Snippets for 23 April 2020

Welcome to this week's edition of our Snippets newsletter.

As we enter our 29th day of lockdown, we can now see a future that is certainly brighter than the one we viewed two-weeks ago. Many minds have been thinking about how things might look and operate post lockdown and how going back to ‘business as usual’ is not an option. The Climate Change Commission has written to James Shaw as the Minister for Climate Change outlining a climate change focussed economic recovery. The Sustainable Business Network and International Energy Agency also echo these thoughts and sentiments.

We also examine a Transpower report setting out how investments in renewable generation need to continue and accelerate in order to decarbonize the New Zealand economy. Hydrogen also has a part to play in terms of decarbonizing heavy transport and industrial processes requiring large amounts of thermal energy.

The shape of how we invest and what sort of companies are going to thrive ahead into the future are also examined. Investments in Environmental, Social and Governance (ESG) funds and companies is only going to increase, if for no other reason than they out perform the rest of the market. Companies that ignore climate change or ESG requirements risk reputational damage, financial vulnerability and a lack of access to capital.

We trust you all remain safe and well from within your ‘bubble’. Only another four-days and hopefully restrictions of movement will ease for many of us as we shift into a Level Three alert level. The Carbon EMS staff are proud of the way New Zealanders have behaved and how we are all getting through this together.

The Climate Change Commission has been using their bubble time to construct a six principled post pandemic proposal for James Shaw, the Minister for Climate Change, to take to Cabinet outlining a climate change focussed economic recovery. The principles include considering how stimulus investments can deliver long-term climate benefits, bringing forward transformational climate change investments and shaping its economic recovery plan in partnership with iwi/ Māori consistent with the principles of Te Tiriti o Waitangi. Read more.....

The lessons we learn from the coronavirus pandemic will shape the future of our children and grandchildren, and will be relevant to another crisis we are already in the midst of – the climate crisis. If something good can come from this crisis, it is these lessons, and the understanding we cannot go back to ‘business as usual’. Two of these lessons are that humans and nature are inseparable, as we depend on a healthy natural environment, and global threats need global cooperation. Read more.....

The SBN (Sustainable Business Network) understand things cannot continue as ‘business as usual’. Some say we must choose between sustainability and getting our economy going again, but the SBN say we must do both. If we don’t transform systems to being sustainable and resilient, then we may not be able to manage future disruptions caused by crises. Here we look at what the SBN suggest is necessary, and what they are actually doing as an organisation to transform their systems. Read more.....

A new report from Transpower suggests that if New Zealand successfully swaps out fossil fuels for more sustainably-generated electricity, we will reduce our emissions and households will save money. It is a positive outlook, but in order to make this happen, it will require upgrades to our electricity infrastructure and over the next 15-years, construction of additional renewable generation equivalent to what was added over the previous 40 years, at the cost of between $8 and $10 billion. Read more.....

As part of their shift towards sustainable electricity generation, Los Angeles announced plans to retire a coal-fired power plant and, in its place, construct gas-fired natural gas plants (by 2025) that eventually will run completely on green hydrogen (by 2045). There are potential opportunities here for NZ, as excess renewable generation could be used to electrolyze hydrogen for use in heavy transport, for export, or even as a means to retire coal/natural gas use at the Huntly power station. Read more.....

Because of COVID-19, global carbon emissions from the fossil fuel industry is set to fall by a record 2.5bn tonnes this year. This steep decline however, is happening because of the economic meltdown and not as a result of government climate policies. Dr. Fatih Birol, the head of the International Energy Agency, has warned against viewing the steep decline in emissions from fossil fuels as a climate triumph and has urged governments to include support for clean energy in their stimulus packages. Read more.....

Thankfully not everything associated with this crisis is negative. There is possibly going to be a skyward surge in sustainable, responsible and impactful investing over the next 12-months, for three main reasons. Firstly, investments in Environmental, Social and Governance (ESG) funds outperform the general market; secondly, investments need a social licence to operate and thirdly, Millennials support ethical investing. ESG investing was already going to reshape the investment landscape in this new decade – but the coronavirus appears to be accelerating this reshaping. Read more.....

And to confirm this shift into ESG investing, our next article discusses how amid a volatile stock market, ESG leaders are holding their own. Amid plunging stock markets, ESG investments have fared better than the overall market. During March, 62 percent of ESG-focused large-cap equity funds outperformed that index. One of the fundamental aspects of fully integrated ESG analysis is a recognition that most issues that affect the business world (and the world in general) are interrelated and cannot be evaluated in isolation. Read more.....

When one considers that science is all about observation and experimentation, it makes sense that those who evolved in the landscape would have valuable insights. This article discusses the knowledge of Indigenous Peoples and how that relates to disease, environment and climate change, as well as indigenous land rights movements. The premise is that science is starting to back the value of indigenous knowledge, and that we should value and preserve that knowledge. We need to respect the environment. Read more....

Social license is a very important part of the ability of any company or industry to be able to operate and succeed in the marketplace. The discussion around climate change, and public awareness of the subject, has been ramping up to the point where it is now quite risky for companies not to take the subject seriously. Reputational damage, financial vulnerability and a lack of access to capital are likely the impacts for firms that fail to respond to the climate crisis this decade. Read more....

The cost of lithium, and consequently the cost of batteries, may be on the decrease if this new process for mining lithium becomes the norm. Read more.....