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Party poopers give COP27 a whiff of failure

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Source: Oleg_P / iStock via Getty Images

The setting will be Sharm el-Sheikh, a resort city on the Red Sea that Google describes as being “known for its sheltered sandy beaches, clear waters and coral reefs” and as having “a palm tree-lined promenade … filled with bars and restaurants.” An international airport, meanwhile, is conveniently close.

Sounds great! The event is November 6-18’s COP27, otherwise confusingly known as the Conference of the Parties, the United Nations annual confab about combating climate change. It’s a get-together that’s grown in importance over the years as the world grapples with global warming.

This one, however, is beginning to have the smell of a dud…

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By David Callaway

25 Most Popular Landmarks Around the World

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Source: Sean Pavone / iStock via Getty Images

Just as we seem to be putting the pandemic behind us, we’re getting hit with elevated levels of inflation and the possibility of a recession. Those headwinds might suppress the rekindled travel fires of adventurers, who’ve been prevented by Covid-19 from visiting some of the world’s most desirable destinations.

The benefits of travel are many. It ties the world together, promotes greater cultural understanding, and offers a shared experience. It also supports as many 120 million direct tourism jobs all over the world, according to the World Tourism Organization, and provides significant portions of the gross domestic product for many countries.

One lure for travelers is the chance to see some of the world’s most famous landmarks – whether man-made or natural – for themselves. To compile a list of the 25 most popular landmarks in the world, 24/7 Tempo reviewed the results of a report from Bounce, a luggage storage app that also frequently analyzes data around various travel topics.

Bounce evaluated data on 125 worldwide landmarks, measuring their annual visitors, annual Google search volume, TripAdvisor ratings, and Instagram posts, as well as average ticket price and annual ticket revenue to determine the 25 around the world that people love the most. (Here are some natural landmarks already damaged or destroyed by climate change.)

Click here to see the 25 most famous landmarks around the world

Seven of the landmarks on the list are free to visitors. On the other hand, the most-visited destination, the Burj Khalifa tower in Dubai – also the world’s tallest building at 2,716 feet – boasts the highest ticket price. It’s also the most-searched landmark on Google. But it’s not the most popular landmark overall. That distinction goes to a destination long associated with romance and honeymooners – Niagara Falls. (Here are some early photographs of the world’s most famous landmarks.)

Corporate climate disclosures triple, led by banks, new TCFD report says

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Source: Victorburnside / iStock via Getty Images

No surprise that the latest annual climate report from The Task Force on Climate-related Financials Disclosures (TCFD) shows a marked increase in climate risk reporting in the past five years. But the leading industry sure shocked us.

The TCFD said in its 2022 Status Report today that banks led all industries in increasing disclosures, along with insurance companies, particularly since 2019. Other top industries, energy, and building materials were less surprising.

The task force, chaired by Michael Bloomberg, surveyed 1,400 companies across eight industries and five global regions, and found in general that the number of the 11 TCFD reporting recommendations adopted by the companies tripled to 4.2 since 2017, led by companies in Europe. Still far below 11, though.

It said the number of companies disclosing climate risks in annual reports rose to more than 60% in 2022 from 27% in 2017.

Despite the current culture wars in the U.S. over ESG policies on Wall Street, it’s clear that at banks and insurance companies, where climate risk is felt on the balance sheet, the move to more climate reporting is getting stronger.

More insights below . . . .

Why engagement works better than divestment

. . . . A new report out of Europe adds almost 30 years of research to the question of whether investors can have more impact on forcing environmental change in their holdings through engagement rather than divestment, writes Mark Hulbert. Among the findings was that engagement by investors led to more change in environmental, social and governance (ESG) practices at companies than efforts by CEOs, corporate management and boards of directors combined. And importantly, led to significantly better financial returns than a policy of excluding sectors or industries from portfolios. . . .

Read the full column

A selection of this week’s subscriber-only insights

. . . . Here’s what happens when you get into a new arena: It suggests all types of ways to expand. And that’s what GM, with its big push to be all-EV by 2035, is doing by entering the energy storage and charging businesses. Read more here. . . .

. . . . When it comes to renewables, increasingly the word is local. First up: thousands of homes in New England have organized to feed power to the grid from their solar panels and battery backups. Meanwhile, neighbors across the country are teaming up into co-ops to buy solar panels. Read more. . . .

Editor’s picks: ‘Exponential expectations for ESG’

Survey: Exponential expectations for ESG

Despite current market weakness, a new survey from PwC says eight in 10 investors polled plan to increase ESG-related investments in the coming years, and that by 2026 there will be $33.9 trillion in projected ESG-oriented assets under management, outpacing the industry as a whole. PwC’s report says that since 2020, “we’ve seen an unprecedented acceleration in the move towards environmental, social and governance–orientated investments. As investor allocations to ESG funds increase, the industry now has an opportunity to be at the forefront of a burgeoning ESG revolution.” Among PwC’s segment on how ESG is shaping future markets: ESG is replacing asset price increases as an engine of growth; and investors are pushing for new ESG products, but demand outstrips supply.

From fire to flood

As the scorching summer season recedes, the increasing threat of heavier rains looms for many Americans. New research from Northwestern University shows heavier rain in many parts of the U.S. can be tied to climate change. The study, published in Geophysical Research Letters, says changes over the full distribution of precipitation intensities “remains an overlooked and underexplored subject, despite their critical importance to hazard assessments and water resource management.” Researchers looked at daily rainfall observations and saw higher rain intensities, particularly in the central and eastern U.S., while changes in precipitation for the western U.S., which is in a severe drought, were mixed.

Climate impacts on natural capital

The effects of climate change on natural systems will be substantial, widespread, and likely irreversible, according to the authors of Climate Impacts on Natural Capital: Consequences for the Social Cost of Carbon, which appears in the Annual Review of Resource Economics. From the abstract: “Warmer temperatures and changing precipitation patterns have already contributed to forest dieback and pushed some species toward extinction. Natural systems contribute to human welfare both as an input to the production of consumption goods and through the provision of nonuse values (i.e., existence and bequest values). But because they are often unpriced, it can be difficult to constrain these benefits. Understanding how climate change effects on the natural capital stock affect human well-being, and therefore the social cost of carbon (SCC), requires understanding not just the biophysical effects of climate change but also the particular role they play in supporting human welfare. This article reviews a range of topics from natural capital accounting through climate change economics important for quantifying the ecological costs of climate change and integrating these costs into SCC calculations.” Authors: Bernardo A. Bastien-Olvera, University of California, Davis; Frances C. Moore, University of California, Davis.

Words to live by . . . .

“The challenge of pollution and global warming is no longer the science, or the rate of innovation, but the rate of implementation: We have the clean solutions; now let’s bundle them and install them.” — Jens Martin Skibsted, Danish designer and entrepreneur.

By David Callaway

Why engagement works better than divestment

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Source: ilkercelik / iStock via Getty Images

(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) — If you’re interested in influencing corporations’ climate policies, you should actively engage with their management. Merely shunning “bad” firms and investing in “good” ones might make you feel good about yourself, but it is a relatively ineffectual way of changing firms’ behavior…

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By David Callaway

What a Nuclear Attack Would Do to the World’s Major Cities

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Source: AlexLMX / iStock via Getty Images

Russian president Vladimir Putin recently reiterated his threat to use nuclear force, should Russia be attacked. He has also repeatedly suggested that he might consider using smaller “tactical” nuclear weapons at targets in Ukraine. Since the end of the Cold War, the fear that a nuclear weapon could be used has diminished for many Americans, in part as both Russia and the United States have worked to reduce their arsenals. But the idea of a threatened Russia — especially in light of Ukraine’s recent counteroffensive — has caused some to seriously reconsider the possibility of a nuclear attack on the West.

Worryingly, the world’s nuclear arsenal will grow in the next few years for the first time since the Cold War, according to a recent forecast from the Stockholm International Peace Research Institute, a leading armaments and conflict watchdog.

While the U.S. and Russia have more than 90% of the world’s nuclear weapons, China is in the process of expanding its nuclear stockpile with the construction of more than 300 silos. (These are the countries that control the world’s nuclear weapons.)

Estimates vary in the number of nuclear weapons worldwide. The Federation of American Scientists estimated roughly 12,700 warheads as of early 2022, including more than 3,000 retired warheads.

The largest nuclear explosion ever detonated was the Soviet Union’s RDS-220, or Tsar Bomba, a 50 megaton hydrogen bomb. That test explosion took place over an Arctic Ocean island on Oct. 30, 1961. By comparison, the bombs dropped on Hiroshima and Nagasaki in August 1945 had a combined yield of about 40 kilotons. The Bulletin of Atomic Scientists puts the death toll from those bombings between 110,000 and 210,000 people.

To find what a nuclear attack would do to 23 world capitals (G20 nations plus Israel, North Korea, and Pakistan, which also have nuclear weapons), 24/7 Wall St. used Nukemap, a site that simulates detonation of nuclear bombs. We have chosen two typical warhead yields, the equivalent of 100 kilotons and 800 kilotons of TNT, detonated in the air over these cities. Countries are ordered alphabetically. For South Africa we have chosen Pretoria, the seat of the executive branch. 

Today’s thermonuclear warheads provide an immensely more powerful punch than the ones used during World War II. A 100 kiloton bomb dropped on Capitol Hill would kill an estimated 177,650 people instantly and injure more than 383,210, with 21% of the Washington D.C.’s population in the blast range. An 800 kiloton bomb would kill or injure 1.3 million people, and nearly half of the population would be within the blast range.

The considerably larger Russian capital, Moscow, would suffer over 250,000 deaths if a 100 kiloton yield nuclear bomb detonated over the Kremlin. If an 800 kiloton were to be detonated, more than 1 million people would be killed and another 2.3 million injured.

The casualties would be much higher in more densely-populated cities. An 800 kiloton thermonuclear weapon dropped on the Chinese capital of Beijing would cause nearly 1.3 million deaths and nearly 3 million injuries. And such a bomb dropped on the Indian capital of New Delhi would kill 2.1 million people instantly and injure 5.8 million. (This is what a nuclear war would do to the world.)

Here is what a nuclear attack would do to a major global city
Click here to read our detailed methodology

Rivian recall highlights plight of EV makers in a bear market

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Source: RoschetzkyIstockPhoto / iStock Editorial via Getty Images

In today’s issue:

— The pathetic performance of EV and charging stocks this year is a bad sign for the transition
— BlackRock redemptions hit $1 trillion as red states pile on the anti-ESG pressure
— The Inflation Reduction Act has opened a new era in energy deal-making, with new buyers
— Gas taxes come in many forms, as New Zealand farmers are finding out
— New record in offshore wind turbine production in Germany

It’s been 11 months since electric vehicle maker Rivian $RIVN hit Wall Street with a splashy climate IPO, raising $12 billion on expectations it will help lead the transition of the U.S. automotive fleet to battery-powered engines. A brutal bear market, three manufacturing recalls and a 70% decline in shares later, those dreams lie in tatters, along with most of the EV and charging station space.

In a new world where the scramble is on for renewable energy providers, the makers of shiny new toys are being left in the dust. Rivian, which recalled almost all of its 13,000 vehicles this week to fix a loose bolt, has seen its shares decline from an IPO price of $78 to $31. But it’s not alone.

Nikola Corp. $NKLA , another previous EV darling, is also down 70% year-to-date. Fisker $FSR is down 56%. Lucid Motors $LCID is down 8%. Even Tesla $TSLA is down 36%. The charging station companies are no better. ChargePoint $CHPT is down 28%, Blink $BLNK is down 43%, and EVGO $EVGO is down 7.6%. Even big automakers pushing into EVs are struggling, with Ford $F and General Motors $GM both down 45%.

With a recession likely, it’s hard to see these stocks recovering on increased sales of EVs, particularly when they are priced as luxury purchases. Ford even raised the price of its F-150 Lightning Pro electric truck last week.

The bigger picture here is that far from leading the economic transition to renewable energy as so many investors had expected last year, the EV makers look set to follow the actual producers of solar, wind and battery power as the economic cycle shifts.

More insights below . . . .

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By David Callaway

The Best and Worst States for Science and Tech

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Source: Cecilie_Arcurs / Getty Images

The United States has long ranked among the most innovative countries in the world. Innovations in any number of fields – from software development and finance to energy storage and biotech – can have profound effects on our day-to-day lives. 

Not only is innovation a primary driver of economic growth, but some innovations, like the COVID-19 vaccine, have saved an untold number of lives. Others, meanwhile, like the on-going lithium-ion battery development, may prove critical in reducing global carbon emissions. 

The U.S.’s status as a global hub of innovation is partially attributable to public funding of research and development. The federal government spent nearly $138 billion on R&D in 2020 alone. The private sector is also an engine of innovation, from companies on the Fortune 500 to small start-ups. Amazon, for example, spent over $62 billion on R&D in fiscal 2022. (Here is a look at the most innovative companies in 2021.)

Several key indicators reveal that much of the innovation that takes place in the U.S. is concentrated in certain parts of the country. Using an innovation index created by personal finance website WalletHub in its report report Most & Least Innovative States, 24/7 Wall St. listed the 50 states in order from least innovative to most. WalletHub’s index ranks states based on multiple measures indicative of innovation – including patents issued, venture capital funding, entrepreneurship, and employment in STEM (science, technology, engineering, and math) fields. We added some of the data, such as employment in STEM, venture capital investment, and patents issued, using different sources.

Many of the most innovative states are coastal, located along both the Atlantic and Pacific coasts. These places are often notable for their high concentration of large research universities, in addition to being home to major employers in industries ranging from defense to information technology. (Here is a look at 30 inventions that shaped military history.) 

Jobs in the STEM fields in these states tend to be higher paying than STEM jobs in states that rank lower on this list. In each of the five least innovative states, for example, the average annual salary among STEM workers is less than $85,000, while in each of the five most innovative states, the average STEM salary exceeds $100,000.

Click here to see the best and worst states for science and tech.

Click here to see our detailed methodology.

New York City’s EV paradise isn’t quite what it seems; plus, Coke’s Egypt headache

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Source: wakila / E+ via Getty Images

Why you shouldn’t swallow these Manhattan EV-charging numbers

At first glance, the headline on the Bloomberg story — “Manhattan’s EV-Charging Sites Now Outnumber Gas Stations 10 to 1” — was gulp-inducing. The gulps then grew in reading the introductory paragraph, which claimed that charging an electric car in New York City’s most iconic borough is “much easier than finding a gas station.”

Er, sorry, but finding a gas station in Manhattan has always been hard — and in recent years has become even harder. Why? Because land is too darned expensive. Thus, most of the 29 fill-up spots are on the fringes and in neighborhoods such as East Harlem and Washington Heights.

To be fair, the article’s authors later ’fess up to their misleading gas station count. As they say, “Land on the island is simply too valuable to waste on a business that’s minimally profitable and needs a convenience store or car wash to survive,” and point out that “One by one, the borough’s gas stations have been bulldozed to make way for condos and offices.”…

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By David Callaway

The Least Vulnerable Countries Most Prepared for the Climate Crisis

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Source: Don Mennig / Getty Images

By 2040, the global average surface air temperature will be 1.5 degrees Celsius (2.7 F) higher compared to pre-industrial (latter half of the 19th century) levels, according to the most recent projections from the Intergovernmental Panel on Climate Change. The IPCC projections under the high emissions scenario also predict that by 2100 parts of the planet could become too hot for humans. (Earth’s CO2 level rose every year since climate change became a national issue.)

With the Earth getting warmer and wetter thanks to human industrial, agricultural, and personal activities, it is causing deadly floods, droughts, heatwaves, erratic weather patterns, and stronger, more frequent storms across the globe. But climate change has been affecting countries to different degrees. 

To identify the 25 counties least vulnerable to climate change, 24/7 Wall St. reviewed the Notre Dame Global Adaptation Initiative that measures the vulnerability to climate change and readiness of 182 different countries. Countries are ranked by their overall index score, which itself consists of a vulnerability index and a readiness index.

The vulnerability index “measures a country’s exposure, sensitivity and capacity to adapt to the negative effects of climate change,” considering indicators in six life-supporting sectors: food, water, health, ecosystem service, human habitat, and infrastructure. The readiness index “measures a country’s ability to leverage investments and convert them to adaptation actions” and considers different indicators in three components: economic readiness, governance readiness, and social readiness. 

We also added GDP per capita and total population from the World Bank World Development Indicators for 2020.

About 944 million live in the 25 countries that are most vulnerable to climate crises (23 of them in Africa), most of them in extreme poverty. About the same number of people, about 906 million, live in the 25 mostly high-income countries on this list – the ones least vulnerable to climate crises.

Most of the 906 million people least vulnerable to climate change live in European countries, the United States, and Canada. About 215 million of these lucky global residents live in the Asia-Pacific region: in Japan, South Korea, Australia, New Zealand, and Singapore. (These are the worst cities to live as climate change gets worse.)

While similar threats face high-income and low-income countries, the outcomes are radically different. High-income countries with stable political systems have more resources to handle climate emergencies and disasters. They are also better able to prepare and even stave off some of the effects with investment in infrastructure, agriculture, health, and more. 

This imbalance between poorer and wealthier nations in their vulnerability and readiness for climate change is even more disturbing when considering that poorer nations emit far less carbon emissions than rich nations. (These are the 20 countries responsible for nearly all global emissions.)

Here are the least vulnerable countries most prepared for the climate crisis.

Climate Risk Assessments Missing from 98% of Company Financial Reports

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Source: franckreporter / Getty Images

Everybody talks about the weather, but nobody does anything about it. If Mark Twain were commenting on today’s world, he might say, “Everybody talks about climate change, but 98% of the time, nobody intends to do anything about it.” He’d probably say it better.

In any event, that may be the nutshell version of a new report published Thursday by Carbon Tracker, an independent financial think tank that analyzes the effect of the energy transition on capital markets. For its second annual report on the absence of climate risk assessments in financial reporting, Carbon Tracker reviewed the audited financial statements of 134 “highly carbon-exposed companies” and found that 98% of those companies failed to offer enough information to show how the companies consider the financial impact of “material climate matters.”

It gets worse. Despite making commitments to achieving net-zero carbon emissions by 2050, not a single company used assumptions and estimates in their financial reporting that aligned with those commitments.

Carbon Tracker has developed its own climate accounting and auditing assessment methodology consisting of seven metrics, five of which are standard auditing requirements. The other two are specific to achieving net-zero emissions by 2050.

Using that scale, only eight of 134 companies received even partial positive scores. Of those eight companies, five were energy or utilities companies: BP, Eni, Equinor, National Grid and Shell. The other three were Glencore, Rio Tinto and Rolls-Royce.

No U.S.-based company was among the eight. That also gets worse: “Notably, none of the auditors of the 46 US companies provided evidence that they comprehensively considered the impacts of climate matters in such audits.” The U.S. companies included in the audit included such notables as Berkshire Hathaway, Boeing, Chevron, Exxon Mobil, General Electric and Walmart.

Some recent history of American companies’ efforts to mitigate the impact of climate change may be useful here. In 2019, the Business Roundtable declared that stakeholders, not just shareholders, were affected by companies’ actions. The next year, the Roundtable issued a second statement, declaring that the United States needed to adopt a “more comprehensive, coordinated and market-based approach to reduce [greenhouse gas (GHG)] emissions.” The Roundtable sought certainty: give us a market-based national policy on GHG emissions and then back off and let the market work its magic.

In June of this year, the U.S. Securities and Exchange Commission issued proposed rules that would require companies to report climate-related information in their federal filings. The Roundtable called some key provisions “unworkable,” imposing “requirements that could not be satisfied in the manner and timeframe proposed, and may not result in decision-useful information for investors.” The Roundtable also complained about the amount of information that the proposed rule would require and said the information “would not be comparable, reliable or meaningful, much less material, for investors.” The new rules also would subject companies to “significant liability for disclosures that inherently involve a high degree of uncertainty.”

Concluding its review, Carbon Tracker offered recommendations for companies, auditors, regulators, policymakers and investors that markets need in order to provide information “about the financial impacts of climate on carbon-exposed companies to facilitate an efficient and effective transition to a low carbon global economy, or to understand the impacts of not transitioning.”

Carbon Tracker’s review calls for more activist roles for company audit committees and independent auditing firms. The lack of climate-related information in a company’s financial statements would improve if a board’s audit committee insisted. Similarly, auditing firms need to insist on more comprehensive risk assessments.

By Paul Ausick

By Douglas McIntyre

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