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Greetings from London — where Moral Money has now established a European beachhead.
As Gillian kindly flagged in a recent missive, I’m joining the Moral Money team this week, based at the FT’s headquarters. I’m thrilled to be joining an award-winning outfit that has helped put sustainability at the top of the agenda across the FT, and well beyond.
Having reported for the FT since 2010, I have seen how this subject has moved with astonishing speed from the margins to the very centre of the global business conversation. I have watched this shift in South Africa, where I joined the FT, from London as a corporate and financial reporter, and in Asia, running the FT bureaux in Seoul and Mumbai. To sink my teeth into the story, I have just spent two years travelling the world to research and write my first book, Race for Tomorrow, which covers how climate change is unleashing global crisis and pain — but also innovation and business opportunity.
You can check out some short films from my journey and the book itself (with characters ranging from the plant-based meat tycoon Pat Brown to Saudi energy minister Prince Abdulaziz bin Salman, and scenes including Congo’s hazardous informal cobalt mines, BYD’s giant electric car factory in Shenzhen and the besieged Uru-Eu-Wau-Wau tribe in the Amazon jungle).
Today’s Moral Money has important stories: the growing global trend of climate-related litigation, the green policy implications of Germany’s landmark election and those of the Quad strategic alliance. We are always on the lookout for more inspiration from around the world, so send us any tips to [email protected] And if you want to discuss my own climate journey, or share ideas, find me at [email protected]
‘See you in court’: Climate change litigation stalks companies
Climate change litigation accelerated again this month, striking fear into corporate boardrooms worldwide.
This week, Deutsche Umwelthilfe, a climate activism group, filed lawsuits against BMW and Daimler for allegedly not doing enough to cut carbon emissions from their cars.
“For us it is important to use these cases as examples. It is a starting point,” Jürgen Resch, an executive director of Deutsche Umwelthilfe, told Moral Money. “It is possible that some additional suits are following.”
Globally, the cumulative number of climate change-related cases has more than doubled since 2015, Credit Suisse said in a September 26 report. “Climate change litigation continues to grow in importance.”
Earlier this month, Greenpeace said it was suing Volkswagen for failing to align with the Paris accord’s 1.5C temperature goal. To build its case, Greenpeace pointed to a decision from the Karlsruhe constitutional court in April that said young people’s freedoms are at risk when companies fail to cut carbon emissions.
Even if climate lawsuit plaintiffs are not successful, legal action highlights to companies that their climate activities could have “huge” costs, David Greene, a senior partner at the London Solicitors Litigation Association, told Moral Money.
The Paris-based International Federation for Human Rights is turning to social media to draw attention to climate litigation with its #SeeYouInCourt campaign. Two of the organisation’s members filed climate lawsuits against coal power companies in Chile and Colombia this month.
“The #SeeYouInCourt dynamic is likely to see an increase in use of the courts in this way both here and round the world,” Greene said. “London has already seen UK-based companies such as Shell being targeted and we are going to see much more of that over the next few years.” (Patrick Temple-West)
How a German coalition could marry big business with climate solutions
I spent part of my youth in Germany and as many of my friends went to the polls this weekend to vote in their first election in which Angela Merkel was not on the ballot, they told me two issues were top of mind: the country’s green transition and market innovation.
Polling results reflected the chatter. While the centre-left Social Democratic party (SPD) and Christian Democratic Union and sister party the Christian Social Union (CDU/CSU) secured the largest share of votes overall, the Greens and the pro-business Free Democratic party (FDP) won the backing of a majority of younger voters.
Among 18- to 29-year-olds, the Greens landed 22 per cent of the vote and the FDP followed closely behind, with 20 per cent.
As the two parties face coalition talks with the SPD and CDU/CSU, the results could be instructive for creating market and technology-based solutions to climate change as the Greens and FDP reconcile different priorities in achieving a green transition.
“The message that unites the parties is a renewal or transformation. The difference is in the details,” Rafael Loss, co-ordinator for pan-European data projects at the European Council on Foreign Relations, told Moral Money.
Both parties agree that the state has a role to play in providing incentives and investing in green innovation, Loss said. Creating new avenues to foster these developments could be an area for collaboration.
“Enhancing transparency on climate change standards helps [investors], and I think [the FDP and the Greens] can relatively easily agree on pushing further with it,” said Volker Wieland, endowed chair of monetary economics at the Institute for Monetary and Financial Stability and a member of the German Council of Economic Experts.
“More problematic is the question of whether this should be coupled with subsidies or even a green monetary policy where the central bank buys their debt.”
With the two parties in the driver’s seat on forming a coalition with the CDU/CSU and the SPD, the discussions could have an impact on the make-up of the German cabinet as well. As the FDP’s Christian Lindner eyes a potential bid for finance minister, his selection could come with some Green stipulations. (Kristen Talman)
House Democrat alleges greenwashing by big banks
Congresswoman Katie Porter of California is a rising star in the Democratic party. Earlier this year, she was a dark horse candidate to lead the Consumer Financial Protection Bureau for President Joe Biden.
Now, Porter is taking aim at the big banks that continue to do business with fossil fuel-polluting companies. Yesterday she teamed up with Stop the Money Pipeline, a coalition of environmental groups, to raise pressure on financial organisations ahead of the COP26 meeting. They specifically targeted the Glasgow Financial Alliance for Net Zero, which was started by Mark Carney to bring together various asset managers and banks with net zero pledges.
“Banks have bankrolled the climate crisis,” Porter said on a conference call. “And they continue to do it today.”
Porter and the activists called out Citigroup and Bank of America for underwriting a September bond issuance from SUEK, a Russian thermal coal exporter. Additionally, Citi in May underwrote a bond for the Newcastle Coal Infrastructure Group, an Australian coal export terminal. Both banks are founding members of the Net Zero Banking Alliance.
Porter’s involvement shows how the hunt for greenwashers is expanding as regulators worldwide, including the US Securities and Exchange Commission, scrutinise green claims. Banks and other financial institutions must be careful about what net zero claims they sign up to as climate activists continue to uncover fossil fuel financing. (Patrick Temple-West)
Tips from Tamami
Nikkei’s Tamami Shimizuishi helps you stay up to date on stories you may have missed from the eastern hemisphere.
Media coverage of President Joe Biden’s meeting last week with the leaders of Japan, Australia and India focused on the group’s efforts to counter China. But there is another important mission of the Quad alliance worth highlighting: bringing India closer to the global efforts to tackle climate change.
India is the third-largest emitter behind China and the US, and it is expected to double its energy consumption by 2050. While the Quad has made climate change one of its priorities, India’s domestic targets for energy access, job creation and domestic manufacturing could complicate the group’s efforts.
“These targets at times are not in tandem with the green growth,” said Vibhuti Garg, energy economist at Institute for Energy Economics and Financial Analysis.
“If the US, Japan and Australia can bring in the technologies that can bring the costs down and improve the efficiency of generation and also facilitate finance at low rates, India can accelerate deployment of renewable energy, electric vehicles, battery storage and other new technologies,” she said.
There is broad recognition of China’s essential role in the deployment of the global green economy. However, India also has huge renewable energy potential, said Reed Blakemore, deputy director at the Atlantic Council, adding that India is an emerging innovation ecosystem for clean technologies.
“The framing of a climate pillar by Quad leaders underscores that regional climate ambitions are part of the group’s broader geopolitical vision for a free and open Indo-Pacific,” Blakemore said. “This effectively adds climate change and the development of the green economy to the areas where the Quad is prepared to balance against or offer an alternative to China.”
Chart of the day
Investors are calling for a protein transition as many food suppliers “fail to respond to booming sales and investment in meat alternatives”, according to a new report from investors concerned about meat production.
In the past five years, investor support for Farm Animal Investment Risk and Return’s initiative to engage with food retailers and manufacturers has grown from 40 investors with a total of $1.25tn assets under management, to 104 investors with $17.7tn AUM. Still, 72 per cent of food retailers have yet to set any concrete targets on shifting to alternative protein.
“Oil and gas has been the focus. Now, we are seeing agriculture is becoming the next big industry focus,” said Rebecca White, responsible investment analyst at Newton Investment Management.
- US is still grasping for a solution on how to insure against floods (FT)
- Soaring pea costs set to hit plant-based meat producers (FT)
- BHP/Glass Lewis: investors demand more from ESG commitments (FT Lex)
- ESG Disclosure Plans Emerge as Corporate Priority, Study Finds (Bloomberg Law)
- ‘False choice’: is deep-sea mining required for an electric vehicle revolution? (Guardian)
- Hollywood’s climate-change crusade has a whole new wave of energy — and hurdles (Washington Post)