Report: Insurers, banks and pensions face climate change risk
The world’s insurers, banks and pension funds are “inherently susceptible” to threats from climate change and must make adjustments, from shifting investment toward environmentally friendly industries to revamping strategies to reduce risk, says a new report from the Global Risk Institute. Global investment portfolios may lose up to 45 percent due to short-term shifts in climate sentiment, the report says. Half those losses could be avoided by reallocating portfolios. Insurers face threats from physical events, risks tied to liability and “transition risk” from adjusting to a lower-carbon economy. “To avoid financial liability and mitigate climate change-related risks, pension funds must diversify their portfolios across all sources of risk and increase allocations to low carbon technologies and green energy,” the institute said. (Bloomberg)
Policy
Abolition of DECC ‘major setback for UK’s climate change efforts’
The abolition of the Department of Energy and Climate Change (DECC) has been condemned by former ministers as a major setback to British efforts to combat global warming. DECC was closed in a series of sweeping changes announced by the new prime minister, Theresa May. Its functions, which include representing the UK at international climate talks, responsibility for meeting carbon targets and levying subsidies for green energy, have been transferred to a beefed-up business department led by Greg Clark. Ed Davey, who served as secretary of state at DECC between 2012 and 2015, called the decision “a major setback”. “Greg Clark may be nice and he may even be green, but by downgrading the Whitehall status of climate change, Theresa May has hit low carbon investor confidence yet again,” Davey said. (Guardian)
Pacific islands nations consider world’s first treaty to ban fossil fuels
The world’s first international treaty that bans or phases out fossil fuels is being considered by leaders of developing Pacific islands nations. The leaders of 14 countries agreed to consider a proposed Pacific climate treaty, which would bind signatories to targets for renewable energy and ban new or the expansion of coalmines. The treaty being considered by the newer group embraces the aspirational 1.5°C target set at Paris, setting mitigation targets that are in line with it, as well as establishing adaptation mechanisms to cope with the effects of that warming. The treaty would also establish a fund to provide compensation for communities that have suffered climate change-related losses. (Business Green)
Community Investment
Accenture and partners launch South African microgrid programme
Accenture, the University of Notre Dame Initiative for Global Development and the Rural Development Company have launched the first solar-powered microgrids in South Africa. The Connectivity, Electricity and Education for Entrepreneurship (CE3) programme aims to serve as a catalyst for local economic development in rural communities, providing power for irrigation equipment and shared pack houses for farmers. Accenture has supported CE3 with more than US$2.3 million in contributions since 2012. Following a successful pilot in Uganda, the current projects scale the model further in Uganda and into South Africa. Accenture expects to train and mentor more than 3,350 entrepreneurs in South Africa and Northern Uganda, and help create approximately 2,475 jobs or start-up businesses by June 2017. (CSR Wire)
Corporate Reputation
VW failure to compensate UK owners ‘deeply unfair’
Volkswagen‘s failure to compensate UK owners of cars affected by the emissions scandal as they are US owners is “deeply unfair”, MPs have said. The UK Parliament’s Transport Select Committee said the government had been too slow to investigate whether VW should be prosecuted in the UK for the scandal. Louise Ellman, the Labour MP who chairs the committee, said VW had “acted cynically” to cheat emissions tests. “Volkswagen’s evidence to us was just not credible but the government has lacked the will to hold VW accountable for its actions,” she said. Volkswagen has agreed to repair or buy back affected diesel vehicles in the US and pay owners between $5,000 and $10,000 in compensation. But in the UK, owners affected have only been offered the option of a repair. (BBC)
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