They all want to learn more about the greenhouse gases and other pollutants that pour out of the world’s power plants, with the aim of holding companies and polluters accountable. They’ll be relying on satellites currently up in space to gather data for this endeavour.
Climate, culture and risk are now mainstream governance issues in agriculture and natural resource management.
In a recent risk and governance forum held in Australia, experts highlighted that organisations should undertake rigorous review of their non-financial risks, in particular those related to culture and climate.
While some sectors – including banking and agriculture – were directly called out in terms of their impact, there were implications for all sectors of industry.
With the increasing focus on the need for good governance, and expectation that the advice provided by professionals meets the highest ethical standards, it is incumbent upon professionals in all sectors to demonstrate how they are acting in the interests of their clients and organisations as a whole, and not just focus on financial performance.
This article was originally published in the Australian Farm Institute Insights newsletter in May 2019
Economic modelling is one of many tools for policy development. It is often taken out of context and misused. The present debate over the cost of Labor’s climate policy provides an example. Lack of context, modelling assumptions and selective use of modelling results risks distorting future climate and energy policy, with serious consequences.
Before entering into discussion of recent Coalition claims regarding the impact of Labor’s climate policies, we should consider some context.
Belgium, Denmark, France, Luxembourg, the Netherlands, Portugal, Spain, and Sweden urged the EU to cut emissions to net zero by 2050. They also demand that at least a quarter of the EU budget be spent on projects to fight climate change.
Responding for the government, the environment secretary, Michael Gove, said he accepted “that the situation we face is an emergency”, and called for a consensual, cross-party approach so the UK could take a lead on climate action.
“[Young people] understand the simple discoveries of science about our dependence upon the natural world,” he said. “My generation is no great example for understanding – we have done terrible things.”
The protests by young people were enormously encouraging, Attenborough said. “That is the one big reason I have for feeling we are making progress. If we were not making progress with young people, we are done.”
Carney has delayed his exit from the BOE twice because of Brexit, though he’s said he won’t do so again and will leave at the end of January 2020.
Last week, the EU announced that it is going to immediately proceed with new regulations that will impact a broad range of financial services. The new regulations will be based on the recommendations made recently by the High Level Expert Group on Sustainable Finance.
The Australian Government and the EU jointly announced last week they are going to fast track a bilateral trade agreement. This will open up new opportunities to the Australian financial services industry – but also potentially make them subject to EU regulations. See below for more on these two important announcements.
EU Announces Plans to Implement HLEG Recommendations
24 May 2018.
Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union said: "We should put our money into projects that are compatible with our decarbonisation objectives and the fight against climate change. This is important for the environment and the economy, but also for financial stability. Between 2007 and 2016, economic losses from extreme weather disasters rose by 86%. The proposals presented today show that the European Union is committed to ensuring that our investments go in the right direction. They are about harnessing the vast power of capital markets in the fight against climate change and promoting sustainability."
The proposed Regulation will introduce consistency and clarity on how institutional investors, such as asset managers, insurance companies, pension funds, or investment advisors should integrate environmental, social and governance (ESG) factors in their investment decision-making process. Exact requirements will be further specified through Delegated Acts, which will be adopted by the Commission at a later stage.
But the council has added a warning that it wants to make sure the deal doesn’t compromise its high standards of social and environmental protection, or hurt small and medium sized business. Read More
EU-Australia Free Trade Negotiations Start - Sydney Morning Herald
22 May 2018
European officials will land in Australia next month to begin negotiations on a free trade deal, after the EU’s governing council gave its long-awaited official authorisation on Tuesday to begin negotiations for trade deal with Australia.
“The council also approved negotiation of a similar deal with New Zealand. They expect the agreement to increase EU exports to New Zealand and Australia by about a third in the long term, through removing customs duties and other barriers. EU Trade Commissioner Cecilia Malmstrom said the deal would “safeguard high standards in key areas such as sustainable development”. Read more
“Automakers remain committed to increasing fuel efficiency requirements, which yield everyday fuel savings for consumers while also reducing emissions -- because climate change is real and we have a continuing role in reducing greenhouse gases and improving fuel efficiency,” David Schwietert, executive vice president of federal government relations at the Alliance, wrote in the letter, which was made public Monday.
"Australia needs to bite the bullet on road-user charging in the next few years before the disruptive influence of electric vehicles and more fuel-efficient cars blows a hole in government revenue, according to Productivity Commission chairman Peter Harris.
Describing the inability of Australia to embrace road pricing as the "greatest failure of my time in infrastructure", Mr Harris said the failure of successive governments to sell the idea of paying for a quicker trip home or to work was a key reason for user charging always being left in the "too-hard" basket."
“If you want to set rules and regulations, that’s why you need definitions, and that’s why green taxonomy is an important part of the European policy agenda.”
Dr. Paul Fisher, Senior Associate at the Cambridge Institute for Sustainability Leadership, discusses the determination of what “green” is . He unpacks the importance of identifying green definitions to better set rules and regulations, and create metrics to measure green investments and products at the 2018 Climate Bonds Initiative’s Annual Conference, in conversation with Sherah Beckley, Editor of Thomson Reuters Sustainability.
On Thursday 24th May, the EU Commission revealed its first legislative package on sustainable finance, comprising three major legislative proposals as a follow up to the Action Plan adopted in March:
- A unified EU classification system
- Investors' duties and disclosures
- Low carbon benchmarks
The EU and governments around the world committed to the objective of a more sustainable economy and society when they adopted the Paris Agreement on climate change and the UN 2030 Agenda for Sustainable Development. The EU is already making a difference thanks to the EU 2030 Energy and Climate framework, the Energy Union, the Circular Economy Action Plan, and the EU implementation of the 2030 Agenda for Sustainable Development. This is at the core of the Union’s Capital Markets Union project.
Current levels of investment are not sufficient to support an environmentally-sustainable economic system that fights climate change and resource depletion. More private capital flows need to be oriented towards sustainable investments to close the €180-billion gap of additional investments needed to meet the EU's 2030 targets of the Paris Agreement. The Commission's first step was the Action Plan on Financing Sustainable Growth of 8 March 2018. The Action Plan was informed by the final report in January 2018 of a High-Level Expert Group on sustainable finance established by the Commission in 2016. The Commission also conducted a public consultation on institutional investors' and asset managers' duties regarding sustainability.
On 22 March 2018, the Commission organised a high-level conference to discuss how to best put the Commission's strategy on sustainable finance into practice. The conference confirmed the support and commitment of EU leaders and key private players for the changes needed in the financial system and the economy.
Over the coming decades, digital technologies are set to make energy systems around the world more connected, intelligent, efficient, reliable and sustainable.
Stunning advances in data, analytics and connectivity are enabling a range of new digital applications such as smart appliances, shared mobility, and 3D printing. Digitalized energy systems in the future may be able to identify who needs energy and deliver it at the right time, in the right place and at the lowest cost. But getting everything right will not be easy. Read more
The Task Force on Climate-related Financial Disclosures (TCFD) held its first conference on scenario analysis and the recommendations of the TCFD in New York on May 1, 2018.
The conference featured an overview of TCFD recommendations and examined the role of climate-related scenario analysis in disclosure. The event also discussed what resources and tools are available for companies to conduct scenario analysis and presented real-world examples of applying scenario analysis from the financial, energy, airline and automobile sectors. Read more
New legal analysis released to coincide with the Commonwealth Heads of Government Meeting (CHOGM) in London last month shows that Australian business needs to work on better understanding climate change through a financial risk lens.
If not, they may risk being left behind their global peers according to Sarah Barker, MinterEllison Special Counsel, Climate Change Risk.
“The key takeaways from the federal government’s response to the Senate Inquiry are that our law already accommodates action in this area, and that further regulatory guidance can be expected. This is only reinforced by the Commonwealth Climate and Law Initiative’s conclusion that Australian corporate governance laws demand a proactive approach to the governance and disclosure of climate-related financial risks. If this is news to any business or board, they would be well advised to accelerate their understanding of the issue before enforcement proceedings begin to flow.” Continue reading.
"The new contracts are awarded after competitive reverse auctions, open to all kinds of competitors. This is likely to continue to drive down the price of winning bids and therefore returns. We have already seen the impact on new renewable capacity. If prices converge further and faster due to greater competition, the pace of technology cost improvement might not be fast enough to offset radically lower revenues. “
"In response to a 2018 shareholder proposal, Chevron goes so far as to “… disagree with the premise… that future diversification of energy sources requires all energy producers to curtail production of fossil fuel resources and/or to diversify their portfolios proportionately. A decrease in overall fossil fuel emissions is not inconsistent with continued or increased fossil fuel production by the most efficient producers. "
A global power system fully based on renewable energy is no longer a long-term vision, but a tangible reality.
Last year, Costa Rica has beaten its own record. The Central American country has run 300 days on electricity generated solely from renewable energy. Following the steps of Norway and Iceland, Costa Rica is about to showcase to the world how an emerging country can succeed in transitioning to a fossil-free electricity system.
Renewable energy is increasingly a success story in emerging and developing markets. Last year, they were leading in green energy investments. China will have added around 54 GW solar PV capacity in 2017 — three times more than any other country has ever done, which tops China’s total amount to 120 GW of solar PV installed capacity. India is catching up too, as its government announced to tender enough renewable energy projects to surpass 200 GW of new green capacity by 2022. According to financial analysts, by 2020 renewables will have become the cheapest form of power generation. Read More