Seeing Red on Climate | Grist

There’s a small but growing alliance of concerned conservatives who want to reclaim climate change as a nonpartisan issue. This motley crew of lobbyists, Evangelical Christians, and far-right radicals call themselves the “eco-right.”

Christine Todd Whitman, former chief of the Environmental Protection Agency under President George W. Bush, believes the eco-right has a real chance at inspiring action in Congress. With Republicans controlling both houses of Congress and the White House, and a record-breaking year of environmental disasters finally behind us, 2018 could be the year the party reverses course. “If you look at the damage from just this last summer, from the floods, the droughts, the fires, it’s pushing $300 billion out of our economy,” Whitman said.

Source: Seeing Red on Climate | Grist

The Danger Of Not Embracing ESG

According to Rivel Research Group, a firm that specializes in delivering actionable insight based on in-depth measurements of the investment community, ESG has six pillars: enhancement of market and accounting performance; lowering the cost of capital, a means to engage key shareholders; improving business reputation; fostering new revenue growth through product innovation; and aligning company and strategies with increasingly diverse constituents of the three-legged stool – customers, employees and shareholders.The strong focus on ESG is coming from significant institutional investors like BlackRock and Vanguard, who are taking a longer view of performance. These institutional investors are massively impactful in influencing the allocation of capital, share price and the election of board members. Now, in addition to the ongoing short-term quarterly reporting pressures, there are issues such as environmental risk mitigation and gender diversity that large investors believe can impact the bottom line. Investors have ongoing concerns for the future that need to be addressed. These issues include aligning business strategies for the greater good and being responsible to the business communities they serve.

Source: The Danger Of Not Embracing ESG

Why climate related financial disclosure is no longer an option | Toronto Sustainability | TSSS

Greg Rogers writes:

In the world of corporate finance and law, information is “material” (and must be disclosed) if there is a substantial likelihood that a ‘reasonable investor’ would attach importance to it in determining whether to buy or sell a company’s stocks or bonds. There is no bright line rule for what is material, and corporate managers and attorneys have long had ample room to argue that climate change is immaterial because its financial impacts are too uncertain or too remote in time to significantly affect current stock prices.In 2017 this rationale began to crumble. In 2018 it will collapse entirely.

He refers to the support for shareholder proposals on this issue (some supported by the 5050 Climate Project, where VEA Vice Chair Nell Minow serves on the board) and lists several other developments that will push for better disclosure including one we’ve mentioned before:

When President Trump announced that the U.S. would withdraw from the Paris climate accord, he united the other nations of the world in a battle against climate change. Trump also sent a clear message to captains of industry: business can’t depend on government when it comes to climate change. As Jeff Immelt, the CEO of General Electric, put it in a tweet, “Climate change is real. Industry must now lead and not depend on government.”

Source: Why climate related financial disclosure is no longer an option | Toronto Sustainability | TSSS

Proposed Energy Policy: Bob Massie For Governor

We highly recommend this comprehensive policy statement by Massachusetts gubernatorial candidate Bob Massie about an energy policy that is good for the environment, infrastructure, the economy, and job creation. He asks, “Why are we keeping fossil fuels on life support?”
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Source: Policy — Bob Massie For Governor

The Materiality of Climate Change Risk

Greg Rogers writes about the “materiality meterGreg Rogers writes about the “materiality meter” that will assess disclosure requirements relating to the risks of climate change.

As corporate boardrooms begin to consider whether and to what extent to include climate-related disclosures in future financial filings, as recommended by the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures (TCFD), the need to quantitatively assess the materiality of climate risk will move center stage. Listed companies will need a “materiality meter” to objectively measure their financial exposure to climate risk as a critical first step in assessing the information investors will need to make informed decisions….From the capital market perspective, investors can use investee disclosures of climate-related scenario analysis to assess the credibility of firms’ transition plans and their ability to execute them, and analyze the potential changes in value of assets and liabilities that could result from a transition to a lower carbon economy or to other climate-related events (e.g., physical or legal risks). This enhances investors’ ability to manage and price these risks and, if they wish, to take lending or investment decisions based on their view of transition scenarios. Going forward, investors must resist the temptation to characterize forward-looking disclosures as predictions, benchmarks, or statements of fact and recognize that good scenario analysis does not isolate on a single one-size-fits-all future state.

 

‘Undeniable Victory’: Cheers Follow Proposals to Divest Massive New York Pensions From Fossil Fuels | Common Dreams

Climate activists claimed “an undeniable victory” on Tuesday after New York City and New York State officials called for city and state pension funds to halt investments in fossil fuels.”The dam has broken,” said 350.org co-founder Bill McKibben. “After years of great activism, New York has taken a massive step towards divesting from fossil fuels. Coming from the capital of world finance, this will resonate loud and clear all over the planet. It’s a crucial sign of how fast the financial pendulum is swinging away from fossil fuels.”New York City Comptroller Scott M. Stringer said in a statement that his office “will bring a proposal to the trustees of the NYC pension funds in the coming weeks to examine ways to de-carbonize the portfolios, including the feasibility of ceasing additional investments in fossil fuels, divesting current holdings in fossil fuel companies, and increasing investments in clean energy.”

Source: ‘Undeniable Victory’: Cheers Follow Proposals to Divest Massive New York Pensions From Fossil Fuels | Common Dreams

Jonathan Salem Baskin: The Market Isn’t Interested In Investing In Oil

Our thanks to Jonathan Salem Baskin for allowing us to reprint his column about the market-based move away from fossil fuel, originally published on Medium.

As the worldwide debate about climate change rages nowhere except in certain American electoral districts, the market is busy making air pollution less profitable.

ExxonMobil will be more transparent on “energy demand sensitivities” resulting from increases in temperature, and what it’s doing to prepare for a lower-carbon future, joining almost all of its competitors. Norway’s sovereign wealth fund is contemplating selling its shares in oil companies because they appear vulnerable to a “permanent drop in oil prices” (keep in mind that the money in its fund came in large part from developing the country’s oil reserves). The World Bank will stop investing in oil and gas exploration in 2019.

So much for debate.

Investors might bring their emotions to markets, but value is determined by price, not passion. Transactions with real consequences quickly disabuse people of their biases (if not, they risk being on the losing side of the next trade). Belief is a detriment to effective investing, as are “facts” that aren’t borne out by objective reality.

That’s not to say that markets are always efficient or accurate. The current valuations of tech companies that have no customers or profits are wildly too high. Venture capital skews cash and attention toward new business propositions that are idiotic, in hopes that one in a thousand will prove itself sane enough to let its initial investors cash out, so it’s more a gambling crap shoot than functioning market.

Many businesses are undervalued because they don’t know how to sell themselves to opinion-makers. Much of the infrastructure companies that run the world probably fall into this category; just think of any industry in which you’ve read about some disruptive tech startup, and not about the immense innovation going on behind the closely guarded doors of established businesses.

The difference between financial markets and markets for ideas is that the former has to return, at some point, to the lodestone of legal tender currency, while the latter has no such guardrail; this is especially true on topics such as climate change, to which certain parties bring their own sets of facts and derived truths that are all but immune to any challenge.

Markets recover, primarily by recognizing true costs and benefits, even as the most argent opponents in arguments resign themselves to eternal, principled detente.

So it’s interesting that not only is the market lowering its valuation of fossil fuels, but oil companies themselves see the writing on the wall. Pollution is becoming a not-so-profitable industry.

When it comes to money, there’s no debate.

Baskin is president of Arcadia Communications Lab, a global collaborative solely focused on helping established businesses get value from communicating about innovation.

Vanguard’s quarter-trillion in fossil fuel investments

Vanguard is one of the world’s largest asset managers, handling the retirement savings of millions of Americans. Its mission is to help people save for the future. At the same time, it’s playing a major role directing billions in funding to carbon polluters — companies maintaining and expanding the fossil fuel infrastructure that threatens to make the future uninhabitable.Fossil fuel stock prices are based on oil reserves that will not actually be burnable if we expect to avoid catastrophic effects due to climate change. Countries are already moving to restrict emissions and transition to clean energy alternatives. Money invested in fossil fuel infrastructure is likely to become ‘stranded assets’….Vanguard is behind the curve with only one socially responsible portfolio. That’s the Vanguard FTSE Social Index Fund, and with holdings in ConocoPhillips, Kinder Morgan, and other large oil companies, it’s hardly fossil free. But it’s the only mutual fund Vanguard offers with a responsible investing mandate.

Source: Vanguard’s quarter-trillion in fossil fuel investments

BlackRock Wields Its $6 Trillion Club to Combat Climate Risks – Bloomberg

BlackRock Inc., the world’s biggest asset manager, is telling companies that now is the time to start reporting clear information on climate risk to their businesses.

The firm, which oversees almost $6 trillion in assets, sent letters from its corporate-governance team to about 120 companies this week, urging them to report climate dangers in line with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, set up by Bank of England Governor Mark Carney. The letters were sent globally to BlackRock holdings with “material climate risk inherent in their business operations,” such as those in the energy, transportation and industrial sectors, according to a copy seen by Bloomberg. They were signed by Michelle Edkins, the firm’s global head of investment stewardship.

Source: BlackRock Wields Its $6 Trillion Club to Combat Climate Risks – Bloomberg

How big oil is tightening its grip on Donald Trump’s White House | Environment | The Guardian

API has gone beyond the lobbying typical of trade associations, helping spawn permanent substructures within the executive branch that ensure its voice is heard. These government entities, which include the petroleum council and an obscure but powerful White House office, have for decades worked in tandem with API to fortify the oil and gas industry, often, its critics say, at the public’s expense.

API’s history on climate issues goes back farther than most realize. As early as 1959, it grappled with global warming, hosting a conference where the looming, manmade catastrophe was discussed. As the environmental movement was blossoming, API – with the government’s support – was working behind the scenes to undermine it by distorting projections of regulatory costs. An enduring false narrative was constructed: the economy or the environment.

For nearly a century, API has enjoyed special access to the executive branch, furtively shaping policy from the inside. Now, under Donald Trump, the industry smells victory on multiple fronts with a White House that openly detests regulation as much as it does. Days before Trump’s inauguration, API president Jack Gerard heralded the “once-in-a-generation opportunity” to reshape energy policy.

Fifty-two environmental rules have since been overturned or are in the process of being rolled back. API has publicly supported at least 23 of these actions. In May, the institute also sent a 25-page wish list to the US Environmental Protection Agency. Among the items it wants reconsidered: tougher standards for ozone – the main ingredient in smog – and regulation of methane, a greenhouse gas that is far more potent than carbon dioxide.

Source: How big oil is tightening its grip on Donald Trump’s White House | Environment | The Guardian