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In snowy Davos, oil steals the climate show

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Source: Sergei Dubrovskii / E+ via Getty Images

Davos Man has changed in the past decade. He’s richer.

That’s about all though, as the annual summit of the 1% in the Swiss Alps has presided over a steady erosion in globalization that can be traced all the way back to the great financial crisis of 2008.

But few could resist the first meeting back in the snow since Covid, as record numbers turned out this week, with celebrities such as Sting hobnobbing with the usual Davos crowd of John Kerry, Anthony Scaramuchi, and others. And with little else to boast about, given the war, recession and global energy crisis, the topics have broadly focused on climate change, and the oil industry.

Already this week, we’ve seen a massive deal in Norway’s $1.3 trillion sovereign wealth fund, built on oil revenue, taking a 49% stake in Iberdrola’s Spanish renewables portfolio. We’ve seen oil giant Shell buy EV charger Volta for $169 million.

We’ve seen an oil executive take the reins of this year’s UN climate summit in Dubai. And we’ve seen climate celebrities from UN Secretary General António Guterres to activist Greta Thunberg go after fossil fuel interests in Switzerland and Germany.

The coming together of oil and climate interests will be messy and distasteful. But it needs to happen for us to achieve the reduction of emissions we need to save the planet. A decade from now, 2023 will go down as a pivotal year in that story, whereas what the elite predict this week in Davos will be forgotten.

More insights below . . . .

Shades of green: Funds slash ESG rankings on legal worries

. . . . Confusion over new European Union sustainable rules for funds and ETFs as they take effect this month portends a difficult period for the U.S. fund industry when new corporate disclosure rules hit later this year, writes Mark Hulbert. The EU’s Sustainable Finance Disclosure Regulation (SFDR) requires funds to rank themselves based on their sustainability, but lack of reporting standards among the companies inside those funds adds to the confusion and has caused several funds to lower their rankings to avoid potential legal troubles tied to greenwashing. Hulbert likens the issue to the furor over the ‘organic’ label on foods in the U.S., and says there is only one thing investors can do. . . .

Read the full story

This week’s subscriber-only insights

Solar installation projections on the upswing for first time in two years

. . . . It’s been a rough few years for solar installations, as Covid, trade problems with China and local U.S. subsidy challenges hold back consumer demand. But solar stocks began taking off in the fourth quarter and now we know why. Installations are projected to rise in 2023 as relations with China ease, supply chain issues improve, and the Inflation Reduction act subsidies hit. Not quite sunny days ahead but a harbinger for renewables, and investors. Read more here. . . .

. . . . The Biden Administration made a big push into starting the U.S. offshore wind industry last year, but hostility from locals in the Northeast and West Coast, and — ironically — from environmentalists concerned about the turbines impacts on sea life, are holding projects back, and widening the gap between the U.S. wind industry and its competitors in Northern Europe. Read more here. . . .

. . . . Red state Republican leaders opened two new fronts in their culture wars on Wall Street this week as attorneys general from 21 states asked proxy advisers ISS and Glass Lewis to clarify their positions on advising clients to vote for sustainable initiatives, and as Texas said it might kick Citigroup out of its municipal bond market for its stance against firearms.

The culture wars will be a defining part of the U.S. climate story this year but will likely have more impact on the red states then on Wall Street. BlackRock $BLK Chief Larry Fink said this week in Davos that while $4 billion came out of its funds from red states opposed to its climate policies last year, more than $400 billion came in from other sources. And an environmental study last week said the competitive costs of kicking banks out of local municipal and pension markets could cost local taxpayers up to $700 million in higher interest costs from the remaining bank bidders.

At some point, someone is going to realize that the cost of God, guns, and gas stoves at the expense of green is going to add up to political trouble. . . .

Editor’s picks: Clean energy value chain; hydrogen patents signal shift to clean tech

Hydrogen patents signal shift to clean tech

Hydrogen technology development is shifting toward low-emissions solutions such as electrolysis, according to a joint study of patents by the European Patent Office and the International Energy Agency. A report from the IEA quotes Executive Director Fatih Birol as saying, “Hydrogen from low-emissions sources can play an important role in clean energy transitions with potential to replace fossil fuels in industries where few clean alternatives exist, like long-haul transport and fertilizer production. This study shows that innovators are responding to the need for competitive hydrogen supply chains, but also identifies areas — particularly among end-users — where more effort is required. We will continue to help governments spur innovation for secure, resilient and sustainable clean energy technologies.”

Break me off a piece of that recyclable paper

Nestlé, the parent company of KitKat, is running a test of compostable and recyclable paper packaging for their chocolate bars. According to a report in Environmentlleader.com, the pilot is exclusive to Coles supermarkets in Australia and is part of Nestlé’s efforts to reduce plastic waste by moving away from single-use plastic packaging. The pilot program will feature KitKat bars wrapped in recyclable paper packaging. The company says the initiative could save 1,900 tonnes of CO₂ emissions annually if it expanded beyond Australia.

Fighting fire with knowledge

Electricity-utility ignited wildfires increasingly threaten communities in California, the American West, and around the globe as climate change accelerates dry conditions. The author of the article Fight Utility Wildfire with Knowledge Management, published in Duke Environmental Law & Policy Forum, Vol. 33, No. 2, 2023, offers a unique contribution to the legal, safety, energy, and environmental fields by arguing that electric utility knowledge management is a key wildfire risk driver that corporations and regulators must address. From the abstract: “Knowledge management focuses on creation, transfer, analysis, and utilization of knowledge to foster understanding and decision-making. Knowledge management is critical to vegetation management, the primary ignition source for utility-caused wildfires in California. Through a case study of the 2020 Zogg Fire ignited by Pacific Gas & Electric $PCG , this article examines electric utility knowledge management through doctrinal examination of electric utility statutes, regulations, PG&E’s federal criminal probation record, and normative recommendations informed by process safety standards. Author: Catherine J.K. Sandoval, Santa Clara University School of Law.

Words to live by . . . .

“We learned last week that certain fossil fuel producers were fully aware in the 1970s that their core product was baking our planet. Just like the tobacco industry, they rode rough-shod over their own science. Big Oil peddled the big lie. And like the tobacco industry, those responsible must be held to account.” — UN Secretary General António Guterres, speaking at the World Economic Forum in Davos on Wednesday.

By David Callaway

Shades of green: Funds slash ESG rankings on legal worries

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Source: a-herzog / Flickr

(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — It’s hard — in theory — to be against requiring mutual funds and ETFs to disclose more accurately and completely the ways in which they are “sustainable.”

In practice, however, those requirements appear to shed more heat than light. In many fundamental ways, “sustainability” is in the eye of the beholder. To ensure that the climate-friendly ETF you’re considering is indeed climate-friendly, you have no choice but to closely analyze the companies in which it invests.

That’s the conclusion I draw from reviewing the European Union’s “Sustainable Finance Disclosure Regulation” (SFDR). Though the SFDR was adopted last March, a number of specific standards for its implementation didn’t go into effect until this month. In many ways the SFDR is attempting to define the undefinable, and it faces many serious and perhaps insuperable obstacles.

This isn’t just a problem for European investors, by the way. The SEC is in the process of finalizing its own set of ESG disclosure rules, and the challenges the EU is facing are a harbinger of what almost certainly will be the case in the U.S. as well…

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By David Callaway

The 17 Effects Nuclear War Would Have on Earth

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Source: AlexLMX / iStock via Getty Images

To determine what a nuclear war would do to the world, 24/7 Wall St. gleaned information from the book “Nuclear Choices for the Twenty-First Century: A Citizen’s Guide” written by Richard Wolfson, a Benjamin F. Wissler Professor of Physics at Middlebury College, and Ferenc Dalnoki-Veress, a Scientist-in-Residence at the Center for Nonproliferation Studies of the Middlebury Institute of International Studies. Wolfson and Dalnoki-Veress also wrote in MIT Press The Reader a summary of the book, The Devastating Effects of Nuclear Weapons.

Other information was gathered from various media outlets and websites Futurism, and Nuclear War Map. We included various outcomes from nuclear wars since not all possible scenarios are all-out conflicts.

Even though not every scenario involving the use of nuclear weapons ends in Armageddon, the deployment of the most lethal weaponry in a limited or regional conflict has dire consequences for the planet. 

A nuclear exchange between India and Pakistan could mean as many as 125 million fatalities. Nuclear-triggered fires would produce smoke that would eventually climb into the stratosphere, where it would spread globally within weeks. There would be a dramatic decline in surface sunlight, global temperatures would fall, and precipitation would drop. There would be famine and mass starvation and possibly other disasters. Recovery would take more than 10 years. (Speaking of India, this is the country with the largest military.)

An all-out war, what experts have called “unthinkable,” probably means the end of our world. Cities would be targeted with multiple weapons, and lethal fallout would cover much of the United States. More than half of the U.S. population would be killed initially, and the survivors would be exposed to radiation high enough to cause lowered disease resistance and greater incidence of fatal cancer.

Click here for what a nuclear war would do to the world

Fossil fuel ‘influencers’ add new twist to old game of paid promotions

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Source: PamWalker68 / iStock via Getty Images

(A native of England, veteran journalist Matthew Diebel has worked at NBC News, Time, USA Today and News Corp., among other organizations. Having spent much of his childhood next to one of the world’s fastest bodies of water, he is particularly interested in tidal energy.)

Made in the shady: The fossil fuel industry’s ‘influencers’

Ever since I first heard it, I’ve been both fascinated and repelled by the word “influencers.” As a skeptical journalist who hopes he’s not easily persuaded, the moniker has an ickiness about it that leaves one with the impression that many people are gullible.

The term appeared on the scene a few years ago and usually meant some beauteous celebrity or social media star pushing a particular perfume or party dress. OK, not such a big deal, even when, as my son does, you spend hundreds of dollars annually on sneakers touted by one hotshot or another.

But now the somewhat insidious salespersonship has come to the matter of climate change, with millions being paid to influencers to promote fossil fuels. And it turns out it’s a shady business in more ways than one…

Subscribe to Callaway Climate Insights to keep reading this post and get 7 days of free access to the full post archives.

By David Callaway

From Brazil attack to climate change, how the fight against disinformation can be won

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Source: takver / Flickr

(Marcelo Rech, is executive president of the Brazilian Association of Newspapers (ANJ) and a board member of the World Editors Forum.)

By Marcelo Rech

For years, supporters of former president Jair Bolsonaro, who was defeated at the polls on Oct. 30, have been fed conspiracy theories, falsifications of reality or simple superstitions. From the supposedly miraculous effects of drugs against Covid to the accusation of fraud in electronic voting machines, which was never proven, millions of Brazilians began to live in a parallel world.

In this universe of the absurd, the cult spirit is fermented by social media and messaging services. Its followers are urged to ignore or disregard press reports and to believe unquestioningly in its leaders, who in turn provide their supporters with an intoxicating cocktail of preposterous theories with grudges and fears that end up turning people from moderate and balanced nature into extremists.

In Brazil, the Jan. 8 riot in Brasilia was the culmination of a movement that began shortly after the Oct. 30 election. Encouraged by social media influencers, thousands of people left their homes and families and went to live in tents in front of military barracks in hundreds of Brazilian cities to ask for a “federal intervention against fraud at the ballot box.” Not even the games of the Brazilian team in the Qatar World Cup had the attention in these camps, because their leaders considered the championship a distraction from their goals.

The expectation of this crowd, increasingly radicalized by social media, was that the armed forces would prevent the inauguration of Luiz Inácio Lula da Silva in the presidency — a fantasy in which a hallucinated ghost of communism was mixed with non-existent threats to the religious faith of Brazilians. It was from these camps that, wrapped in flags and yellow-green decorations, radicals came to invade the headquarters of the presidency, the supreme court and the congress, armed with cell phones that fed other extremists with videos and live transmissions.

‘Global warming is the biggest threat to the Earth’s physical health. The disinformation epidemic is the greatest threat to the mental health of the planet, with concrete risks to the political and social stability of billions of people.’

It is possible to recognize traces of this collective hallucination almost everywhere, including the invasion of the U.S. Capitol two years ago. In some countries, like Russia, it is the government itself that promotes a massive disinformation campaign with the aim of sustaining its war in Ukraine. In many others, political organizations with radical views gain ground because they also manipulate emotions by triggering revolt and indignation about false or out-of-context situations.

The truth is that no nation, however advanced and developed, is immune to this virus that corrodes truth, plurality, respect for adverse opinions and, therefore, the very friendly coexistence between opposites, the basis of any democratic society.

In the face of such threats, the time has come for the world that still keeps intact its mental health to put an end to this epidemic. Just as the United Nations brought those who have the power to contain global warming to the negotiating table, the same UN needs to take the lead in combating disinformation through a major global, self-regulated agreement that reverses the announced disaster.

The logic of such a pact is simple. Global warming is the biggest threat to the Earth’s physical health. The disinformation epidemic is the greatest threat to the mental health of the planet, with concrete risks to the political and social stability of billions of people. Its potential consequences, ranging from the erosion of democracies and freedoms to a nuclear confrontation, are as or more catastrophic than climate change.

To begin with, the United Nations should invite to the table the two parties with the most immediate powers to contain and reverse the epidemic: the major technology platforms and representatives of professional journalism. It should be noted that, in Brazil and in the world, the toxic cloud of fake news spreads in the vacuum of journalism. The media has been forced to contract in the face of insurmountable, until now, difficulties to create a new economic model after the devastation in its revenues that fatten the balance sheets of the big tech companies.

Journalism is far from perfect, but, as seen during the pandemic, it is still the best antidote for giving voice to reliable sources, reestablishing the truth and checking versions circulating on social media and messaging services. Some countries, such as Australia, New Zealand and soon Canada, have approved laws that largely recover the financial imbalance of professional journalism and allow the gradual reoccupation of the so-called news deserts, vast regions where there are no more traces of independent press.

Although it represents an advance, such legislation is not an achievable solution for most of the planet. In dozens of countries in Latin America, Africa and Asia especially, governments and parliaments would not like to see a strengthened press, with more plurality, diversity and investigative capacity able to confront them. On the contrary, autocracies and even immature democracies do not understand the role of the free press and work to weaken and intimidate it, never to make it an increasingly loud and independent voice.

Despite being relatively simple, the table in search of a pact would not be an alternative without mishaps or possible setbacks, as can be seen in the discussions on agreements related to global warming. But with the support of governments and democratic societies, a great global pact against disinformation is possible. It is also a necessity for the business and very existence of big tech companies, which are threatened by content controls and external regulations by autocracies that do not always have the best intentions.

Enough, therefore, with procrastination, in the vain hope of a natural cure for the fake news epidemic. The free world still has the ability to be indignant with real and concrete reasons, such as the insurrection in Brasilia. However, we need to create, through a tangible pact, a vaccine against disinformation as soon as possible, before the virus contaminates many other capitals on the planet.

(The World Editors Forum is the leading global community of editors and is an integral part of WAN-IFRA. We stand up for a free press, quality journalism and newsroom transformation, and have been doing so for over 25 years. We work with editors to shape their newsrooms for the future. We do so by identifying innovation and trends, tools and best practices. We share this intelligence through our blog, newsletter, meetings, networking events, conferences, and research.)

Callaway Climate Insights

By David Callaway

Iowa Is the Best State to Live Off the Grid, According to Data

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Source: Maksymowicz / iStock via Getty Images

In this day and age, getting “off the grid” has become an increasingly popular way for people to live. What does it mean to live off the grid? According to the Cambridge Dictionary, those who live off the grid do not need to rely on public utilities, such as electricity and water, as they draw from sources on their own land – solar energy being probably the best example. (These are the states producing the most electricity from renewable sources.)

This becomes an increasingly popular idea as tornadoes, floods, and hurricanes can black out electric and internet grids for weeks at a time. People have already begun the process of moving off the grid, and the state where it is most prevalent is Iowa.

While there is no clear reason why Iowa is at the top of the list, it sits in what is known as “tornado alley”. This section of America, which also includes much of the upper Midwest and Texas, is an area where climate conditions make the presence of these storms more likely than in the rest of the nation. According to The National Weather Service, Iowa had 42 tornadoes last year. The Des Moines Register puts the number since 1950 at 3,178.

Iowa is also the site of some of America’s most famous floods. The NWS has a list of Flood Hazard Information for Iowa, presumably so people know what’s coming during some huge storms. (These are the worst climate-related disasters since 2010.)

States which have terrible storms are likely to have more people living off the grid over time. The two largest states in the U.S. based on population are prime examples. Both Texas and California have experienced rolling blackouts due to climate events in recent years, making off-the-grid living a tantalizing option. Luckily for Texas, it ranks as the No. 2 best state for living off the grid, with the highest growth projections for both solar and wind power in the coming years.

Click here for all of the best states to live off the grid

By Douglas McIntyre

Greta’s message to the media, an oil exec in charge of COP28, and more

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Source: Spencer Platt / Getty Images

My brother in London gave me an early copy of Greta Thunberg’s “The Climate Book,” for Christmas. It hits the shelves in the U.S. on Valentine’s Day. At 436 pages, it’s more of a textbook than a beach read, but it’s a fascinating compilation of articles from climate academics, writers and commentators.

Ranging from Margaret Atwood and Katherine Hayhoe to Bill McKibben and Erica Chenoweth, the articles attack climate change and our impending future from every angle, interspersed with short bursts of hope and guilt from Greta herself. In particular, she takes direct aim at the media.

She argues that the media ignores climate as a global disaster and instead marginalizes it by focusing on the symptoms, such as individual disasters, or campaigns against oil companies, or even climate celebrities. She points out that only when the media collectively led with the facts about Covid — that it was killing people indiscriminately and that immediate changes in lifestyle, such as sheltering in place, were needed to survive — did people collectively react.

It’s a simplistic argument that any media executive would find a hundred holes in, almost all of them tied to business strategies and ratings. But that’s why it works. The division in how governments, investors, politicians and activists approach climate change is a direct result of the information, or misinformation, being fed to them.

In the past five years, we’ve seen the media begin to understand that every story is a climate story, and beef up coverage from every angle, including climate finance here at Callaway Climate Insights. I’m not a huge Greta fan, and I’m sure she’d be no fan of our thesis that technology will help us adapt to global warming and turn a profit. But in this instance, I think she’s captured the essence of, not what the media needs to do, but what it will eventually have to do when every other alternative has failed.

More insights below . . . .

Zeus: Fed’s shift on climate policy won’t weather the coming storms

. . . . Federal Reserve Chairman Jay Powell is doing his best to sidestep Republican opposition to any and all climate change policy in Washington, but the central bank is already in the center of a growing climate financial crisis, writes David Callaway from storm-torn Northern California. Capitol Hill politics is a different world than the one from the one where people are living through climate disasters, where both human and financial damages are rising. Powell protects the Fed’s cherished independence by staying away from global warming, but with climate risk growing, banks and insurance companies need leadership. . . .

Read the full Zeus column

Marsha Vande Berg’s Sustainability Stars: Hitachi’s Norio Masuda

. . . . One of the biggest climate finance stories of 2023 will be how Europe and the U.S. climate bodies sync regulations on corporate reporting and risk management. But what of Japan and Asia? In the next installment of her Sustainability Stars series, Marsha Vande Berg interviews Hitachi’s Norio Masuda, senior manager and liaison to the country’s important ESG Disclosure Study Group, about how to adapt emerging global regulations with Japan’s unique business culture. Her Q&A with Masuda-san provides unique insight into how Japan’s largest companies view climate risk and corporate reporting. . . .

Read the full interview

This week’s subscriber-only insights

. . . . Extreme weather disasters fueled by climate change killed at least 474 people and caused more than $165 billion in damages across the U.S. in 2022, NOAA scientists said Tuesday. Meanwhile, the death toll in the California floods and storms is still climbing. Yes, global warming has become very costly, both in terms of lives and money. And now a majority of people want something to be done. Read more here. . . .

. . . . . Got a kid in high school? Thinking about a possible career for him or her? You might want to consider heading for electrician school. Why? Because the need for wiring wizards looks like it’ll be huge as we head to the all-electric era. Read more. . . .

COP28 climate summit approaches new low — an oil exec in charge

. . . . Oil executives have always been a sort of, well, greasy presence at COP climate summits, like O.J. Simpson at a Super Bowl party. But the past two summits in Glasgow and Sharm-el-Sheikh have been overrun with them. Now the Guardian reports that the UAE, home to this year’s COP28 in Dubai, plans to name the country’s top oil boss, Sultan Al Jaber, chief of Abu Dhabi National Oil Company, as president of the climate talks.

The UN’s COP climate summits have been gradually succumbing to greenwashing from corporations for years. Last year’s was sponsored by Coca-Cola $KO , a notorious plastic polluter. And yes, there is a strong case that we need oil companies to eventually lead the renewable energy transition, as they have the expertise, the firepower, and the cash. Certainly, that will be Dubai’s argument.

But the symbolism of Big Oil capturing control of the largest global climate meeting will be too much to bear for many climate activists. Expect a fight over this one as the entire concept of the massive COP climate meetings slides toward irrelevancy. . . .

Editor’s picks: Benefit$ of bi-directional charging, more

India expects utilities’ coal demand to rise

India has said it expects its power plants to burn about 8% more coal in the fiscal year ending March 2024, according to a senior government official and a power ministry presentation, Reuters reports. India missed its 2022 renewable energy goal by more than 30%. According to the report, India “has been clinging to coal for energy security as it tries to get its economy back on track after a Covid slowdown and stave off power shortages that led to idled factories and villages without electricity during a blistering heatwave.” The government presentation showed utilities’ coal demand is forecast to reach 821 million tonnes in 2023-24.

FBI joins investigation of attack on Las Vegas solar plant

A Las Vegas man has been charged with terrorism after he allegedly attacked a solar facility that provides power to 13 MGM Resorts International casino properties. A report from S&P Global Market Intelligence notes that “while previous attacks have mostly targeted substations, causing widespread power outages in separate recent incidents in the Pacific Northwest and North Carolina, this attack was one of the first on a generation facility.” According to the report, Las Vegas police have Mohammed Mesmarian, 34, with one count of committing terrorism, two counts of first- and third-degree arson, one count of destroying personal property and another count for attempted escape by a felony prisoner. Mesmarian is accused of forcibly gaining entry to the 100-MW Harry Allen Solar Energy Center, known as the Mega Solar Array, just before noon on Jan. 4, where he crashed his car into the solar generator’s transformer and then lit his car on fire. The FBI said Monday it has joined the investigation but did not provide any additional details.

Saying farewell to fossil fuels

Leaders in the fossil-fuel sector must bring about the end of their industry as we know it, say the authors of Time to Put the Fossil-Fuel Industry Into Hospice, published in the Stanford Social Innovation Review. And to consider how that can be accomplished, they apply models typically seen in the healthcare scenario of terminal illnesses. From the abstract: “We begin by presenting the prognosis that both society and the fossil-fuel industry face existential challenges that are terminal in nature. With such a prognosis, we then consider three possible forms of treatment: (1) triage, (2) euthanasia and (3) hospice. Finally, we offer 10 key considerations in carrying out such a treatment regimen.” Authors: Andrew John Hoffman, University of Michigan, Stephen M. Ross School of Business; and Douglas Ely, University of Michigan, Stephen M. Ross School of Business.

Words to live by . . . .

“Climb the mountains and get their good tidings. Nature’s peace will flow into you as sunshine into trees.” — John Muir.

By David Callaway

California Has Had More Weather Disasters Than Any Other State in the Past Decade

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Source: thenationalguard / Flickr

Weather disasters have become almost a regular part of living in America. While the problem has worsened coast to coast, the state with the most weather disasters over the last decade is California. It is the third largest by area, which may contribute to the severity of the problem compared to most other states. California spans over nearly 156,000 square miles.

The effects of weather on the population are also quite significant in the state. California has the largest population of any state, at 39,613,493, which is about 12% of the national total.

There were 25 climate disaster declarations in the state from 2011 to 2021, with Napa County suffering the most occurrences, according to the Atlas of Disaster report published by Rebuild by Design, a nonprofit that helps communities struck by natural disasters. Eleven of these disasters were wildfires or fires. Twelve were flooding, which usually came during severe storms. These storms were also often accompanied with mudslides, landslides, or other debris flows. There was also a tsunami event in 2011.

One problem is the size of the wildfires in the state, compared to other states. Some of the largest wildfires in American history were in California, with many occurring since 2017. One of the biggest was the Dixie Fire, which burned over 963,000 acres. (These are the 13 most destructive wildfires in U.S. history.)

Although California is well known for droughts, it is also the location of some of the most violent rainstorms of the last few years. These come off the Pacific Ocean, and have been at times ferocious. Just in January, San Francisco was hit with what is known as a “bomb cyclone”. It dropped several inches of rain, and caused significant flooding. It came just a few days after the second rainiest day in San Francisco history. (These are the most destructive storms in U.S. history.)

As a result of the many natural disasters in California, the state was the sixth largest recipient of federal weather disaster aid over the 10-year period at $6.2 billion, or $157 per capita.

See the states with the most weather disasters in the last decade.

By Douglas McIntyre

Marsha Vande Berg’s Sustainability Stars: With Norio Masuda, Senior Manager, Hitachi Ltd.

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Source: SeanPavonePhoto / iStock via Getty Images

(Marsha Vande Berg is director of MJGlobal Insights, a resource for corporate and fund decision-makers when shaping their dynamic sustainability stakeholder narratives. The former CEO of the Pacific Pension & Investment Institute, Marsha has worked with pension executives worldwide. A Stanford University Distinguished Careers Fellow and author of MJGI Briefs, you can reach her at linkedin.com/in/mjvb and follow her @MarshaJVB.)

By Marsha Vande Berg

SAN FRANCISCO (Callaway Climate Insights) — So much has happened in the world of ESG disclosure in the past year. We at Sustainability Stars and Callaway Climate Insights now find ourselves reaching to get a read on what this New Year portends for sustainability in the face of increasingly difficult inflationary pressures, the threat of recession in the major economies, China’s challenge in unleashing itself from its zero-Covid policies, and the reverberations of Russia’s brutal war in Ukraine.

Yes, the drive for corporate and regulatory sustainability disclosure will push forward – albeit in fits and starts and facing significant headwinds. In Europe, widely viewed as the leader in corporate disclosure and transparency, the EU’s governing body has given the final green light to the Corporate Sustainability Reporting Directive (CSRD) and upped the ante on corporate accountability and Europe’s economy-wide transition toward sustainability.

The European Financial Reporting Advisory Group (EFRAG) now has draft disclosure standards underway but which must also pass the muster of the EU’s 27 governments, including Poland and Hungary.

In the U.S., the SEC is likely to move its proposed climate disclosure rule to enforcement status during this first quarter and simultaneously prepare to defend its ground in the face of political and legal challenges. It maintains its rule reflects its mission as a regulator doing its job to protect investors and capital market integrity.

In the U.S. in particular, the pitch of the political and legal challenges is increasing. State and local governments are getting into the act by targeting public fiduciaries.  As of  year-end, states have BlackRock $BLK in the crosshairs and are threatening to pull some $3.3 billion from the world’s largest asset manager because of its ESG investment strategies. Meanwhile, ESG strategies also are attracting mounting criticism for turning a blind eye to greenwashing.

At the same time, large asset managers are recalibrating their own public relations. Capitalism can be a catalyst for change and help shape society — but business cannot go it alone, BlackRock CEO Larry Fink wrote in his annual letter to CEOs last month. Business can’t be the “climate police…We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients.”

The forces at play are deep, important and the result of multiple countervailing currents. This is why what Japan does about sustainability disclosure matters. It’s the world’s third largest economy with a stock market capitalization of nearly $7 trillion. Its global companies are household names — including Toyota, Honda, Mitsubishi, Panasonic and Hitachi.

Prime Minister Kishida Fumio has called for liberal democratic capitalism that balances growth and distribution. His message emphasizes digitization together with investment in green technology and human capital. The island nation intends to be a carbon neutral economy by 2050.

With this Sustainability Stars’ column, we turn again to Hitachi’s senior executive for sustainability, Norio Masuda, featured a year ago in this column for his work at Hitachi, a Fortune 500 conglomerate headquartered in Tokyo and a pioneering technology leader including in green technology. Masuda is also Hitachi’s liaison to the important ESG Disclosure Study Group, a collection of big hitters, mostly representing Japan Inc. and who are intent on influencing the direction of corporate sustainability disclosure for Japan’s listed companies – in step with emerging international trends and Japanese corporate culture characteristics.

This column’s objective is to benchmark anew Japan’s efforts vis a vis the ISSB’s intended global sustainability financial disclosure standards for application side by side with the IFRS Accounting Standards. The status of the regulatory emphasis on sustainability as well as of corporations like Hitachi can serve as a bellwether for the prospective pace for integrating disclosure protocols globally.

By way of brief background, the ISSB is a sister agency to the International Accounting Standards Board (IASB) under the IFRS Foundation. While the London-based ISSB focuses on sustainability financial factors, the IFRS is responsible for the IFRS Accounting Standards now followed in 144-plus jurisdictions around the world.

There is also the J-ISSB, under Japan Financial Services Agency. They are working on a proposal for mandatory climate risk disclosure with up-to-date disclosure guidelines that reflect SSB protocols and are complementary to EU and SEC protocols.

Currently in Japan, the Corporate Governance Code recommends that all companies listed on the Tokyo Stock Exchange produce sustainability reports disclosing opportunities and risks that relate to climate change. As of last April, companies designated as Prime Market by the TSE are obligated to follow TCFD guidelines.

The combination of the corporate focus and FSA’s intent has positioned Japan in the forefront of the debate on mandatory versus voluntary disclosure even as the paradigm continues to shift in favor of disclosure at some level particularly as it relates to climate, the environment and human capital.

It also positions Japan as a leader across Asia where regulatory considerations and corporate emissions and climate risk disclosure gained traction in recent years. But it’s clear that this year, they also face a range of significant challenges. Here we welcome to the conversation, Norio Masuda, Senior Manager, Hitachi Ltd. and Co-Representative Director of ESG Disclosure Study Group.

Question: Masuda-san, please update us on the relationship between the IFRS, the ISSB rules and Japan’s efforts?

Masuda: This has been an ongoing process in Japan. But now I think we are finally all moving in the same direction toward putting in place ESG disclosure rules that reflect Japan’s business culture and that are in step with the international standards that the ISSB is drafting.

Q.: What exactly are Japanese authorities doing, particularly regulators?

Masuda: The Accounting Standards Board of Japan (ASBJ) is discussing internally how best to address the ISSB standards, two of which could be finalized for implementation as early as the first quarter of this year. Our concern — which is shared by other Japanese multinationals — is the outcome of the current conversation between the ISSB and their European counterparts to identify points of common interest. That’s because so many of us do business in Europe. …

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By David Callaway

Zeus: Fed’s shift on climate policy won’t weather the coming storms

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Source: Maxiphoto / iStock via Getty Images

(David Callaway is founder and Editor-in-Chief of Callaway Climate Insights. He is the former president of the World Editors Forum, Editor-in-Chief of USA Today and MarketWatch, and CEO of TheStreet Inc. His climate columns have appeared in USA Today, The Independent, and New Thinking magazine).

SAN FRANCISCO (Callaway Climate Insights) — “What is going on in California,” a friend from New York texted the other night. “Old Testament-types of floods and famines. Any locusts?”

Actually, my editor points out, locusts were the eighth plague on Egypt. Frogs were the second. “We’re more at the frogs stage now.”

As the rain pounds outside my house for the seventh straight day after arriving home from the holidays, more than one commentator or wag has spoken of the biblical nature of the storms hitting California. Atmospheric rivers, bomb cyclones, thunder, lightning, hail, and rainbows all in the same afternoon. We got it.

For a region suffering from unprecedented drought, it’s bizarre to see a month of storms fill all the reservoirs and then some, but that’s climate change. Once the storms have passed in a few weeks, the damage assessment will begin.

There’s no doubt that in addition to the cost in lives lost, the damages will be in the billions. And as nature has it in California, the vegetation fed by the rain this month will grow and serve as fuel for wildfires this summer, which will in turn loosen the soil and make it vulnerable to mudslides next winter.

Paradise has its cost. And banks, insurance companies, and consumers are going to pay for it. Which brings me to the comments earlier this week by Federal Reserve Chairman Jay Powell, who said the central bank “is not, and will not be a climate policymaker.” …

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By David Callaway

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