What a week! Maddie has been in New York covering Climate Week NYC 2022– so many interesting and important discussions going on. We’ve also had some fantastic discussions this week here in London
We are flagging here some of the areas of discussion over the last week (and here is our previous update from London Climate Action Week, in case you missed it):
- Emissions are going up. Global emissions surged last year, and are higher in 2022 than they were in 2019 (1.2 per cent higher in the first five months, compared to the same time period three years ago). (cf. Global Carbon Project)
- Dangerous tipping points are being passed. We have already passed five out of 16 tipping points (the lower temperature thresholds). This is increasingly dangerous for our planet, with irreversible impacts looming for polar ice, coral reefs, permafrost, etc. (cf. Science journal). There is a record melting of ice sheets in Greenland this month (cf. Nasa’s Earth Observatory)
- Gas or no gas. The debate about whether gas can be viewed as a helpful transition fuel, or a dangerous option for our climate, is intensifying. The European Investment Bank is firm on its position that it will not invest in gas projects; and the EU taxonomy (which defines gas and nuclear as sustainable energy sources for investment purposes) is being disputed by environmental NGOs (ClientEarth and others). If the European Commission does not reconsider their inclusion, we will see a European Court of Justice court case
- Phasing out – or no new coal at all? The UN’s Race to Zero, that accredits the pledges made by GFANZ members (think: 450 financial institutions representing $130tn of assets) has recently revised it guidance from “no new coal projects” to “phase out” of coal, “in line with appropriate global, science-based scenarios.” FT’s Simon Mundy has flagged for us the (adverse) role of the law and lawyers in this revision – it’s also published on the FT’s Moral Money of 21 Sept 22 and reposted on my Linkedin so I won’t repeat here)
- Public relations companies under fire. Following the US lawmakers’ focus on how extractive companies misled the American public on climate change, the scrutiny is now on public relations companies. The latest report from the US Democratic House Natural Resources Committee’s Oversight and Investigations describes numerous deceptive actions by these companies financed by extractive companies to mislead the general public
- Scrutiny of ESG. The latest in the ESG debate comes from the Financial Conduct Authority that recently spoke about needing to delve into how an ESG benchmark is compiled, to help ensure that investors can meaningfully consider ESG as part of their investment decisions. This echoes a recent statement by the SEC calling for more disclosure on the use of ESG factors within portfolio management.
And here is a recap of some of the insights we heard in New York:
- Reckoning with the past for the sake of the future: Many conversations evoked a sense of collective harm rather than individual harm; specifically the idea that climate change will impact every single person on earth, regardless of who emits the most, where forests are cut down, and where water is depleted. A high school student opened a panel by recounting her despair when she learned that by 2050, sea levels could rise by 20 to 70 cm, and the effect it could have on her life and her community in New York. She added, "I'm being asked to take on an enormous responsibility for our earth without the proper tools to do so. This is why schools need to be teaching about intergenerational accountability [for harm to the earth]."
- Emergence of new thinking about protecting nature. Seeing trends away from companies focusing on “how much can I extract or pollute within legal limits" and towards a decommodification of nature. A few examples: Some states like India, Ecuador, Colombia, New Zealand have recognised the rights of nature in courts or even in the constitution. Some court systems are expanding their jurisdiction to allow any person or group to bring a climate-related lawsuit against the state or against a company, with much lower barriers to show that direct harm has been done to them--just proof that they have not lived up to their climate commitments. In the US, most of this is being achieved through consumer disclosure regulation and claims of greenwashing
- Litigation on climate and human rights front and center, and expectation for it to only grow and evolve. Legislation is a good development, but accountability is the key to the castle. What are the consequences for violating the Paris Agreement, for example? A big future question: there must be a global agreement about the consequences of violating international treaties, like the Paris Agreement, that are not yet well-defined. When asked about future trends for climate and human rights litigation, Meriam Nazih Al-Rashid, a partner at Eversheds Sutherland, said: “For me the future trend is accountability; that is the only way that we will address climate change in a meaningful manner.”
- Litigation still has its practical limitations, though. How do you determine accountability for harm to the environment and corresponding harm to people and communities in a legal court without a clear causation? Who is left holding the bag at the end of the day? Often, it's the most vulnerable individuals and communities who bear the disproportionate burden because they lack the resources to claim their rights. Vulnerable groups face barriers to bringing lawsuits due to costs, knowledge of who to talk to, how the process works, long delays in court proceedings, failure to enforce injunctions and the amount of time it can take to reach a remedy. Meanwhile, affected communities are still going to suffer from lack of clean water, people will still see their families suffer illness caused by pollution, drought and famine will continue to make people go hungry. With the way many legal systems are structured now, the question becomes, is a court settlement always true justice?
- Companies need to focus on their human rights and environmental due diligence to keep up with the increasing expectations of their stakeholders and the law. At the same time, Matthias Thorns, Deputy Secretary-General of the International Organisation of Employers (IOE), cautioned in one panel that “Due diligence is the focus, but it's not a silver bullet.” He pointed out that due diligence will help companies learn more about what's happening in their supply chains, and then they will need to address these issues. This will be a significant topic for the future as more and more companies discover human rights and environmental impacts and move to address them, including through using collective leverage.