Global Risks, Taxonomy Debates, Energy Data, and NASA
Here are 5 ESG insights you might have missed this week:
1. WEF Global Risks Report 2022-
Environmental risks dominate the World Economic Forum’s Global Risks Report 2022 - for both the short and long term.
Two years on from the first COVID-19 cases, countries are reporting record infections due to the Omicron variant, but the pandemic pales compared to the long-term risks the world faces from climate change.
This is the sobering view of nearly 1,000 risk experts and global leaders in business, government and civil society in the World Economic Forum’s Global Risks Report 2022.
Climate action failure, extreme weather events, and biodiversity loss and ecosystem collapse were considered the top three of the top 10 global risks by severity over the next 10 years in the annual Global Risks Perception Survey (GRPS).
2. EU Green Taxonomy Scrutinized Over Inclusion of Nuclear, Gas-
Plans by the European Union to classify nuclear power and natural gas as "green" investments have divided energy experts, environmental groups and EU members.
Late on Dec. 31, the European Commission confirmed both nuclear and gas would be included in the long-awaited draft of its sustainable finance legislation, a checklist for climate-friendly investments aimed at preventing greenwashing and supporting the EU's pursuit of net-zero by 2050.
While the taxonomy is a guidebook, investments in gas and nuclear would have remained possible regardless of their inclusion, and projects with profitable business models would have continued to receive funding. Conditions for gas are stricter than for nuclear, although it remains to be seen how they are implemented in member states.
Nuclear projects permitted until 2045 will be classified as green, on the condition that countries can safely dispose of the toxic waste and do not create significant harm to the environment. Meanwhile, gas is only included until 2030 and emissions thresholds are also in place.
3. IIGCC Publishes Open Letter Calling For Gas To Be Excluded From The EU Taxonomy-
Taxonomy is critical for investors trying to align their portfolios and investments with net zero emissions.
The Institutional Investors Group on Climate Change (IIGCC) has published an open letter to EU Member State representatives and MEPs, calling for gas to be excluded from the EU Taxonomy.
IIGCC is the leading European membership body enabling the European investment community in driving significant and real progress by 2030 towards a net zero and resilient future. IIGCC’s 370+ members, representing €50 trillion AUM, are in a position to catalyse real world change through their capital allocation decisions, stewardship and engagement with companies and the wider market, as well as through their policy advocacy.
4. The IEA Wants To Make Their Data Available To The Public – It Is On Governments To Make It Happen-
We are just one step away from unlocking the world’s energy data for everyone. This would be a massive achievement for progress on energy and climate.
To tackle climate change we need good data. This data exists; it is published by the International Energy Agency (IEA). But despite being an institution that is largely publicly funded, most IEA data is locked behind paywalls.
Anyone who currently wants access to this energy data has to pay hundreds or thousands of dollars to access one dataset. The consequence is that most people in the world, especially also in poorer countries, do not have access to the energy data they need.
Link to Source: https://ourworldindata.org/free-data-iea
5. Supply Chains as a Game-Changer in the Fight Against Climate Change-
Supply-chain decarbonization will be a ‘game changer’ for the impact of corporate climate action. Addressing Scope 3 emissions is fundamental for companies to realize credible climate change commitments.
In most supply chains, the costs of getting to net zero (the state in which as much carbon is absorbed as is released into the atmosphere) are surprisingly low. Even full decarbonization would result in end consumer price increases of only 1% to 4% in the medium term—less than $1 on a $40 pair of jeans.
Eight global supply chains account for more than 50% of annual greenhouse gas emissions. Only a small proportion of these emissions are produced during final manufacturing. Most are embedded in the supply chain—in base materials, agriculture, and the freight transport needed to move goods around the world.
One more thing: NASA released its annual assessment of global temperatures. 2021 was 1.1 degrees Celsius higher than the historic average.
Find the data here: https://www.giss.nasa.gov/research/news/20220113/
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