The Carbon Clean 200
Posted August 15, 2016
Investing in a clean energy future
Over the past five years, and growing dramatically leading up to and post-Paris COP 21, a movement of institutional and individual investors representing more than $3.4tn in assets under management have divested a portion of their fossil fuel investments and committed to divesting the balance in the next five years. The corollary of divesting fossil fuels is re-investing in the clean energy future. As an invitation to a larger discussion of how we can invest in a clean energy future, we created the Carbon Clean 200 (Clean200TM) – a list of the 200 largest companies worldwide ranked by their total clean energy revenues.Continue Reading...
Posted July 19, 2016
Improving sustainability disclosure requirements
Considerable effort goes into sustainability reporting, but to what end? On the critical issue of climate change, we now have a potentially game-changing answer from finance ministers: to protect the financial system.
Last year, G20 finance ministers asked the Financial Stability Board (FSB) to consider how the financial sector could take account of the risks climate change poses to our financial system. The upshot is an FSB climate task force report due later this year that will recommend consistent climate-related financial risk disclosures. The recommendations will penetrate the financial mainstream standard-setters in a way that previous efforts by NGOs could not. The G20’s Green Finance Study Group, created under China’s presidency, provides a valuable forum for such recommendations to be taken up.Continue Reading...
Mind the gap
Posted June 10, 2016
Building an energy bridge to the future
Kermit the Frog famously said it’s not easy being green. Today, it might be easier being green than being a CEO in the oil business.
Fifty-two oil companies have already filed for bankruptcy this year, and over one-third of the world’s biggest oil and gas companies could end up bankrupt in 2016 under stress from crushing debt loads (over US$150 billion) and lacklustre cash flows depressed by low oil prices, according to a recent study by Deloitte.Continue Reading...
Posted May 27, 2016
When it comes to tackling climate change risks, Canadian pension funds are dangerously out of touch.
Dear Mr. King:
As representatives of Labour in the House of Commons, may we ask whether it is your intention to introduce at this session legislation with regard to (a) Provision for the unemployed; (b) Old Age Pensions. We are venturing to send a similar inquiry to the leader of the opposition.
Ninety years ago, my great grandfather A.A. Heaps and J.S. Woodsworth, the two lone labour members of Parliament, sent the above now famous letter to Prime Minister Mackenzie King. King was sympathetic philosophically to old age pensions, and in a receptive mood pragmatically given that he needed the support of Heaps and Woodsworth in the minority parliament. A deal was struck. When King’s government won a strong mandate in the 1926 election following the bizarre King-Byng affair, he made good on his promise by introducing legislation that became the Old Age Pensions Act in 1927. It entitled British subjects aged 70 or over who had lived in Canada for 20 years to a maximum of $20 per month.Continue Reading...
Posted April 7, 2016
The intersection of fiduciary duty and climate change.
Many investors today are trying to understand what climate change implies for their portfolios. Does market efficiency indicate they should hold market cap weighted indexes, or do expected impacts on valuations suggest another course of action?
Meanwhile, stakeholders are raising questions and putting pressure on asset owners. Some are motivated by concerns about ethical issues and consistency with mission; others are purely focused on risk and expected returns.
There is clearly a moral issue to consider in owning a public company that, for example, spreads misinformation and otherwise deliberately impedes public policy for private gain, but how far does that moral concern spread? Only a few institutions, such as the Rockefeller Brothers Fund, have announced divestment from all fossil fuels on moral grounds.Continue Reading...