Climate change not a top 10 issue, Google makes ESG history & U.S. lags world in clean tech transition

The newsletter for people "woke" on carbon and climate

(source: Market Watch)

V.P. Candidate Kamala Harris (D): the new face of Climate Justice

Issue No. 39 - August 16, 2020

Welcome to the latest issue of Carbon Creed - a curated newsletter for people “woke” on carbon and climate.

My name is Walter McLeod, and I appreciate your time and interest. We hope to hear from you as we navigate this weekly journey through the good, bad and ugly of carbon and climate. 

Well, the mystery is solved - Joe Biden has selected Kamala Harris (D-CA) to be his Vice Presidential running mate. Most of you wrote or texted me when the news was announced, and the consensus was either “safe and smart choice” or “she’s really tough.” Of note, earlier in the week Harris released the Climate Equity Act, essentially throwing down the gauntlet on climate justice. I’m getting that Morpheus fight feeling about this issue.


It will be interesting to see what level of attention carbon and climate issues receive during the upcoming conventions and debates. We’ll keep you posted on anything interesting in the coming weeks.

Now, to THIS ISSUE - Pew has come out with a fascinating new poll on the top 12 issues going into November 2020, Alphabet (Google) makes corporate history with an ESG Bond sale, and we look at the opportunity covid-19 presents the U.S. to reset the clean energy economy. As always, I hope you enjoy the selections.

You can ping me anytime at mcleodwl@carboncreed.com.

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Now, LET’S GO DEEP!


DECISION 2020


Climate change not a top 10 issue for U.S. voters - yet


With the U.S. in the midst of a recession, nearly eight-in-ten registered voters (79%) say the economy will be very important to them in making their decision about who to vote for in the 2020 presidential election – the top issue of 12 included in a national survey conducted by the Pew Research Center.


Fewer than half say climate change (42%) will be a very important factor in their decision (though majorities say the issue will be at least somewhat important to them).

This could be a challenge for the Biden-Harris ticket, which has linked its proposed low-carbon energy and infrastructure investments to its economic recovery message.

The Pew data also sheds light on the partisan divisions on key issues:

Among registered voters, the Republican Party holds a 9 percentage point edge over the Democrats on the issue of being better able to handle the economy (49% Republican Party, 40% Democratic Party). And as has been the case for many years, more voters say the GOP could do a better job than the Democratic Party on terrorism (46% vs. 37%)

By contrast, the Democratic Party holds wide advantages among voters on climate change (58% to 27% over the GOP) and health care (51% t0 37%). In addition, the Democratic Party has 12-point leads on handling the public health impact of the coronavirus and issues involving race and ethnicity.

Go deeper here LINK.

Creed Comments: The results of this survey are not surprising - words matter. If the pollsters had asked about electric vehicles or solar energy rather than climate change, the ranking would have been much higher. The term “climate change” has been unfairly stigmatized, but that doesn’t minimize the threat of a warming planet, regardless of word choice or politics.



ESG Investing

(source: Bloomberg)

Google’s historic corporate bond sale dedicated to ESG commitments

Alphabet Inc. sold $5.75 billion of bonds with rock-bottom yields in the largest corporate bond sale dedicated to environmental, social and governance purposes.

The parent company of Google is looking to fund organizations that support Black entrepreneurs, small and medium businesses impacted by Covid-19, as well as affordable housing, among other eligible proceeds listed in bond documents seen by Bloomberg. The borrowings can also be used to finance clean energy projects and green buildings.

The bond sale comes amid a surge in similar offerings geared toward ESG efforts, with social bonds driving much of the increase due to the pandemic. Those offerings jumped 376% in the first half of 2020 compared to the same period last year, according to a report by BloombergNEF.

Alphabet sold $10 billion of bonds in total, with other proceeds to fund generate corporate purposes. It set record low yields on the seven-year portion at 0.8% and with 40-year debt at 2.25%, besting levels set by Amazon.com Inc. in June.

Investors had placed more than $38 billion in orders for the sale at the peak, according to a person with knowledge of the matter. The company, which last tapped the bond market four years ago, was said to initially target a deal size of around $7 billion, the person said, asking not to be identified since the details are private.

Google has prioritized supporting the Black community, recently announcing a $175 million “economic opportunity package” to invest in Black-led venture capital firms and startups, training for Black job seekers and grants for small businesses. It also said it will hire more Black workers in senior roles and establish internal anti-racism programs for all employees, according to a June blog post.

Like other tech companies, Google has struggled to diversify its staff and top ranks -- just 2.6% of its U.S. leadership is Black, according to its latest diversity report. That’s unchanged from a year ago.

JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley were lead managers on the bond sale, the person said. Diverse underwriters like Blaylock Van LLC, a minority-owned investment bank, and Drexel Hamilton, which is owned and operated by serviced disabled veterans, were among the deal’s co-managers.

In addition to the sustainability-linked proceeds, the bond sale will also support green projects. Google has been expanding its use of sustainable energy, touting its carbon-neutral status for over a decade. It’s one of the world’s largest corporate buyers of renewable power.

Go deeper here LINK

Creed Comments: Alphabet is sending a clear message to its FANG peers with this bold move (and yes, I include Microsoft in this group). Alphabet now appears to be “woke” about the need to improve its social “ESG” performance. Generally, I think this is a great move. I only hope that Sundar Pichai (CEO) and Ruth Porat (CFO) don’t fall into the trap of picking “familiar MBEs” to receive the lion’s share of the spend. My advice: cast your bread on many waters…spread the wealth.


GOVERNMENT/CLEAN TECH

(source: WEF)

The U.S. has the tech to go “zero carbon” but will we use it?

As the rest of the world follows the global trajectory toward an energy transition, moving away from fossil fuels to alternative forms of energy, whether in the interest of creating a decarbonized future or staying afloat in a decarbonized economy that is looming on the horizon, the United States is falling behind. 

COVID-19 has presented the world with an unprecedented and largely unanticipated disruption to the industrial and economic status quo, and many experts think that these extraordinary circumstances provide an unmissable opportunity to reorient the global economy toward decarbonization and construct what the World Economic Forum has advocated as a “new energy order” and a “great reset.” The World Economic Forum is not alone. International agencies such as the United Nations, theInternational Energy Agency, and the European Union, are all either currently considering or actively drafting green stimulus plans. Even a surprising number of blue chip companies are pushing for a green energy stimulus, but in the United States these calls have largely fallen upon deaf ears.

It is against this backdrop that Vox published an article claiming, “the U.S. has everything it needs to decarbonize by 2035,” and outlines a plan for “How to drive fossil fuels out of the US economy, quickly.” The article advocates for a mobilization as widespread as President Franklin Delano Roosevelt’s New Deal, which revived the U.S. economy in the wake of the Great Depression “with a massively expanded workforce and turbocharged productive capacity.” To do its part in limiting global temperature rise to between 1.5° and 2° Celsius, the U.S. must reach net-zero carbon emissions by 2050 at the latest. To achieve this, the full resources of the U.S. economy must be bent toward manufacturing the needed clean-energy technology and infrastructure.”

As in the case of FDR’s New Deal, a nationwide initiative aimed at decarbonizing the United States would also kickstart the economy and create millions of jobs over the next ten years. PV Tech recently reported that there is “a raft of new studies” which has “come to underscore the business case of pushing renewables to the heart of the COVID-19 recovery, amid claims green energy plays offer a low-cost, high-return opportunity for investors.” And just last week, “physicist, engineer, researcher, inventor, serial entrepreneur, and MacArthur ‘genius’ grant winner” Saul Griffith’s organization Rewiring America “made its big debut with a jobs report showing that rapid decarbonization through electrification would create 15 million to 20 million jobs in the next decade, with 5 million permanent jobs after that.”

This actually exemplifies why the novel coronavirus pandemic could be the surprise catalyst needed to make this change. While historically a loss of energy demand has been synonymous with a struggling economy, and would therefore be a tough sell, COVID-19 has already sent U.S. energy consumption crashing to its lowest point in 30 years.

“Despite the titanic effort it would take to decarbonize, says Vox, “the US doesn’t need any new technologies and it doesn’t require any grand national sacrifice. All it needs, in this view, is a serious commitment to building the necessary machines and creating a regulatory and policy environment that supports their rapid deployment.”

The stage has been set. The pandemic has allowed for new ways of thinking and novel solutions as business-as-usual has failed us. Will U.S. politicians listen? We may have to wait until November to find out.

Go deeper here LINK

Creed Comments: First, we need to see the U.S. in the number 1 spot on this list. I am 100% in support of clean energy infrastructure and decarbonization. I agree, we have the technology to reach our climate goals today. However, I am not convinced that the Green New Deal (as currently proposed), is the best way to get there. The $2T Biden-Harris plan is a good start, however, the workforce policy components need more refinement. I’d really like to hear other/opposing views on this issue. Ping me if you have an opinion.


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