COP 27 in Egypt: The United States Got Back To the Table

November 2022

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

The top stories in ESG and sustainability in November included the coverage of the annual global climate meetings that took place in Egypt – COP 27 (the Conference of Parties), convened by the United Nations.

These meetings of about 200 sovereign nations’ leaders and other global influentials began in Rio de Janiero in 1992 (President George H.W. Bush was in his last year in office).

The position of the United States in the global talks (and the agreements that result) have see-sawed over the years in terms of staying at the table, and exerting leadership or not. The welcome news for 2022 is that the U.S. is back at the table. And at least for now, attempting to lead. 

This year’s meetings saw President Joseph Biden drop in to address the gathering. ormer Secretary of State John Kerry, now the U.S. Special Presidential Envoy for Climate, appeared to be playing a much more visible role than was the case during prior years (during when the Trump Administration was in charge and moving away from the COP talks and the Paris Agreement of 2015).  

It is fitting for the United States of America attempting to lead in the global efforts to address climate changes and the challenges posed  — the U.S. is the world’s largest economy and the second largest emitter of Greenhouse Gas Emissions. Use of oil and natural gas define the American economy and the culture of the nation.  The US is a major producer of and user of fossil fuel products. 

In his remarks at COP 27, President Biden “reclaimed” the country’s role as global leader in climate change actions and committed to help to address global warming at home and abroad.

The Biden Administration’s “Whole of Government” comprehensive approach to climate change was the centerpiece of his commentary to the gathered at COP 27.

Emphasizing the U.S. commitment to address climate change, President Biden told the summit participants: “I introduced the first piece of climate legislation in the United States Senate way back in 1986, 36 years ago. My commitment to this issue has been unwavering.

“And today, finally, thanks to the actions we’ve taken, I can stand here as President of the United States of America and say with confidence: The United States of America will meet our emissions targets by 2030. We are racing forward to do our part to avert the ‘climate hell’ that the U.N. Secretary-General so passionately warned about earlier this week. We’re not ignoring the harbingers that are already here.”

For domestic U.S. audiences, President Biden had this important news: “The United States became the first government to require that our major federal suppliers disclose their emissions and climate risks and set targets for themselves that are aligned with the Paris Agreement.

“As the world’s largest customer, with more than US$630 billion in spending last year, the government of the United States is putting our money where our mouth is to strengthen accountability for climate risk and resilience.”

However, while the U.S. government could leverage almost US$400 billions committed by Congress and the Administration to make investments in climate change solutions, “missing” are major investments to help other less-wealthy nations in climate change mitigation.

Not that President Biden was unsympathetic about helping other nations — . he has pledged to help developing countries with $11 billion each year to 2024 for transitioning to wind, solar, and other renewable energy sources.

Who Will Pay?  A Question Floating Above the Conversations

“Reparations” was the a key word circulating at COP 27 — who will help the less fortunate nations to address climate change issues? The expectations of less developed economies is that the rich peers, who generate the carbon emissions that affect the climate, will come to the aid of the nations they are negatively affecting.

While the U.S. expresses ambitions to help, with a divided U.S. Congress (keepers of the purse strings), the U.S. is not likely near-term to commit funds for other countries to address their climate change challenges.  The present state of affairs in US governance poses the question of whether the nation itself can continue on course to meet the goals of the “whole of government” approach to addressing climate change over changes of administrations. 

The “reparations” are about “loss and damage”. As The New York Times pointed out in its coverage of the COP meetings –  determining “loss and damage” funding is very difficult to define and loaded with potential legal liability for donating nations (such as for the U.S. and European powers).

Not that President Biden was unsympathetic about helping other nations. He has pledged to help developing countries with $11 billion each year to 2024 for transitioning to wind, solar, and other renewable energy sources.

One of continuing stories we see as this conference (COP 27) ends and the almost 200 nations that participate in the Conference of Parties are back at home dealing with climate change will be increasing focus among the participants on the “who pays” question going forward. The G&A team will be being staying tuned and will keep you updated as we move toward COP 28.

President Biden’s Comments at COP 27:
https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/11/11/remarks-by-president-biden-at-the-27th-conference-of-the-parties-to-the-framework-convention-on-climate-change-cop27-sharm-el-sheikh-egypt/

The Domestic Agenda To Renew and Strengthen the U.S. from Council on Foreign Relations –

November 4, 2022

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

How about attending to some critical domestic issues that could help to determine the USA’s Global Influence

The United States of America “in” the world and “of” the world. Where do we as a nation and where do our people stand on domestic and global issues? Where should we stand on policies and practices (and what should the U.S. “stand for”)?

We monitor the work of, and the shared perspectives of a good number of organizations here at G&A Institute, including the Council on Foreign Relations (CFR).

As the COP 27 gathering nears (the Conference on Parties / UN climate talks), what are the concerns of the citizens of the U.S. – and what are the concerns of citizens of other nations about the U.S.?

Most important, what should our top line domestic concerns be so that the United States is well positioned to continue to lead as the world’s largest economy? And project influence abroad?

The Council set out its “Renewing America” agenda recently, with the noble aims of “fortifying the political, economic, and societal foundations fundamental to national security and international influence” (it’s our Top Story selection for you).

Nine critical domestic issues are on the agenda.

The CFR concerns address issues that likely keep CEOs and board rooms up at night as they strategize and chart the way forward for their company:

• Energy and climate change [the concerns about the effects of domestic wildfires, severe storms, other extreme events, transitions/shifting to cleaner energy and energy efficiency];
• the future of the world of work;
• trade and finance [needed sensible policies, fixing the supply chain];
• democracy and [public sector] governance [ability to project power in the world];
• education [and the need for skilled workers, the long-term need for educated workforce];
• immigration (and attracting talent for the American workforce);
• infrastructure (investment to address crumbling infrastructure);
• innovation (R&D, China posing challenges to U.S. technology]:
• and, social justice and equity (think: long-term injustices to be considered).

On Energy and Climate Change: the Council experts share a “filter” of perspectives on the topics, including the perspectives of the U.S. ambassador on climate, Secretary of State John Kerry (“COP 27 and International Climate Action – a Conversation”).

Other “filtered” perspectives include “How the Inflation Reduction Act Will Help the U.S. to Lead in Clean Energy Economy”; “California Capitalism’s Successes and Challenges:, and, a webinar on “Climate Justice.”

If you have not followed the Council on Foreign Relations, the web link we provide will help you to learn more about the topics that we headline above.




Top Story:  https://www.cfr.org/programs/renewing-america


Going Green and Still Pumping Oil? The Challenges of Climate Change and Potential “Solutions” For Fossil Fuel Producers

October 19, 2022
by Hank Boerner – Chair & Chief Strategist, G&A Institute

We were thinking the other day about the enormous challenges posed by climate change to our global society — and therein of the challenges of meeting the ambitious goals being set by governments, the private sector, and investors to achieve “a net zero economy” by mid-century. That’s not so far away.

And so the pumping of tens of millions of gallons of crude oil every day by OPEC countries and other nations (like the U.S.A.) to meet the insatiable demands of society is not helping in the short term.  But we need the oil!

Not so far back the United States was a very different country (meaning, at the end of the 19th Century). Not so dependent on “oil” from below the ground (yes, we did rely on kerosene lamps and before that whale oil!)

The majority of people lived outside of cities, mostly on farmlands and ranches and wilderness places. Horses and boats provided the main means for transport of people and goods. (Remember stage coaches and canal boats towed by mules?) Homes were heated by wood and coal fuels.

Coming into their own in the early 20th Century: miracle developments like electric power, telephony, radio, gasoline-powered cars & trucks, powered flight, modern chemicals, modern medicines. And people were moving en masse to rapidly-expanding cities and the newly-identified “sub-urban” communities.

One such place was Queens County, New York, where some of the G&A team live and work or grew up in (today home of JFK International).  After World War One ended, 100,000 people a year (!) moved in to the new suburbs, rapidly replacing farms that dated back to Dutch settlement in the 1600s.

After World War Two ended, neighboring Nassau County (where some of us live and work today) saw the same growth pattern – in just four years “Levittown” replaced the sprawling farmlands of the former Island Trees (NY) on the largest prairie in the Eastern U.S.. (That was the Hempstead Plains.)

Which required more railroads and roads for autos & trucks to move commuters to city-center offices and factories. And so, more more more drilling for oil & gas and mining of coal.

All of this dramatically changed how Americans today live, work, and play, and s0 many aspects of our family and business lives. The same things were happening in Europe, the British Isles, Japan, and many other places.

And here we are in the 21st Century enjoying the fruits of all of this progress and at the same time trying to undo the negative sides of the sweeping progress made over the past 125 years or so.

To put some of this change and resulting challenges in perspective: TIME magazine had an essay recently about Saudi Arabia, its state-owned oil company (Saudi Aramco) and the ambitions of the world’s leading oil exporting sovereignty to lean toward green while still pumping 12 or more millions of gallons of oil per day (to help meet global demand of 100 million BBLs a day!).

Today, Saudis talk of the dreams of carbon capture, of moving to hydrogen power for autos, of building a new “green” city (NOEM) from scratch.  The Saudi goal is Net Zero emissions) by 2060!

The dreams include the desert blooming with new green (cities)…and yet that Saudi oil keeps moving to distant points on Earth through pipelines and on oil tankers. Missing: the plan to reduce oil & gas production by 2030.

To help companies around the globe to meet ambitious 2030, 2040, and 2050 (net zero!) goals. Challenging. 

To contrast the astonishing changes of the recent decades: The Saudi Arabia we know today as a top oil & gas producer was a desert kingdom populated by Bedouin tribes and often shown on maps as “the Empty Quarter”.

Discovery of oil reservoirs changed all of that – today the kingdom has a Sovereign Wealth Fund (the SWF is the Public Investment Fund) with US$600+ billion and more in treasury thanks to oil & gas pumping and invests in many publicly -traded companies like Netflix (so dependent on fossil fuels to ever more power servers!).

About the impacts of climate change and the inherent challenges of our present society to achieve solutions – we see the story-telling of this everyday now in our favorite media!

Our editors and G&A team members carefully track and curate the coverage for you in the issues of our Highlights newsletter and here in our G&A Institute Sustainability Updates blog.

In our newsletter we regularly feature many news and feature stories about the efforts of public and private sector organizations taking actions to protect the planet and help the global society achieve a sustainable (and livable) planet in the decades ahead.

That’s the good news we try to share.  At the same time, as we think about the world’s progress from wilderness1800s to dramatic changes of the 1900s and into challenges of the 2000s and the negative aspects of progress…we cheer on the strategies, policies, actions, actions of leaders of organizations in the capital markets, corporate community, activist organizations, multilateral organizations, and more to address climate change challenges.. 

Ah, to save the planet while still making progress – that’s the ambitious goal of so many now.  After all, there is no Planet B for we, the billions on Earth (at least not yet).  

Top Story:

We bring you the fascinating story of Saudi Arabia and its plan to go green while remaining the world’s number one oil exporter over the coming years: https://time.com/6210210/saudi-arabia-aramco-climate-oil/

And a personal note:  A  durable book that has been around telling the story of the first half of the 20th Century (since 1952) may be of interest to you. This is “The Big Change, American Transforms Itself, 1900-1950” by Frederick Lewis Allen. He was the long time editor of Harper’s Magazine and authored such books as “The Lords of Creation” (about key capitalists like the Rockefellers, Morgans, Vanderbilts, and other of the Gilded Age wealthy). 

Highlights of Climate Week NYC 2022

by Lauren Snyder, Ph.D., Sustainability Analyst at G&A Institute

Global Citizen Festival NYC” featured big-name musical artists to cap the 14th annual Climate Week NYC, a week of multi-stakeholder events focused on climate change in New York City.

Climate Week NYC brought together leaders, decision-makers and activists from government, civil society, and the private sector for discussions, encouragement and collaboration on how to keep the climate issue at the top of political and business priorities.

Organized by Climate Group, the week featured a variety of in-person, hybrid and virtual events all focused on a call-to-action of “getting it done.”  The opening ceremony, began by setting the current geopolitical contexts for the need to deliver on promises made, which was followed by Hub Live, bringing together over 1,000 voices in the climate space to collaborate, share ideas and promote workable solutions.

This year’s Climate Week revolved around ten themes: the built environment, energy, environmental justice, transport, sustainable living, finance, industry, nature, policy, and food.

Beyond these events, many others were held alongside the main New York City-based events. Climate Week NYC is scheduled each year to run concurrent with the opening week of the UN General Assembly. This year Climate Week included a 90-minute, high-level “SDG Moment” session, designed to keep focus on the 17 SDGS.

For those unable to attend the in-person events, the hybrid and virtual ones emphasized two key themes. A panel of journalists on the second day focused on the question:  “Are we looking up? Climate communications at a pivotal moment”, highlighting the need to move away from the alarmist nature of climate communications to one that focuses on “co-benefits.”

Rather than storytelling, for example, one presenter noted the need to shape climate change conversations to reach as many people as possible. In this example, energy opportunities that advance cheaper, reliable fuel supply can help to convince even climate skeptics who might oppose the usual climate-speak ideas.

The theme of spelling out the “co-benefits” also percolated in a public sector-oriented session: “The Paris Agreement and the Ambition We Need.” This session included Environment ministers from various countries such as Canada and the Maldives.

The Minister from Canada stated it is “vital to sell the dream,” to show that current solutions and technologies are available to make a difference in mitigating and adapting to climate change.

The ministers presenting also emphasized the need for granular data and transparency – a theme that also could be found in the two opening ceremony  events – “Climate in the Geopolitical Context of Todayand “The cold truths for a warming world: what’s stopping us from ‘Getting It Done”?

Some of the more promising events for businesses were held in-person, including “Corporate Disclosure: Understanding Investor Perspective on Climate Risk sponsored by Agendi; others were organized by Morningstar, Sustainalytics, and The Wall Street. Journal.

The panel on “Preparing for the SEC’s Climate Disclosure Rule” provided interesting comparisons between the TCFD-based rules already implemented in the United Kingdom and the proposed SEC rule that will require companies to disclose climate-related risks and actions they will take to mitigate them.

While the multitude of events was overwhelming for some, everyone could find a topic of interest during the week-long series of sessions. While there was a lot of talking, presenting and chatter, these events do inevitably excite, encourage stimulating debates, and allow for exchange of ideas. The true test in the end for actions to be taken will be judged in the weeks and months to come.

The next climate summit (COP27) gathering is less than two months away, where world leaders, NGOs and private business decision-makers will gather for further climate action. The goal of keeping the 1.5C limit “alive” – this, the temperature threshold needed to avoid the worst climate catastrophe — does at times seem like a dream. The act of making that dream a reality depends on all of us — and perhaps was the most salient point of Climate week NYC 2022.

About the Author

Dr. Lauren Snyder joined G&A Institute in May 2022 as a Sustainability Analyst. She previously worked at the United Nations Global Compact Environment and Climate team where she launched a high-level external newsletter to promote corporate engagement on all aspects of climate change. Dr. Snyder also co-led with Accenture on the CEO Study on Sustainability “Climate Leadership in the Eleventh Hour.

A native of South Korea, Dr. Snyder came to the U.S. as a child. She obtained her B.A. in German Literature and Linguistics from New York University and lived in Germany and Sweden for two years as a part of her undergraduate studies. Lauren also holds a master’s and Ph.D. in International Relations from the London School of Economics.

Dr. Snyder also holds a master’s degree in Public Administration and Sustainability from the Marxe School of International Affairs and Public Administration at Baruch College.

Dr. Snyder resides in New York City and enjoys time spending with her daughter. She also enjoys singing, theater and tennis. Although Dr. Snyder is legally blind, her disability does not stop her from achieving her goals.

Is Your Mutual Fund or ETF Really “Green” or “Sustainable”? How Do You Know? More Disclosure by Fund Managers and Advisors May Be Coming…

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

What is it about an investable product – a mutual fund, an exchange traded fund (ETF) – that would qualify it as an “ESG” or “sustainable investment” offering to the retail or institutional investor?

That’s a question getting more attention recently.

S&P Global has issued a report that says only 12 percent of so-called “green” or “environmental” investment funds are on track to meet the global climate goals agreed to at the Paris Agreement / COP 21 meetings in 2015.

The goals agreed to by the community of almost 200 nations at that time: try to limit the global temperature to below 2 degrees Centigrade above pre-industrial levels and aim for limiting the increase to 1.5C.

We are sharing some analysis of the S&P report by Mark Segal as published in ESG Today (he’s the founder of the web site).

He explains: S&P Global looked at about 12,000 equity funds and ETFs with US$20 trillion in total market value. Findings: about 300 funds (with $350 billion total valuation) used “green” in their name or investment objectives.

Looking then at the holdings (equities of corporations) using the S&P Global Trucost Paris Alignment Data for 17,000 companies in the universe of 12,000 funds, only 11% were really aligned with the Paris Agreement goals.

What about the smaller universe of 300 (the “green” funds)? Only about 12% were on track to meet Paris goals.

S&P Global noted that some funds are screening out publicly-traded fossil fuel companies for portfolios, including renewable energy companies, and some are engaging with portfolio companies to urge the firms de-carbonize their operations.

Conclusion: “Our analysis,” reports S&P, “points to a systemic issue. Few funds, even those that describe themselves as using green or climate-specific language, are on track to meet the goal of the Paris Agreement. Understanding the trajectory is an important step toward planning for a low-carbon future.”

The marketing of mutual funds and ETFs as “green” is being closely looked at by the Securities & Exchange Commission. SEC is focused on “enhancing ESG investment practices” of certain capital market players.

The agency in May proposed amendments to rules and reporting requirements of investment advisors and investment companies (that manage mutual funds and ETFs) to “promote consistent, comparable, and reliable information for investors” about funds’ and advisors’ incorporation of ESG factors.

The proposed rule would aim to categorize types of ESG investment strategies and require funds and advisors to be more specific in disclosures (such as in prospectuses, annual reports, brochures) to inform investors about ESG strategies being pursued.

Funds with strategies focused on the consideration of environmental factors would be required to disclose the greenhouse gas emissions associated with their portfolios. (That is, the GHG emissions of companies in the assembled portfolios of the mutual funds or ETFs.)

And, funds that use proxy voting and engagement with corporate issuers would be required to disclose their voting and engagement with companies on ESG-related matters.

Morningstar rates “sustainable mutual funds” among the thousands of funds rated by the firm’s analysts and its Sustainalytics unit.

Here’s a look into the challenges fund companies may face if the SEC rules are adopted: “This year has been difficult for many ESG funds,” writes Morningstar’s Katherine Lynch. “After years of solid performance, sustainable investing mutual funds have been roughed up, but a handful of strategies have been able to outperform.”

Which ones? Those holding energy stocks, which some investors in ESG try to avoid. Energy stocks are now outperforming, and most sustainable funds hold little or no oil companies in portfolio because of the connection of oil and gas consumption and climate change.

The conversation about “sustainable investing” and the criteria used by mutual fund management companies is sure to get more complicated in the days ahead.

Our G&A Institute team will continue to monitor developments and keep you updated on the changes to the mutual fund / ETF disclosure requirements.

Here are Top Stories for you to learn more:

  1. Less Than 10% of Climate Funds are Aligned with Global Decarbonization Goals: S&P (ESG Today )https://www.esgtoday.com/nearly-90-of-green-funds-are-not-aligned-with-global-climate-goals-sp/
  2. SEC Proposed to Enhance Disclosures by Investment Advisors and Investment Companies About ESG Investment Practices: https://www.sec.gov/news/press-release/2022-92
  3. 2022’s Top Sustainable Fund Weather a Tough Market: https://www.morningstar.com/articles/1097780/2022s-top-sustainable-funds-weather-a-tough-market



Role of Green Building Certifications in Telling Your ESG Story

By Kavya Dhir, G&A Institute Sustainability Analyst

With climate change at the forefront of today’s environmental, social, and governance (ESG) discussion, and corporate ESG disclosures in focus, companies are being held more accountable for their overall environmental impact.

These impacts include the carbon footprint of their operations — such as office space, business travel, and packaging of consumer goods.

For office buildings, third-party certifications such as the WELL Building Standard (WELL) managed by the International Well Building Institute (IWBI), and, Leadership in Energy and Environmental Design (LEED) managed through the US Green Building Council (USGBC), have ushered in a new era of sustainability transparency and accountability.

Green building standards have served as a foundation for more than two decades to make buildings become more energy efficient, less polluting, and healthier for their inhabitants. The USGBC was created in 1993 in the boardroom of the American Institute of Architects (AIA), with representatives from over 60 corporations and organizations.

Today, investment firms and property businesses are raising the bar for “green.” This includes increased greenhouse gas emission reduction targets and supply chain management regulations. Further, these organizations and individual assets are being expected to back up their ambitions with real-world performance data.

Green building standards should be promoted by real estate professionals to work to ensure that the advantages are widely recognized and implemented.

What is a Green Building?
According to the World Green Building Council (WGBC), the definition of a green building is: “a building that, in its design, construction or operation, reduces or eliminates negative impacts, and can create positive impacts, on our climate and natural environment.”

Here is a brief overview of the ESG issues that are involved:

Environmental – Energy, water, and material are three essential environmental components that have a significant influence on the natural environment over the lifespan of any construction.

According to the WGBC definition, the ultimate goal is not just to optimize resource use so that harmful impacts are reduced, but also to ensure that the building itself contributes positively to the natural environment.

Examples of positive impacts are if a building use recycled and reusable materials, has a greywater system that collects and uses rainwater, or has solar panels which feed excess energy back to the grid.

The societal pressure to adapt to meet the goals of The Paris Agreement on climate change has grown considerably. There is also pressure on the construction and real estate sectors to contribute significantly. In the future, making a good contribution to climate protection would include adhering to tight requirements including reducing the net primary energy need in the planning and construction of new buildings by 20% as compared to the ‘lowest energy level.’

Social A building is designed for occupants; therefore, it must consider their health, comfort, and safety. In office buildings, asking building management if they have engaged in any Indoor Air Quality (IAQ) certifications is a simple way to determine whether the facility has inadequate air quality which may trigger headaches, respiratory irritation, nausea, and allergies. Natural lighting has physiological effects that may be measured. The synchronization of the body’s internal clock – known as circadian rhythm, can be aided by exposure to adequate quantities of natural sunshine.

Governance – Facility managers must design metrics to monitor the health of a building in order to demonstrate effective governance in building operations, maintenance, and management. Furthermore, construction companies and operational managers should be obliged to set quantifiable objectives and demonstrate efforts in advancing the industry toward a beneficial influence on the environment to quantify how a building may do better.

To be considered to be really “green,” a building must serve as a link between people and nature. The ESG of buildings described above aren’t designed to oversimplify the industry’s complexity; rather, they’re meant to raise awareness and start dialogues about acceptable reporting standards. Investors are becoming more demanding in terms of accurate, transparent, and timely account of asset-level performance. The future of ESG reporting in real estate development will move far above entity-level disclosures.

About the Author

Kavya Dhir is a G&A Institute Sustainability Analyst.  Her role consists of conducting materiality assessments, gap analysis and benchmarking research. A researcher and a lifelong learner at heart, Kavya is a LEED GA, WELL AP and holds a bachelor’s degree in Civil engineering and a MSc. In Design and Energy Conservation.

She is involved with many organizations, including ASHRAE, U.S Green Building Council, UN Green (R)evolution and ISHRAE.

She is an optimist who looks towards a future in which our built-environment and energy production exist in harmony with us and the natural world.  Kavya has experience with projects which integrate concepts of net-zero energy and carbon, high performance HVAC and healthy buildings, and general sustainability early in the building design process.

Kavya is committed to accelerating the transition to a more sustainable environment with a continual focus on establishing the integrated bottom line: environmental stewardship, economic inclusion, and social equity.

REFERENCES

Contributor, G. (2021, June 21). Synergies Between LEED, WELL Certifications And ESG Programs. Facility Executive Magazine. https://facilityexecutive.com/2021/06/synergies-between-leed-well-certifications-and-esg-programs/

Dolya, A., Romanin, P., Weise, D., Lupia, F. P., Villani, L. A., & Hemmige, H. (2022, January 11). Boosting ESG Performance in Today’s Energy Supply Chains. BCG Global. https://www.bcg.com/publications/2022/boosting-esg-performance-framework

A Performance-Based Future for Real Asset ESG Reporting. (2019, February 28). GRESB. https://gresb.com/nl-en/2019/02/28/a-performance-based-future-for-real-asset-esg-reporting/

What is green building? (2020). World Green Building Council. https://www.worldgbc.org/what-green-building

The World’s Eyes on the USA as FSOC Agencies Engage on Climate Risk

October 31, 2021 – As The Family of Nations gathers for COP 26 climate talks in Glasgow – the USA is back at at the table. 

What is President Joe Biden and the American delegation bringing with them to Scotland?  A big announcement from the White House just a few days ago that signals “we are serious”. Especially in regulatory and financial matters.

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

The gathering of the family of the world’s nations in Glasgow, Scotland for “COP 26” (the annual UN climate summit) is at hand!

There has been an increasing flow of news and opinion related to the big event as the United Nations, almost 200 sovereign governments, NGOs, corporations, and other constituencies announce a widening range of developments related to the summit now underway

In the United States, a significant announcement came in October as the Federal government’s FSOC – the Financial Stability Oversight Council “engaged on climate change”.

We’re sharing the important background with you:

You may recall that in May 2021, soon after taking office, The Biden-Harris Administration detailed the policies and actions of its “whole of government” approach to climate change in the “U.S. Climate-Related Risk Executive Order” (the “EO”) originally issued in May 2021.

The EO set out the federal government’s climate risk accountability framework and the implementation strategies for the “whole of government” approach to climate-related financial risk.

Think about the agencies affected by the EO: NASA; DoD; Labor; Interior; HHS; Education; the Federal Acquisition Council (considering GhG emissions when making buying decisions)…and many more.

The policies in the EO and in then implementation steps by Federal agencies are again in public view as President Joe Biden prepared to participate in the COP 26 meetings.

The White House reminded us of EO 14030 in a news announcement (“A Roadmap to Build a Climate-Resilient Economy”) on October 14th.

This was the backdrop for the announcement from the powerful FSOC via U.S. Treasury Department for planned measures to protect retirement plans, homeowners, consumers, businesses and supply chains, workers, and the federal government from the financial risks of climate change.

Policies and actions were outlined for us as the FSOC on October 21 at identified climate change as an emerging and increasing threat to financial stability.

To review: there are six important “workstreams” in the Federal government’s framework to address climate-related financial risk:

• Protecting the resilience of the U.S. financial system.
• Protecting life savings and pensions.
• Using Federal procurement (federal agencies are the largest buyers of goods and services in the nation).
• Incorporating the risks into Federal lending and underwriting.
• Incorporating the risks into the Federal financial management and budgeting.
• Building resilient infrastructure and communities.

In the historic May 2021 EO “financial regulation” was among the issues addressed; now we are seeing the implementation plans of the government’s Financial Stability Oversight Council (the FSOC), the member group of key regulators as the agencies of the council spell out approaches to engagement on climate change issues.

Important: the work of the regulatory agencies in the FSOC affects many aspects of the American society: the Federal Reserve System and 12 district banks; Department of Treasury; the Office of Comptroller of Currency (OCC), part of Treasury that regulates national banks; Securities & Exchange Commission (SEC); Commodity Trading Futures Commission (CTFC); and, Federal Housing Finance Agency (FHFA).

The FSOC’s new report demonstrates the Council’s and member Federal agencies’ commitment to building on and accelerating existing efforts on climate change through “concrete recommendations” to the individual member agencies.

In our conversations with corporate managers and investment professionals we often explain that after the 2008 financial crisis, the member nations of the G20 came together to address financial risk matters in the new Financial Stability Board (FSB). This is a “think tank” approach to developing policies that each G20 nation can bring back to their regulatory agencies for consideration.

The FSB created the TCFD (Task Force for Climate-related Financial Disclosure), chaired by Michael Bloomberg. Important to keep in mind: the representatives to the FSB are the Secretary of the Treasury; the Federal Reserve chair; and, the SEC chair.

Each of those regulatory agencies and their leaders are members of the Federal government’s Financial Stability Oversight Council.

Commenting on the latest developments at FSOC, former Federal Reserve chair, now Secretary of Treasury Janet Yellen noted: the FSOC report puts climate change squarely at the forefront of the agenda of [Council member agencies] and is a critical first step forward in addressing the threat of climate change…it will by no means be the end of this work…”

We share the important documents related to these development as President Joe Biden and his delegation start their conversations at COP 26. 

Top Story/Stories

U.S. Financial Stability Oversight Council Engages on Climate Change
https://home.treasury.gov/news/press-releases/jy0426

Secretary of Treasury Janet Yellen Comments
https://home.treasury.gov/news/press-releases/jy0424

From the White House: Executive Order #14030
https://www.whitehouse.gov/wp-content/uploads/2021/10/Climate-Finance-Report.pdf




The U.S.A. & the 2015 Paris Accord: Five Years On, the Largest Economy on Earth Promises to Return – With a Cabinet of Climate Change Champions Preparing for Action

December 20 2020 – published again in the blog in October 2021 as President Joe Biden travels to the Stockholm meeting of the COP 26.

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

Seems like just yesterday we were celebrating the great promise of the 21st Century in 2015 – the Paris Accord. Can you believe, it is now five years on (260 weeks or so this December 2020) since the meeting in the “City of Lights” of the Conference of Parties (“COP 21”, a/k/a the U.N. Paris Climate Conference).

This was the 21st meeting of the global assemblage focused on climate change challenges.

The Promise of Paris was the coming together of the world’s sovereign states – the family of nations — to address once more what for many if not all of the states is an existential threat: climate change.

The parties agreed to a binding, universal agreement – the Intended Nationally Determined Contributions (“NDC”) to attempt to limit global warming to 2.7C by 2100.

The United States of America was [then] prominent among leading economies of the world at the Paris gathering, signaling the intention to play a significant role in addressing climate change matters. In fact, the final agreement was signed in New York City on Earth Day in April 2016.

Promises made, promises broken – in his campaigning and then almost immediately upon taking office, President Donald J. Trump said the U.S. would leave the historic agreement and nearing the end of his term in 2020 had just about completed the exit.

To the family of the world’s nations was this message: Do it without the United States of America.

Then, the recent good news: President-Elect Joseph Biden has indicated that his would be the “climate administration” beginning in January 2021 and quickly named former Secretary of State John Kerry to be his “climate czar”, the influential voice on the world stage to signal the USA is back in addressing the challenges of climate change.

Secretary Kerry was the U.S. representative to the COP 21 meetings in Paris and guided the nation’s inclusion in the Paris Agreement.

Forward to the last days of 2020: This is a climate emergency, President-Elect Biden said, and former US Senator and Secretary of State Kerry would lead the effort to elevate the nation’s response to the ever-escalating crisis, influencing policy and diplomatic initiatives on the world stage. (

Secretary Kerry will officially be on the National Security Council and report to the President of the United States after January 20, 2021.

Speaking to ProPublica, Secretary Kerry said “…the issues of climate change and human migration are intertwined… people are moving to places where they think they can live…and they will fight over places they want to move to… we will have millions, tens of millions of climate migrants…”

Come 2021, the family of nations can begin to celebrate – the United States of America will be back on the front lines in meeting myriad challenges related to the climate crisis.

As we prepared our commentary for the G&A Sustainability Highlights newsletter, President-Elect Biden named his dream team of climate change champions to lead the nation’s efforts:

Gina McCarthy, former head of the US EPA, will be the domestic climate change advisor (heading the White House Office of Climate Policy).

Governor Jennifer Granholm is the nominee to head the Department of Energy (her home state of Michigan is the home of the auto industry – she was the state’s governor).

Congresswoman Deb Haaland will be the first Native American when confirmed to be named to a cabinet post. She’s member of the federally-recognized Pueblo of Laguna, the New Mexico tribe whose 500,000 acres of land are near to Albuquerque. They refer to themselves as “Kawaik People”.  As Secretary of the Interior, she will have responsibility for jurisdiction over tens of millions of acres of tribal lands). Interior’s Department of Indian Affairs (BIA) is charged with “…promoting safe and quality living environments, strong communities, self-sufficiency and enhancing protection of the lives, prosperity and well-being of American Indians and Alaska Natives”.

Michael S. Regan, who worked in both George W. Bush and Bill Clinton administrations, and who is head of North Carolina’s Department of Environmental Quality, is Biden’s nominee to head the US Environmental Protection Agency.  He will have the daunting task for rebuilding the nation’s environmental regulations that were unraveled during the Trump Administration.

Brenda Mallory, experienced federal government attorney, will had the Council on Environmental Quality.

This is also a team, Biden and supporters point out, “that looks like America”.

Leveraging the strategies, policies, actions, and programs designed to address climate change challenges, the team and colleagues will “build back better” with green infrastructure initiatives at the core.

In the December 2020 issue we brought readers a selection of current news and opinion and shared perspectives on the Paris Accord, now five years in.

As we neared year-end 2020 much of the news was about climate, climate, climate in the context of the peaceful transition of power in this, the world’s most influential democracy.

A nation that for many years had been that Shining City on a Hill for other peoples and nations.  Will the USA be that again?

Stay Tuned to climate change crisis responses that have the potential to be at the heart of many of the new administration’s public policy-making efforts. On to year 2021…

TOP STORIES in the Newsletter Dec 20 2020

Against the above context, we share here a selection of the perspectives on the 5-Year Anniversary of the Paris Agreement.  Where we are now as we prepare for the transition year 2021 in the USA:

“APAC” & Corporate Sustainability Journeys – Monitoring Progress & Demonstrated Leadership on the Rise in This Vital Global Region

May 24 2021

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

Business and financial activities in “APAC”, the Asia / Pacific Basin Region are vital to the economies of the rest of the world.

Think of the region’s leading sovereign economies…in order of magnitude, consider the impact of the economies of China, Japan, India, South Korea, Australia, Indonesia (the top economies).

These six countries are;

  • home to some of the world’s lower cost manufacturing and assembly centers,
  • sources of financing for companies and other government entities, sourcing points for many of the world’s natural resources and food and industrial ingredients,
  • sources of value-added manufactured products (such as the chips used in a multitude of consumer and business IT applications such as smartphones and electric vehicles).

The good news is that the region is also home to a growing number of corporate sustainability leadership companies. 

For example, CDP reports that “despite many challenges in 2020” companies disclosing on TCFD-aligned reporting reached a global high — and that included more than 3,000 companies in 21 Asia Pacific Region (“APAC”) countries responding to CDP for the first time…and that now account for almost a third of CDP’s global corporate responses.

ESG Leadership Progress:  The majority of the 3,000 APAC companies report having a board-level oversight on climate-related issues (79%) and say that they are beginning to integrate climate issues into business strategy.

Half say they have integrated incentives in management of climate issues, including attainment of targets.

Three of four APAC companies responding to the CDP survey say they have identified climate risk as maybe having substantive impact on their business and 60% of these are transition risk.

Climate Change Impact:  CDP in its Global Climate Risk Index 2021 found that 60% of countries most affected by climate change from 2000 to 2019 are in Asia.

McKinsey consultants estimates that the impact on labor productivity due to chronic increases in heat and humidity could cost Asia as much as US$4.7 trillion in of annual GDP by 2050.

We are sharing CDP’s recap of the survey responses for 2021 as a Top Story.

Looking at the smaller economy of the region, Sustainalytics’ manager Frank Pan focuses on ASEAN-6 nations and reports that in the context of sustainable investing moving from “niche” to mainstream, this trend is still limited those Southeast Asian countries — even though the region is an economic block with one of the world’s fast-growth rates.

The ASEAN-6 countries: Singapore, Malaysia, Thailand, Vietnam, Indonesia, the Philippines.

All six of these countries, Pan points out, do have some form of ESG disclosure required and the governments have guidelines to help companies in their ESG disclosures; all the nations have stock exchanges that are members of the Sustainable Stock Exchange Initiative to encourage ESG reporting by listed companies.

He points out the nature of the ESG disclosure regimes of the six nations in another Top Story selection this week.

Sustainability Reporting:  The Global Reporting Initiative (GRI) is the world leader in number of corporate reports published following the organization’s standards; while some ESG standards are designed to inform the investment community, GRI’s were developed over 30-plus years with stakeholders in mind, including providers of capital (today’s standards were preceded by GRI’s reporting frameworks, “G1 through G4”).

GRI in our third Top Story this week reports growing momentum for sustainability reporting in South Asia and especially for three target countries (India, Bangladesh, Sri Lanka).

GRI’s research examined 1,100 companies in the region; of these, 503 are in India, 320 in Bangladesh, and 284 in Sri Lanka.

The “2020 Sustainable Reporting Trends in South Asia” research found that GRI’s Standards are the most widely-used for ESG reporting across all the countries; 64% of listed companies in Sri Lanka use the standards; the number of reports published in Bangladesh increase by more than a third from 2018 to 2019; in India, 99% of organizations analyzed by GRI have integrated sustainability reporting into their management practices.

While the usual flow of content that we monitor and share in the newsletter each week at times has a focus on Asia and the Pacific Basin region and subregions, we are bringing you much more detail in these stories – where you will find more information about the above research efforts and respective organizations’ reports in the Top Stories.

TOP STORIES

Earth Day – Climate Week – The World Celebrates Promises and Actions to Meet Climate Change Challenges

April 21 2021

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

In brief – yes, this is Climate Week, being observed just about everywhere on this precious Blue Orb floating in space. 

The varied observations are “surrounding” the now-50-plus-one years of celebrating Earth Day going back to April 1970, United States Senator Gaylord Nelson of Wisconsin was the moving force behind the very first Earth Day in the United States of America.

Good news for 2021: The U.S.A. is fully “back” in climate change matters with the nation rejoining the Paris Agreement and embracing and promising to surpass the COP temperature-limiting goals. As we write this,

President Joseph Biden and VP Kamala Harris are leading a global leader virtual summit on climate change issues.

Senator Gaylord’s words in Denver, Colorado that first Earth Day continue to speak to us across the decades: “Our goal is not just an environment of clean air and water and scenic beauty. The objective is an environment of decency, quality and mutual respect for all other human being and all living creatures.”

Here we are in 2021 in the USA witnessing the dramatic expansion of the decades of Earth Day celebrations with current and future promises, pledges, and action on many fronts – in many nations as well – and among global institutions (like the arms of the United Nations and many more),

And by tens of millions of people, individuals who care about the state of humanity and state of our planet.

While considerable focus is on the Biden-Harris Administration policy declarations and actions at the Federal level (“the climate administration”), there are many more actions at the state, city – municipality and tribal levels as well in the United States.

And, across the spectrum of firms in “Corporate America” and at many asset management firms there is the rapidly-widening embrace of ESG policies and actions.

‘No doubt the digital climate summit of this week will spur internal debate in corporate suites along the lines of: What are industry and investing peers doing – what else should we be doing! What are our risks and opportunities as the world engages to move toward Net Neutrality!

In this brief post we are sharing timely updates in each of our subject/topic silos that readers find each week in the G&A Sustainability Highlights newsletter.

Reminder – there is much more related current and archived climate change content beyond the silos for you on the G&A’s SustainabilityHQ platform.  And more related content to share on G&A’s Sustainability Update blog.

TOP STORIES