Climate Risk Toolbox, Direct Air Capture, Blockchain, Insurers, and SSPs
Here are 5 ESG insights you might have missed this week:
1. UNEP FI's 2022 Climate Risk Tool Landscape-
A guide to the fast-changing landscape of climate tools and analytics.
Given the growing number of climate risk tools and providers, UNEP FI has developed resources to inform financial institutions on the structure, coverage, and methodologies of commonly used tools. This report includes detailed case studies from 15 financial institutions.
The report gives financial institutions insights into the process, challenges, and outputs related to using selected climate risk tools; makes suggestions to tool providers on where their services could benefit from additional components; and highlights to supervisory authorities and regulators current tool applicability, possible gaps and ways forward in the near future.
Link to Source: https://www.unepfi.org/publications/the-climate-risk-tool-landscape-2022-supplement/
2. IEA's Direct Air Capture Report-
Direct air capture plays an important and growing role in net-zero pathways.
In the IEA Net Zero Emissions by 2050 Scenario, direct air capture technologies capture more than 85 Mt of CO2 in 2030 and around 980 MtCO2 in 2050, requiring a large and accelerated scale-up from almost 0.01 MtCO2 today. Currently 18 direct air capture facilities are operating in Canada, Europe and the United States. The first large-scale direct air capture plant of up to 1 MtCO2/year is in advanced development and is expected to be operating in the United States by the mid-2020s.
This report explores the growing momentum behind direct air capture, together with the opportunities and challenges for scaling up the deployment of direct air capture technologies consistent with net zero goals. It considers the current status of these technologies, their potential for cost reductions, their future energy needs, and the optimal locations for direct air capture facilities. Finally, the report identifies the key drivers for direct air capture investment and priorities for policy action.
Link to Source: https://www.iea.org/reports/direct-air-capture-3
3. You Are Not Doing ESG Investing-
Morgan Stanley blog post discussing their view on ESG, sustainable investing and impact investing.
In our view, ESG is not about doing good, nor is it an investment strategy in itself. ESG is simply a framework that can and, we believe, should be applied to all investment diligence processes. ESG diligence aims to identify and mitigate economic, social and governance risks that could weaken or de-rail an investment.
Investors who do not follow a process that would enable them to identify this company’s environmental shortcomings before they decide to commit their capital are likely to suffer alongside it. One does not have to be a “do-gooder” to see how weak ESG can materially affect investment returns.
Link to Source: https://www.morganstanley.com/im/en-ie/intermediary-investor/insights/articles/you-are-not-doing-esg-investing.html
4. How Blockchain Technology is Transforming Climate Action-
It’s time to unite the blockchain community with the climate change community in some concrete and scalable investments into DLT and climate action.
Although the digital asset industry has been slammed for its high energy consumption, such an accusation is misleading. It is essential to differentiate between cryptocurrencies and underlying blockchain platforms that are energy efficient and underpin climate initiatives. Few climate initiatives leverage cryptocurrencies.
The renewed interest in carbon reporting, sequestration, and capture-leveraging voluntary carbon markets has opened the door for green digital asset solutions, which can be tokenized and used as commodities in a market system — e.g., green utility tokens, a reward for lowering carbon emissions; green asset tokens, tokenized carbon credit or biodiversity off-sets; green crypto, programmed only to be spent on green products; and green security token offering issuance platforms designed to enable green proof of impact reporting.
Link to Source: https://cointelegraph.com/news/how-blockchain-technology-is-transforming-climate-action
5. Goldman Sachs' Insurance Survey 2022-
Eight-five percent of insurers in the Americas now consider environmental, social and governance factors when investing compared to just 15% in 2017.
The eleventh annual report released by Goldman Sachs Insurance Asset Management incorporates the views of 328 Chief Investment Officers (CIOs) and Chief Financial Officers (CFOs) representing over $13 trillion in global balance sheet assets, which accounts for approximately half of the global insurance industry.
For the sixth consecutive year, insurers indicated that Environmental, Social and Governance (ESG) factors and impact investing are primary investment considerations. EMEA continues to lead as the region with the highest percentage of respondents noting ESG as a primary consideration, as it has since 2018.
Link to Source: https://www.gsam.com/content/gsam/global/en/market-insights/gsam-insights/2022/Insurance_Survey_2022.html
One more thing: A Climate Scenario Explorer from Our World in Data explores the assumptions of global shared socioeconomic pathways (SSPs) used in IPCC scenarios.
Find the model here: https://ourworldindata.org/explorers/ipcc-scenarios
Do share your comments or the content you think our community should not miss!