Edition for 12 June 2020

Top Stories

U.S. regulator to report on climate risks to markets in July (Reuters)

  • A report commissioned by a U.S. regulator on climate-related risks to financial markets, the first of its kind, will be ready next month and will include specific policy recommendations for federal oversight, the head of the panel preparing it said on Thursday.
  • “This whole report is about everyone recognizing the urgency of addressing this very significant risk-management issue,” said Bob Litterman, who chairs a 35-member panel formed last year by the Commodity Futures Trading Commission to examine the threat that climate change poses to the stability of financial markets. 
  • But he is not worried the report will fall on deaf ears, in no small part because its authors include such a broad range of industries, including Litterman’s former employer, Goldman Sachs Group Inc (GS.N), as well as oil producer BP Plc (BP.L), the Environmental Defense Fund and the Dairy Farmers of America.

Do institutional investors have to choose between divestment and engagement? (Benefits Canada)

  • For institutional investors, the debate still rages over whether to divest from a company they find to have problematic practices where environmental, social and governance issues are concerned or to remain invested and engage with the company to try to push it in the desired direction.
  • A new paper by smart beta platform provider Scientific Beta is suggesting there’s evidence that both strategies actually achieve the sought-after effect and can go hand in hand, rather than investors being required to choose just one option.
  • The paper also pointed out certain weaknesses in ESG mixing strategies or ESG integration strategies, “whereby ESG data and analysis are mixed with traditional financial inputs in the portfolio construction process.”

Corporate purchases of wind capacity set record in 2019; now totals 16.857 GW: AWEA (S&P Global Platts)

  • US commercial and industrial companies bought 4.447 GW of US wind capacity in 2019, setting a new annual record and bringing total corporate wind capacity purchases to 16.857 GW, the American Wind Energy Association said in two reports released June 11.
  • It said that more than 140 companies have purchased US wind energy and that Google is the top corporate wind energy customer in the US, with 2.397 GW contracted.
  • For its corporate wind energy purchases report, AWEA looked at four case studies that included Cargill, Anheuser-Busch, AT&T and Google.

Making the right choices when it comes to investments (Irish Times)

  • Investment managers cannot worry only about the health of the free market and hope that “someone else will take care of everything else."
  • Conscientious investors who want to earn the best possible returns may prefer funds that opt for engagement over divestment.
  • Both JPMorgan and Schroders have cautioned about the possible formation of green bubbles, the latter saying that it has “respect” for ESG but warning that managers should be “very careful” not to put investors’ money into bubbles.

ArcelorMittal SA slapped with a R3.64m fine (IOL)

  • ArcelorMittal South Africa (Amsa), Africa’s steel-making giant, was yesterday slapped with a R3.64 million fine for allegedly violating three atmospheric emissions licence conditions at its Vanderbijlpark operations, south of Johannesburg.
  • Amsa said it had entered into a plea agreement with prosecutors relating to the charge of exceeding hydrogen sulfide (H2S) minimum emissions standards at the coke-making plant between January and December 2016.
  • He said the group remained committed to focusing on and continuously improving its social, economic, financial and environmental performance. Last May Amsa and the environmental manager Johan Hattingh were charged with breaking environmental laws.

Google, WWF Partner for Sustainable Fashion Platform (Born Digital)

  • World Wildlife Fund (WWF) Sweden and Google have paired up to launch a platform that analyzes the environmental impact of individual raw textiles, the organizations revealed this week.
  • Using Google Earth Engine data, which can quantify changes to the Earth’s surface, and a framework for data processing developed by the WWF, the collaboration will provide a comprehensive look at the impact of textile production.
  • Stella McCartney, a brand long known for its sustainability mandates, will be the first fashion brand to test the platform. 

Report: These rarely used, dirty power plants could be cheaply replaced by batteries (Grist)

  • A sweeping analysis released last month by researchers at the nonprofit Physicians, Scientists, and Engineers for Health Energy (PSE) studied nine states to identify which peaker plants have the greatest potential to be replaced by clean energy alternatives, based on their operational features and the characteristics of local electricity grids, as well as the health, environmental, and equity benefits of retiring the plants.
  • These states have also already set ambitious renewable energy goals and climate targets for the coming decade.
  • Already across the Atlantic, new research shows that energy storage and renewables will dominate power systems in Germany, France, Italy, Spain, and the U.K. as soon as 2023.

New oil sands projects will no longer need government approval under new Alberta bill (The Globe and Mail)

  • The regulator recently came under fire by three Northern Alberta First Nations for temporarily suspending a swath of oil patch monitoring of soil, water, emissions and wildlife.
  • Kavi Bal, press secretary to Energy Minister Sonya Savage, added that projects have to be approved by the Aboriginal Consultation Office based on their economic, social and environmental value and outcomes.
  • Alberta was one of the last jurisdictions in North America to establish an energy efficiency body, but Mr. Hunter said “there’s no need to have that agency anymore.” Mr. Hunter said some EEA programs would roll into Emissions Reduction Alberta.

Unesco urged to declare Great Barrier Reef 'in danger' (The Guardian)

  • Environmental law groups in the US and Australia are pushing Unesco to place the world heritage status of the Great Barrier Reef on an “in danger” list, arguing the Morrison government has violated legal obligations by not doing all it could to protect the world’s biggest coral reef system.
  • The legal groups’ report stresses the reef’s plight has worsened since the 2015 review, noting a marine park authority report last year found its outlook had deteriorated from poor to very poor and acknowledged greenhouse gas emissions were the greatest threat to its health.
  • Ariane Wilkinson, a senior lawyer at Environmental Justice Australia, said an in-danger listing was now warranted on climate grounds. Imogen Zethoven, director of strategy at the Australian Marine Conservation Society, said it would be a “game-changer” if the committee recognised the climate crisis endangered the reef and required the government to introduce policies aligned with limiting heating to below 1.5C.

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