The Environmental Forum Testimony: Dan Esty, Climate Optimist

The Environmental Forum Testimony: Dan Esty, Climate Optimist

With all the challenges that humanity faces, there are huge opportunities as well. Which is not to say that the environmental news isn’t bleak. When the world community met in Bonn last November to advance the Paris Agreement on climate change, Washington signaled it would be leaving the 2015 accord and abandoning the key domestic program for achieving America’s commitment to reduce its greenhouse gas emissions by 26-28 percent over the next dozen years, the Clean Power Plan to cut power plant emissions. But despite the new administration’s actions, the momentum behind America’s Paris pledge remains strong — and emissions reductions in general continue across the world, as 190-plus other nations move to implement the agreement...

Here Are 5 Ways Climate Became Part Of The 2018 Davos Dialogue

Here Are 5 Ways Climate Became Part Of The 2018 Davos Dialogue

Will the real Donald Trump please stand up?

One week ago, the U.S. president showed his stripes as an "America First" trade protectionist by blessing a tariff that is likely to raise costs for corporate solar purchases and cost domestic jobs among installers and developers. Five days later, a "restrained" POTUS stood before world leaders at the World Economic Forum in snow-blanketed Davos, Switzerland, encouraging them to invest in a "strong and prosperous" United States.

The money quote from his speech: "America First does not mean America alone."

Much of the media coverage remarked on the relative lack of drama associated with Trump's WEF debut (he skipped last year). As is to be expected, his remarks completely ignored the topic of climate change. However, plenty of the other leaders there — notably France's President Emmanuel Macron and Chinese economist Liu He — were more than willing to position their nations as champions of inclusive economic growth engineered to address the threat of global warming....

Do-Good Investors: Watch Out For What These Funds Hold

Do-Good Investors: Watch Out For What These Funds Hold

If you listen to the marketing hype, assets devoted to ESG—industry jargon for investments sensitive to environmental, social and governance issues—account for some $8.7 trillion, double the amount just five years ago. That's great news for the planet, right? Not so fast. Much of the growth is a matter of semantics. What were once run-of-the-mill value or growth funds are being reclassified as sustainable or ESG-friendly.

Take, for example, American Century's $227 million Sustainable Equity Fund. In 2004 it launched with the name Fundamental Equity, focusing on large companies. Last year the frequent underperformer was renamed to meet growing investor demand for sustainable investing. Says portfolio manager Joe Reiland, "We all want to preserve the environment and do well and do good."

Even more rampant than shape-shifting funds are those with liberal definitions of what qualifies as ESG. Take the two largest asset managers in the world, BlackRock and Vanguard. Both have ESG funds with holdings that defy what many might consider socially responsible. BlackRock's MSCI KLD 400 Social ETF holds McDonald's, ConocoPhillips and Occidental Petroleum, even though McDonald's has struggled with ongoing labor disputes and many ESG funds steer clear of companies that hold fossil-fuel reserves. BlackRock declined to comment on specific holdings...

Protecting The Environment In The Trump Era

Protecting The Environment In The Trump Era

Local organizations and activists must play “a much bigger role” in protecting the environment because of policy changes in Washington and the financial limitations of federal, state and local governments.

“You must do more. It is time to step up,” former state Energy and Environmental Protection Commissioner Daniel Esty told an Aspetuck Land Trust (ALT) gathering on Nov. 15.

Describing it as “an incredibly challenging moment” for environmentalists, Esty said people volunteering their time and donating money at the local level “does make a difference.”

Esty spoke on “Environmental Protection in the Trump Era: What’s Next?” as part of ALT’s Haskins Lecture Series. Close to 200 people attended the event, which included a question-and-answer session, at the Pequot Library in Southport.

The nonprofit ALT has more than 1,000 dues-paying members and owns about 1,800 acres of open space in Easton, Weston, Fairfield, and Westport...

CDP's Climate Week Event

CDP's Climate Week Event

Dan Esty spoke at CDP's Climate Week gathering in NYC, which was focused on metrics for sustainability. More deep integration of Environmental, Social and Governance metrics (particularly climate change related metrics) was a topic of great interest across may conversations occurring during the 2016 Climate Week that brought together business leaders, climate leaders, and NGOs from around the globe. This years program had particular interest and involvement from the investment community who are interested in sustainability metrics. Dan Esty spoke at the CDP program to explain the Constellation Research and Technology (CRT) improved ESG data feeds, in particular, the Climate Impact Score that is being developed.

Putting value on carbon can lower energy use, campus experiment shows

Putting value on carbon can lower energy use, campus experiment shows

More than 600 major companies — from BP to Microsoft — have adopted carbon-pricing programs to spur energy conservation and control their carbon emissions. But the effectiveness of these efforts has not been analyzed or publicly reported.

An article published in the journal Nature on Nov. 2 provides new insights into the value of carbon-pricing incentives based on analysis of a pilot program at Yale University in 2015. The researchers highlight some of the ingredients needed to achieve successful carbon-pricing schemes.

In the paper, three Yale researchers provide an overview of internal carbon pricing strategies, including an examination of different models of implementation. Further, they illustrate how the Yale project, which has since been expanded into a campus-wide initiative, has provided empirical evidence of the effectiveness of utilizing such price signals.

“What we found is that carbon pricing can be a valuable tool to help reduce emissions, especially at a time when there is little activity to reduce emissions at the national level,” said Kenneth Gillingham, a professor of economics at the Yale School of Forestry & Environmental Studies (F&ES) and lead author of the paper.

The co-authors are Stefano Carattini, a postdoctoral fellow at F&ES, and Daniel Esty, a professor of environmental law and policy at F&ES and Yale Law School...

Q&A with John Moorhead (JM) and Dr. David Lubin (DL) co-authors of “Global 250 Greenhouse Gas Emitters: A New Business Logic” on the occasion of its launch in Geneva on 31st October 2017

Key Take-Aways

1.       Share of emissions: The Global 250 (G250) are essential partners to emission reduction and decarbonization, since G250 and G15 represent about 1/3 and 10% respectively of anthropogenic GHG (Greenhouse Gas) emissions (at a 60% rate of double counting).

2.       Leadership benchmark: The G250 needs to reduce GHGs by 3%/year linearly (absolutely and with positive decoupling) to show and achieve zero GHG emissions by 2050 latest.

a.       This reduction rate is compatible with UNEP’s 1.5 degree C pathway and Millar et al., 2017 study on carbon budgets (but not CarbonBrief’s analysis of remaining carbon budgets).

b.       About a 1/3 of the G250 have achieved this benchmark from 2014 to 2016 and 12% are in the Science Based Targets initiative

3.       Sustainability premium: There is no evidence of a financial penalty for decarbonization of the G250 and there is emerging evidence of a Sustainability Premium for those that decarbonize in Utilities and Automobiles (moderate correlation with Total Returns)

4.       Decarbonization platform: Due to the dynamic nature of GHG data & performance and as data quality, information and knowledge improves (particularly of Scope 3), this report is insufficient to engage, per se, and is rather a starting point for a decarbonization platform.

GLOBAL 250 GREENHOUSE GAS EMITTERS: A NEW BUSINESS LOGIC

GLOBAL 250 GREENHOUSE GAS EMITTERS: A NEW BUSINESS LOGIC

The 250 companies referenced in this report, together with their value chains, account for approximately one-third of global annual greenhouse gas (GHG) emissions. For a decade or more, the management teams in these large organizations have recognized the potential future constraints that climate change could pose on their business operations and outlook. While many have deferred making a strategic shift toward a low-carbon future, others have recognized a new business logic: a historic opportunity for innovation that drives durable growth and competitive advantage.

As the early movers see it, carbon-intensive firms – whether they are big energy producers, consumers or makers of energy-intensive products who could ride the coming wave of technological and organizational change – would be positioned to prosper in a carbon-constrained world. Companies and their customers would see increased eco-efficiencies and reduced eco-risks. Firms unwilling or unable to adapt would ultimately fall behind as the new business logic of a post-carbon economy slowly but surely redefines the terms of competition.

The question for most managers, investors and analysts has been one of timing. Not surprisingly, conventional wisdom suggests that it is still too early – shareholders could pay a penalty resulting from the significant investments required to transform core processes and product portfolios for low-carbon markets that have not yet fully materialized or technologies that are still rapidly evolving. While there could be significant consequences for being late, those consequences could be many years away.  

Yale Sustainable Finance Symposium

Yale Sustainable Finance Symposium

Sustainability has moved from the margins to the mainstream of the investment world evidenced by the fact that assets under management in the United States invested in responsible investment strategies have grown 76 percent since 2014. Any investor will tell you that demand for responsible investing is increasing. What many cannot explain, however, is how to quantify sustainability and how it corresponds with financial performance. These issues were the focus of a Yale Initiative on Sustainable Finance Symposium (co-sponsored by the Journal of Environmental Investing) on September 22 at the Yale School of Management.