Biden’s summit was not the perfect argument for every day being Earth Day.
How was your Earth Day? Could you keep count of the gigatonnes of CO2 we’re going to save via the emissions reductions announced over the six sessions of the Earth Day Summit’s first day? As world leaders outdid each other with their diverse boasts and the baselines for their pledges, one couldn’t help thinking some kind of TCFD for governments would have helped keep score.
US President and summit host Joe Biden set the tone and shifted the conversation, committing the US to cutting GHG emissions by 50-52% from 2005 levels by 2030. UN Secretary General Antonio Guterres tweeted that all countries – “especially large emitters” – should present ambitious 2030 targets well before COP26.
Despite Guterres’ entreaties, calls from industry, and growing evidence of corporate usage, there was little mention of carbon pricing among the speeches. While some leaders walked the walk, others just talked the talk. And the less said the better about bunny-hugging.
Responses were mixed. Greta Thunberg called bullsh*t, literally. “We have to end fossil fuel subsidies, stop new exploration and extraction, completely divest from fossil fuels and keep the carbon in the ground,” she told a US Congress committee hearing yesterday. BTW, never let it be said Thunberg doesn’t have a sense of humour.
If 2030 is the new 2050, we’re going to need some flesh on the bones of those commitments very soon. As Fiona Reynolds, CEO of the Principles for Responsible Investment, said in her ESG Interview this week: “You can’t just announce a commitment to net zero and think it’s all going to magically happen.” Investors might also warn politicians of the importance of bringing your stakeholders with you.
On Wednesday, the finance sector had voiced its support for meaningful action on climate, with the announcement of the industry-wide US$70 trillion Glasgow Financial Alliance for Net Zero (GFANZ), including a new Net Zero Banking Alliance, consisting of 43 global banks. The fact that nine NZBA members showed up in a CNBC analysis of 33 banks which have increased their fossil fuel financing from 2016 to 2020 suggests it’s not only politicians that face both ways in a period of transition.
Flesh on the bones was exactly what the European Commission provided with the release of further details on its taxonomy of green activities, plans for a new Corporate Sustainability Reporting Directive and range of supporting measures to its sustainable finance package, including agreement on a European Climate Law.
After delaying decisions on inclusion of nuclear and gas, the Commission hardly needed to point out that the taxonomy is an evolving concept. But the need for progress and detail on its full range of environmental objectives, including circularity, remains urgent.
While this week ended with the focus firmly on climate, it’s worth noting that it could have been very different if a certain court case had turned out differently, and that Earth Day isn’t the only reason to remember April 22.