It’s never enough. Urgency in addressing climate change has reached new heights in the wake of the pandemic. That’s great news. But we need to do more — way more
by David Rutherford
April 22 is Earth Day. It’s the 51st edition of this special day designed to diversify, educate and activate the environmental movement worldwide. A half century on, where do we stand in our relationship with Mother Earth? It would seem at first glance — and maybe second and third glance, too — that every part of Earth Day’s original mission is suffering.
Diversify? The movement to restore and preserve the earth remains an us-versus-them proposition. Just ask Greta Thunberg. Eighteen months after taking North America by storm — and boat — and rallying millions of people to protest inaction on climate change, Greta will be skipping the UN COP26 conference in Glasgow in November. COP26 is a gathering designed to “accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.” The conference has already been postponed once due to the pandemic, and Greta’s anticipated absence is related: it’s rooted in her protest over inequitable distribution of COVID vaccines worldwide, which would effectively restrict attendance to representatives of the developed world. Hardly the diversification of views and stakeholders the founders of Earth Day envisioned.
Educate? Is there anyone on planet earth who doesn’t know the track we’re on? The challenge is the unwillingness to take action. But when some members of one of Canada leading political parties can’t even bring themselves to accept the reality of climate change, action becomes a moot point. That speaks volumes about how difficult it is to make progress on climate, even in countries like Canada, whom many would consider progressive on this front. The political fallout from the Supreme Court decision upholding the federal government’s legitimacy in levying a carbon tax, however, shows just how divisive this issue remains in Canada.
All of that, of course, inhibits progress on the third pillar of Earth Day: real action. Simply put, there just isn’t enough being done to reverse the negative impacts of climate change on the planet.
So where’s the good news in all this? Is there anything at all to celebrate on Earth Day 2021?
In fact, there is.
How responsible companies are taking action on climate change
Despite the derailing impact of the pandemic, we think there’s still much to celebrate this year. From our viewpoint as an active investor, we’re seeing significant progress being made by corporations that are increasingly attuned to the long-term implications of climate change. To quote from NEI’s 2021 Focus List of company engagements:
“In 2020 the pace of corporate (and investor) commitments to address climate change quickened, with an unprecedented sense of momentum building as the market turned its attention to the systemic risks facing us all. We anticipate 2021 will bring even more tangible actions and commitments across the spectrum of the energy system, from the companies and consumers driving the demand for energy to the firms tasked with providing it, to the governments and regulators trying to align their jurisdictions with Paris commitments.”
The ‘S’ in ESG may have entered a new place in our collective consciousness, but that welcome development did not come at the expense of the ‘E.’ The pandemic has caused us to recognize multiple ESG risks far more acutely. And to Greta’s point, those risks are connected, and we need to tackle them together. In that sense, the pandemic has ushered in a new definition of what a ‘livable planet’ means: achieving a fair and just society, in addition to achieving environmental sustainability.
On climate specifically, business is really picking up the ball. If that’s due to a new realization that access to capital, mitigation of business risks and long-term viability are inexorably tied to the quality of a company’s climate response, so be it. To quote again from our Focus List:
“There is a growing consensus in the corporate world around the imperative of aligning business strategy with the Paris Agreement’s global goal of net-zero greenhouse gas emissions by 2050, and increasingly net-zero is becoming the lens through which climate strategies are being assessed by investors. While this target is undoubtedly ambitious for many companies, it is increasingly clear that ambition is exactly what’s needed to avoid the worst impacts of climate change.”
Climate ambition does not automatically translate to climate action; but when that ambition is put out there for everyone— consumers, investors and regulators — to see, it can and will inspire companies to fulfil that ambition with real, meaningful action to mitigate climate change.
Every day is Earth Day
At NEI, we’ve pushed companies to take meaningful climate action for years — decades, in fact. And in many cases, we’ve been very successful in getting them to take climate seriously in their business operations. Our work in the oil and gas sector, for example, has been instrumental in helping companies begin their transition into viable entities for a low-carbon economy, including setting ambitious net-zero targets.
Every day in 2021 — not just on Earth Day — we will build on our success in getting some of Canada’s largest companies to commit to a target of net-zero emissions by 2050. And we will ensure those commitments are backed by robust actions. We’ll demand meaningful financial commitments in capital spending, and we’ll expect compensation plans to link climate action to executive pay. At the same time, we’re reviewing our own climate strategy to ensure our investments are also aligned with a net-zero future.
You can’t judge the future pace of change based on how quickly — or slowly — change moved in the past. The COVID-19 crisis in particular has caused us to reconsider the major social and environmental challenges facing us, and take action to mitigate them with a far greater degree of urgency than ever before.
That’s good, but is it good enough? Put it this way: it’s never enough. When it comes to the earth, this Earth Day we need to do more — way more.