Edition for 15 May 2020

Top Stories

Sustainable finance is performing well in the pandemic—but why? (Quartz)

  • Early calls for economic transactions to incorporate environmental, social, or governance (ESG) issues can be traced back as far as the Holy Books.
  • Mathematical consensus is building up around the idea that ESG issues have a financially material impact on equities and other asset classes and, as a result, financial assets managed through ESG lenses have been steadily growing nearly 20% a year, and presently account for over one-third of the global financial market.
  • ESG indices—whether constructed around exclusions of controversial sectors or stocks, or designed to highlight companies that better manage ESG-related opportunities or risks—keep outperforming traditional indices even during the current crisis.

How airlines can chart a path to zero-carbon flying (McKinsey)

  • Even before the coronavirus pandemic began, the industry was facing the challenge of reducing its carbon emissions in line with international goals to reach net-zero emissions by 2050.
  • Forces that have buoyed the case for sustainability—including customers and regulators worried about emissions and unpredictable future carbon policies—have shifted with the pandemic, as airlines’ survival seems to be at stake.
  • Carbon offsetting holds more promise, and it can help serve as a bridge while the industry takes action needed to reduce its own emissions over time.

The Drilldown: Trudeau says ‘clear leadership’ needed on climate change (iPolitics.ca)

  • “We’ve seen investors around the world looking at the risks associated with climate change as an integral part of investment decisions they make,” Canadian Prime Minister Justin Trudeau stated yesterday as a response to some of Canada’s largest energy companies being blacklisted by a Norwegian $1-trillion wealth fund and Japan’s largest bank announcing that it will be limiting the business it does with oil sands.
  • Alberta Energy Minister Sonya Savage made a statement saying that excluding the Imperial Oil Ltd., Canadian Natural Resources Ltd., Suncor Energy Inc. and Cenovus Energy Inc. was “poorly informed and highly hypocritical,” and noting that between 2011 and 2017, oil sands operations have seen a 19-per-cent reduction in their emissions.
  • According to a statement from Alex Pourbaix, the Chief Executive of Cenovus, “pulling investments from the oil sands and claiming it’s for climate change reasons is more about publicity than fact.” By 2030, Cenovus intends to have reduced its emissions by 30 per cent.

Oil & gas sector belief, investment in hydrogen future grows: report (S&P Global Platts)

  • "While hydrogen gas produced from renewable energy (green hydrogen) is the industry's ultimate destination, analysis shows that the sector can only realistically scale up to large volumes and infrastructure with carbon-free hydrogen produced from fossil fuels combined with CCS technology (blue hydrogen)," it said.
  • "Natural gas reformation combined with CCS is characterised by residual GHG emissions due to methane leaks upstream of the reformers and the inefficiencies of CO2 capture facilities downstream.
  • DNV GL's Hovem agreed blue hydrogen was not net zero carbon, "but neither is green hydrogen."

Big Structural Change (SSIR)

  • On one hand, impact investors, social entrepreneurs, and corporate leaders are increasingly embracing the power of profit to find and scale solutions to the world’s problems.
  • At the same time, others have proclaimed capitalism an irredeemable failure based on its environmental destruction, oppressive and underpaid jobs, racial and gender biases, and production of massive economic inequality.
  • Investors need to focus on the long term and consider social and environmental impact.

Amazon road projects could lead to Belize-size loss of forest, study shows (Mongabay)

  • “Many roadway projects in Amazonia generate environmental, social and economic disasters.
  • There’s also a consistent lack of evaluation of the real impact these projects will have, according to co-author Ane Alencar, scientific director of the Amazon Environmental Research Institute (IPAM).
  • If this happens, it could lead to an additional 400 million tons of carbon dioxide emissions by 2030.

CEO Action Group Will Support European Commission On Advancing European Green Deal (Eurasia Review)

  • The World Economic Forum brought together leaders from the European Commission with chief executives and top-level representatives from the private sector to discuss the path to a green and sustainable post-COVID-19 recovery.
  • The Forum’s new CEO Action Group for the European Green Deal, chaired by Thomas Buberl, CEO of AXA, agreed to advance dialogue on the critical challenges facing Europe’s post-pandemic recovery and to work together to build a plan of action for mobilizing business to contribute in advancing the European Green Deal agenda.“We must all join forces in the fight against the virus and the climate crisis.
  • Business plays a critical role to accelerate investments and action to realize this ambitious plan – that is why we created the CEO Action Group for the European Green Deal,” said Martina Larkin, Head of Europe and Eurasia, and Member of the Executive Committee at the World Economic Forum.

The Climate Sentinel is an AI-powered news assistant for ESG investors and those concerned about climate change, corporate social responsibility, and related topics. Learn more.

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