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Pressure on creatives: PR, advertising firms targeted by fossil fuel divestment movement. Airlines have faced "flygskam" — or flight shame — which has seen some travelers shun air travel, heightening pressure for the sector to demonstrate that it can develop a flight path to net-zero emissions. Michael Holder.
Let’s name the elephant in the room: Bay Street and Calgary are on a collision course on net-zero. Large Canadian banks, insurance companies and pensions have declared they will reach net-zero in financed emissions in their portfolios by 2050. But, any rudimentary analysis shows that simply isn’t true.
Slow-to-change investors and greenwashers in the business community will lose their cover to continue propping up the fossil fuel economy. Sustainable investments should grow as divestment from carbon-intensive industries intensifies. Faster private- and public-sector innovation to get emissions down should follow.
Last month, the Canada Pension Plan Investment Board (CPPIB) released its 2022 Report on Sustainable Investing , highlighting its commitment to be net-zero by 2050 and its engagement strategy to pressure companies to manage climate risks. requires an immediate end to fossil fuel expansion and a rapid phase-out of production.
CDPQ was deemed a climate leader, with the report highlighting the asset owner’s decision to divest of firms involved in oil production, refining and coal mining in 2022. Most – but not all – of these funds have also put in place interim targets.
Renaming trend may lead to a short uptick in greenwashing, but ultimately will accelerate the path to netzero and offer sustainable investors more choice. The decision to rebrand a fund often raises eyebrows, with investors “intuitively suspicious” of the activity due to greenwashing concerns among others.
McMurdo anticipates more such rebellions this year, which he says reflects the pervasive greenwashing evident in netzero plans. LAPFF focused on changes to executive pay and discussed Persimmon’s commitment to ensure that all new homes are net-zero by 2030. Disputing divestment.
Direct litigation risks include challenging investors’ mismanagement of climate and biodiversity-related risk, breaches of fiduciary duty, greenwashing, or financing environmental and human rights-related harms.
Joined-up commitments – If asset managers are likely to struggle to interpret firms’ holistic transition plans, how are they going to handle “meaningful, non-greenwashed, accountable, achievable netzero commitments”? What this bodes for the NetZero Data Public Utility we shall soon find out, in Bonn probably.
Similarly, ESG factors featured prominently in the top reasons for investors to reject or divest from real asset investments, with lack of clarity around ESG credentials or impact reported by 38% of respondents, and concerns over the level of performance or disclosure on ESG grounds by 32%, ranked only behind historical underperformance at 47%.
The effectiveness of asset owner and manager actions in tackling greenwashing by companies is seen as critical to the low-carbon transition. Reclaim Finance notes a “growing trend” within the investor community to condemn exclusion and divestment from heavy emitters as both “unrealistic and ineffective” tools to decarbonise the economy.
David Byrns, Portfolio Manager at American Century, explains why transition investing is fundamental to achieving netzero. But the range of transition planning frameworks being developed to support organisations on their path to netzero is inevitably driving demand for assets turning from brown to green.
Direct litigation risks include challenging investors’ mismanagement of climate and biodiversity-related risk, breaches of fiduciary duty, greenwashing, or financing environmental and human rights-related harms.
The private sector’s ability to accelerate the pace of netzero transition is open to question. With pension schemes continuing to commit to netzero and concerns rising about the risks from stranded assets , tensions between asset managers and owners may rise further.
These new requirements are part of a bigger push right across the economy for new standards on environmental reporting to weed out greenwashing and support our transition to a netzero financial system – for example, through our new Sustainability Disclosure Requirements ,” she said.
CDPQ was deemed a climate leader, with the report highlighting the asset owner’s decision to divest of firms involved in oil production, refining and coal mining in 2022. Most – but not all – of these funds have also put in place interim targets.
For ESG-aware investors, this paucity of solid information leads to questions over whether they should they wait for information flows to improve, pinning hope on further action from regulators or legislators, or divest their holdings to avoid uncertainty over the climate risks in their portfolios. Potential evidence of greenwashing.
Pressure to divest is commonly applied by ESG-conscious investors who no longer want to be associated with these companies or fund them. However, in practice, divestment is not the best strategy to enact change or to have a meaningful impact. The post Investing in Transitional Issuers appeared first on ESG Investor.
To achieve the Agreement’s goal of net-zero emissions globally by 2050 , we must significantly boost energy efficiency and greatly accelerate the global transition away from fossil fuels, and toward new fuels such as green hydrogen and renewables such as wind, solar and thermal.
In the statement it referred to metallurgical coal as “carbon steel materials”, drawing accusations of greenwashing. Divest or wind down? By 2035, it has committed to halve its Scope 1, 2, and 3 emissions from a 2019 baseline, with goals to hit netzero by 2050.
At COP26, the Glasgow Financial Alliance for NetZero ( GFANZ ) declared a sector-wide commitment of US$130 trillion – a number that has increased over the year to US$150 trillion – of private capital to transition the global economy to net-zero greenhouse gas emissions. Engagement ring.
ESG investing has had to overcome numerous challenges, ranging from investor caution to multiple cases of greenwashing. Around 270 asset managers have committed to reducing GHG emissions by tracking carbon intensity as part of their membership of the NetZero Asset Managers initiative. and the UK rate at 9.9%.
The International Energy Agency estimates that US$1 trillion a year to 2050 will need to be spent in developing economies to achieve net-zero GHG emissions. It’s about greening their portfolio, but doing it in the real world and in a way that mitigates the risk of greenwashing,” said Christ.
Perhaps more encouragingly, almost a fifth of shareholders voted in favour of resolutions calling on ExxonMobil and Shell to accurately disclose the role of asset transfers in their reported GHG emissions reductions, which would stop them claiming CO2 cuts from divestments.
Large institutional investors have taken divergent approaches to managing the climate risks in their portfolios, with some pension funds divesting fossil fuel holdings. Meanwhile, many have opted to retain their stakes and influence in other carbon-intensive firms as their netzero transition plans evolve.
From 2021 to May this year, 22 investors, including banks and pension funds, have divested from JBS or its subsidiaries, citing its links to biodiversity loss and governance issues, according to the Financial Exclusion Tracker project. JBS is widely regarded as an ESG pariah.
BNEF expects a larger jump in 2023 thanks to even more generous tax credits for carbon capture, utilization and storage (CCUS) included in the US Inflation Reduction Act, and an acceleration in net-zero transitions by European companies. The divestment movement will wane. Julia Attwood, head of sustainable materials.
As is their wont, many companies used the occasion to proclaim updated commitments — the buzzword du la semaine was "net-zero" with Walmart declaring a zero-emissions target by 2040 along with a big clean fleet promise and a pledge to "protect, manage or restore" at least 50 million acres of land and 1 million square miles of ocean by 2030.
The Bonn Climate Conference got under way this week by unveiling a new phase in accountability and transparency of non-state netzero commitments. Race to Zero , previously responsible for non-state campaigns, will partner with UNFCCC in the endeavour. But many investors know they must look beyond their portfolios too.
For sustainable tech to be possible, funders, including investors, philanthropists, and foundations, must develop a two-pronged approach of intentional investments in those leading justice-centered approaches to technological and economic transitions and informed divestments from extractive and fossil-fuel-dependent systems and enterprises.
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