Connect with us

Climate change

ECB sets up climate change centre

EU Reporter Correspondent



The European Central Bank (ECB) has decided to set up a climate change centre to bring together the work on climate issues in different parts of the bank. This decision reflects the growing importance of climate change for the economy and the ECB’s policy, as well as the need for a more structured approach to strategic planning and co-ordination.

The new unit, which will consist of about ten staff working with existing teams across the bank, will report to ECB President Christine Lagarde, who oversees the ECB’s work on climate change and sustainable finance.

“Climate change affects all of our policy areas,” said Lagarde. “The climate change centre provides the structure we need to tackle the issue with the urgency and determination that it deserves.”

The climate change centre will shape and steer the ECB’s climate agenda internally and externally, building on the expertise of all teams already working on climate-related topics. Its activities will be organised in workstreams, ranging from monetary policy to prudential functions, and supported by staff that have data and climate change expertise. The climate change centre will start its work in early 2021.

The five work streams of the climate change centre focus on: 1) financial stability and prudential policy; 2) macroeconomic analysis and monetary policy; 3) financial market operations and risk; 4) EU policy and financial regulation; and 5) corporate sustainability.

The new structure will be reviewed after three years, as the aim is to ultimately incorporate climate considerations into the routine business of the ECB.

Climate change

Show us the plan: Investors push companies to come clean on climate





In the past, shareholder votes on the environment were rare and easily brushed aside. Things could look different in the annual meeting season starting next month, when companies are set to face the most investor resolutions tied to climate change in years, write Simon Jessop, Matthew Green and Ross Kerber.

Those votes are likely to win more support than in previous years from large asset managers seeking clarity on how executives plan to adapt and prosper in a low-carbon world, according to Reuters interviews with more than a dozen activist investors and fund managers.

In the United States, shareholders have filed 79 climate-related resolutions so far, compared with 72 for all of last year and 67 in 2019, according to data compiled by the Sustainable Investments Institute and shared with Reuters. The institute estimated the count could reach 90 this year.

Topics to be put to a vote at annual general meetings (AGMs) include calls for emissions limits, pollution reports and “climate audits” that show the financial impact of climate change on their businesses.

A broad theme is to press corporations across sectors, from oil and transport to food and drink, to detail how they plan to reduce their carbon footprints in coming years, in line with government pledges to cut emissions to net zero by 2050.

“Net-zero targets for 2050 without a credible plan including short-term targets is greenwashing, and shareholders must hold them to account,” said billionaire British hedge fund manager Chris Hohn, who is pushing companies worldwide to hold a recurring shareholder vote on their climate plans.

Many companies say they already provide plenty of information about climate issues. Yet some activists say they see signs more executives are in a dealmaking mood this year.

Royal Dutch Shell said on Feb. 11 it would become the first oil and gas major to offer such a vote, following similar announcements from Spanish airports operator Aena, UK consumer goods company Unilever and U.S. rating agency Moody’s.

While most resolutions are non-binding, they often spur changes with even 30% or more support as executives look to satisfy as many investors as possible.

“The demands for increased disclosure and target-setting are much more pointed than they were in 2020,” said Daniele Vitale, the London-based head of governance for Georgeson, which advises corporations on shareholder views.

While more and more companies are issuing net-zero targets for 2050, in line with goals set out in the 2015 Paris climate accord, few have published interim targets. A study here from sustainability consultancy South Pole showed just 10% of 120 firms it polled, from varied sectors, had done so.

“There’s too much ambiguity and lack of clarity on the exact journey and route that companies are going to take, and how quickly we can actually expect movement,” said Mirza Baig, head of investment stewardship at Aviva Investors.

Data analysis from Swiss bank J Safra Sarasin, shared with Reuters, shows the scale of the collective challenge.

Sarasin studied the emissions of the roughly 1,500 firms in the MSCI World Index, a broad proxy for the world’s listed companies. It calculated that if companies globally did not curb their emissions rate, they would raise global temperatures by more than 3 degrees Celsius by 2050.

That is well short of the Paris accord goal of limiting warming to “well below” 2C, preferably 1.5.

At an industry level, there are large differences, the study found: If every company emitted at the same level as the energy sector, for example, the temperature rise would be 5.8C, with the materials sector - including metals and mining - on course for 5.5C and consumer staples - including food and drink - 4.7C.

The calculations are mostly based on companies’ reported emissions levels in 2019, the latest full year analysed, and cover Scope 1 and 2 emissions - those caused directly by a company, plus the production of the electricity it buys and uses.

Sectors with high carbon emissions are likely to face the most investor pressure for clarity.

In January, for example, ExxonMobil - long an energy industry laggard in setting climate goals - disclosed its Scope 3 emissions, those connected to use of its products.

This prompted the California Public Employees’ Retirement System (Calpers) to withdraw a shareholder resolution seeking the information.

Calpers’ Simiso Nzima, head of corporate governance for the $444 billion pension fund, said he saw 2021 as a promising year for climate concerns, with a higher likelihood of other companies also reaching agreements with activist investors.

“You’re seeing a tailwind in terms of climate change.”

However, Exxon has asked the U.S. Securities and Exchange Commission for permission to skip votes on four other shareholder proposals, three related to climate matters, according to filings to the SEC. They cite reasons such as the company having already “substantially implemented” reforms.

An Exxon spokesman said it had ongoing discussions with its stakeholders, which led to the emissions disclosure. He declined to comment on the requests to skip votes, as did the SEC, which had not yet ruled on Exxon’s requests as of late Tuesday (23 February).

Given the influence of large shareholders, activists are hoping for more from BlackRock, the world’s biggest investor with $8.7 trillion under management, which has promised a tougher approach to climate issues.

Last week, BlackRock called for boards to come up with a climate plan, release emissions data and make robust short-term reduction targets, or risk seeing directors voted down at the AGM.

It backed a resolution at Procter & Gamble’s AGM, unusually held in October, which asked the company to report on efforts to eliminate deforestation in its supply chains, helping it pass with 68% support.

“It’s a crumb but we hope it’s a sign of things to come” from BlackRock, said Kyle Kempf, spokesman for resolution sponsor Green Century Capital Management in Boston.

Asked for more details about its 2021 plans, such as if it might support Hohn’s resolutions, a BlackRock spokesman referred to prior guidance that it would “follow a case-by-case approach in assessing each proposal on its merits”.

Europe’s biggest asset manager, Amundi, said last week it, too, would back more resolutions.

Vanguard, the world’s second-biggest investor with $7.1 trillion under management, seemed less certain, though.

Lisa Harlow, Vanguard’s stewardship leader for Europe, the Middle East and Africa, called it “really difficult to say” whether its support for climate resolutions this year would be higher than its traditional rate of backing one in ten.

Britain’s Hohn, founder of $30 billion hedge fund TCI, aims to establish a regular mechanism to judge climate progress via annual shareholder votes.

In a “Say on Climate” resolution, investors ask a company to provide a detailed net zero plan, including short-term targets, and put it to an annual non-binding vote. If investors aren’t satisfied, they will then be in a stronger position to justify voting down directors, the plan holds.

Early signs suggest the drive is gaining momentum.

Hohn has already filed at least seven resolutions through TCI. The Children’s Investment Fund Foundation, which Hohn founded, is working with campaign groups and asset managers to file more than 100 resolutions over the next two AGM seasons in the United States, Europe, Canada, Japan and Australia.

“Of course, not all companies will support the Say on Climate,” Hohn told pension funds and insurance companies in November. “There will be fights, but we can win the votes.”

Continue Reading

Climate change

Plato tackles climate change

Guest contributor



What connects Plato, ancient Athenian philosopher, to the most pressing long term problem of the 21st century? In his new book Plato Tackles Climate Change, Brussels-based author and teacher Matthew Pye offers a guide to making sense of the climate crisis. Journeying through the ideas of Western philosophy’s founding father, the book boldly brings together an information rich scientific perspective on the climate crisis with the probing playfulness of Plato’s work. The book blends accessibility with depth, and does not shy away from the big questions" writes Sebastien Kaye, recent graduate of Environmental Governance at the University of Oxford

The student of Socrates, Plato, is perhaps the best known of the ancient philosophers. He had a deep influence in classical Antiquity. Plato established the first university, an academy of Philosophy in Athens where his students worked on important philosophical issues concerning truth, virtues and metaphysics. Centuries later, the rediscovery of Plato in the West provided a major stimulus to the Renaissance - a rebirth that was (arguably) triggered by the crisis of the Black Death.   Matthew Pye brings Plato back to life, resurrecting his insights to make sense of our current climate emergency.

The problem of climate change, Matthew Pye demonstrates, demands another major rethink of everything. Confronted by the non-negotiable laws of physics, the threat of systemic breakdown, and a society with an increasingly slippery relationship with the truth, this book offers a safe and challenging intellectual space to chew over everything. He argues that it seems rather reckless to allow our short-sighted desires and over excitable human pride to get the better of some simple truths about reality. Pye highlights how unwise it is to play around with deep seated equilibriums in nature, and how risky it is to have a slack and casual attitude to the truth; and with carefully constructed points he brings in Plato’s life and works to help make things clear.

One section is concerned with “Truth Decay”. He notes that the stale tactics of the climate sceptics, with their glib conversations that are designed to distract and dissuade, now look increasingly marginalised, and that the surge in climate change awareness has been long overdue. However, Pye exposes just how serious the crisis remains and how disconnected from reality we still are. He points out that we are still not asking some very basic questions, such as “How fast must we reduce our greenhouse gas emissions to stay below 1.5°C or 2°C?”, “Why are climate targets still not rooted in the mainstream science of the carbon budget?”.

Matthew Pye weaves into the analysis personal accounts of his expedition into the world of climate change education and action. Ten years ago, he founded a Climate Academy for secondary school students in Brussels. At the centre of this effort has been a collaboration with some pioneering work by scientists who have created an index to make clear the vital statistics behind the climate crisis. Endorsed by the numerous world authorities in climate science, the project “” provides the percentage reductions of GHG emissions that every country should be reducing every year to stay within a ‘safe’ operating space of warming. The book explains the key facts and principles in the agreement among scientists that in order to have a chance of staying within the temperature thresholds of the Paris Agreement, the Very High Developed nations of the must cut global emissions by 11% each year, starting now. Every country has its own yearly percentage of emission reductions that increases with inaction. People have the right to know these vital statistics that are updated every year. Pye argues that they are the survival codes to a safe future – and the absence of laws to embody this basic act of common sense is starkly revealing of the human condition.

Championing this right to knowledge and the determined call that political efforts must be uniquely based on the scientific reality of the climate crisis, acts as the book's central message.

Plato was the first to point to the fault lines that exist in a system where popular belief can usurp the truth through the democratic process; the ancient Athenians voted to get into a catastrophic war with the Spartans and they voted to execute wise old Socrates. Indeed, beyond the figure of the high-minded philosopher juggling with concepts such as virtues, truth and the soul, there is the human called Plato who experienced major trauma and tragedy in his life. When the democracy that he lived in made reckless decisions, when the booming culture of Athenian society was overtaken by the forces of the Spartan army, he struggled to make sense of everything. How could such a noble and progressive society be so short-sighted? How could such an innovative and advanced culture, with remarkable achievements in both the arts and technology fail so catastrophically? Pye brings the historical context of Plato to life, and then turns the same questions towards our own time.

Plato’s early criticism of democracy holds true when analysing the contemporary politics of climate change as much as it does in making sense of the success of recent right-wing populism.

Matthew takes on both of these, tailoring a thread between them and Plato’s ‘Simile of the Ship’. In this simile, the ship is like a State, where the captain is blind and needs to be guided. The ship’s navigator (the Philosopher), who is trained in the art of navigation, is overthrown by quarrelling, truth-averse sailors (the Demos). We have all embarked on the journey of climate change – we cannot escape it. The ultimate decision, Pye highlights, rests on who we are going to appoint as the captain of our ship – the deniers and delayers or those who have the courage to face the truth of climate change and act upon it?

Pye concludes that the central solutions to tackle climate change have to be legal and they have to be courageous. Legal because a systemic problem requires a systemic solution – laws have far more leverage and power than individual actions. Courageous because thinking outside of the cultural clichés of climate change requires us to be genuinely modesty about our own efforts, and it also means that we have to be brave enough to acknowledge the true scale of the crisis. The book, like his Academy and his lessons to young people, invites the reader into a space where these things seem both doable and reasonable.

Matthew Pye’s book “Plato Tackles Climate Change” is available to buy at Bol and Amazon. For more information on Matthew Pye’s Climate Academy click here.

Continue Reading

Climate change

Carbon levy on EU imports needed to raise global climate ambition  

EU Reporter Correspondent



To raise global climate ambition and prevent ‘carbon leakage’, the EU must place a carbon price on imports from less climate-ambitious countries, say Environment MEPs. On Friday (5 February), the Committee on Environment, Public Health and Food Safety adopted a resolution on a WTO-compatible EU carbon border adjustment mechanism (CBAM) with 58 votes for, 8 against and 10 abstentions.

The resolution underlines that the EU’s increased ambition on climate change must not lead to ‘carbon leakage’ as global climate efforts will not benefit if EU production is just moved to non-EU countries that have less ambitious emissions rules.

MEPs therefore support the introduction of a WTO-compatible CBAM to place a carbon price on imports of certain goods from outside the EU, if these countries are not ambitious enough about climate change. This would create an incentive for EU and non-EU trade industries to decarbonize in line with the Paris Agreement objectives.

MEPs underline that it should be designed with the sole aim of pursuing climate objectives and a global level playing field, and not be misused as a tool to enhance protectionism.

CBAM must be linked to a reformed EU Emissions Trading System (ETS)

The CBAM should be part of a broader EU industrial strategy and cover all imports of products and commodities under the EU ETS. MEPs add that by 2023, and following an impact assessment, it should cover the power sector and energy-intensive industrial sectors like cement, steel, aluminium, oil refinery, paper, glass, chemicals and fertilisers, which continue to receive substantial free allocations, and still represent 94% of EU industrial emissions.

To prevent carbon leakage, carbon pricing under the CBAM should be linked to the price of EU allowances under the EU ETS, they add.

After the vote, Parliament rapporteur Yannick Jadot (Greens, FR) said: “The CBAM is a great opportunity to reconcile climate, industry, employment, resilience, sovereignty and relocation issues. It is a major political and democratic test for the EU, which must stop being naïve and impose the same carbon price on products, whether they are produced in or outside the EU, to ensure the most polluting sectors also take part in fighting climate change and innovate towards zero carbon. This will give us the best chance of remaining below the 1.5°C warming limit, whilst also pushing our trading partners to be equally ambitious in order to enter the EU market. Parliament is leading the way and we expect the same level of ambition from the Commission and member states.”

Next steps

Plenary is set to vote on the resolution in its session 8-11 March 2021. The Commission is expected to present a proposal in the second quarter of 2021.


While the EU has already substantially reduced its domestic greenhouse gas emissions (GHG), those from imports have been rising, thereby undermining the EU’s efforts to reduce its global GHG footprint.

Parliament has played an important role in pushing for more ambitious EU climate legislation and declared a climate emergency on 28 November 2019.

More information 

Continue Reading