The latest edition of our Sustainable Views newsletter
Dear reader,
Never (or at least, not for a very long time) has the world been so hot at this time of year, shows data released this morning by the Copernicus Climate Change Service, with March 2024 the 10th month in a row to be the hottest on record.
Last month was 1.68C warmer than the estimated March average for 1850-1900, the pre-industrial reference period, says the EU monitoring service, or 0.18C above the 1.5C threshold scientists and world leaders have agreed global warming should be held. Average temperatures in Europe were particularly high at 2.12C above the 1991-2020 average.
And it is not just temperatures that were abnormal, many regions, including most of western Europe, North America and Australia, all had a rather soggy month, while other areas such as western Canada and northern Mexico, China and most of southern Africa and South America experienced drier than usual conditions.
“March 2024 continues the sequence of climate records toppling for both air temperature and ocean surface temperatures,” says C3S deputy director Samantha Burgess. “Stopping further warming requires rapid reductions in greenhouse gas emissions.’’
Just one of the many negative economic impacts of rising temperatures will be higher food prices and inflation, concludes a study published last month by the Potsdam Institute for Climate Impact Research and the European Central Bank. Higher temperatures could drive food inflation up by 3.2 percentage points and overall inflation by 1.18 percentage points annually by 2035, with future warming worsening these effects, it says.
The extreme heat of the summer of 2022 increased food inflation in Europe by about 0.6 percentage points, estimate the researchers. “Future warming projected for 2035 would amplify the impacts of such extremes by up to 50 per cent,” says Maximilian Kotz, PIK scientist and one of the study’s authors. “These effects are very relevant for currency unions with a 2 per cent inflation target such as the eurozone, and will continue to increase with future global warming.”
RepRisk chief commercial officer Alexandra Mihailescu Cichon argues in Sustainable Views that our response to this ever greater need to cut emissions should be “pragmatism” rather than perfectionism.
Responding to Larry Fink’s 2024 letter to investors and the absence of the terms ESG in the BlackRock chief executive’s annual missive, Mihailescu Cichon focuses on his call for “energy pragmatism” and argues “as we transition to a more sustainable economy, companies, investors and regulators are all better served by pragmatism than by perfectionism”.
“Pragmatism enables a flexible and open-minded approach amid fast-moving developments, without reducing ambition when it comes to achieving sustainability goals,” says Mihailescu Cichon.
In other news, Alex has analysed the first civil action win by Australia’s financial services regulator Asic against asset manager Vanguard for greenwashing, after it was found guilty of making misleading claims about ESG screening. Asic said the court’s decision “sends a strong message to companies making sustainable investment claims”.
“This should sound a warning to other asset managers who are playing fast and loose with claims that their funds are ‘green’ or ‘sustainable’,” says Lara Cuvelier, sustainable investments campaigner at non-profit Reclaim Finance, who calls on European regulators in particular to take note. “European investors and pension savers are being misled,” she says.
Finally, a report by Carbon Market Watch and the NewClimate Institute argues that a standard introduced in 2023 by the Voluntary Carbon Markets Integrity Initiative, designed to encourage companies to use carbon credits, would undermine the Scope 3 emissions targets of some of the world’s largest companies.
After analysing the impact of the standard on 14 businesses, the non-profits conclude it “would effectively nullify the Scope 3 targets of most companies, reducing their 2030 commitments to cover only Scope 1 and 2 emissions”. A VCMI spokesperson tells Sustainable Views the so-called Scope 3 flexibility claim beta version “includes robust guardrails to ensure carbon credits are used in addition – and not to delay – decarbonisation”.
Until tomorrow,
Philippa
Philippa Nuttall is the editor of Sustainable Views