Despite a surge in interest in the financial world in climate change in the past five years, only about a third of the world’s largest financial institutions have cut their greenhouse gas emissions, according to data provided to Callaway Climate Insights from Physis Investments in Boston.
Among the 110 largest global financial institutions ranked by market value, just 35 have recorded emissions cuts since 2017, with the biggest success stories being HSBC Plc $HSBC , Commonwealth Bank of Australia, National Australia Bank, Japan’s Mizuho Financial, and … wait for it … Goldman Sachs Group $GS , according to the data.
Among some of the biggest polluters during that time have been the Canadian banks, and some of the Chinese financial institutions, in particular China Life Insurance, according to the data, which is available on the Physis platform.
Physis, founded five years ago by Stefania di Bartolomeo, is an online data company that allows investors to track just how sustainable their assets are performing across several categories, such as emissions, renewable energy, water security, or diversity data such as women in management numbers.
- Read the Callaway Climate Insights profile Zeus: Stefania Di Bartolomeo’s quest to answer this one simple ESG question.
As billions of dollars in public and private investment in renewable energy and de-carbonization plays materialize in coming years, this type of data will become more high profile as investors want to see who is putting their climate money where their mouths are. This simple slice above illustrates that in the banking sector, there is still a long way to go.
More insights below . . . .
Can the EPA really build a $27 billion green bank next year? An interview with Reed Hundt
. . . . One of the most overlooked big-ticket items in President Joe Biden’s recent climate law provides for the creation of a $27 billion government climate fund to invest in renewable energy projects, which many hope will lead to the first U.S. green national bank next year. But how, or whether, a national bank is created depends on the Environmental Protection Agency, and there are still many hurdles. In an exclusive interview with Callaway Climate Insights’ Bill Sternberg, Reed Hundt, the CEO for Coalition for Green Capital, walks investors through what needs to happen. . . .
Subscriber-only insights samples: Two bumps in the road that could hamper the U.S.’s EV charging network
. . . . The numbers from Ford $F were amazing. Last month, the company reported sales of its U.S. EVs were up 102.6% over November 2021. And overall American electric vehicle sales reached 6% by the end of Q3, with a 7% market share predicted by the end of the year. Great. But it’s not all great news in the EV arena. In particular, the U.S., because of its large size compared with most other countries and greater distances often traveled, is a place of bigger “range anxiety” than, say, Europe. And that means that the charging network needs to be extensive, comprehensive and robust, which at present it is not.
You can add a couple of pieces of bad news to that. First up, reports E&E News, is that construction of a national web of electric vehicle charging stations could be delayed if the Biden administration enforces a January deadline to manufacture the chargers domestically, according to industry officials. In particular, state transportation agencies, along with manufacturers and operators of electric vehicle chargers, say “Buy America” rules in the $7.5 billion charger network unleashed by the Inflation Reduction Act could derail their planning processes if they are implemented too quickly.
Brendan Jones, president of Blink Charging $BLNK , which manufactures and operates charging stations across the country, said his company is not yet able to produce Level 3 chargers — which will be the pillars of the charger network — at scale, he told the website. And then, further in the future, is the issue of America’s transmission grid. As we have reported, much of the current system is inadequately prepared for the growing proportion of renewables, with their ebbs and flows of energy. And now you can add growing demand for EV charging. For instance, a new report from clean-transport advocacy organization CalStart, finds that in two states, Massachusetts and New York, that have committed to selling only zero-emissions cars by 2035, the current transmission systems are woefully inadequate, something also faced in EV-heavy California.
“Right now, when people are talking about capacity” for EV charging, “they’re asking which distribution transformer has capacity, or which feeder, or even a substation,” report co-author Dave Mullaney told Canary Media. “But when you start to throw tens of megawatts on a distribution system, you’re quickly overloading it.”
Decisions are going to have to be made. And quickly. . . . — Matthew Diebel.
Vanguard’s climate alliances withdrawal exposes greenwashing
. . . . Vanguard’s withdrawal from two prominent fund groups dedicated to fighting climate change this week wasn’t the first and won’t be the last as Wall Street pulls back on its climate commitments in the face of attacks on its business by Republicans in red states and in Congress.
Membership in the Net Zero Asset Managers initiative (NZAM) and its umbrella group, the Glasgow Financial Alliance for Net Zero (GFANZ) was always just an exercise in greenwashing for many big fund managers, who wanted to attract money to their environmental, social and governance (ESG) funds in the last few years when the funds were hot.
In the face of a Republican backlash that includes lawsuits, hearings, and the withdrawal of real money from the fund managers’ pension products, the cost of losing business — any business — was quickly weighed against the marketing value of being associated with a green alliance and fighting climate change came up short.
It’s a slap in the face to all those, such as former Bank of England Gov. Mark Carney, who worked so hard to put the alliances together, but in the end, it will better serve investors by exposing those who are really serious about cutting greenhouse gas emissions and investing in the renewable transition and those who are just along for the ride. Vanguard, we now know, has made its choice. . . . — David Callaway
Editor’s picks: California offshore wind rights auction brings in $757 million
— USGS Volcanoes🌋 (@USGSVolcanoes) December 8, 2022
California’s first-ever offshore wind auction raises $757 million
The White House on Wednesday said $757 million in winning bids were received for its auction of offshore wind development rights in California. It’s the third offshore wind lease sale this year and the first for the Pacific region. The Biden Administration has said that as part of its goal to help in the clean-energy transition, it will deploy 30 gigawatts of offshore wind energy by 2030, enough to power 10 million homes. Cal Matters reports the auction includes five sites about 20 miles off Morro Bay and Humboldt County, totaling 583 square miles of deep ocean waters. The leases from the federal government are the first step in a years-long regulatory process that could produce the first commercial-scale floating wind turbines off the California coast.
UK approves new coal mine in Cumbria
UK officials have OK’d the first new coal mine there in 30 years, overriding concerns about climate impacts. The proposed mine in Cumbria would dig up coking coal for steel production in the UK and across the world, the BBC reports. According to the report, critics say the mine would undermine climate targets and demand for coking coal is declining. Yet supporters say the mine will create jobs and reduce the need to import coal. The BBC quotes Tony Bosworth, a Friends of the Earth campaigner, as saying the mine is unnecessary, “will add to global climate emissions, and won’t replace Russian coal.”
Investors will pay more for ESG value
Environmental, social, and governance (ESG) objectives have risen to near the top of the agenda for corporate executives and boards, driven in large part by their perceptions of shareholder interest, say the authors of a new National Bureau of Economic Research (NBER) working paper titled How Do Investors Value ESG? From the abstract: “We quantify the value that shareholders place on ESG using a revealed preference approach, where shareholders pay higher fees for ESG-oriented index funds in exchange for their financial and non-financial benefits. We find that investors are willing, on average, to pay 20 basis points more per annum for an investment in a fund with an ESG mandate as compared to an otherwise identical mutual fund without an ESG mandate, suggesting that investors as a group expect commensurately higher pre-fee, gross returns, either financial or non-financial, from an ESG mandate.” Authors: Malcolm P. Baker, Harvard Business School, NBER; Mark Egan, Harvard University Business School, NBER; Suproteem Sarkar, Harvard University.
Words to live by . . . .
“What good is the warmth of summer, without the cold of winter to give it sweetness?” — John Steinbeck.