U.S. States and Cities — “Still In” to the Paris Agreement — and Great Progress is Being Made

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

This is our second commentary this week on the occasion of the first anniversary of the decision by the Trump White House in June 2017 to begin the multi-year process of formal withdrawal of the United States of America from the Paris COP 21 climate agreement…

The action now is at the state and municipal levels in these United States of America.

Where for years the world could count on US leadership in critical multilateral initiatives – it was the USA that birthed the United Nations! – alas, there are 196 nations on one side of the climate change issue (signatories of the 2015 Paris Agreement) and one on the other side: the United States of America. At least at the sovereign level.

Important for us to keep in mind: Individual states within the Union are aligned with the rest of the world’s sovereign nations in acknowledging and pledging to address the challenges posed by climate change, short- and longer-term.

Here’s some good news: The United States Climate Alliance is a bipartisan coalition of 17 governors committed to upholding the goals of the Paris Agreement on climate change. These are among the most populous of the states and include states on both coasts and in the nation’s Heartland.

The Paris meetings were in 2015 and at that time, the USA was fully on board. That was in a universe now far far away, since the election of climate-denier-in-chief Donald Trump in 2016.

On to the COP 23 and the USA

In 2017, two years after the Paris meetings, the USA officially snubbed their sovereign colleagues at the annual climate talks. A number of U.S. public and private sector leaders did travel to Bonn, Germany, to participate in talks and represent the American point-of-view. This included Jerry Brown, Governor, California (the de facto leader now of the USA in climate change); former New York City Mayor (and Bloomberg LP principal) Michael Bloomberg; executives from Mars, Wal-mart and Citi Group.

While the U.S. government skipped having a pavilion at the annual United Nations-sponsored climate summit for 2017, the US presence was proclaimed loud and clear by the representatives of the U.S. Climate Action Center, representing the climate change priorities of US cities, states, tribes and businesses large and small who want action on climate change issues.

Declared California State Senator Ricardo Lara in Bonn: “Greetings from the official resistance to the Trump Administration. Let’s relish being rebels. Despite what happens in Washington DC we are still here.”

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As the one year anniversary of President Trump’s announcement to leave the global Paris Agreement (June 1, 2018), state governors announced a new wave of initiatives to not only stay on board with the terms agreed to in Paris (by the Obama Administration) but to accelerate and scale up their climate actions.

Consider: The Alliance members say they are on track to have their state meet their share of the Paris Agreement emission targets by 2025.

Consider: The governors represent more than 40 percent of the U.S. population (160 million people); represent at least a US$9 trillion economic bloc (greater than the #3 global economy, Japan); and, as a group and individually are determined to meet their share of the 2015 Paris Agreement emissions targets.

Consider: Just one of the states – California – in June 2016, according to the International Monetary Fund, became the sixth largest economy in the world, ahead of the total economy of France (at #7) and India (#8).

Consider: The US GDP is estimated at $19.9 trillion (“real” GDP as measured by World Bank); the $9 trillion in GDP estimated for the participating states is a considerable portion of the national total.

The states involved are: California, Colorado, Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and the Commonwealth of Puerto Rico.

The initiatives announced on June 1, 2018 include:

Reducing Super Pollutants (including hydrofluorocarbons (HFCs), one of the Greenhouse Gases, and harnessing waste methane (another GhG).

Mobilizing Financing for Climate Projects (through collaboration on a Green Banking Initiative); NY Green Bank alone is raising $1 billion or more from the private sector to deploy nationally).

Modernizing the Electric Grid (through a Grid Modernization Initiative, that includes avoidance of building out the traditional electric transmission/distribution infrastructure through “non-wire” alternatives).

Developing More Renewable Energy (creating a Solar Soft Costs Initiative to reduce costs of solar projects and drive down soft costs; this should help to reduce the impact of solar tariffs established in January by the federal government).

Developing Appliance Efficiency Standards (a number of states are collaborating to advance energy efficiency standards for appliances and consumer products sold in their state as the federal government effort is stalled; this is designed to save consumers’ money and cut GhG emissions).

Building More Resilient Community Infrastructure and Protect Natural Resources (working in partnership with The Nature Conservancy and the National Council on Science and the Environment, to change the way infrastructure is designed and procured, and help protect against the threats of floods, wildfires and drought).

Increase Carbon Storage (various states are pursuing opportunity to increase carbon storage in forests, farms and ecosystems through best practices in land conservation, management and restoration, in partnerships with The Nature Conservancy, American Forests, World Resources Institute, American Farmland Trust, the Trust For Public Land, Coalition on Agricultural Greenhouse Gases, and the Doris Duke Charitable Foundation).

Deploying Clean Transportation (collaborating to accelerate deployment of zero-emissions vehicles; expanding/improving public transportation choices; other steps toward zero-emission vehicles miles traveled.

Think About The Societal Impacts

The powerful effects of all of this state-level collaboration, partnering, financial investment, changes in standards and best practice approaches, public sector purchasing practices, public sector investment (such as through state pension funds), approvals of renewable energy facilities (such as windmills and solar farms) in state and possibly with affecting neighboring states, purchase of fleet vehicles…more.

California vehicle buyers comprise at least 10% (and more) of total US car, SUV and light truck purchases. Think about the impact of vehicle emissions standards in that state and the manufacturers’ need to comply. They will not build “customized” systems in cars for just marketing in California – it’s better to comply by building in systems that meet the stricter standards on the West Coast.

US car sales in 2016 according to Statista were more than 1 million units in California (ranked #1); add in the other states you would have New York (just under 400,000 vehicles sold); Illinois (250,000); New Jersey (250,000) – reaching to about million more. How many more vehicles are sold in the other Coalition states? Millions more!

(Of course, we should acknowledge here that the states not participating yet have sizable markets — 600,000 vehicles sold in Florida and 570,000 in Texas.)

Project that kind of effect onto: local and state building codes, architectural designs, materials for home construction; planning the electric distribution system for a state or region (such as New England); appliance design and marketing in the Coalition states (same issues – do you design a refrigerator just for California and Illinois?).

There are quotes from each of the Coalition governors that might be of use to you. (Sample: Jerry Brown, California: “The Paris Agreement is a good deal for America. The President’s move to pull out was the wrong call. We are still in.”) You can see them in the news release at: https://static1.squarespace.com/static/5a4cfbfe18b27d4da21c9361/t/5b114e35575d1ff3789a8f53/1527860790022/180601_PressRelease_Alliance+Anniversary+-+final.pdf

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In covering the 2017 Bonn meetings, Slate published a report by The Guardian with permission of the Climate Desk. Said writers Oliver Milman and Jonathan Watts: “Deep schisms in the United States over climate change are on show at the U.N. climate talks in Bonn, where two sharply different visions of America’s role in addressing dangerous global warming have been put forward to the world.

“Donald Trump’s decision [to pull out of the Paris Climate Agreement] has created a vacuum into which dozens of city, state and business leaders have leapt, with the aim of convincing other countries that the administration is out of kilter with the American people…”

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At the US City Level

Jacob Corvidae, writing in Greenbiz, explains how with the White House intending to withdraw, cities are now in the driver’s seat leading the charge against climate change.

Cities have more than half of the world’s populations and have the political and economic power to drive change.

The C40 Cities Climate Leadership Group is the Coalition helping cities to make things happen. The C40 Climate Action Planning Framework is part of a larger effort to make meaningful progress toward carbon reduction goals and build capacity at the municipal level. Cities are expected to have a comprehensive climate action plan in place by 2020. This will include 2050 targets and required interim goals.

The cities have the Carbon-Free City Handbook to work with; this was released in Bonn in 2017 at COP 23. There are 22 specific actions that can (1) drive positive impacts and (2) create economic development. This September the Carbon-Free Regions Handbook will be available. There is information for you about all of this at: https://www.greenbiz.com/article/every-action-how-cities-are-using-new-tools-drive-climate-action

The clarion call, loud and clear: We Are Still In!  Watch the states, cities and business community for leadership on meeting climate change issues in the new norms of 2018 and beyond.

World Bank – G4 Reporting Pioneer!

559719_615384138487346_109625660_a[1]by Hank Boerner – Chairman, G&A Institute

Stay Tuned to the World Bank – it’s a Pioneer in G4 Sustainability Reporting!

The World Bank, composed of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), is a vital source of financial and technical assistance to developing countries around the world.
Since its inception in 1944, the World Bank has expanded from a single institution to a closely associated group of five development institutions.

Their mission evolved from the International Bank for Reconstruction and Development (IBRD) as facilitator of post-war reconstruction and development to the present-day mandate of worldwide poverty alleviation in close coordination with their affiliate, the International Development Association, and other members of the World Bank Group: the International Finance Corporation (IFC), the Multilateral Guarantee Agency (MIGA), and the International Centre for the Settlement of Investment Disputes (ICSID). Today the institution has a staff of engineers, financial analysts, economists, sector experts, public policy experts, and social scientists.

The newly-endorsed goals of the Bank are to end extreme poverty and promote shared prosperity by fostering growth at the bottom 40 percent of every country. To accomplish this, the World Bank — operating in over 130 countries around the world — offers its members low interest loans, interest-free credits, and grants as well as a wealth of technical assistance and knowledge sharing.

The World Bank sets an example for its clients and partners in reporting and public accountability.

So it is fitting that one of the first institutions to embrace the new GRI G4 (fourth generation) guidelines would be the World Bank. Spearheading the effort is Monika Kumar, the Bank’s sustainability coordinator. When the report landed on our platform, we reached out to Monika to ask her about the effort – here are highlights of our conversation.

G&A Institute: Monika, congratulations on being one of the first U.S. based institutions to embrace G4 for reporting. What was the experience like, moving from G3.1?

Monika Kumar: We started with the premise that the G4 would be similar to the G3.1, simply with a few additional indicators, but were pleasantly surprised. The emphasis on materiality was something that we had to understand better, and inform our internal stakeholders about. In our preparation, we reviewed each and every one of the Aspects and Indicators to assess the relevance to the World Bank, which falls within this unique mix of a public-financial-development institution. We also had to ensure to link content material to the Bank as a development institution, such as how we address issues of food security in our client countries, with the appropriate GRI indicators.

G&A: How long has the World Bank been reporting?

MK: Our first report was published in 2005, covering our 2004 fiscal year. We began first using G3 and then shifted to G3.1 for our Content Index and over time included the Financial Services and the Public Agencies Sector Supplements. In 2008, we moved to an on-line platform, with a standalone GRI index report where we addressed every GRI indicator, explaining inapplicable indicators where needed. So, every year, we’ve learned from our experience – trying to make our reporting process more efficient and the report more reader friendly.

G&A: Talk about your Materiality process – what is involved?

MK: G4 required that we dedicate a considerable amount of time to carrying out a materiality assessment and disclose that methodology in the specific indicator responses (G4-19-21).

We had to develop a methodology that applied to our development-oriented business model, incorporated feedback from our myriad stakeholder groups (clients, civil society, investors, to name a few), and simultaneously allowed us to determine the sustainability impact of the aspect considered.

We looked at the AA 1000 five-step process, ISO 14001, and the Natural Step process, and then created our own approach to meet our specific needs – one that looks at financial and reputational risk, stakeholder concern, and sustainability impact. This is the first time that we applied the approach and since G4 is so new, we really had no good examples to follow. You will note we have a simplified version of the methodology on our website currently. We hope next year to validate the process and upload a more robust response.

G&A: What’s the worldview of the institution as you prepare your “progress report” for the user base?

MK: Lots of exciting things are happening at the Bank right now. We are undergoing a period of change, one that would help us achieve the two goals we have set: reducing extreme poverty globally to 3 percent by 2030, and boosting incomes for the bottom 40 of the population in developing countries. President Kim has made it clear that sustainability frames these two goals – a sustainable path of development and poverty reduction would be one that: (i) manages the resources of our planet for future generations, (ii) ensures social inclusion, and (iii) adopts fiscally responsible policies that limit future debt burden.

In this effort, addressing climate change is key. We are currently working with 130 countries to take action on climate change—helping cities to adopt green growth strategies and develop resilience to climate change, developing climate-smart agricultural practices, finding innovative ways to improve both energy efficiency and the performance of renewable energies, and assisting governments to reduce fossil fuel subsidies and put in place policies that will eventually lead to a stable price on carbon.

A lot is happening, but I’m really excited that we began tracking the GHG footprint for specific sectors including energy and forestry within our lending portfolio. Within the next three years we expect to be publishing this information – as currently we only report on our corporate carbon footprint – in both our annual sustainability review and the Carbon Disclosure Project (CDP). We are working towards more comprehensive reporting.

This is important, not just for us being a model of a sustainable institution, but also for our stakeholders, especially sustainable and responsible investors who invest in our “green bonds,” that benefit projects related to climate change.

We are proud to say that the World Bank helped start the development of the quickly-expanding green bond market – the program recently reached a milestone of USD 4 billion in issuance, helping create and develop a market that raises funds to support climate activities – one that will support future climate finance.

I’ll stop there and urge the reader to read more about the Bank’s efforts to achieve its ambitious goals in the Sustainability Review online (http://crinfo.worldbank.org).

G&A: Thank you Monika. We will be watching as other financial sector institutions transition to G4 guidelines over the next two years. The World Bank example will be helpful to the financial sector partners, we’re sure.

Footnote: As we prepared this blog post, news came from the Global Reporting Initiative (GRI) that as of November 4, 2013, 84 organizations had signed on to the new initiative – the G4 Pioneers Program. Organizational Stakeholders (OS), organizations that support the GRI, commit to producing a G4 report in their next (reporting) cycle. The program is interactive, and designed to be knowledge-sharing (webinars, focus groups). We will be following the Pioneers and will bring you updates on the program’s progress.