Why UN climate week matters, bonding on ESG and climate migration is a thing

A newsletter for people "woke" on carbon and climate

(image: Joel Pett)

Issue No. 45

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

IN THIS ISSUE we draw attention to the history and highlights from UN Climate Week 2020 (September 21-27), which ends today. Our first post takes you through the history and importance of collaboration during UN Climate Week. Next, we dive into the new report from the World Economic Forum (WEF) announcing a common set of environmental, social and governance (ESG) metrics for corporate reporting. Our final post examines the emerging climate migration crisis, and how we might avert the worse case scenarios.

I hope you enjoyed last week’s posts on Tesla Battery Day and the late Justice Ruth Bader Ginsburg. I had fun writing them and hope you enjoyed reading them as well. As always, we appreciate the value of your time.

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Why Is the United Nations Climate Week important now?

Climate Week is happening as a virtual event during the week of September 21 through 27. This will be one of the few international climate events taking place in 2020. It is being jointly hosted by the United Nations and the City of New York.

To understand how history has shaped the agenda of Climate Week 2020, we need to consider the events that preceded it and how they laid the framework for this year.

The Kyoto Protocol

The Kyoto Protocol was adopted on December 11, 1997. However, it took until February 2005 for it to be put into force. Currently, there are 192 parties to the Kyoto Protocol. It operationalizes the United Nations Framework Convention on Climate Change (UNFCCC) by committing industrialized countries to limit and reduce greenhouse gas (GHG) emissions, but it only binds developed countries. The protocol’s emission reduction targets add up to an average 5 percent emission reduction compared to 1990 levels over the five-year period of 2008 to 2012 (the first commitment period).

The United States has not ratified the Kyoto Protocol.

The Doha Amendment

In Qatar in 2012, the Doha Amendment to the Kyoto Protocol was adopted for a second commitment period, starting in 2013 and lasting until 2020. During this second commitment period, parties committed to reduce GHG emissions by at least 18 percent below 1990 levels in the eight-year period from 2013 to 2020.

However, as of this writing, the Doha Amendment is still not in force.

The Paris Agreement

At the UN Conference of the Parties (COP 21) in Paris on December 12, 2015, parties to the UNFCCC reached a landmark agreement to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low carbon future. For the first time, this conference brought nations together for a common cause to undertake ambitious efforts to combat climate change and adapt to its effects.

The Paris Agreement entered into force on November 4, 2016. Since then, more countries have ratified—and continue to ratify—the agreement, reaching a total of 189 counties today. The central aim of COP 21 is to strengthen the global response to the threat of climate change by 1) keeping global temperature rise this century well below 2 degrees Celsius above pre-industrial levels, and 2) to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.

On June 1, 2017, United States President Donald Trump announced that the U.S. would cease all participation in the Paris Agreement.

Post-COVID Recovery & Climate Change

The United Nations estimates that over the next eighteen months, countries will invest over $20 trillion in COVID-19 recovery. How this investment is used will have a direct impact on the world’s efforts to combat climate change, as well as addressing the reduction of risk for future pandemics by rethinking and redesigning high-risk urban centers. The United Nations Environment Program (UNEP) clearly states that cities are key to a green recovery. More than half of the world’s population lives in cities, and it is estimated by the UN that over 95 percent of all reported COVID cases have been in urban areas.

Recovery plans with integrated green components will provide an opportunity to future-proof economies—for cities to clear their air, to create more open spaces and adopt solutions that help reduce resource use and related impacts on ecosystems, while creating new jobs. This is the approach taken by the European Union.

Climate Week 2020 will conclude today. Access to previous year’s events at Climate Week was limited. This year, the pandemic has provided us with a silver lining that is unique. We all have an opportunity to join the 2020 virtual sessions, learn more about what is already being achieved and find out how we and our businesses can add our own actions to the goals. Go deeper here LINK.

Creed Comments: History will mark 2020 as the start of the Decarbonization Age. Zero carbon infrastructure is underway and scaling in the electricity and mobility sectors. The irony is that the COVID-19 reset may have been the needed trigger.

I remain hopeful that Climate Week can serve as a catalyst for change. One thing is clear - nothing happens without collaboration. No single entity can solve climate change. Not a government, not a company, not an individual. This takes partnerships, shared resources and cooperation.


World Economic Forum releases common ESG reporting metrics

The Big Four accounting firms have developed a set of metrics for companies to use for environmental, social and governance reporting internationally.

The metrics were released Tuesday by the World Economic Forum in conjunction with the fourth annual Sustainable Development Impact Summit, which coincided with Climate Week 2020 in New York. They come a week after five ESG standard-setters — the Carbon Disclosure Project, the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Integrated Reporting Council and the Sustainability Accounting Standards Board — agreed to work together more closely on aligning their various sets of standards and frameworks after being urged to do so by international securities regulators.

The ESG metrics are organized around four pillars:

  • People: Reflecting a company’s equity and its treatment of employees. Metrics include diversity reporting, wage gaps, and health and safety.

  • Planet: Reflecting a company’s dependencies and impact on the natural environment. Metrics in this pillar include greenhouse gas emissions, land protection, and water use.

  • Prosperity: Reflecting how a company affects the financial well-being of its community. Metrics include employment and wealth generation, taxes paid, and research and development expenses.

  • Principles of Governance: Reflecting a company’s purpose, strategy, and accountability. This pillar includes criteria measuring risk and ethical behavior.

The metrics and disclosures were developed in collaboration with the Big Four firms — Deloitte, EY, KPMG and PwC — and come after a consultation process with representatives from corporations, investors, standard-setters, NGOs and international organizations. They aim to provide a common set of existing disclosures that lead toward a more coherent, comprehensive global corporate reporting system.

“This is a unique moment in history to walk the talk and to make stakeholder capitalism measurable,” said World Economic Forum founder and executive chairman Klaus Schwab in a statement. “Having companies accepting, not only to measure but also to report on, their environmental and social responsibility will represent a sea change in economic history.”

The World Economic Forum also collaborated with the Impact Management Project to bring together the efforts of the five leading independent global framework and standard-setters (CDP, CDSB, GRI, IIRC and SASB) to work toward a comprehensive corporate reporting system and a statement of intent which works as a complement to the common metrics released during this week.

Creed Comments: This was another “made for Climate Week” announcement, but I’m glad to see it happen. There needs to be consensus in the financial/accounting community regarding what defines ESG reporting for investment purposes. While regional variation is likely and expected, this is a step in the right direction for financial markets.


The faces of climate migration

Humanity has always been on the move.

People move for many reasons – economic, social, and political. Now, climate change has emerged as a major driver of migration, propelling increasing numbers of people to move from vulnerable to more viable areas of their countries to build new lives.

The following infographic by the World Bank helps bring this issue to life.

Go deeper by reading the full World Bank report here LINK.

Creed Comments: Climate refugees and migration are a global challenge that will create a multitude of critical issues that the international community must confront, including:

  • Large-scale human migration due to resource scarcity and increased frequency of extreme weather events, especially in the global south

  • Intensifying intra- and inter-state competition for food, water, and other resources

  • Increased frequency and severity of disease outbreaks

All of these challenges are serious, but the scope and scale of climate migration will test the limits of national and global governance as well as international cooperation. I only hope we avoid a crisis multiplier like another pandemic or global recession to make things worse.


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