Gustavo Bernal Torres
SEC Rules, CPP, Real Estate, Externalities, and Nuclear Fusion
Here are 5 ESG insights you might have missed this week:
1. SEC Commissioners at Odds Over Climate Disclosures-
At issue is how much environmental data companies can be forced to disclose before regulators put themselves in legal jeopardy.
The regulation is a top goal for the White House, and SEC Chair Gary Gensler had pledged to unveil a proposal by the end of last year. Now, the timeline has likely slipped to March or even later, people familiar with the matter said.
The conflict, which pits Gensler against his two fellow Democrats on the commission, is largely over how much information the agency can force companies to divulge without losing an almost certain legal challenge brought by Washington’s business lobby or a Republican-led state.
Link to Source: https://www.bloomberg.com/news/articles/2022-02-08/sec-bogs-down-on-climate-rule-saddling-biden-team-with-new-woe
2. Major Breakthrough on Nuclear Fusion Energy-
European scientists say they have made a major breakthrough in their quest to develop practical nuclear fusion - the energy process that powers the stars.
Fusion works on the principle that energy can be released by forcing together atomic nuclei rather than by splitting them, as in the case of the fission reactions that drive existing nuclear power stations.
The fusion announcement is great news but sadly it won't help in our battle to lessen the effects of climate change. There's huge uncertainty about when fusion power will be ready for commercialisation. One estimate suggests maybe 20 years. Then fusion would need to scale up, which would mean a delay of perhaps another few decades.
Link to Source: https://www.bbc.com/news/science-environment-60312633
3. CPP's Path to Net Zero-
We commit our portfolio and operations to being net zero of GHG emissions across all scopes by 2050.
We are holding ourselves accountable to our net-zero commitment by taking the following actions. We will evolve and expand our plans over time.
We will continue to invest and exert our influence in the whole economy transition as active investors, rather than through blanket divestment.
We will achieve carbon neutrality for our internal operations by the end of FY23.
We expect our $67 billion investment in green and transition assets will increase to at least $130 billion by 2030.
We will build on our new decarbonization investment approach that seeks attractive returns from enabling emissions reduction and business transformation in high-emitting sectors.
Link to Source: https://www.cppinvestments.com/the-fund/sustainable-investing/investing-in-the-path-to-net-zero
4. Climate Risk and the Opportunity for Real Estate-
Real-estate leaders should revalue assets, decarbonize, and create new business opportunities. Here’s how.
The combination of this economic transition and the physical risks of climate change has created a significant risk of mispricing real estate across markets and asset classes.
For example, a major North American bank conducted analysis that found dozens of assets in its real-estate portfolio that would likely be exposed to significant devaluations within the next ten years due to factors including increased rates of flooding and job losses due to the climate transition.
Link to Source: https://www.mckinsey.com/industries/real-estate/our-insights/climate-risk-and-the-opportunity-for-real-estate
5. Positive Externalities: Carrots As Well As Sticks For The Carbon Era-
Putting a price on carbon is only the beginning.
With prices on Europe’s emissions trading scheme topping $100 a ton and rising on other markets as well, the cost of carbon emissions and the value of avoiding or sequestering it are affecting corporate balance sheets, technology investments, financing for conservation and agriculture, and more.
A model for “carbon quantitative easing” developed by Australian engineer Delton Chen proposes to finance global decarbonization by valuing – and rewarding – the “positive externalities” of emissions reduction without exacting such a cost on the economy, indeed without the public bearing the cost at all.
Link to Source: https://impactalpha.com/positive-externalities-carrots-as-well-as-sticks-for-the-carbon-era/
One more thing: The Top 10 Countries by Energy Transition Investment. An infographic by Visual Capitalist using Bloomberg NEF data.
Find the infographic here: https://www.visualcapitalist.com/ranked-the-top-10-countries-by-energy-transition-investment/
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