG investors is not a lack of data but an oversupply of tools and frameworks. This confusion only delays and adds cost to achieving the ultimate goal of aligning capital to sustainable business practices.
Help is on the way. As discussed in prior editions of this newsletter, the International Financial Reporting Standards Foundation (IFRS - which oversees financial accounting standards used by most of the world) will launch the International Sustainability Standards Board at the upcoming COP meeting. The new ISSB will establish ESG accounting standards and metrics alongside, and theoretically in concert with, its globally recognized financial standards.
Seems like the solution is at hand…not so fast! The European Union continues to be on a collision course with the IFRS by insisting on developing its own ESG standards under the emerging “corporate sustainability reporting directive (CSRD).” Finally, this week a coalition of 57 organizations representing more than $8.5 trillion in assets published an open letter saying enough is enough. While there are important differences in approach between the EU and the IFRS, the letter makes the common-sense argument that everyone’s objectives will be better served with a globally consistent way to measure and report on ESG issues. Here’s hoping that the differences can be ironed out – and soon!
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Here’s what else you need to know in ESG and Climate News this week:
The jig is up! CNBC is reporting on a Congressional hearing that took place this week putting big oil in the hot seat for ‘climate disinformation’ campaigns. Some of the largest oil companies today including ExxonMobil, Chevron, Shell and BP America stood their ground claiming they followed the science during the time, however, lawmakers are threatening subpoenas to dig in further.
The travel industry is no stranger to carbon intensive operations. American Airlines is looking to change that with a goal of having net zero emissions by 2050, through investments in sustainable fuels, a new generation of airplanes, carbon offsets and more.
The transition to a future of electric vehicles (EVs) will not be easy nor fast. One of the greatest challenges? Charging EVs outside the home. Axios is reporting on General Motor’s $750M commitment to address “charging deserts”, and create 40,000 new charging stations across the U.S. and Canada. This coupled with the Biden administration’s goal to have Congress allocate funding for as many as 500,000 new EV chargers across the U.S. may make the transition to EVs even faster.
Missed our previous edition of ESG & Climate News? Check it out now and stay in the know: October 22, 2021.