The United States government was not present. But much of the rest of the world had been at Tuesday’s climate summit in Paris. Global governments and international businesses alike united in an effort to find remedies to the climate change dilemma as well as to increase awareness about the amount of monies that it would take to achieve success.
The meetings marked the two year anniversary of the signing of the Paris climate agreement by nearly 200 nations. The goal is to keep temperature increases from rising no more than 2 degrees Celsius by mid century. There are a number of ways to achieve that but the most prominent one is to change out older coal-fired plants for cleaner burning ones, notably those that run on renewable power. That could also include onsite generation using microgrids.
All that cost money. The global community is spending billions a year to get there but the OECD has said that $6.3 trillion a year between 2016 and 2030 is needed to have a “climate compatible infrastructure.” An even more problematic issue is getting the roughly $100 billion to the developing world by 2020 so that it can also employ the most advanced technologies to have climate-friendly economies. Needless-to-say, there’s a shortfall.
The purpose of this week’s Paris summit was thus to increase that understanding and to get global leaders to understand the implications. CO2 levels have been falling in the European Union, for example, which has largely been a reflection of less coal generation and more renewable energy use.
By 2020, the continent aims to achieve a 20% cut in greenhouse gas emissions (from 1990 levels,) a 20% increase in renewables and a 20% improvement in energy efficiency. In March, the continent is expected to discuss increasing its CO2 targets to 40% by 2030.
“It is not that funding or financing is not available,” French President Macron told the summit attendees in Paris. “In Europe, we have the ambition to be the hotbed of urban innovation. This is why we support local climate action through EU funds, with at least 20% of the EU budget going into climate-related projects.”
To that end, Forbes is reporting that the United Kingdom is increasing its investments in the clean tech economy along with the World Bank, which has $4.5 billion in new investments in the pipeline. The World Bank Group announced that it stop financing upstream oil and gas operations in 2019.
At the same time, institutional investors that manage trillions in assets are working to persuade companies to pursue socially responsible investments — specifically those that would reduce heat-trapping emissions. In the past, those investors have been effective in getting businesses to listen and to act, albeit the level of commitment has varied depending on corporate missions.
“Moving 100 of the world’s largest corporate greenhouse gas emitters to align their business plans with the goals of the Paris Agreement will have considerable ripple effects,” Anne Simpson, Investment Director of Sustainability at the world’s largest institutional investor CalPERS, said. “Our collaborative engagements with the largest emitters will spur actions across all sectors as companies work to avoid being vulnerable to climate risk and left behind.”
Altogether, 225 investors with $26 trillion in assets under management have combined their financial might under the banner of Climate Action 100+. Their message: Companies that focus on the so-called triple bottom line — economics, environment and social — are outperforming other broader indices and they are also demonstrating that they are living their missions and ingraining their brands among their customers.
Among the companies that they hope to persuade are China Petroleum & Chemical Co., Gazprom and Exxon Mobil Corp., which just this week said that it will give its shareholders a sharper look inside of its strategy to fight climate change. Calpers said via a telephone conference that companies are being asked to cut their CO2 emissions by 80% by 2050.