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Strandedassets Speaking later with ESG Investor , Lord Deben stressed that strandedassets – when investment assets become liabilities – will present a significant challenge for investors in the transition to a low-carbon economy. “As It’ll be a mess.”
There is also the risk that fossil fuel infrastructure is retired before the end of its economic lifetime and becomes a strandedasset—a liability taxpayers would likely pay for.” “Building new natural gas-fired power plants means locking in emissions—and costs—for many years to come.
Broken Window Economics: an event that seems to be beneficial for those immediately involved can have negative economic consequences for many others. Originally posted here. The US and most countries have energy economies based on fossil fuels, plus contributions from nuclear, hydro, geothermal and biomass.
Speaking at ESG Investors Nature Data for Institutional Investors event in December, she stressed that the plastic in play today cannot be the plastic in 10 to 30 years time, because the chemical additives involved render many products harmful to human health and the environment.
Extreme weather events increasingly point to a future that will be more dangerous than the climate that has so far underpinned human progress. For decades, scientists have studied the risks of increasing greenhouse gas (GHG) emissions on the earth’s climate. The signals of early-stage climate change are becoming unmistakably visible.
The evolving climate drives physical risks—damaged or strandedassets and business-interruption costs from severe weather events. However, approximating transition and location risks has to be done with great care, particularly as we consider tipping points and cascading events.
The science shows roughly half the world’s population likely to be exposed to the impacts of climate change, and once-in-a-century climate disasters on track to become annual events. Already, “widespread and rapid changes in the atmosphere, ocean, cryosphere , and biosphere have occurred,” the report says.
Financial institutions urged to mitigate risks posed by water-strandingevents to portfolios and loan books. Sixty-nine percent of listed equities reporting via CDP’s platform stated they are exposed to water risks that could “generate a substantive change in their business”, said CDP’s report on how water issues are strandingassets.
The Real World Climate Scenarios initiative aims to address the issue by developing more relevant scenarios that integrate the complex the overlapping impacts such as geopolitical, extreme weather events, migration and strandedassets, among others.
billion to acquire 335 million barrels of oil in Texas and Mexico,” said Patrick DeRochie, Senior Manager of Shift. “The CPPIB is risking our national retirement fund on strandedassets and investing in a future of ever-worsening climate disaster.” The post CAFA to Catapult Canada to Climate Leader appeared first on ESG Investor.
When asked why economists are failing to re-evaluate their approach to modelling climate-related risks, Philipponnat says that it’s due to a mixture of difficulties in breaking old habits and uncertainty over so-called ‘Green Swan’ events – a concept used to highly impactful and potentially financial disruptive events related to climate change (..)
These were highlighted at last October’s PRI in Person event by Jan Rasmussen, Head of ESG and Sustainability at PensionDanmark. At least part of the rationale is the risk of breaching fiduciary duty by potentially landing clients with strandedassets and higher costs due to the persistence of policies that overshoot 1.5°C.
“Physical risk represents an increasingly severe risk for investors, with the escalating climate and natural capital crisis leading to elevated risks of damage from extreme weather events, supply chain disruptions, strandedassets, productivity impacts, insurance unaffordability, just transition impacts, and potential economic instability,” said Robyn (..)
But policy action is slow and uneven: while the first UN water conference in 50 years wrought a long list of commitments (despite a lack of engagement at senior governmental levels) under the Water Action Agenda , these can be overtaken or offset by events; albeit typically ones less dramatic than those seen in Japan this week.
Increasing gas infrastructure must be avoided to avert dangerous climate impacts and strandedassets.”. “As coal retires, political leaders and investors seem to be turning to fossil gas as a ‘diet’ alternative to coal,” ClientEarth’s Diamantopoulou says.
Nevertheless, MSCI will be present at the event as the world takes stock of climate action progress and assesses the policy solutions and broader innovations for addressing climate-related issues. Sultan Al Jaber is CEO of the Abu Dhabi National Oil company – the biggest oil producer in the country and the twelfth largest globally.
Recent events are forcing us to consider new economic paradigms. The repercussions of these dramatic events are reverberating around the world and calling us to confront deeply entrenched weaknesses in our economic systems. It does this by reforming markets to address real needs while factoring costs and stakeholder concerns.
But if you talk extreme events, droughts, heat waves, people across political spectrums agree it is an issue. Countries that have fossil fuel assets, they need to understand that the demand is going to decrease. So they either start the transition now with their economic system, or they have strandedassets.
It makes no long-term sense to continue pumping money into an asset that is already destined to eventually have no value — a strandedasset. For more information on COP26, including events listings, click here > The post COP26 Live Blog: All in for 1.5ºC appeared first on We Mean Business Coalition.
The courts, investors , banks and insurers are all making this point and this compelling argument is buoyed by increasing examples of strandedassets. A total of 208 educational institutions have divested their assets from fossil fuels. It is fitting that educational institutions are divesting in droves.
These events illustrate the dangers of spills and more specifically the dangers of transporting fossil fuels. The demise of the KXL strandedassets and declining financial support foreshadows Big Oil’s demise. Thousands of spills occur each year all around the world and southern California is no exception.
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