TBLI Weekly - December 3rd, 2024
Your weekly guide to Sustainable Investment
TBLI Radical Truth Podcast
Is Sustainability achievable in the present climate?
John Elkington is an award winning world authority on corporate responsibility and sustainable capitalism, a bestselling author and serial entrepreneur. John is the founder and chief-pollinator of Volans, which works with leaders to make sense of the emergent future to unlock the potential of their organisation. Volans tackles some of the world's most challenging problems, helping key actors move from the responsibility agenda through resilience to regeneration through strategic advisory work. John's thought leadership is brought to bear in Volans Inquiries including Project Breakthrough, Tomorrow’s Capitalism Inquiry and the Green Swans Observatory. John will share his vision of the future.
Australia accused of undermining landmark climate change case brought by Pacific nations in international court
By: Adam Morton and Australian Associated Press
Vanuatu leads the charge of several nations arguing developed nations have a legal responsibility beyond non-binding promises
Australia has been accused of undermining its Pacific neighbours in a landmark international legal case after it argued that high-emitting countries are not obliged to act on the climate crisis beyond their non-binding commitments to the 2015 Paris agreement.
In the case before the UN’s international court of justice (ICJ), Vanuatu is leading an argument brought by several Pacific nations and developing states – including Fiji, Papua New Guinea, Solomon Islands and Vanuatu – that developed countries have a legal responsibility beyond existing UN frameworks. The case does not specify the names of countries that would fall under the definition of high emitters.
The hearing, which began on Monday, follows years of campaigning by a group of law students from Pacific island countries and a unanimous UN general assembly resolution calling on the ICJ to provide an advisory opinion on what obligations states have to tackle climate change and what the legal consequences could be if they don’t.
Ralph Regenvanu, Vanuatu’s special envoy for climate change and environment, told the Peace Palace in The Hague, that responsibility for the climate crisis lay with “a handful of readily identifiable states” that had produced the majority of greenhouse gas emissions, but stood to lose the least from rising sea levels and extreme weather events.
In its submissions, the Australian government said it was “resolutely committed” to the UN Framework Convention on Climate Change (UNFCCC) and the Paris agreement, which set a goal of trying to keep global heating since preindustrial times well below 2C and as close as possible to 1.5C. The goal is non-binding.
It said the agreements were the “central instruments” for global cooperation “to tackle the grave challenge of climate change”, and international legal requirements had already been considered when they were negotiated.
Most states recognised a responsibility to prevent “transboundary harm” – damage from pollution that crosses international borders – but Australia and other parties did not agree that the principle applied to damage caused by greenhouse gas emissions.
The country’s solicitor-general, Stephen Donaghue, said Australia’s view was that the UNFCCC and the Paris agreement had been widely adopted, and that customary international law should not extend beyond those frameworks.
Despite this, the general counsel for the Australian attorney general, Jesse Clarke, said the country applauded Vanuatu’s leadership in “driving forward” on the climate crisis.
“Climate change poses the single greatest threat to the livelihoods, security, and wellbeing of the peoples of small island states, including Pacific island states,” Clarke said. “Australia acknowledges the extent of the challenge posed by climate change, and recognises that ambitious individual and collective action must be undertaken urgently.”
But Greenpeace Australia Pacific’s general counsel, Katrina Bullock, said Australia’s submissions “completely undermined its Pacific neighbours” and its position was “fundamentally flawed”.
Over 100 countries want an ambitious plastics treaty. Oil-producing nations are getting in the way.
By: Joseph Winters - Grist.org
“If it wasn’t for Saudi and Russia we would have reached an agreement here.”
What was supposed to be the final round of United Nations negotiations for a global plastics treaty ended without an agreement on Sunday, as delegates failed to reconcile opposing views on whether to impose a cap on plastic production.
Another negotiating session — dubbed INC-5.2 after this week’s INC-5 — will be held in 2025, but it’s unclear how countries will make further progress without a change in the treaty’s consensus-based decision-making process. As it stands, any delegation can essentially veto a proposal they don’t like, even if they’re opposed by most of the rest of the world.
“If it wasn’t for Saudi and Russia we would have reached an agreement here,” one European negotiator told the Financial Times. Those two countries, along with other oil producers like Iran and Kuwait, want the plastics treaty to leave production untouched and focus only on downstream measures: boosting the plastics recycling rate, for example, and cleaning up existing plastic pollution.
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Kuwait’s delegation said on Sunday that “we are not here to end plastic itself … but plastic pollution.” That’s the position the plastic industry is taking, as well: Chris Jahn, council secretary for a petrochemical industry consortium called the International Council of Chemical Associations, said it’s “crucial” for the treaty to focus on plastic pollution alone. “With 2.7 billion people globally lacking access to waste collection systems, solutions must prioritize addressing this gap,” he said in a statement.
Dozens of countries — supported by scientists and environmental groups — say that approach is futile while the plastics industry plans to dramatically increase plastic production. “You can talk about waste management all you want, but this is not the silver bullet,” one of the European Union’s delegates said last week. “Mopping the floor when the tap is open is useless.”
Christina Dixon, oceans campaign leader for the nonprofit Environmental Investigation Agency, attended INC-5 and told Grist the conference made it clear that “consensus isn’t working.” She said countries seem to be recognizing this too, in light of INC-5’s shortcomings and the low probability of finding unanimity on the treaty’s most critical issues.
Last week, one French minister accused a coalition of oil-exporting countries of “continuing obstruction.” Fiji’s negotiator said a “very minority group” was “blocking the process,” and at a press conference over the weekend told delegations holding back the treaty to “please get out.”
Technically, the treaty could move forward without Saudi Arabia, Russia, and their allies, either continuing under the U.N. framework or — a more radical scenario — in a new forum led by a breakaway alliance of countries. The latter is unlikely given the time and energy countries have invested in the U.N. system, and because they still value the baseline mandate they agreed to two years ago: to “end plastic pollution” by addressing the “full life cycle of plastics.” But a smaller group of signatories could still make a global impact by using import tariffs and other trade policies to indirectly influence plastic production in non-signatory nations.
It’s more likely that delegations will arrive at INC-5.2 with proposals to change to a voting-based decision-making system. Senegal’s delegate, Cheikh Ndiaye Sylla, said it was a “big mistake” not to do this from the outset. The reason voting wasn’t discussed at INC-5 is because the topic tanked an entire week of negotiations last year.
Scientists baffled as orcas seem to revive an 80s trend: dead salmon hats
By: Marina Dunbar - The Guardian
At least one of the marine mammals was recently spotted in Washington wearing the multipurpose fishy accessory
Researchers suspect that orcas may be reviving a peculiar fashion statement of sorts not seen since the 1980s.
Scientists in Washington state have observed at least one orca balancing salmon on its head, a trend known as the “dead salmon hat”. They spotted the stylish killer whale this autumn in Puget Sound.
It is likely that these marine mammals are not just sporting these hats to look chic for their deep-sea neighbors. These fishy accessories are multipurpose, allowing the wearers to enjoy a snack as they travel along on their oceanic journey.
The strange phenomenon was first documented in 1987, when a female orca was observed to be wearing a salmon hat for nearly the duration of that year. Within a few weeks, two other orcas, creatures known for being highly intelligent and social, began to adopt her unique fashion.
Yet the trend seemed to disappear just as suddenly as it had appeared – as the salmon hats already seemed to be out of fashion by 1988.
But as all fashion is cyclical, the accessories have seemingly made a comeback as of November. A 32-year-old male orca known as J27 Blackberry was photographed flaunting the same salmon hat trend at Point No Point, Washington, just off Whidbey Island in Puget Sound.
Researchers are still baffled by the abrupt resurgence.
“Honestly, we have no idea why this started again, why it happens or why it seems to be started again,” Deborah Giles, a researcher heading the team at Wild Orca, told New Scientist.
Scientists speculate that the salmon hats may be a way to combat a lack of food options in certain areas of the sea in the same way that hikers might bring snacks with them on a long trek.
It could also possibly be some sort of playful behavior in reaction to a larger than usual number of salmon in the region this year. If an orca has gorged on salmon until it is satisfied, it may be choosing to store the leftovers on its head for later because the fish are too tiny and slippery to hold under their fins.
Orcas have a reputation for being clever when it comes to their meals, but even a healthy access to salmon has not prevented the discerning species from the threat of extinction. Source
Could sustainable investing be the answer to the world's environmental problems?
Featured researchers: Professor Dirk Jenter, Dr Tom Gosling, Professor Alex Edmans
Proponents of sustainable investing argue it could be key to helping the environment and lowering carbon emissions, but are they being too optimistic? New award-winning research by Dirk Jenter explores exactly how sustainable funds work and if they can encourage companies to engage in more green behaviour.
Sustainable investing – the practice of incorporating environmental and social (ES) factors into investment decisions – has become increasingly popular in recent years with thousands of funds marketed as “sustainable” cropping up in the marketplace. Advocates of the practice believe it is key to lowering carbon emissions and nudging companies to adopt more environmentally friendly and pro-social behaviour, but is this how it works in reality?
A new paper on sustainable investing, which recently won the PRI Outstanding Research Award, by Professor Dirk Jenter, Department of Finance at LSE, along with colleagues Alex Edmans and Tom Gosling from London Business School, explores how sustainable funds differ from traditional funds. The researchers set out to investigate whether, why and how sustainable and other funds incorporate firms’ ES performance into investment decisions.
To find out, the researchers surveyed 509 equity portfolio managers from both traditional (290) and sustainable (219) funds. They found that asset managers across both types of fund approach investment decisions in a surprisingly similar way.
Financial returns
Few asset managers (27 per cent), even among sustainable funds, said they were willing to sacrifice even a very small financial return for ES performance, citing fiduciary duty – the obligation to act in the financial best interest of a client – as the reason. Indeed, one manager said: “We could never accept lower risk-adjusted returns out of the goodness of our hearts.”
This finding was surprising to Professor Jenter. “I expected traditional fund managers, who don't have any sustainable labels, to tell us they were focused on maximising financial returns. But to me it was very surprising that sustainable fund managers, the ones who are explicitly marketed as responsible or sustainable, subscribed to the same goal.”
When the researchers asked the asset managers to rank the importance of ES performance for long-term firm value against five other factors, both traditional and sustainable investors ranked it last, below strategy, operational performance, governance, corporate culture, and capital structure.
However, this low ranking of ES performance doesn’t necessarily mean that investors view it as irrelevant. Many free text answers given in the survey emphasised that all the factors are interlinked, and that ES can affect a firm’s competitive position. Indeed, many of the asset managers from both types of fund believe good ES performance to be a sign of a well-managed company. Sixty-seven per cent of sustainable fund managers and 61 per cent of traditional fund managers believe companies that perform poorly on environmental or social issues will also deliver negative financial returns.
One investor wrote: “it is difficult to drive long-term value if you are doing any one of these items poorly.” Another added, “many of these factors are interlinked (for example, a company with good strategy, corporate culture and governance is likely to have a better approach to ES performance and capital structure).”
Thus, it appears that both sustainable and traditional fund managers do acknowledge ES performance to an extent, but only insofar as it can be a predictor of long-term value and larger financial returns.