Climate Detox’s Post

Global Climate Transition funds are suffering outflows this year. Why? Appetite for funds tracking Paris-aligned benchmarks (PAB) is waning mainly because of PABs' fossil fuel exclusions. Investors are favouring funds that track Climate Transition benchmarks (CTB), which have less stringent exclusion criteria, and other types of strategies. Morningstar Sustainalytics #Transition #ESG #sustainability #climate

Here’s a note from David Carlin: "Climate change is already making us poorer, even in strong mitigation scenarios, where incomes are 19% lower than in no climate change scenarios. However, mitigation actions today are also the best investment we can make in our future, offering major returns in harms avoided. A great paper in Nature explored the economic impacts of future climate change by examining hundreds of regions and their historical damages due to temperature and precipitation. The findings help to put numbers on the notoriously tricky problem of estimating the economic impacts of climate change. These impacts are most damaging and pronounced in developing and tropical states. In addition, given that the scope of the analysis did not consider all direct and indirect harms of climate change, it may even be an underestimate." #esg #climate https://lnkd.in/etDrthW3

🐢🐇 Climate Action: From Slow to Fast Change Following up on my takeaways below from Boston Consulting Group (BCG) Global Chair Rich Lesser’s insights on the Climate Rising podcast, he touches on theme I spend a lot of time thinking about: Change comes slow… then fast. People are hardwired by recency bias to assume things happen gradually, but businesses can’t rely on gradual shifts in attitudes: “... when people change their minds, they change their minds quickly. It's not some linear thing over 10 years. So you better be getting your business models ready, not for some slow change in attitudes between now and 2040, but some triggering events. Maybe it'll be around the inability to get insurance, and people can't sell their homes anymore. Maybe it'll be around the devastating heat wave or floods..." Rich outlined a five-step roadmap for how businesses can prepare for this rapid transformation. 🚢 Own your supply chain - 75-95% of corporate footprints in the products they sell are not from their own scope, it from up the value chain. 👀 Understand your customer. - Consumers won’t pay more just for sustainability—but they will for products that bring additional value, with sustainability as part of the package. 👬 Collaborate across industries. - Common labelling is critical. Right now, it’s impossible for customers to know which products are more sustainable. Collaboration can change that. 🔬Invest in technology. - Mitigation and adaptation require innovation. Businesses must allocate budgets to develop solutions that don’t yet exist. 🏛️ Partner with government. - Governments are often bureaucratic, but businesses can move faster. Bold leadership from businesses will drive action, with governments providing the frameworks to follow. The message is clear: prepare for rapid change. Businesses that build resilience, innovate, and collaborate now will be best positioned for the inevitable climate transformation. #ClimateAction #NetZero #Sustainability #Leadership #CarbonMarkets

🌍 🌱 Climate Action: A Pragmatic Wake-Up Call I recently listened to Boston Consulting Group (BCG) Global Chair Rich Lesser on the Climate Rising podcast, where he laid out one of the clearest assessments of where we stand on climate action—and what needs to happen next. He gives a wake-up call on complacency: While the climate discussion has centred on limiting warming to 1.5°C, 2024 has brought the realisation we are 600 gigatons off track and heading toward 2.5–3°C of warming, and a growing appreciation of the devastating impacts on lives, nature, health, global economies, and businesses. The smartest investment we can make is to reduce emissions now. Even if we can’t eliminate 100%, addressing the majority today and removing the rest later remains the most cost-effective strategy. Rich lays out five critical steps for Government action to close the gap: 1️⃣ Ambition gap: Current national commitments fall well short of what’s needed 2️⃣ A price on carbon: A mandated carbon price is probably the single biggest lever 3️⃣ Invest in new solutions: Funding and incentives to drive the new climate mitigation technologies into commercial reality 4️⃣ Remove obstacles: Cutting red tape on permitting and policy is required to streamline action. 5️⃣ Contingency planning: We are likely to undershoot on mitigation which necessitate. More drastic regulatory response. Ultimately my take-away is that pragmatic, bold action is no longer optional. It’s necessary to secure a sustainable future and governments must lead—but businesses also have a crucial role (he also has 5 steps businesses need to take which I will write another post about). #ClimateAction #NetZero #Sustainability #CarbonMarkets #BCG

5 key takeaways from NY Climate Week 2024 This year’s NY Climate Week brought together more than 100,000 attendees. Over 600 events filled the city. With fewer corporations heading to COP29 in Azerbaijan and a global focus on climate action wavering due to political and economic uncertainty, there was much to unpack. Here are the five biggest takeaways: 1️⃣ Regulatory worries: Corporations are bracing for compliance chaos as laws like the EU’s CSRD kick in. The transparency push aims to drive real climate action, but the growing pains are evident. 2️⃣ Realism and practicality: The goalpost has shifted from "1.5 degrees" to "substantially below 2.0 degrees." Practical actions are replacing ambitious yet unsubstantiated targets. 3️⃣ Voluntary Carbon Markets (VCM): Despite its challenges, VCM took center stage with its own day. Leaders see it as a vital tool in global decarbonization strategies – the key now is to get it right. 4️⃣ Maturing reporting frameworks: New governance for the GHG Protocol and an expanded partnership between CDP and the Net-Zero Data Public Utility aim to make climate data more accessible. 5️⃣ Geopolitical unrest: Global tensions are hampering progress. With nations like Barbados calling for a “reset” of global institutions, it’s clear the climate fight is deeply intertwined with political dynamics. For more detailed insights, check out the original article by Tim Mohin (27 Sep 2024). #ClimateWeekNYC #Sustainability #ClimateChange #ESG

Earlier this week we published our eighth annual Climate Impact Pledge report. We believe climate change is an important systemic risk to our clients’ portfolios. Since 2016, we have encouraged companies to transition to a net-zero economy through our Climate Impact Pledge. This year we have engaged with more companies than ever before and although not part of the Climate Impact Pledge activity we also believe that policymakers also have a critical role to play to mitigate the systemic risks of climate change. This is why we actively communicate with both companies and policymakers. Find out more about the progress we’ve made in our 2024 report: https://lnkd.in/e5T_BR7B For professional investors only. Capital at risk. #LGIMClimatePledge #ResponsibleInvestment #ClimateAction

#thoughtleadership #climatechange #climaterisk #physicalrisk #susty Physical climate risks are on the rise, but progress on adapting to them still varies, leaving some financial and nonfinancial corporates vulnerable. Read this research article published in #SustainabilityQuarterly https://okt.to/nIj4pg

There is ample evidence that people’s votes are influenced by climate change. But the evidence is more mixed around how climate change impacts peoples’ investments. This image from https://lnkd.in/e6C98srv shows the consequences of that imbalance. Only 24% of the world’s nations have entirely resisted efforts to set net-zero targets, but 42% of global companies have. Expressing yourself – with your votes and your investments – makes a big difference. https://lnkd.in/emacerXB . #TillInvestors #TillSustainable #ESGInvesting #ESG #ESGIsNotATree #InvestingInEnvironment #GreenerFuture

As world leaders prepare to gather at the UN General Assembly in two weeks, the urgency of tackling climate change cannot be overstated. Climate impacts are intensifying global challenges such as security threats, displacement, and economic instability. Sectors like the built environment will play a critical role in decarbonization efforts, driving the transition to net zero and reshaping economies. This transition, projected to boost global GDP and create significant economic opportunities, highlights the importance of sustainable infrastructure and green technologies. Collaboration across nations is critical as the stakes grow higher. Prioritizing climate action is not just essential for a sustainable future—it’s crucial for global security and economic growth. #ClimateAction #Decarbonization #UNGA79 #Sustainability #NYCClimateweek

Climate change isn’t just an environmental crisis—it’s a massive economic challenge. In collaboration with Cambridge Judge Business School and climaTRACES Lab, BCG's latest research reveals the stark economic implications of climate inaction and the urgent need for mitigation efforts. Key Takeaways: Staying on our current trajectory could lead to global temperature rises of over 3°C and result in a loss of up to 22% of global cumulative GDP by 2100. Investing less than 2% of cumulative GDP in climate mitigation efforts could limit warming to less than 2°C and avoid up to 13% in economic losses. By allocating less than 1% of GDP to climate adaptation, leaders could prevent a further 4% of GDP losses while securing a more resilient future. Taking climate action today is not just about reducing emissions—it’s about safeguarding economic stability, creating opportunities for growth, and ensuring long-term sustainability. The time to act is now. A big thank you to my fellow authors Amine Benayad, Lars Holm, Hamid Maher, Edmond Rhys Jones, Sylvain Santamarta, Annika Zawadzki, and Kamiar Mohaddes for your collaboration on these critical insights. Read the full article and explore how we can collectively tackle this challenge: https://lnkd.in/eZz8kTA6 #ClimateAction #Sustainability #Climate #NetZero #ClimateChange