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Climate Change was the Hot Topic at the World Economic Forum in Davos

January 28, 2019 Add Comment Edit

Climate change was the dominant theme at and this year's World Economic Forum (WEF). Panel discussions covered a wide range of related topics and including global warming, ocean sustainability and biodiversity. Al Gore, David Attenborough and Jane Goodall were among the participants.

This year's Global Risk Assessment report released at the WEF in Davos revealed, yet again, that climate change and related phenomenon are among the greatest risks both in terms of impact and likelihood. The report surveys nearly 1,000 decision-makers (public sector, private sector, academia and civil society) who are asked to assess the risks facing the world. Over a ten-year horizon, extreme weather and climate-change policy failures are seen as the gravest threats.

The WEF has issued many similar warnings in recent years. The 2016 Global Risks Report was the first that put environmental risks at the top the ranking. This report said the failure of climate change mitigation and adaptation is the risk with the greatest potential to impact society. It specifically warned about the impact of climate change on food security. As an interesting aside, the 2016 report included a prophetic warning about the risks associated with disempowered citizens.

The experts at Davos called for corporate and government action and there was widespread agreement that this requires economic change. As reported by CNN, these experts singled out fossil fuel subsidies in G7 countries. "There are still fossil fuel subsidies from G7 countries — that's ridiculous," said Rachel Kyte, special representative of the UN Secretary-General for Sustainable Energy. "Why we are subsidizing something we know is killing our children, poisoning them and affecting their ability to learn? That's beyond me," she added.

Attenborough, Gore and others have been sounding the alarm about climate change for years. However, the most powerful warning came from 16 year old Greta Thunberg who told attendees: "I don't want you to be hopeful, I want you to panic, I want you to feel the fear I feel every day," She also pulled no punches when she ascribed blame those assembled in Davos: "Some people say that the climate crisis is something that we will have created, but that is not true, because if everyone is guilty then no one is to blame. And someone is to blame," Thunberg said flatly. "Some people, some companies, some decision-makers in particular, have known exactly what priceless values they have been sacrificing to continue making unimaginable amounts of money. And I think many of you here today belong to that group of people."

After her speeches at COP24 and the WEF Greta has emerged as a leading voice for climate action. She is a realist in a world where many are either ebulliently optimistic about the prospects for climate action.

"Many people say that this is not an easy issue, we cannot just say that this is how it is, it's not black and white. But I say that this is black and white. Either we stop the emissions or we don't. There are no gray areas when it comes to survival,"Greta said.

In a chapter on the human causes and effects, the Global Risks Report 2019 calls for greater action around rising levels of psychological strain across the world.

"The world faced a growing number of complex and interconnected challenges in 2018. From climate change and slowing global growth to economic inequality, we will struggle if we do not work together in the face of these simultaneous challenges," the report's authors conclude.

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Towards a Global Climate Agreement at COP21 (WEF Summaries)
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Curbing Fossil Fuels - Carbon Pricing and an End to Subsidies (WEF Summaries)
The Value of Investing in Climate Mitigation (WEF Summaries)
Global Economies Feeling the Heat from Climate Change (WEF Summaries)
Collaboration and Cooperation are Imperitive (WEF Summaries)
What is The World Economic Forum (WEF)
Risks Associated with Environment, Climate, Water Crisis and Extreme Weather in the WEF Report

The End of Fossil Fuel Subsidies

May 31, 2016 Add Comment Edit

Providing handouts to the wealthiest corporations on earth does not make much sense, particularly when their activities are the leading driver of climate change. Ending fossil fuel subsidies is the most obvious next step in our efforts to tackle the climate crisis. In the wake of the Paris Climate Agreement forged at COP21, continuing fossil fuel subsidies is an oxymoron.

These subsidies take many forms including, tax breaks, cheap loans, price controls, purchase requirements, purchasing equipment, royalty breaks and direct spending. According to some reports there are over 800 ways that taxpayers support the fossil fuel industry.

According to the IMF, global energy subsidies amount to 5.3 trillion dollars, or $10 million a minute. This translates to 6.5 percent of global GDP, in 2015 alone. This is more than the entire health spending of all the world’s governments. The IMF suggests that removing fossil fuel subsidies could reduce greenhouse gas emission by 20 percent. Everybody from Prince Charles to the IMF have called for an end to fossil fuel subsidies.

Nicholas Stern, climate economist at the London School of Economics, said: “There is no justification for these enormous subsidies for fossil fuels, which distort markets and damages economies, particularly in poorer countries.”

Christiana Figueres, the UN’s climate change chief commented: “The IMF provides five trillion reasons for acting on fossil fuel subsidies. Protecting the poor and the vulnerable is crucial to the phasing down of these subsidies, but the multiple economic, social and environmental benefits are long and legion.”

The president of the World Bank, Jim Yong Kim, succinctly stated: “We need to get rid of fossil fuel subsidies now.”

Shelagh Whitley, a subsidies expert at the Overseas Development Institute, said: “governments around the world are propping up a century-old energy model. Compounding the issue, our research shows that many of the energy subsidies highlighted by the IMF go toward finding new reserves of oil, gas and coal, which we know must be left in the ground if we are to avoid catastrophic, irreversible climate change.”

The world's biggest providers of fossil fuel subsidies are China, ($2.3tn) US ($700bn), Russia ($335bn), India ($277bn) and Japan ($157bn), and the European Union ($330bn).

By making fossil fuels cheaper, subsidies increase the use of dirty energy resulting in more emissions. A new report shows how subsidies are increasing our emissions. According to the report's author Radek Stefansk from The School of Public Policy at the University of Calgary:

“The resultant 170-country, 30-year database finds that the financial and the environmental costs of such subsidies are enormous- and steadily increasing. The overwhelming majority of the world’s fossil fuel subsidies stem from China, the US, and the ex-USSR; as of 2010, this figure was $712 billion or nearly 80% of the total world value of subsidies. For its part, Canada has been subsidizing rather than taxing fossil fuels since 1998. By 2010, Canadian subsidies sat at $13 billion, or 1.4% of GDP. In that same year, the total direct and indirect financial costs of all such subsidies amounted to $1.82 trillion, or 3.8% of global GDP.”

Perhaps the most noteworthy statistic contained in the report show that in the absence of subsidies emissions would have been cut in half in 2010.

IMF

Numerous other studies including IMF research have come to similar conclusion as the Policy School study. The IMF called these subsidies "unsustainable"." The IMF described these subsidies as "perverse" saying "they are using public funds to create a problem the world has agreed to fix in Paris. And they leave us all to pay the societal costs that fossil-fuel pollution causes."

Ending the subsidies would also reduce the number of premature deaths from air pollution by half translating to about 1.6 million lives a year.

In 2014, IMF leader Christine Lagarde said reducing subsidies for fossil fuels and pricing carbon pollution should be priorities for governments around the world.

“We are subsidizing the very behaviour that is destroying our planet, and on an enormous scale. Both direct subsidies and the loss of tax revenue from fossil fuels ate up almost $2 trillion in 2011—this is about the same as the total GDP of countries like Italy or Russia,” Lagarde said.

G7

In 2009 the G7 (composed of UK, US, Canada, France, Germany, Italy, Japan and the European Union) announced that it would end fossil fuel subsidies but no timelines were given. At a recent meeting of the G7 in Japan, the world's wealthiest economies have agreed to end fossil fuel subsidies in the next decade.

“Given the fact that energy production and use account for around two-thirds of global greenhouse gas emissions, we recognise the crucial role that the energy sector has to play in combating climate change,” said the leaders’ declaration, issued at the end their summit in Japan.

G20

In 2009, G20 countries promised to phase out "inefficient" fossil fuel subsidies. According to a report titled "Empty Promises: G20 subsidies to oil, gas and coal production," G20 countries are spending $452 billion US a year in direct subsidies to their respective fossil fuel industries. The study's co-author Alex Doukas, who is senior campaigner with Oil Change International, said,

"We're subsidizing companies to search for new fossil fuel reserves at time when we know that three-quarters of the proven reserves have to stay in the ground if we hope to avoid the worst impacts of climate change...So paying companies to find more fossil fuels is folly."

The report was produced jointly by Oil Change International, an advocacy group focused on moving the world away from fossil fuels, and the Overseas Development Institute, the U.K.'s leading independent think-tank on international development and humanitarian issues.

US

Despite numerous attempts to remove these subsidies in the US Congress (primarily the Republicans) have thwarted these efforts. The fossil fuel industry owns the Republican party who have consistently shown their loyalty to an industry that is rife with corruption and subterfuge. Internationally, the leaders from over 50 countries have made public commitments to phase out fossil fuel subsidies in the “medium term.” However there has not been much concrete action to date.

Canada

Canada's total federal and provincial support for the petroleum industry was close to $2.7 billion US ($3.6 billion Cdn at current exchange rates) in the 2013-14 fiscal year, with federal subsidies accounting for roughly $1.6 billion. In his election platform, Prime Minister Justin Trudeau pledged his government would end fossil fuel subsidies.

COP21

During the COP21 conference at the end of 2015, the UNFCCC released a statement which read: “An unprecedented coalition of close to 40 governments, hundreds of businesses and influential international organisations has called today for accelerated action to phase out fossil fuel subsidies, a move that would help bridge the gap to keep global temperature rise below 2°C.”

John Key, the New Zealand Prime Minister, presented the Fossil Fuel Subsidy Reform Communiqué to Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change (UNFCCC). Key said:

“Fossil fuel subsidy reform is the missing piece of the climate change puzzle. It’s estimated that more than a third of global carbon emissions, between 1980 and 2010, were driven by fossil fuel subsidies.

Figueres said in accepting the Communiqué: “These subsidies contribute to the inefficient use of fossil fuels, undermine the development of energy efficient technologies, act as a drag on clean, green energy deployment and in many developing countries do little to assist the poorest of the poor in the first place...low oil prices are a good opportunity to really get going on this issue.”

Stefan Löfven, Prime Minister of Sweden, said: “History will prove fossil fuel to be a dead end. Sweden will be amongst the first fossil free welfare nations of the world. And eliminating fossil fuel subsidies is an important step on this path.”

Hakima El Haite, Environment Minister of Morocco, candidate for the presidency of COP22, said: “Not only do fossil fuel subsidies put a strain on government coffers but they also don’t help the poorest of society.”

Solutions

The end of fossil fuel subsidies is coming and there are ways that we can expedite this transition. As reviewed by Price of Oil here are four major ways we can address the problem of subsidies:

Increased transparency – governments must stop hiding the handouts they give to fossil fuel companies!
Support for the poor and vulnerable – we need to be sure that poor countries and communities are supported to ensure access to energy while removing these subsidies.
Global coordination – without a way for the world to coordinate on this effort, countries will continue to drag their heels.
Phase-out Deadline – we all know that unless you have a deadline, you’re apt to procrastinate. It’s time to set one for fossil fuel subsidy elimination!

Fossil Fuel Subsidies and Renewable Energy Post COP21 (Infographic)

December 26, 2015 Add Comment Edit

One of the most important things we can do to curb climate change is to end fossil fuel subsidies. This would reduce the amount of fossil fuels burned and it would level the playing field for clean renewable sources of energy. Event thought 60 percent of all new investment is going into renewable energy fossil fuels still get the lions share of subsidies. The International Energy Agency (IEA) say that government subsidies for fossil fuels are 12 times greater than those for renewable energy.

It is estimated that removing fossil fuel subsidies would reduce greenhouse gas emission by 10 per cent by 2050.

As reported in the New Yorker, the International Monetary Fund (IMF) said that there are $5.3 trillion worth of fossil fuel subsidies in 2015 or six and a half percent of global G.D.P.. This breaks down to $10 million a minute or more than the entire health spending of all the world’s governments.

According to Reuters fossil fuel subsidies exceed climate aid by a ratio of 40 to 1.

Jake Schmidt, of the Natural Resources Defense Council, said: "Given tight budget times and the need to address global warming, subsidising activities that are heating the planet just doesn't make sense. The only beneficiaries of fossil fuel subsidies are oil, gas and coal companies that are raking in record profits at the expense of the rest of us."

Prince Charles said the governments must end fossil fuel subsidies. Realizing the dream of ending fossil fuel subsidies was brought one step closer at the recent COP21 climate meetings in Paris.

Almost 40 countries have endorsed the Fossil Fuel Subsidy Reform Communiqué, including: Canada, Chile, France, Germany, Italy, Malaysia, Mexico, Morocco, Peru, the Netherlands, the Philippines, Samoa, the U.S., Uganda and Uruguay.

According to the UNFCCC statement: “An unprecedented coalition of close to 40 governments, hundreds of businesses and influential international organisations has called today for accelerated action to phase out fossil fuel subsidies, a move that would help bridge the gap to keep global temperature rise below 2°C.”

John Key, the New Zealand Prime Minister, presented the Fossil Fuel Subsidy Reform Communiqué at the Paris Conference said: “Fossil fuel subsidy reform is the missing piece of the climate change puzzle. It’s estimated that more than a third of global carbon emissions, between 1980 and 2010, were driven by fossil fuel subsidies...Their elimination would represent one seventh of the effort needed to achieve our target of ensuring global temperatures do not rise by more than 2°C. As with any subsidy reform, change will take courage and strong political will, but with oil prices at record lows and the global focus on a low carbon future—the timing for this reform has never been better.”

Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change (UNFCCC) said in accepting the Communiqué: “These subsidies contribute to the inefficient use of fossil fuels, undermine the development of energy efficient technologies, act as a drag on clean, green energy deployment and in many developing countries do little to assist the poorest of the poor in the first place.

Some wrongly argue that fossil fuel subsidies help the poorest members of society. According to the IEA said. Just 8 percent of aid reached the poorest 20 percent of each country’s population last year. Most of the benefits—85% to 90%—typically accrue to those on middle incomes and the wealthy

Hakima El Haite, Environment Minister of Morocco, candidate for the presidency of COP22, said: “Not only do fossil fuel subsidies put a strain on government coffers but they also don’t help the poorest of society.”

In 2011 President Obama's attempts to eliminate $4 billion in oil and gas subsidies from the U.S. budget was denied by Congress. However in the US and around the world pressure is growing to definitively end subsidies that are wrecking the climate and imperiling life on earth.

Here is an infographic that does a good job of visually illustrating the issue of fossil fuel subsidies:

Six Types of Sustainability

September 10, 2015 Add Comment Edit

Sustainability is an expansive concept that applies widely. Commonly, the definition of sustainability is narrowly defined particularly by entrepreneurs and some members of the business community.

Many focus on profitability, at the expense of the five other dimensions of sustainability. Profitability is only one of the three pillars of the so called three legged stool of sustainability (people, planet and profits).

While no one can deny the importance of profitability, some fail to recognize how the other elements of sustainability can also contribute to or detract from the bottom line.

The three legged stool can be further subdivided into six overlapping sub-components of sustainability.

Commercial sustainability is largely about the importance of generating a profit to sustain a company's viability. Environmental sustainability is about the environmental impacts associated with a business while ecological sustainability is about the impacts on bio diversity. Economic sustainability is a reflection of the market's ability to carry a business while social sustainability deals with the social impacts of a business. Finally regulatory sustainability is about being onside with government regulations and laws.

Failure to understand and incorporate issues on any of these dimensions of sustainability can have adverse implications for the others.

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Summary of Recent Reports on the Costs of Climate Action/Inaction

September 04, 2015 Add Comment Edit

Reports are coming in that make it hard to ignore the economic benefits of action on climate change. This includes recent reports from Citi the world's third largest bank and the London School of Economics, one of the most prestigious and respected schools in the world.

In April 2015 the World Health Organization (WHO) and the US Department of Energy published reports that demonstrate just how high the costs of inaction could be.

According to a study by the WHO, the financial costs of air pollution in Europe alone amounts to $1. trillion each year from death and disease. This is one tenth of Europe's gross national product. The economic costs of deaths alone represent $1.4 trillion.

As reported by Bloomberg, a US Energy Department report indicates that in the US, extreme weather costs about $33 billion each year.

According to a Tufts University report commissioned by the NRDC, the costs of climate inaction to the US economy is equivalent to more than $3.8 trillion annually or 3.6 percent of the nation's GDP by 2100. Hurricane damage, real estate losses, increased energy costs and water costs add up to a price tag of 1.8 percent of U.S. GDP, or almost $1.9 trillion annually (in today’s dollars) by 2100. Hurricane damages: $422 billion Real estate losses: $360 billion Increased energy costs: $141 billion Water costs: $950 billion.

The NRDC report indicates that if left unchecked global warming will cause drastic changes to the planet’s climate, with average temperature increases of 13 degrees Fahrenheit in most of the United States and 18 degrees Fahrenheit in Alaska over the next 100 years.

As reported in skeptical science, peer-reviewed projections indicate that the costs of inaction on climate change outweigh the costs of addressing the problem by trillions of dollars.

"The benefits of reducing greenhouse gas emissions outweigh the costs by trillions of dollars. Combining the results of the report by the German Institute of Economic Research and Watkiss et al. (2005) studies, we find that the total cost of climate action (cost plus damages) by 2100 is approximately $12 trillion, while the cost of inaction (just damages) is approximately $20 trillion."

Image Credit: Skeptical Science

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An LSE Cost Benefit Analysis Supports Climate Action

September 03, 2015 Add Comment Edit

Research from the London School of Economics (LSE) makes the economic case for acting on climate change. This study along with many others (see related posts below) make the point that the costs of inaction on global warming are far greater than the costs of acting. This is in addition to the costs directly related to the damage caused by climate change.

Much has been said about the costs of combating global warming but a slew of independent research indicates that the benefits of climate action far outweigh the costs. This was also the conclusion of Citibank study published in August.

Two research institutes at the London School of Economics found that there are significant economic gains from limiting emissions. The LSE study published in July says that improved air quality, energy efficiency and energy security combine with falling renewable energy prices to make climate action the more economically compelling option.

The employment and health benefits alone outweigh the costs of climate mitigation even if we do not factor the liabilities associated with the damaging impacts of climate change. In the simplest terms climate action has massive economic benefits while inaction will augur massive costs.

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Acting on Climate Change Makes Good Economic Sense According to Citibank

September 03, 2015 Add Comment Edit

A recent Citibank report showed that if we act to slow climate change we could save as much as $50 trillion. This finding is significant because cost is one of the most common reasons put forth to avoid acting on climate change. The Citi report is but the most recent study to soundly refute the contention that acting on climate change is too expensive. Research shows that climate action offers excellent ROI not to mention saving trillions of dollars of additional costs associated with the damaging affects of a warmer world.

In a report entitled, "Energy Darwinism II: Why a Low Carbon Future Doesn’t Have to Cost the Earth," Citi Global Perspectives & Solutions (GPS), conducted a cost benefit analysis of a low carbon energy economy. The research explored the costs of inaction (business as usual) versus the costs of acting (transitioning to a low-carbon energy economy).

The research shows that the action scenario actually costs less than inaction. Over the next 25 years the cost of a low carbon energy economy would be about $190 trillion while doing nothing would cost around $192 trillion. These figures do not include the $30 - $50 trillion in costs associated with the damage caused by climate change.

Using these numbers Citi concluded that acting on climate change offers excellent ROI (estimated to be around 10 percent by 2035). The Citi report also reiterates the findings of other research which suggest that a carbon tax would be beneficial for the economy.

In addition to avoiding a string of liabilities, acting on climate change also affords massive improvements in people's health and quality of life. Even if we attempt to divorce ourselves from the human toll of climate change, a purely financial assessment reveals that acting on climate change makes good economic sense.

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Innovate or Die: The Next Big Trend in Sustainability

August 12, 2015 Add Comment Edit

Innovative approaches to sustainability are rapidly becoming the next frontier of corporate differentiation. Being more innovative is not only essential to improve the bottom line, it is also a pathway to growth.

The combination of rapid technological change and slow economic growth are driving innovation. At the macroeconomic level innovation is essential to profitability and economic growth, at the level of the individual organization, innovation is increasingly a key success factor.

Innovation is an imperative for companies looking to do more with less. It is becoming increasingly clear that we can reduce emissions and tackle climate change. However, innovation is absolutely necessary if we are to expedite emissions reductions. Reducing carbon emissions makes good business sense and innovations that respond to the market demands of the low carbon economy are destined to prosper.

There is a large and growing pool of data that supports the contention that with the help of innovative new technologies sustainability affords good business opportunities. This view was corroborated by an October 2014 analysis from the World Resources Institute (WRI). According to the WRI report titled Seeing Is Believing: Creating a New Climate Economy in the United States, emerging technologies could help the US achieve deeper reductions even faster with targeted policy support.

According to a PricewaterhouseCoopers (PWC) report titled Breakthrough Innovation and Growth, executives are looking to innovation to drive growth. The report surveyed 1757 corporate executives in 25 countries and found that 93 percent of executives are looking to innovation to drive growth.

One of the most interesting findings is that while organizations want innovation they do not know how to get it. A total of 81 percent of respondents indicated that they do not believe their organizations know how to lead innovation.

Companies are not living as long as they used to and innovation is one of the primary ways they can lengthen their life span.

To succeed in today's marketplace companies need to engage innovation in a methodical fashion. This entails developing well thought out and fully integrated plans for innovation. This goes far beyond generating a good idea and extends into detailed strategies for implementation.

The corporate world is adopting sustainability as a strategic imperative that is being dictated by the market. However, it is no longer enough that businesses simply engage sustainability, they are now faced with increasingly powerful pressures that are driving them to innovate as a matter of survival.

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Competing Visions of Capitalism Viewed through the Lens of Renewable Energy Investment Strategies

July 24, 2015 Add Comment Edit

In the wake of the Greek financial crisis, and the Pope's Encyclical there is a lot of hyperbole about economic dysfunction. Fueled by popular resistance to austerity, wild allegations about the imminent demise of capitalism abound. Contrary to the musings of some idealistic pundits, capitalism is alive and well. In fact, led by the sustainability movement, there is an economic renewal underway. By marrying self interest and altruism a new brand of capitalism is emerging that has seen advances on both the social and environmental fronts. However, this vision of capitalism is at odds with some basic tenants of conservative economics . What follows is a review of these two competing interpretations represented by the renewable energy investment strategies of Bill Gates and Warren Buffet.
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Bill Gates and Warren Buffet are philanthropists who are both invested in renewable energy. While their actions may appear similar, their diverging investment philosophies reflect two different visions of capitalism.

Renewable energy is a critically important part of sustainability oriented business practices and responsible investment strategies that are driving environmental and social change. Renewables are a low carbon energy source that can reduce our reliance on climate change causing fossil fuels. While renewables are an important part of solving the climate crisis, they are of interest to many investors largely because they offer impressive rates of return. A 2012 Forbes piece titled "Investors are Making Money with Renewable Energy," states that for "investors looking for financially sound, environmentally responsible, climate-friendly investments, renewable energy finance is worth a very close look."

It would appear that the market agrees with the Forbes assessment. As reviewed in a 2015 report, renewable energy investment increased by more than 17 percent to $270 billion in 2014.

Social obligations

While earning returns from investments is important, Gates and Buffet are two high profile examples of men who use their wealth for social betterment. Forbes, reports that Gates, who is worth $79 billion, is the richest man in the world and Buffet, who is worth a paltry $72 billion, is the third richest man in the world.

Both Gates and Buffet refute the stereotype of the wealthy one percent. They both see that their wealth comes with certain social obligations. Even the capitalist icon David Rockefeller understood this more than half a century ago when he said, "The old concept that the owner of a business had a right to use his property as a he pleased to maximize profits has evolved into the belief that ownership carries certain binding social obligations."

Gates has committed his life to his perceived social obligations. He first embraced philanthropy while at the helm of Microsoft, and now, through his full time involvement in the Bill and Melinda Gates Foundation, he has made social betterment the "primary purpose" of his life. His foundation is focused on improving people's health and education. "My full-time work for the rest of my life will be at the foundation," Gates was quoted as saying in a 2013 Telegraph article. So far, Gates has given away $28 billion to philanthropic causes.

Creative capitalism

Contrary to the writings of people like Naomi Klein and Paul Mason who believe that capitalism is profoundly flawed and destined to die, Gates argues that capitalism offers our best hope for social and environmental renewal. Gates is an advocate of system innovation, an approach that he calls creative capitalism.

Gates offers a form of ecological economics. His practical approach is grounded in the fundamentals of human psychology, while the ambiguous utopias insinuated by Klein and Mason are an offshoot of socialism, which has proven to be at odds with human nature.

According to Gates, capitalism can be made to serve those in need and the environment upon which we all depend. In his view, capitalism can harness innovation on the massive scale required to confront the challenges we face. Gates' approach seeks to leverage the fact that human nature is composed of two fundamental elements, self interest and the desire to help others.

In a January 24, 2008 speech at the World Economic Forum, Gates said, "The genius of capitalism lies in its ability to make self-interest serve the wider interest. The potential of a big financial return for innovation unleashes a broad set of talented people in pursuit of many different discoveries." Gates says. "This system driven by self-interest is responsible for the great innovations that have improved the lives of billions."

Gates believes we need to measure and publicize social responsibility to give consumers the tools they need to make good buying decisions. He also suggests that to make markets work, we need to see more collaboration between governments, businesses, and nonprofits.

"Creative capitalism takes this interest in the fortunes of others and ties it to our interest in our own fortunes—in ways that help advance both." Gates says. "There is a growing understanding around the world that when change is driven by market-based incentives, you have a sustainable plan for change—because profits and recognition are renewable resources."

Renewable energy

As reviewed in an Entrepreneur article, Gates has invested over $1 billion in renewable energy and now he is looking to double that amount. In an interview with the Financial Times, Gates said that investing in technology companies is the best way to find cost effective solutions to climate change.

"The only way you can get to the very positive scenario is by great innovation," he said. "Innovation really does bend the curve." He sites the case of current battery technology saying that if we are to fulfill the promise of renewables we will need more reliable energy storage than is currently available. However, Gates' approach to capitalism is anything but laissez faire. He explains that advancing technology requires the kind of massive investments that only governments can provide. Gates says that efforts to improve renewable technologies require Manhattan or the Apollo style government projects.

Another powerful man who has invested massively in renewable energy is Warren Buffet. Through his investment firm, Berkshire Hathaway, Buffet has invested $30 billion in renewable energy. Buffet has also given away more than $17 billion to philanthropic causes.

Buffet's stellar record of wealth creation has earned him a reputation as the world's foremost investment genius. In 2009, Buffet's investments in lithium show that he was already ahead of the sustainability investment curve. In addition to his other renewable energy investments, Buffet has invested more than a billion dollars in solar energy alone, this includes the massive Agua Caliente solar array in Arizona.

Climate ambivalence

Despite his philanthropy and investments in renewable energy, Buffet has garnered some well warranted criticism. Although Berkshire has invested in renewables, they also own Burlington North Railroad which ferries huge amounts of coal.

One of those who dare to criticize the Oracle of Omaha is Rob Berridge, the director of shareholder engagement at Ceres, one of the most important sustainability focused organizations in the world.

Buffet's supporters may point to the fact that in the fourth quarter of 2014, Berkshire sold its $4 billion stake in Exxon Mobil. However, withdrawing these funds was due to market conditions, not environmental or social concerns. His move was prompted by the falling price of oil and the realization that oil's glory days are gone.

Buffet has also been criticized for his suggestion that extreme weather is not on the increase due to climate change.

Despite what Buffet has said publicly, Berkshire is vulnerable due to its investments in the reinsurance business. Extreme weather is expected to substantially increase insurance pay outs.

Buffet is sending mixed messages said Berridge. "He'll undoubtedly go down as one of the world's greatest investors and most ethical businesspeople." Berridge said, however, "with climate change having such an important impact on the largest parts of his business, we'd love to see him be clearer."

Buffet's statements indicate that he acknowledges the science of climate change. However, his position suggest something far worse than denial. His investment decisions indicate that he is indifferent to climate change.

Buffet may be a titan in the field of renewable energy, but his motivations are suspect and his ambivalent stance on climate change is unlikely to be judged kindly by future generations.

Investment philosophies

Buffet and Gates have two different investment philosophies that are premised on two dissimilar visions of capitalism. Buffet seeks out investments that are exclusively about the returns that they generate. His investment philosophy is focused on value hunting, his gaze myopically seeks out companies that will generate returns. Conversely, Gates' investment philosophy considers issues beyond corporate profits.

On the surface, Gates and Buffet may appear to be very similar, but when it comes to their investment philosophies, the two men are profoundly different. While Buffet is interested in earnings, Gates wants to solve complex global problems. Gates invests in renewables to work towards global betterment, while Buffet invests to generate attractive rates of return.

Buffet makes vast sums of money with his investments and he is generous with his billions, but when it comes to climate change, he seems to be devoid of a higher purpose.

Source: Global Warming is Real

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Sustainability Reporting Attracts Investors and Improves ROI (Video)

June 13, 2015 Add Comment Edit

Here is a panel discussion designed to improve returns and attract investors. This discussion offers practical insights and helps commercial property owners with reputation management, employee engagement and efficiency. It also increases access to capital. This discussion is ideal for all who own or intend to buy or sell real estate. It is also for property managers, developers, and sustainability professionals.

Moderator: Heather Gadonniex, Director of Sustainable Building and Construction, PE International

Panelists

Helen Gurfel, Executive Director, ULI Greenprint
Gary Holtzer, Senior Managing Director, Hines
Kristen Sullivan, Partner, Deloitte
Dan Winters, Director for North America, Global Real Estate Sustainability Benchmark

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Event - Sustainable Investing Conference: Risk Value Impact

April 26, 2015 Add Comment Edit

The 5th annual Sustainable Investing: Risk, Value, Impact conference will take place May 4th–6th at the Westin Michigan Avenue in Chicago. Participants will learn about new approaches, trends and policy developments while networking with industry leaders.

This event offers a unique opportunity to network with leaders of the sustainable, responsible and impact investing community, and to learn about new approaches, trends and policy developments in the field. The conference will attract representatives of investment management and advisory firms, research firms, financial planners and advisors, broker-dealers, community development institutions and asset owners such as pension funds and foundations, along with policymakers and corporate leaders.

Thought-provoking plenary and breakout sessions will cover a variety of topics including sustainability as a driver of value in private equity, university endowments and climate change, advancing impact investing, major issues in the 2015 proxy season, and responding to the low-carbon energy challenge.

Event sponsors include Cornerstone Capital Group, Northern Trust, Trillium Asset Management, Neuberger Berman, Pax World, Calvert Investments, Bank of America, Bloomberg and RBC. View the full list of sponsors on our conference website.

To secure your place at the conference, visit our online conference registration site today! Our early registration discount ends Friday, April 3. You may also be interested in learning about US SIF Foundation’s live course on the Fundamentals of Sustainable and Responsible Investment.

US SIF is the membership association for professionals,firms, institutions and organizations engaged in sustainable, responsible and impact investing. In addition to other benefits, US SIF members are invited to a day of member-only programming at the conference, including a reception, annual meeting, policy update and working group events. Members also enjoy substantially discounted registration fees.

To see the speakers list and their bios click here. To register click here.

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This Year's WEF Gives us Reason to Hope

March 02, 2015 Add Comment Edit

Climate and energy conversations that took place at this year's World Economic Forum (WEF) in Davos gave us reason to hope. Many of those who constitute the core of the world's economic power acknowledged the urgency of climate action and the opportunities associated with forging a new green economy.

We are beginning to see the kind of leadership from CEO's and investors that is an essential if we are to succeed in tackling climate change. Companies and investors are coming together to advance meaningful solutions. Business leaders are now looking at climate change as both a risk and an opportunity. Investors are showing unprecedented interest in investments that support low carbon technologies.

There was even support for bold action that includes ambitious climate policies. Such government support was highlighted for its ability to drive innovation, advance clean energy and improve energy efficiency.

As we head towards a hoped for global climate agreement in Paris at the end of the year, there is reason for unprecedented optimism.

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Video - Live Earth 2015: Pharrell Williams and Al Gore Launch Live Earth Climate Action Concert

February 21, 2015 Add Comment Edit

Climate campaigner and former US vice-president Al Gore and hit musician Pharrell Williams announce Live Earth, concerts in seven continents intended to galvanise support for climate action. Announced at the World Economic Forum in Davos, the event is intended to 'have humanity harmonise all at once.'

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Collaboration and Cooperation are Imperitive (WEF Summaries)

January 29, 2015 Add Comment Edit

Collaboration and cooperation are commonly mentioned as important aspects of sustainability and they emerged as salient themes at the World Economic Forum in Davos, Switzerland. Over the course of the last year we have seen historic collaboration on carbon emissions reduction between the US and China. We have also seen tremendous progress in some private sector areas.

While many are talking about global disunity, others are pointing to significant examples of global collaboration. John Kerry, US Secretary of State, said "I don’t see an unraveling [of international cooperation]. I see just the opposite. I see nations coming together … to reach an ambitious global agreement to address climate change, with the recent agreement by China and the United States that begins to set the targets to make the Paris negotiations this year a success."

Over the course of the last year businesses have come together and provide real leadership on issues like sustainably sourced palm oil. This was the subject of a talk by Dominic Waughray, Head of Public/Private Partnerships at the World Economic Forum. He addressed how the peer-to-peer conversations among business leaders led to significant commitments to sustainably sourced palm oil. As of right now over 90 percent of global palm oil demand is covered by voluntary agreements focused on sustainability.

However, the reality on the ground does not always live up to the talk, particularly in the private sector. As revealed by the BCG/Sloan Management Review annual sustainability survey which found that while 90 percent of respondents believe that collaboration is needed for sustainability, only 47 percent of companies are actually collaborating on sustainability.

We will need to see a lot of progress on the collaboration front if we are to sign a global agreement at COP21 in Paris.

"The key is coming up with a vision of how we are going to finance mitigation and adaptation to climate change," said World Bank President Jim Kim. "We have got to get away from the mutual accusations between rich and poor and move towards cohesive collaboration."

In both the public and the private sector we require more collaboration and cooperation to advance the sustainability agenda.

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Towards a Global Climate Agreement at COP21 (WEF)

January 28, 2015 Add Comment Edit

Much of the climate momentum that occurred at the World Economic Forum (WEF) in Davos is in anticipation of COP21 where it is hoped that a global agreement can be signed.

François Hollande, the President of France and host to next year's COP21 climate talks in Paris, made a number of prescient comments in Davos.

"I call upon the whole of business to make an economic contribution to the most fragile of states, in the name of solidarity and security. I call on you also to counter another threat which is one that looms over the very future of this world: we need to fight global warming," Hollande said.

He continued saying, "The time is past when humankind thought it could selfishly draw on exhaustible resources. We know now the world is not a commodity, is not a source of revenue; it’s a common good, it’s our heritage. And the consequences of climate change are fully known now – we’re not talking about theories anymore, we’re talking about certainties."

Lord Stern has made it clear that the decisions taken at the intergovernmental conference in Paris in late 2015 will shape the next 20 years.

"Paris needs to result in a binding global agreement that will map out an effective fight against climate change – that is the major challenge of the twenty-first century," Hollande said.

UN Secretary-General Ban-Ki Moon added, "Ours is the first generation that can end poverty, and the last that can take steps to avoid the worst impacts of climate change."

The private sector has an important advocacy role to play. They must push governments to be more ambitious with their targets ahead of COP21.

"We have a single mission, to protect and hand on the planet to the next generation," Hollande said. "We are faced with a moral and political responsibility, because a botched solution to a crisis might result in exacerbating the consequences of climate change."

As he introduced the Live Earth: Road to Paris concert, Al Gore said: "The purpose is to have a billion voices with one message to demand climate change now...It is absolutely crucial that we build public will for an agreement."

Although the importance of securing a global climate deal is obvious it will not be easy. "There is a huge challenge ahead for the rest of this year," World Bank President Jim Kim told the Guardian.

"If this year goes badly, and I don't think it will, it would be a massive missed opportunity," said Nobel laureate Michael Spence Michael Spence.

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Curbing Fossil Fuels - Carbon Pricing and an End to Subsidies (WEF Summaries)

January 28, 2015 Add Comment Edit

Carbon pricing and fossil fuel subsidies were popular topics at the World Economic Forum (WEF) in Davos, Switzerland. The comments made by economists, business leaders and climate experts signal a global readiness to price carbon and remove oil subsidies.

Investors and business leaders need and want regulatory certainty. Regulations on fossil fuels are coming the only question is when. Climate economist Lord Nicholas Stern was among those who argued that we need to see carbon taxes and eliminate oil subsidies.

If we are to get serious about tackling climate change we will need to curb fossil fuel use. One of the best ways to do so is through carbon pricing schemes. Rowan Douglas, CEO Capital, Science & Policy Practice and Chairman, Willis Research Network, said, "Carbon pricing is a very important tool in the armory. I think it is difficult to see the world achieving its targets without some sort of pricing mechanism for this critical pollutant."

Stern said, "Those of us who think that market economies work well, are also those who think when we see a major failure like this that the right thing to do to get the markets to work well is to correct it. And there’s a very simple correction: it’s carbon pricing. It can raise revenues for all the important things we have to do, like enhancing the life of poor people, [and] investing in innovation, health and education." He also said, "If you want to put a carbon tax on, now is absolutely the right moment."

Rachel Kyte, World Bank Group, Vice President and Special Envoy for Climate Change said, ‘We want carbon pricing. If you price carbon, we will be able to reduce emissions,’ then that will be a powerful message." World Bank President Jim Yong Kim urged governments around the world to agree on a pricing system for climate-changing CO2 emissions.

We are seeing momentum build for some form of carbon pricing scheme. Kim noted there had been progress over the last 12 months, including the UN general assembly’s commitment to set a carbon price. The head of Unilever, Paul Polman explained that businesses are also getting on-board, "50 of the top-200 companies now have an internal price for carbon. In New York, we had 1,000 businesses who signed a statement calling for a price on carbon."

In the US the Republican controlled congress stands in the way of carbon pricing. As Al Gore said in Davos, "We need to put a price on carbon and we need to put a price on denial in politics."

In addition to carbon pricing we also need to eradicate fossil fuel subsidies. Richard Branson, founder of the Virgin group said, "We have to make sure there are no more coal-fired power stations built anywhere in the world from today onwards. And we’ve got to get rid of all fossil fuel subsidies.”

Nobel Economics Prize laureate Michael Spence talked about progress being made removing oil subsidies in the developing world. "Fortunately, they [oil subsidies] are in the process of disappearing. Energy subsidies are a catastrophic policy. They produce a distorted development of the economy and all kinds of bad things."

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