The Net Zero Overhaul
As we continue our coverage from Climate Week, our newsletter today focuses on what everyone in the finance world is saying about the energy transition. Read on for more details — and to get unlimited access to climate and energy news, please subscribe.
On Wall Street, there’s a new message making the rounds. It’s one that says reaching net zero may be as difficult as, say, driving through midtown Manhattan during the United Nations General Assembly.
Financiers in New York for Climate Week, which accompanies the UN gathering, have found themselves faced with the many “what-if” scenarios posed by a fast-warming planet. Simultaneously, Wall Street’s climate leaders have become increasingly vocal in saying that current net-zero goals (let alone decarbonizing the global economy) are near impossible to attain. And that they have limited power to help.
Conversations at Climate Week have centered on huge challenges such as what happens if financial institutions fail to meet their net-zero promises. And, more importantly, what if the world as a whole fails to attain the climate goals set by governments and business leaders.
For Heather Zichal, global head of sustainability at JPMorgan Chase & Co., the big question is when will there be an honest conversation about how the Paris Agreement’s goal of keeping temperatures from rising more than 1.5C is already out of reach. What does that mean for the many companies and financial firms that have made commitments based on that almost-certain to be unfulfilled goal?
“I’m watching with bated breath the discussion around 1.5C,” Zichal said at a JPMorgan investors event Monday in New York. “Does that continue to be the target or is there an evolution in thinking?”
And if the goals change, “how does the public sector engage with the private sector in a conversation about what that means?” she said. “I think it will be more pivotal than probably a lot of people are thinking in terms of what it does to drive the policy conversation.”
There is real tension between what needs to happen to reach net-zero goals and the reality of where the global economy is today, Zichal argued. “The world needs to be realistic about the challenges to closing that gap, what it would take, and who can help deliver,” she said. “We don't have all the answers to that question, but we do know everyone has a role.”
Wall Street banks finance Big Oil and the continued development and production of fossil fuels, whose burning causes global warming. The banks also have simultaneously spent years promising to attain net-zero emissions.
But lately, Wall Street has taken a new tack by attempting to change public perception about what it can do. Instead, banks are now saying their hands are largely tied when it comes to slowing global warming. Clients and their profits must come first.
Indeed, Zichal was keen to stress the need for government policymakers to push forward the transition to clean energy.
“There are a lot of things that we, as a bank, can control, but there are things that we can’t,” she said. “We’re focused on what we can control—facilitating capital.”
As far as banks are concerned, tackling climate change and its increasingly catastrophic effects on humanity is just one of many issues they consider important.
“It isn’t that it isn’t on their minds,” said Tom Montag, a Wall Street veteran who sits on the board of Goldman Sachs Group Inc.. “It’s one of many things to think about.”
Val Smith, Citigroup Inc.’s chief sustainability officer, cited the rapid development of renewables and the increasing focus on battery storage and “next-gen technologies” as signs of hope amid the planet’s worsening climate.
“It is normal in such a significant transition and transformation that we’re going to see steps forward and steps back, but the fundamental opportunity is holding steady and even seems to be growing,” she said.
Read this story as it appeared on Bloomberg.com.
With events all across the city, it’s hard to keep track of everything happening. Here are just three examples of what’s coming up today:
Carbon markets will be in focus. Voluntary emissions credits have been tainted by controversy over their quality. This full-day event will look at the role the market has to play in accelerating corporate climate action and efforts to bring more integrity and transparency.
Find out how close we are to phasing out fossil fuel. This midtown event will give the perspectives of two developing countries that produce substantial oil and gas. One of them, Colombia, has signed the Fossil Fuel Non-Proliferation Treaty, which commits the country to not explore and develop new fossil fuel reserves. The other, Brazil, hasn’t and the country’s climate ambassador will be asked to answer why.
Here’s something if you’re hungry for change. This lunchtime event, which promises “food and drink served to illustrate the scenarios,” will provide some potential answers to the question: What does the climate future taste like?
Here are some things we learned Tuesday at Climate Week:
Biden sees climate change as a job creator. President Joe Biden cast the climate crisis as an economic opportunity for the US, saying his policies in office had developed “a new formula” to fight global warming while also creating jobs and bolstering domestic industries.
Prince William wants to sort out food waste. A Kenyan company combating food waste with refrigerated boxes and a British startup that samples environmental DNA to measure biodiversity are among the 15 finalists for the Earthshot Prize, an annual award from an organization led by Prince William that recognizes solutions to the environmental crisis.
Clean energy needs more investment. The increasingly rapid deployment of renewables around the world is still not enough to meet global goals, according to a group of political and climate leaders at the Global Renewables Summit.
Record rainfall leading to flooding that killed 24 people in Europe earlier in September was twice as likely due to manmade climate change, a study has found.
The flooding took place across central Europe after Storm Boris stalled over the region between Sept. 12 and 16, inundating Poland, Romania, Slovakia, Austria, the Czech Republic and Germany with the heaviest rainfall ever recorded in some areas and affecting almost two million people.
“Our study has found the fingerprints of climate change in the blasts of rainfall that flooded central Europe,” said Joyce Kimutai, a researcher at Imperial College London and one of the contributors to the report by World Weather Attribution. “Yet again, these floods highlight the devastating results of fossil fuel-driven warming.”
In a little more than six weeks, Americans will cast their votes in a presidential election that has enormous stakes for the future of the planet. On the latest episode of Zero, Akshat Rathi sits down with energy and environment reporter Jen Dlouhy to talk about how Kamala Harris’ still-opaque plans could continue President’s Joe Biden’s climate legacy — and how Donald Trump has already signaled he plans to chip away at it. “Starting on day one, he's already said he intends to direct federal agencies to begin repealing and replacing climate regulations,” Dlouhy tells Zero. Listen now, and subscribe on Apple, Spotify or YouTube to get new episodes of Zero every Thursday.
