Updated: Sep 2, 2021
The IPCC's (Intergovernmental Panel on Climate Change) sixth and latest Assessment Report (AR6) doesn't make for pleasant reading.
234 volunteer scientists reviewed 14,000 scientific papers, responded to 80,000 comments on their research, representatives from 195 national governments approved the report at a summit. One conclusion. The planet is getting warmer and it's "unequivocal" that human actions have caused climate change.
Since we're the cause this also means we have the ability to reverse the damage and direction of our planet's climate warming. The most important number. We still have a chance to limit global warming to 1.5 or 2 degrees. The safe temperature range as set by the Paris Agreement.
The IPCC's report is a timely and critical reminder. Described as "a code red for humanity" by the UN Secretary General António Guterres, and "really should give us a kick in the pants" by Climate Change Minister James Shaw.
Within the context of the IPCC report, we've collected articles to explore ways individuals, organisations and investments can contribute to the climate solution.
Ākina: Four things businesses can do to combat climate change, includes a superb infographic that summarises the IPPC report (see end of article):
Get to grips with the impact of your business on the climate
Invest in making change
Look out for your employees
Use your voice
Has the company you are investing in signed on to a rigorous commitment - that is judged by a reputable outside party - and started making progress toward that commitment?
How do a company’s climate commitments and actions compare to others in their sector?
How does the climate footprint of a mutual fund look as measured by a wide range of metrics?
Does my asset manager have a strong commitment to net zero goals?
Bloomberg, ESG Investors Question Their Own Methods After Grim Climate Report. Highlights include:
Finance industry needs to take a longer perspective to tackle global warming i.e. look ahead into the year 2060, 2100.
Investors need to move faster and invest in green debt that can have greater real-world impacts.
Integrate climate science into investment models to measure the projected carbon emissions of portfolios.
Bloomberg, There’s $35 Trillion Invested in Sustainability, but $25 Trillion of That Isn’t Doing Much. Highlights include:
According to the Global Sustainable Investment Alliance’s latest report, sustainable investment assets grew to $35 trillion globally last year. A third of managed assets is being invested into ESG. However this ESG integration often doesn't translate into action unless it's combined with conditions such as proxy voting and corporate engagement.
In March, the European Union implemented the Sustainable Finance Disclosure Regulation, requiring fund managers to classify and disclose the ESG features of their investment products. Between 2018 and 2020 EU sustainable investments reduced by $2 trillion as policymakers tightened parameters for what could be considered responsible investment.
Investor Group on Climate Change (IGCC), How investors can support an equitable transition to net zero. Investors can contribute to a net zero transition by taking action in five areas:
Investment strategy and capital allocation
Advocacy and partnerships
Impact measurement and evaluation
In New Zealand, the following funds are focused on investing in climate-related solutions.
NZGIF (New Zealand Green Investment Finance)
Climate-related disclosures: the XRB (External Reporting Board) is developing reporting standards to support the New Zealand Government's intention to implement mandatory reporting on climate risks. If approved by Parliament, around 200 of New Zealand's largest entities (e.g. banks, insurers, investment managers, publicly listed companies) could be required to make disclosures in 2023.