Last Chance for the Climate Transition (FT)

Achieving zero emissions by 2050 would require unprecedented global co-operation

https://www.ft.com/content/3090b1fe-51a6-11ea-8841-482eed0038b1

At the World Economic Forum in Davos this year, two people stood out: Greta Thunberg, the 17-year-old Swedish climate activist, and Donald Trump, the US president. In their messages on climate change, these two could not have been more opposed: panic, confronted with indifference. But one thing they share is that they are not hypocrites: Ms Thunberg does not pretend we are doing anything relevant; Mr Trump does not pretend he cares. Most participants in the climate debate, however, pretend to care, pretend to act, or both. If anything is to be done, this must change.

Ours remains what it has been since the early 19th century: a fossil-fuel civilisation. There have been two energy revolutions in human history: the agricultural revolution, which exploited far more incident sunlight; and the industrial revolution, which exploited fossilised sunlight. Now we must return to incident sunlight — solar energy and wind — along with nuclear power, while maintaining our high standards of living.

How passive investment dulls the green wave (FT)

https://on.ft.com/2Sqcjbn

Passive index trackers help to keep money flowing to high-carbon industries

With such a strong financial case against fossil fuels coming into focus, and starting to convince holdouts, activists’ plans to starve oil, gas and coal companies of capital should get a boost as investors abandon the sector for non-ideological reasons. Yet even with this tailwind, the impact of their campaign will be limited as long as people continue ploughing money into market-tracking passive funds.

The ESG Debate Heats Up: Four More Challenges (CFA Enterprising Investor)

https://blogs.cfainstitute.org/investor/2020/02/04/the-esg-debate-heats-up-four-more-challenges/

Investors and Managers: Now Join Hands.

As fires continue to ravage Australia, debates among environmental, social, and governance (ESG) investment professionals have been blazing as well.

One LinkedIn commentator, Dr. Raj Thamotheram, observed:

“There is so much ‘sdg washing’ and ‘impact washing’ going on at the moment, it drives me mad. We shouldn’t pretend that buying a share of XXX in the secondary market is changing the world. Change is slow and incremental. [My employer] isn’t perfect, we try to put our best foot forward, that inevitably leads us to be optimistic in describing what we do on ESG. But I try to be as brutally honest as I can. I’m amazed at how many peers say in the PRI reports that they do ESG integration across all asset classes 100%. Really? And if so, what does that actually mean?

“The answers aren’t easy but the challenge is urgent and CEOs of member firms need to mandate corrective action in 2020.