Just before the Heads of State from the Group of Seven (G7) gathered in Cornwall, England, last week, we learned that carbon dioxide concentrations in the atmosphere have risen to 419ppm, the highest level in the 63 years that data has been collected from the Mauna Loa Observatory. That means that climate change is placing humanity into a very dangerous zone.
Whilst this alarm bell calls for immediate and unequivocal action, the G7 meeting did not agree on a clear timeline for phasing out coal. Coal is both a major contributor to CO2 emissions and is the easiest of the fossil fuels to eliminate immediately on economic grounds. The road to a global net zero world is not smooth. The obstacles leave us with one option: to muster all of our courage and double down on efforts to turn things around. Failure is not an option.
Here’s what’s been going on in the transition to a net zero world this week.
A big win for Keystone XL activists
After years of sustained campaigning and protest, the developer of the Keystone XL pipeline has officially cancelled the project.
Investors speak up
- Ceres coordinated a letter signed by 80 investors managing nearly $2.7 trillion in assets, 155 companies, and 58 nonprofits calling on the SEC to develop climate disclosure rules that are based on the TCFD recommendations and include emissions disclosure, among other elements.
- A group of 457 investors managing over $41 trillion in assets signed a letter coordinated by The Investor Agenda calling on all governments to step up climate action and support sustainable covid-19 recovery efforts consistent with net zero emissions.
- The Asia Investment Group on Climate Change (AIGCC) launched a new program to engage Asian electric utility companies on cutting emissions, strengthening disclosure and improving governance of climate-related risks.
Responses to US Financial Regulator (SEC) on Climate Related Corporate Disclosures
On March 15th of this year, SEC Acting Chair, Allison Herren Lee (who continues to serve as a Commissioner, but has been replaced by current SEC Chair, Gary Gensler) called for public consultation on the Regulator’s intention to provide mandatory guidelines on corporate climate change related disclosures. This week two responses were filed.
- The Investment Company Institute (ICI), an association representing regulated funds including mutual funds, exchange-traded funds (ETFs) and Unit Investment Trusts (UITs), with members managing $30.8 trillion in the USA and $9.7m in other jurisdictions – called on the SEC to require mandatory corporate disclosure of direct and indirect greenhouse gas emissions data and demographic information about their workforces,
- In a letter to the SEC Chair big tech companies urged the Regulator to incorporate a number of clear principles for climate change disclosure proposals. The letter was signed by Alphabet, Amazon, Autodesk eBay, Facebook, Intel and Salesforce.
Corporate Pledges and Advocacy
- Shell CEO, Ben van Beurden, declared the oil and gas major would accelerate its emissions reduction strategy following a Dutch district court ruling ordering Shell to cut its emissions by 45% globally by 2030 from 2019 levels. [Listen to a discussion with Friends of the Earth Netherlands who brought the lawsuit, representing over 17,000 plaintiffs]
- Burberry pledged to become the first climate positive luxury brand by 2040.
- Toyota committed to making global factories carbon neutral by 2035.
- The Alliance of CEO Climate Leaders, convened by the World Economic Forum, published an open letter to world leaders ahead of the G7 Summit demanding transformative policy change to enable a net zero world. Signatories encouraged governments to work together with the private sector to deliver on shared ambitions.
- Ørsted, the Danish firm that transitioned from fossil fuels to clean energy (it was formerly DONG), released a case study, Our Green Business Transformation, outlining how it shifted from being one of the EU’s most coal-intensive power generators to one of the world’s largest renewable energy companies, whilst nearly doubling its operating profit. [Here’s a fascinating discussion with Ørsted Chair, Thomas Thune-Andersen]
Government Commitments and Action
- US Energy Secretary launched the Energy Earthshots Initiative to accelerate affordable, abundant and reliable clean energy solutions within a decade. The first Earthshot, the Hydrogen Shot, aims to reduce the cost of clean hydrogen by 80%.
- The UK government launched an independent Green Technical Advisory Group to develop a Green Taxonomy, a common framework setting the bar for investments that can be defined as environmentally sustainable to help reduce greenwashing in the financial sector.
- The UK Govt Department for Work and Pensions published draft statutory guidance which, if enforced, will require pension schemes with £5 billion or more in assets to report in line with TCFD guidelines. If passed, the regulations will make the UK the first major economy to require climate risk reporting from pension schemes.
New Tools and Resources
- A joint report by IPBES and IPCC concludes climate change and biodiversity loss have largely historically been tackled separately, and both will only be resolved with a holistic approach. The report is the first-ever collaboration between the two UN scientific bodies.
- A new report by the IEA, WEF and World Bank – Financing Clean Energy Transitions in Emerging and Developing Economies – shows that clean energy investment in developing economies must increase seven-fold by the end of the decade for the world to stay on track to achieve net zero emissions by 2050.
- A new report from the Science Based Targets initiative finds no major G7 stock indexes are aligned with the Paris Agreement.
- Electric Vehicle Outlook 2021 is available from BloombergNEF.
- WWF launched Forests Forward, a new program to help companies implement best practices around nature-based solutions to deliver on their sustainability and business goals.
- The Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) merged to form the Value Reporting Foundation to streamline corporate reporting, increase credibility around sustainability disclosure standards, and support investor and business decision-making.
Thanks for reading this week’s net zero news digest, we hope you found it useful. Prior issues of ‘Signals Amidst the Noise’ are available here.
This week our podcast, Outrage + Optimism, features Rolls Royce CEO, Warren East on electric planes, world records, and getting the hardest industries to net zero. Don’t miss it this Thursday! Available wherever you get your podcasts or at globaloptimism.com/podcasts.