About the Climate Crisis — The Hoax? It’s On Us!

Another in the About the Climate Change Crisis series

November 8, 2019

By Larry Checco

The U.S. National Park Service markers show that in the 1940s and 1950s, about the time I was born, a glacier — Exit Glacier, just outside of Seward, Alaska — covered almost an entire valley in hundreds of feet, and megatons of ice and snow.

Today, Exit is melting at the rate of one-foot-per-day and receding back into the Harding Icefield from whence it came …millennia ago.

If you think that climate change is a hoax, then I suggest you visit Alaska.

My wife Laurie and I did recently and were in awe of the variety of its wildlife, the grandeur and majesty of its mountains and landscapes, the diversity and friendliness of its indigenous and transplanted inhabitants.
And we were greatly saddened by the dangers they all face.

Fact is, 2019 has been the driest and hottest year in Alaska’s recorded history. Anchorage, where half the state’s nearly 700,000 people reside, recorded a record-breaking 90 degrees F this past July 4th holiday.

Two-and-a-half times larger than the State of Texas, Alaska encompasses some three million lakes, 3,000 rivers, 1,800 islands, and 100,000 glaciers. You’ve got to experience it to believe it. And best to do it sooner rather than later.

It seems everything in Alaska is being affected by global warming— glaciers, vegetation, fisheries, wildlife, as well as native inhabitants who are fearful of losing their subsistence way of life, which they so cherish.

The heat and dryness accounted for more than 150 forest fires throughout the state during our two-week visit. One fire crossed the only road from Homer to Anchorage and forced our tour bus to follow an official pilot car through the smoke and small flame breakouts.

Alaska’s permafrost is thawing, which is buckling its roads (and Alaska doesn’t have many) and sinking some of its villages, making them uninhabitable.

Our tour of Denali was cut short because a rockslide the previous day took out some of the road.

None of this put us in any real danger, but they were real-life demonstrations of the force and influence of Mother Nature. And maybe, just maybe, we humans have something to do with it.

We saw in the wild, and from the safety of our tour bus, plenty of brown (grizzly) and black bears, moose, elk, caribou, big-horned sheep and more, and were told by our guide that many of their migration patterns have changed because of the increase in temperature.

We did not get to Alaska’s Arctic Circle region, where polar bears struggle to survive, but we were informed that polar bear specialists almost unanimously agree that predicted declines in summer sea ice due to rising CO2 emissions from fossil fuel use are now the biggest threat to polar bears.

Yet, in addition to rolling back some of our most important environmental regulations–including those related to clear air and clean water–the Trump Administration recently opened Alaska’s remote Arctic National Wildlife Refuge (ANWR) to oil and natural gas drilling, ending more than four decades of heated debate on the matter, and placing a large swath of Alaska’s pristine landscape at risk.

Some species live and learn, meaning they adapt to changing environments so as to live another day. Other species just live. I fear we homo sapiens fall into the latter category.

But there may be hope for us yet. Our trip to Alaska also exposed my wife and me to the wisdom of those who came before.

Ten Universal Values

The following Ten Universal Values are from the Alaska Native Knowledge Network, which includes Aleuts, Athabascans, Cup’ik, Tlingits, and several other Alaskan native tribes.

I think these principles are worth incorporating into our techno-driven, often mind-numbing lives:Show respect to others: Each person has a special gift.

  • Share what you have: Giving makes you richer.
  • Know who you are: You are a reflection of your family.
  • Accept what life brings: You cannot control many things.
  • Have patience: Some things cannot be rushed.
  • Live carefully: What you do will come back to you.
  • Take care of others: You cannot live without them.
  • Honor your elders: They show you the way in life.
  • Pray for guidance: Many things are not known.
  • See connections: All things are related.

If we can bring find the ways for ourselves to abide by these values there still may be time to turn things around. Let’s hope so.

There is no Planet B.

Contents Copyright © 2019 by Larry Checco – All Rights Reserved

Sustainable & Responsible Investment and Asset Manager Perspectives – Today, and Quo Vadis Over the Coming Years…

by Hank Boerner – Chair & Chief Strategist, G&A Institute

The terms of reference are familiar now to many more institutional owners and their internal and external managers (as well as to a growing number of retail investors who are their clients and beneficiaries).

This movement began as “socially responsible investing” (“SRI”) which evolved over time to “sustainable & responsible investing” and on to “sustainable & responsible & impact investing” in the 21st Century.

In recent months we’re increasingly hearing and using the simplified term “sustainable investing” and “ESG investing”.

The progress is welcomed!  Our esteemed colleague Erika Karp at Cornerstone Capital Group here in New York (she was formerly managing director/head of Global Sector Research at UBS and is one of the founders of SASB) has been saying for some time at public conferences that one day we’ll just be talking about “investing” — and it will all be what today we’re describing as “sustainable investing”. 

So how do investors – the world’s trusted fiduciaries and intermediaries – feel about sustainable investing? 

According to Schroder’s “Institutional Investor Study 2019 – Geopolitics and Investor Expectations” – belief is very high and the proportion of investors worldwide who do not believe in sustainable / ESG investing fell to just 11 percent (from 20% in 2017); the decline was most notable in Latin America (falling to 12% from 29%).

The survey respondents:  pension funds, insurance companies, sovereign wealth funds, endowments, foundations – 650 in total, managing US$25 trillion in assets from 20 global locations.  According to Schroder’s survey of these entities, the “cynics in the asset management sector” fell by 50% in just three years of the survey effort.

Geographic spread of responses:  27%, North America; 38%, Europe; 27%, Asia-Pacific; Latin America, 8%.

Key numbers:  52 percent cite macro and geopolitical risks as greatest concern; 52% look to increase their exposure to private assets; 53% need customized solutions to meet their needs; 67% believe annual total returns will remain above 5% over the next five years; and, 75% believe sustainability will play a more important role over the next five years.

This is an important point to underscore:  Three quarters of respondents expect sustainable investing to grow in importance over the next five years (up from the base of 67% who thought so in the 2017 survey effort). 

Alas, there are still asset managers doubting the value of sustainable investing – almost one-in-five (19%) of investors responding said they do not invest in sustainable investing funds.

Sixty-seven percent of North American survey respondents said greater transparency and better ESG data and benchmarks were important.  

At G&A Institute we’re hearing this argument every day among our capital market colleagues and this is why the major ESG ratings agencies and ESG information providers – such as MSCI, Sustainalytics, Bloomberg, Thomson Reuters/Refinitiv, Vigeo Eiris and ISS — have been strengthening their systems and enhancing their methodologies to meet increasing investor-clients’ demands. 

We have been successfully working with our corporate sector clients in helping them better manage their ESG data profiles and related information in the effort to improve the information available to the rating agencies’ for rankings and data sets in a more efficient and effective manner. And then from the ratings agencies on to their investor clients.

These efforts help the corporate issuer to better represent themselves as a sustainable investment candidate and to make sure they do not get passed over by the dramatically-growing pool of asset managers now focused on corporate ESG as key factors in financial analysis and portfolio management. 

The Schroder’s results as revealed in their latest investor survey are good news all around, we would say!

Schroder’s Global is a 200-year old investment management firm working with institutions, intermediaries and individuals, managing $500 billion-plus in assets for 5,000 people on all continents.

This week’s Top Story is a review of the Schroder’s report for asset managers as published for the readers of Chief Investment Officer.  Information about the Schroder’s report is also available to you here and here.

Each week as part of our Highlights content we bring you news of ESG / Sustainable & Responsible Investment from global sources.

Adding Considerable Value to This Discussion:
Business Insider shared the results of the Merrill Lynch – Bank of America survey of investors. These are the top 10 reasons investors and companies should care about ESG investing. You can read highlights here.

Top Stories

Sustainable Investment Skeptics are Becoming Believers
Source: Chief Investment Officer – The doubters of sustainable investing are rapidly dwindling in numbers, according to a study by asset manager Schroders, which found that cynics of the sector have fallen by nearly 50% in just three years.

The Climate Change Crisis – “Covering Climate Now” Can Help to Shape The Public Dialogue

Introducing a new series of perspectives from G&A Institute…

by Hank Boerner – Chair & Chief Strategist, G&A Institute

We are bringing you a series of commentaries on the climate change crisis to share news, research results and perspectives to you in an organized way.

Fact:  We are facing dire outcomes for humanity and planet if we don’t move faster with strategies and actions to address the challenges of climate change.

We’re calling our shared perspectives “About the Climate Change Crisis”.

Global Warming.  Droughts. SuperStorms. Floods.  Rising Seas. Outbreaks of forest fires.  Loss of Species.  Degradation of farmlands.  Food Shortages. 

These should be defined as crisis situations, no?

Despite these dangers, the public dialogue on “climate change” issues in the United States reflects in some ways the divide in public opinion on critical issues facing the American public, government, business, the financial sector.

Climate changing? Yes and No. Human activities  causing the changes? Yes and No.
Should we be worried? Yes and No.

And so it goes.

The United States of America participated in the 2015 Paris (COP 21) meetings and signed on to the Paris Agreement along with almost 200 other nations, with President Barack Obama becoming a signatory in April 2016 and in September 2016 by presidential action presented the necessary documents to the U.N. General Secretary Ban Ki-moon.

The People’s Republic of China also presented the documents, a collaboration negotiated by President Obama. (This step by Barack Obama avoided presenting what amounted to an international treaty agreement to the U.S. Senate for ratification, required by the U.S. Constitution – approval assuredly would not happen in today’s political environment.)

The U.S. also contributed US$3 billion to the Green Climate Fund.

And so also by executive order, his successor in the Oval Office, President Donald Trump in March 2017 with swipe of a pen signaled the start of the complex and lengthy process of removing the U.S. from the historic Paris Agreement to limit the damage of global warming.

By his side: EPA Administrator Scott Pruitt (since gone from the environmental agency).

The backdrop: scientific reports that 2016 was the warmest year on record to date!

And credible scientists telling us that we have a decade at most to get control of climate change issues!

Prior to becoming president Donald Trump declared among other things that climate change was a Chinese hoax. (One of his positioning comments on the subject: “The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive” – November 6, 2012 tweet.)

But climate change is real – and we face a climate crisis in 2019!

What Did the Current U.S.A. Leader Do?

President Trump on November 4, 2019 officially notified the international community – and specifically the community of the United Nations – that the process of withdrawal was beginning and would be complete one year from now — the day before Election Day 2020.

Note that in November 2018 the government of the United States of America published the fourth climate change assessment by key U.S. government agencies: the “Climate Science Special Report” was prepared by the U.S. Global Change Research Program of the Federal government. (We’ve including an overview in this series.)

The contents are of significance if you are an investor, a company executive or board member, an issue advocate, public sector officer holder or civic leader, consumer — or other type of stakeholder.

There are volumes of data and descriptions in the report presenting a range of “high probability” climate change outcomes in this the 21st Century.

Adding credibility to the Federal government’s report to the nation and the world:  11, 258 scientists in 153 countries from a broad range of disciplines (biosciences, ecology, etc.) published a report in the Bioscience Journal (November 2018) – “World Scientists’ Warning of a Climate Emergency” – setting out a range of policies and actions that could be (adopted, taken) to address the emergency.

Good News About News Media

Good news from the purveyors of news to millions of people: the publishers of Columbia Journalism Review and The Nation created the “Covering Climate Now” (the initiative was launched in April 2019) intended to strengthen the media’s focus on the climate emergency.  The lead media partner is The Guardian.

The founders are now joined by cooperating media that today reaches more than one billion people worldwide. Representatives of 350 newsrooms in 32 countries have joined to ramp up coverage of the climate crisis and possible solutions. The campaign is designed to strengthen the media’s focus on the climate emergency.

Combined, the cooperating media reach more than one billion people worldwide.

Participants in the campaign include Bloomberg, Agence France-Press, The Guardian, The Minneapolis Star Tribune, The New Jersey Star Ledger, The Oklahoman, Corporate Knights, The Philadelphia Inquirer, The Seattle Times, La Republica (Italy), The Hindustan Times (India), Asahi Shimbun (Japan), La Razon (Spain), Greenbiz.com, Huffpost, Mother Jones, Rolling Stone, Scientific American, Teen Vogue, Vanity Fair, and many many other communications platforms.

Partner organizations in the campaign include wire services, news agencies, newspapers, magazines, digital news sites, journals, radio, podcasters, and institutions like Princeton University and Yale Climate Change & Health Initiative.

Could it be that the press, especially the U.S. press, can turn the tide of public opinion (with the naysayers and public doubters) with increasing and accurate coverage of the climate story?

Is the “media awake”?   That question was posed and answered in September 2019 by Mark Hertsgaard (The Nation) and Kyle Pope (CJR editor) addressing the  initiative.

Their comments are here for you: https://www.cjr.org/covering_climate_now/climate-crisis-new-beginning.php

Is this where you get your news a participant? Check the list here: https://www.coveringclimatenow.org/partners

Participating publisher Corporate Knights points out to us that “climate change” was suggested as a term to use by pollster Frank Luntz to President George W. Bush instead of the more frightening term, “global warming”. Let’s not scare the people. Gently move them forward.

We do need to return to the more accurate and realistic title of global warming. The threats posed by warming of land and sea are visible to us – every day now!

But, OK, if climate change is the popular branding, then let’s talk about the climate change crisis or emergency (so says the media collaboration).

We’re presenting this series of climate change crisis commentaries to help to tell the story of the climate change crisis or emergency.

The title is About the Climate Crisis, following the lead of the collaborating journalists.

The Good News

The good news as background to the above is that cities and states are “still in” and implementing strategies and actions to follow the Paris Accord in their jurisdictions. 

Corporations participated in the Conference of Parties (COP) meetings and especially the Paris COP 21 meetings.

Companies have been launching and reporting on their sustainability journey — actively addressing climate change issues — and investors are building more climate change considerations into their financial analysis and portfolio management. 

Combined these actions are keeping the United States in the game and helping to maintain the nation’s edge in climate change matters. Of course, we can ALL do more!

Let us know how we are doing. And please do suggest to us issues and topics and developments that might be of interest to you and other readers of the G&A Institute’s Sustainability Update blog.

Please do Stay Tuned to our ongoing blog commentaries.

It’s “Official” Now: The United States of America Is Withdrawing From the Historic Paris Accord on Climate Change With Notice to the UN

by Hank Boerner – Chair & Chief Strategist, G&A Institute

Another in the About the Climate Change Crisis series

The big news of this week:  The USA is now “officially” withdrawing from the Paris Accord on Climate Change.  The one-year countdown to “USA out” is now underway.

In 2015 as the representatives of almost all of the nations of the world gathered in Paris, France for “COP 21” (or “the UN Climate Change Forum“, the 21st yearly meeting of the Conference of Parties), an important agreement was reached:  the 196 nations would work together to attempt to limit global warming to below 2-degrees Celsius (3.5-degrees Fahrenheit) – or at least to not above 1.5C (2.7F).

The goals are temperatures above pre-Industrial Age levels; scientists say we have already warmed 1-degreeC (or 1.8F). 

The Washington Post in reporting the administration’s now-official action on the Accord says that 1/10th of the globe is already at more than 2-degrees Celsius when you compare the last five years with pre-industrial levels.

That means all of the nations of the world have to work independently and collectively to limit carbon emissions to zero level between years 2030 and 2050. This would be done in part through “Intended Nationally Determined Contributions” (INDCs) enacted in each signatory country.

Comparing the year 2030 (intended results) with year emissions levels of a quarter-century ago would mean cutting emissions by at least 40 percent – a Herculean effort for many nations, and especially for the big “emitters” of the industrial world – the USA, China, India and European states. 

The United States of America had numerous representatives at the COP 21 meetings – including members of the corporate community; according to a letter to the White House from US Senators who had attended Paris, today, 900 businesses continue to support the Paris Agreement — including 20 of the Fortune 500s. 

President Barack Obama committed the USA to the Paris Agreement / or Accord by executive order and in November 2016 (with other almost 200 other nations) the climate agreement was confirmed by the various state representatives in Paris.

In June 2017, six months into the succeeding administration, President Trump announced plans to withdraw from the Accord because “…it disadvantages the United States to the exclusive benefit of other countries.”  (More recently he described the agreement as a “total disaster” for the U.S.)

And so by various means and executive order, President Obama’s successor (President Donald Trump) “officially” began the withdrawal of the USA this week with notice to the United Nations.

The ending of US participation in the global agreement will be in November 2020 – one day after Election Day next year.  Climate change issues including the status of the USA in the Paris Accord are today political issues in the context of elections at all levels of government including the presidency of the U.S.

Of course, numerous critics sounded alarm and anger at the president’s action (a campaign promise in 2016 and addressed by President Trump since taking office). 

Susan Biniaz, lecturer at Yale University, for example, told The Washington Post: “While the world will not be surprised, it’s a sad reminder of where the world’s former leader on climate change now stands…the decision of two years ago [two withdraw] is now even more grotesque…”

Andrew Steer, leader of the World Resources Institute, said the move “…fails people in the United States who will lose out on clean energy jobs as other nations grab the competitive and technological advances that the low-carbon future offers.”

A successor in the White House in 2021 could begin the process of rejoining the Paris Accord — depending on the election outcome next November. 

And the pledge to do so could be “immediate” while the formal rejoining is now a more complex process.  Stay tuned to this important conversation!
Our Top Stories this week bring you several important perspectives on this issue.

Top Stories

Trump Makes It Official:  U.S. Will Withdraw from the Paris Climate Accord
Source: The Washington Post

Withdrawing from Paris Agreement will hurt U.S. economy and communities around the world
Source: Ceres

What U.S. Exit Means for Paris Climate Change Accord: QuickTake
Source: Bloomberg

On the U.S. Withdrawal from the Paris Agreement
Source:  U.S. Department of State Press Statement

Leaving the Paris Agreement Is a Bad Deal for the United States
Source: Foreign Policy

Where Are U.S. Companies on Climate Change Risk Disclosure? New Survey Results from DFIN Are Available…

by Hank Boerner – Chair & Chief Strategist, G&A Institute

Another in the About the Climate Change Crisis series

Climate Change and Corporate Reporting – the two terms are increasingly coupled now as many more investors and stakeholders are requesting information from publicly-traded companies about their awareness of, and strategies & actions for addressing the many risks posed to the enterprise by climate change.

Important sea change:  many more investors are now asking companies for information about their preparation for climate change and some, demanding a report if none has been issued.

Response:  Many more companies and especially large-cap companies are now disclosing relevant data and information about their climate change / risk management strategies, plans, actions taken, goals set, and results of their efforts to reduce, mitigate and eliminate climate change risks.

The GRI Standards and the SASB Standards are available to provide managers with excellent disclosure guidelines and reporting frameworks for such reporting — and in the dozens of corporate reports that our G&A Institute analyst team examine each week, we are seeing a steady rise in more robust reporting on issues surrounding climate change. 

A new addition to such disclosure and structured reporting are the “TCFD” recommendations for disclosure – these are recommendations of the influential Task Force on Climate-Related Financial Disclosure.

Briefly, why TCFD is important:  The central bankers and top financial regulators of the G-20 nations created the Financial Stability Board (FSB) after the 2008 financial crisis to explore potential regulations for expanded corporate reporting (to prevent unpleasant surprises, which financial market players dread!).

Former Mayor Michael Bloomberg was appointed to head a task force (with 32 members) to develop specific suggestions for public companies’ disclosures on climate change that are financially-related. 

The task force’s report (with recommendations) was made public in 2017.  Companies began responding in their reporting over the following months. At G&A we are seeing the tempo of such reporting increasing as more companies follow the TCFD recommendations.

So where are we?  An important report – “The State of Climate Risk Disclosure: A Survey of US Companies” – was just published by our partners DFIN, in collaboration with the writing team of Richard Mahony and Diane Gargiulo  and research from The Society for Corporate Governance (“The Society”).  The report looks at the evolution of climate-risk disclosure and the state of readiness of corporations to disclose this information.

In partnership with The Society, DFIN conducted a survey of its members on these issues. The results confirmed many of the observations made by the TCFD in its recent update, while also providing new insights into how companies are addressing the challenges associated with climate risk disclosure. (This builds on the earlier report published by DFIN as the TCFD was being released – “Preparing for Climate-Risk Disclosure: Practical Suggestions for Public Companies”.)

The members of The Society for Corporate Governance were surveyed to benchmark what their companies are doing – looking at climate risk, by type; market cap of respondents; frequency of board room discussions on climate risk; use of reporting frameworks; investor queries to the company on climate risk; self assessment of the TCFD (recommendations) implementation; organization structure for climate risk disclosure; and, impediments to TCFD implementation.

The report offers practical steps for companies to take and lessons of the early adopters.  Society members offering value-added perspectives include Val Smith at Citi; Michael Rubio at Chevron; and, Steve Lippman at Microsoft (these sharings are of interest for IROs, corporate secretaries & governance professionals, sustainability leaders at companies, and other professionals involved in the corporate sustainability journey).

Click here to access the survey looking at the evolution of corporate climate-risk disclosure.

The Society for Corporate Governance is comprised of governance professionals and business executives responsible for supporting boards and exec management. 

DFIN is a leading global risk and compliance solutions company providing expertise to public companies.  G&A Institute partners with DFIN to serve corporate client needs with a range of sustainability services including climate change disclosure and reporting.

The G&A Institute team has developed a Resource Paper about the TCFD and what it means for company managements and investment professionals. Click here to download it.

Click here to view G&A’s published a backgrounder on the TCFD as the recommendations were made public in August 2017 (now on G&A’s Sustainability Update blog).

For more information about the TCFD and related disclosure appropriate for your company, contact us at: info@ga-institute.com.

Top Story

The State of Climate Risk Disclosure: A Survey of US Companies
Source: DFIN Solutions
The State of Climate Risk Disclosure: A Survey of US Companies published by DFIN, in collaboration with the writing team from Gargiulo + Partners and research from the Society for Corporate Governance (Society), looks at the evolution of climate-risk disclosure and the state of readiness of corporations to disclose this information.

Also from Governance & Accountability Institute:
G&A’s Climate-Related Corporate Risk Disclosures Resource Guide
Task Force on Climate-related Financial Disclosures | TCFD Organized by the Financial Stability Board of the G-20

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