Friday - August 12, 2022 | News & Views | 3 min read
This past Sunday, the US senate passed the Inflation Reduction Act (IRA). Although it is a leaner version of the original Build Back Better bill, it will still be the largest bundle of climate-related spending in American history.
This could be a big moment for America on its journey to meet the climate-change goals of the Paris Agreement. There are subsidies to help individuals make more energy efficient purchases. Loans to businesses to attract capital, in particular a new Green Bank. Finally, a boost to green technology and innovation.
This all means opportunities, risks and change. Your first step, as a senior business leader or board director, is to get as well informed as possible about environmental, social and governance (ESG) topics such as these that affect your company. Our world-class Designation and Certificate programs are the best way for you to do that.
- My kind of (ESG) town. The city of Chicago has taken a bold green step forward with its new renewable energy transformation plan and goals. From 2025, the city will only buy 100% renewable energy for all city facilities and operations, making it one of the largest urban centres in North America to make this positive change. The change will include buildings, airports, streetlights and much more, according to Mayor Lori Lightfoot. Construction on its Double Back Diamond solar project that will help power the transformation will start before the year’s end. The deal is worth US $422 million.
- Climate change commitments. The government of India announced a new series of climate-change commitments last week. These follow the pledges made by Prime Minister Narendra Modi at the COP26 summit in Glasgow last November and form part of India’s updated Nationally Determined Contribution. The goals are part of a larger framework of India’s transition plan towards achieving net zero by 2070 and accelerate the switch to renewable energy in the short term. By 2030, India aims to meet 50% of its energy requirements from renewable energy, and reduce its total projected carbon emissions by one billion tonnes in that timeframe. The announcement should also create more green jobs in low emissions products production, energy-efficient appliances and technologies such as green hydrogen.
- Energy insecurity. BP has just published its annual Statistical Review of World Energy for 2021. Despite the global pandemic, energy consumption rose by 6% around the world last year, taking it 1% higher than 2019 before anyone had heard the term “COVID-19”. As a result, carbon emissions also climbed 5.7%. On the plus side, renewable energy, with wind and solar power to the fore, grew strongly and now accounts for 13% of total power generation. Renewable power generation rose by almost 17% in 2021, accounting for more than half of the increase in global power generation over the past two years. Of that, China remained the main driver of solar and wind capacity growth, accounting for about 36% and 40% respectively. However, fossil fuels still dominate the global energy market, which needs to change fast according to the latest data from the Intergovernmental Panel on Climate Change (IPCC).
- Canvassing ESG opinions. Institutional Shareholder Services (ISS) launched its Annual Global Benchmark Policy Survey last week. This year’s edition has climate-change risk management at the top of the list. The survey drills down into climate-related board accountability, climate transition plans, climate risk as a critical audit matter, how much management has a say on climate resolutions and financed emissions for finance companies. ISS also wants to hear from respondents on their views on racial equity audits and executive-pay audits. The target audience for the survey is corporate directors, institutional investors, public companies and other stock market stakeholders.
- Green room service. International hotel giant Hilton has updated its environmental and social goals to be more ambitious in its pursuit of its “Travel with Purpose” ESG strategy. It now aims to cut greenhouse-gas emissions in its managed hotels by 75% by 2030, and in its franchised ones by 56%. SBTi validated in June this year that Hilton’s strategy aligned with an overall path to keep global temperature rise to 1.5C above pre-industrial levels to limit the climate crisis. Hilton was the first global hospitality company to set measurable, science-based climate targets in 2018.
Mathew Loup is Competent Boards’ Director, Marketing & Communications. Follow Competent Boards on LinkedIn.Back To News & Views