Early Christmas presents for the planet
The European Union and a worldwide collection of financial and insurance giants have decided to give the planet an early Christmas present by upping their investments in the fight against destructive climate change.
The EU’s announcement of a €9bn climate finance contribution on Tuesday 12th December – the second anniversary of the Paris Climate Change Agreement – is a major step from the world’s largest economic bloc. The move was confirmed at the One Planet Summit, hosted by France, and investment will be targeted in three key areas – sustainable cities, sustainable agriculture and rural entrepreneurs and agri-business.
"The Paris Agreement and the UNFCCC climate convention remain the only pathway to tackle climate change and this One Planet Summit demonstrates how the financial system is aligning to the objectives of the agreement," UN Climate Change Executive Secretary Patricia Espinosa said in a statement, welcoming the news of the EU’s External Investment Plan being expanded further.
Bringing more festive cheer to the table were 225 of the most influential global investors who control a total of US$26.3tr. This collective, known as Climate Action 100+ plans to collaboratively engage with the world’s largest greenhouse gas emitters and pressure them into changing their ways. This will be a tough sell, but it is encouraging to see our richest citizens exercising some social responsibility.
Similarly, the Task Force on Climate-related Financial Disclosures also received public commitments from a further 237 companies with a combined market capitalisation of US$6.3tr, taking its total assets up to US$81.7tr. Led by Michael Bloomberg and chaired by Mark Carney, the Governor of the Bank of England, the Task Force has drawn up voluntary regulations climate-related disclosures to help investors and customers make informed decisions with their money.
"Climate change poses both economic risks and opportunities. But right now, companies don't have the data they need to accurately measure the risks and evaluate the opportunities. That prevents them from taking protective measures and identifying sustainable investments that could have strong returns," Bloomberg said.
Funnily enough, it turns out that companies and people don’t tend to want to give their money to the worst polluters and are quick to divest once the risks are clear. The latest announcement from the world of divestment comes from AXA which has announced its complete lack of interest in the tar sands sector. Extracting oil in this way is amongst the most environmentally damaging methods available, and AXA refusing to insure either the production or the pipelines to transport the oil is a big step. Combine this with its announcement of significant further investment in green technologies and the pattern is clear. Likewise, France’s largest bank, BNP Paribas, has also declined to fund any further tar sand projects in the future.
There is a long way to go, but there is still hope. If you cannot fund or insure fossil fuel developments then the industry will die. When organisations like the European Union put serious money into a green future then there is suddenly an alternative, and it seems to be the case that many people and companies are willing to make the move away from fossil fuels.