Earth Day Pledges, Scenario Analysis Tools, PRI Accountability, and GFANZ
Here are 5 ESG insights you might have missed this week:
Earth Day Climate Summit Pledges and Quotes-
The White House opened the two-day virtual summit, attended by 40 leaders from around the world, aimed at renewing America's leadership on climate change and rallying other world leaders to set their own ambitious targets.
President Joe Biden pledged to cut U.S. greenhouse gas pollution in half by 2030 at a virtual climate summit Thursday, outlining an aggressive target that would require sweeping changes to America's energy and transportation sectors.
Though other world leaders offered similarly dire assessments of the threat posed by climate change, only a few outlined steps to address the crisis. Canadian Prime Minister Justin Trudeau said his country would reduce carbon pollution by 40% to 45% by 2030, an increase from Canada's previous 30% target. Japanese Prime Minister Yoshihide Suga vowed to reduce emissions 46% below 2013 levels.
The UK government confirmed reports that it plans to slash emissions by 78 per cent by 2035, when compared to levels in 1990. This is the level of reduction that the UK's independent climate advisers say will be needed to reach the legal goal of net-zero emissions by 2050.
Two of the world's biggest emitters – China and India – did not outline new targets.
Boris Johnson, the United Kingdom's prime minister, said "This is not about bunny-hugging. This is about jobs."
"We are all so delighted to have the United States back" South African President Matamela Cyril Ramaphosa
Climate Change Could Cut World Economy by $23 Trillion in 2050, Insurance Giant Warns-
The effects of climate change can be expected to shave 11 percent to 14 percent off global economic output by 2050 compared with growth levels without climate change, according to a report from Swiss Re, one of the world’s largest providers of insurance to other insurance companies.
Poor nations would be particularly hard hit, but few would escape, Swiss Re said. The findings could influence how the industry prices insurance and invests its mammoth portfolios.
If countries succeed at holding average global temperature increases to less than two degrees Celsius above preindustrial levels — the goal set by the 2015 Paris accord, an agreement among nations to fight climate change — economic losses by midcentury would be marginal, according to Swiss Re. The company found that most countries’ economies would be no more than 5 percent smaller than would otherwise be the case.
But current emission levels are far from those targets. Global temperatures are likely to increase as much 2.6 degrees by 2050 based on current trajectories. Swiss Re also modeled the economic impacts of a 3.2-degree increase by 2050, which it described as the “severe case” for temperature gains.
New Financial Alliance for Net Zero Emissions Launches-
The Glasgow Financial Alliance for Net Zero (GFANZ), chaired by Mark Carney, UN Special Envoy on Climate Action and Finance, brings together over 160 firms (together responsible for assets in excess of $70 trillion1) from the leading net zero initiatives across the financial system to accelerate the transition to net-zero emissions by 2050 at the latest.
All GFANZ member alliances must be accredited by the UN Race to Zero campaign. They must use science-based guidelines to reach net-zero emissions, cover all emission scopes, include 2030 interim target setting, and commit to transparent reporting and accounting in line with the UN Race to Zero criteria.
43 banks from 23 countries (with assets of $28.5 trillion) form the Net-Zero Banking Alliance (NZBA) today - which joins GFANZ - with its members committing to align operational and attributable emissions from their portfolios with pathways to net-zero by 2050 or sooner.
PRI Sets Strategic Vision-
The Principles for Responsible Investment (PRI) announced the launch of its new three-year strategy, which is focused on increasing the accountability of its signatory base and driving ESG incorporation and outcomes.
In line with the evolution of responsible investment, as an organisation, the PRI has also come a long way. Starting with a small but dedicated group of signatories in 2006, we’ve grown to a diverse membership of nearly 4,000 global signatories representing more than half of the world’s institutionally managed funds.
Importantly, the new strategy maintains an inclusive approach; the PRI will remain a ‘big tent’ organisation at its heart, open to all potential signatories.
In remaining a ‘big tent’ organisation, increasing the accountability of our signatory base will be key to tackling risks of greenwashing. We will continue to move the needle on what it means to be a signatory, celebrating leadership and raising the bar both at the bottom and the top. We will strengthen our minimum requirements and complete the reform of the reporting and assessment framework, aiming to improve practice over time. This year we’re piloting the new reporting framework and are encouraging signatory feedback. This will be reviewed by the board, who will formally report back to signatories on the outcomes of the pilot review before the 2022 reporting period.
Banks in Norway Offered Free Climate-Risk Tool by Government-
Financial institutions in Norway are being offered help from the government to measure the climate risk in investment portfolios.
Norway is working with the non-profit think tank, 2° Investing Initiative, which developed the tool being offered to the financial industry. Called PACTA, it’s designed to measure climate risks based on the Paris Agreement, according to a statement. Norway’s financial institutions will be able to access it for free, and the results will be anonymous.
2° Investing Initiative says its tool allows companies to align portfolios with different climate scenarios and to analyze specific companies. More than 1,500 financial institutions have used it since a version for banks was introduced in September, according to its website.
One more thing: A hot list of climate scientists?- Since at the start of every disaster movie is a scientist being ignored, Reuters decided to create The Reuters Hot List of the world's top 1,000 climate scientists.
Find the list here- https://www.reuters.com/investigates/section/climate-change-scientists/
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