The significant transformations required to meet the challenges posed by climate change are also, from an entrepreneurial perspective, tremendous opportunities. Inventors, business strategists and, of course, far-sighted entrepreneurs appreciated this perspective for years. Their activities have since been chronicled and analyzed by reporters, researchers, and, in some cases, the entrepreneurs themselves.
For this month’s bookshelf on climate change and business, Yale Climate Connections has assembled two different lists. This one covers recent reports from international organizations, trade associations, and research centers. A companion Bookshelf feature compiles 12 full-length hard-cover and paperback books on this subject. The books range from 200 to 704 pages and cost between $18 and $140.
The descriptions of the twelve reports listed below are drawn from copy provided by organizations that released them.
Advancing Inclusion Through Clean Energy Jobs, by Mark Muro, Adie Tomer, Ranjitha Shivaram, and Joseph W. Kane (Brookings Metropolitan Policy Program, April 2019, 44 pages. Free download here.)
The transition to a clean energy economy continues. Motivated by mounting scientific evidence, shifting market forces, and in some cases policy, U.S. industries are installing more zero-carbon energy sources, developing more energy-efficient products, and adopting more environmentally sensitive standards. These “green” shifts have become some of the highest profile, most discussed trends of the decade. Considerably less attention has been paid to the types of workers, activities, and skills needed in years to come. This analysis aims to give energy professionals, state and local policymakers, education leaders, and community organizations a clearer look at the nature, needs, and opportunities associated with the future clean energy workforce.
In Sight of the Clean Trillion: Update on an Expanding Landscape of Investor Opportunities, edited by Mark Fulton and Sue Reid (Ceres, May 2018, 60 pages. Free download here.)
The Ceres Clean Trillion project highlights the need for an additional $1 trillion per year in clean energy investment to avoid the worst impacts of climate change. This new report, In Sight of the Clean Trillion, points to significant opportunities for investors to scale up their clean energy investments while simultaneously meeting their risk-return requirements. It takes stock of the updated context and landscape in which clean energy has gone mainstream, and includes the following key findings: the scale of global clean energy investment opportunity is significant; achieving the “Clean Trillion” is eminently feasible; and a significant proportion of global clean energy investment is anticipated to be deployed in the transportation sector.
Carbon Capture and Storage in the United States Power Sector, by Deepika Nagabhushan and John Thompson (Clean Air Task Force, February 2019, 37 pages. Free download here.)
This new report is based on a CATF-led U.S. power sector modeling study, which finds that 45Q federal tax credits for carbon capture & storage (CCS) can have a significant impact on CO2 emissions reductions by 2030. This report contains estimated levels of CCS deployment in the U.S. power sector as a result of the newly expanded and extended 45Q federal tax credits. The report analyzes the impact of 45Q on CO2 reductions as well as on growth of Enhanced Oil Recovery. For this study, CATF developed robust assumptions for CCS technology costs & performance, which are included in the appendices of this report.
New Energy Solutions for 1.5° C: Pathways and Technologies to Achieve the Paris Agreement, by Mariana Heinrich and Lindee Wong (World Business Council for Sustainable Development, Dec. 2018, 51 pages. Free download here.)
Human activities have already caused global warming of about 1.0°C and global warming is likely to reach 1.5°C around 2040 if it continues to increase at the current rate. While a 1.5°C world is still possible, we need to urgently and radically transform all systems at an unprecedented scale. Transforming the energy system will be crucial as unabated fossil fuels are currently responsible for over 80% of primary energy demand. In parallel to aiming for net-zero emissions as early as possible in the second half of the century, we also need to achieve emissions reductions in the near-term to limit cumulative emissions. The transition to a zero-carbon energy system must be accelerated now, using technologies already existing today.
The Role of Business in the Circular Economy: Markets, Processes, and Enabling Policies, by Vasileios Rizos, Arno Behrens, Elanor Drabnik, David Rinaldi, and Katja Tuokko (Centre for European Policy Studies, March 2018, 80 pages. Free download here.)
The circular economy is attracting significant interest worldwide, as evidenced by the numerous government strategies, business commitments and partnerships devoted to its development. Against this background, CEPS brought together executives from major multinational companies as well as representatives of business associations, non-governmental organizations and research institutes to form a Task Force charged with tackling the immense challenges associated with the circular economy. This report is the outcome of their deliberations. It analyzes the key obstacles that need to be addressed, explores numerous policy areas where support can act as a catalyst for market transformation, and puts forward actionable policy recommendations.
State of Integrated and Sustainability Reporting 2018, by Sol Kwon, Heidi Welsh and Robin Young (Investor Responsibility Research Center Institute and Sustainable Investments Institute (Si2), Dec. 2018, 44 pages. Free download here.) 150×195
This report paints a dynamic picture of corporate sustainability reporting. Most companies use multiple reporting models and customized guidance for their own needs. But the number of integrated reporters in the S&P 500 has doubled since 2013. Si2 also found a surprising share of companies are including sustainability information in their financial filings, indicating elementary but growing acceptance that sustainability information is material to investors. All these findings show most companies are paying attention and adapting to raised expectations from stakeholders, including but not limited to investors. Integrated reporting just may be the future of corporate disclosure, its proponents assert, even if change is slow and shifting.
Got It Covered? Insurance in a Changing Climate, by Toby Belsom, Pavel Kirjanas, Felix Nagrawala, Sam Hayward, Peter Uhlenbruch, and Emily Franklin (ShareAction, May 2018, 44 pages. Free download here.)
Weather-related financial losses, regulatory and technological changes, liability risks, and health impacts related to climate change have implications for the business operations, underwriting, and financial reserving of insurance companies. This survey utilizes the framework provided by the Task Force on Climate-related Financial Disclosures (TCFD) to benchmark responses from the world’s 80 largest insurers to our survey on climate-related risks and opportunities. As such, we hope it makes a significant contribution to the debate surrounding the role of the insurance sector in addressing climate change, resulting in real improvements across the sector.
Getting Physical: Assessing Climate Risks, by Ashley Schulten, Andre Bertolotti, Peter Hayes, and Amit Madaan (BlackRock Investment Institute, April 2019, 20 pages. Free download here.) 150×200
A series of recent extreme weather events – from hurricanes and wildfires in the U.S. to heat waves in Europe and floods in Japan – have put a spotlight on climate-related risks. We offer a new set of tools for assessing such risks to portfolios. Advances in climate and data science now allow us to gauge the likely overall economic impact of climate-related risks on a localized basis. For example, our modeling predicts that 58% of U.S. metro areas will likely suffer annualized GDP losses of 1% or more by 2060-2080 under a “no climate action” scenario. Among the likely losers: Arizona, the Gulf Coast region, and coastal Florida.
Investing in a Time of Climate Change: The Sequel, by Jillian Reid, Alex Bernhardt, Kate Brett, Karen Lockridge, and Steven Sowden (Mercer, April 2019, 96 pages. Free download here.)
Investing in a Time of Climate Change – The Sequel documents Mercer’s latest efforts to assess the effects of climate-related physical damages (physical risks) and the transition to a low-carbon economy (transition risks) on investment return expectations. The Sequel models three scenarios, a 2°C, 3°C and 4°C average warming increase on preindustrial levels, over three timeframes – 2030, 2050 and 2100. The findings argue for investor action on climate change and suggest greater attention be paid to how investors, as “Future Makers,” can support the transition to a 2°C scenario. Fiduciaries have the opportunity, and arguably the obligation, to use their portfolios and influence to help guide us towards this more-economically-secure outcome.
How AI Can Enable a Sustainable Future, by Celine Herweijer, Benjamin Combes, Jonathan Gillham (Microsoft and PwC UK, April 2019, 52 pages, Free download here.)
How might AI influence economic growth and the global ambition to reduce emissions between now and 2030? Research by PwC UK, commissioned by Microsoft, models the economic impact of AI’s application across four sectors – agriculture, water, energy and transport. It estimates that using AI for environmental applications could contribute up to $5.2 trillion USD to the global economy in 2030, a 4.4% increase relative to business as usual. In parallel the application of AI could reduce worldwide greenhouse gas (GHG) emissions by 4% in 2030, an amount equivalent to the annual emissions of Australia, Canada and Japan combined. At the same time, AI could create 38.2 million net new jobs, offering more skilled occupations as part of this transition.
Playing for Our Planet: How Sports Win from Being Sustainable, by WWF and UEFA, with Green Sports Alliance (Union of European Football Associations and World Wild Fund for Nature, May 2018, 105 pages. Free download here.)
A new report by UEFA and WWF, in collaboration with the Green Sports Alliance, shows how sport can contribute to sustainability and tackle climate change. Playing for Our Planet highlights good practices to emphasize the commitment made by many sports to local communities and the planet. It examines the link between sports and environmental issues, and stresses the impact that the sector has, as well as its unique power to raise awareness and promote sustainability to fans in Europe and beyond. Playing for Our Planet features 25 examples of sports stakeholders, who are committed to reducing the environmental impact of their operations – leading by example in the fight against pressing environmental challenges, such as climate change and ocean plastics.
Climate Risk and Real-Estate Investment Decision Making, by Katharine Burgess and Elizabeth Rapoport (Heitman and Urban Land Institute, Feb. 2019, 36 pages. Free download here.) 150×212
Climate Risk and Real Estate Investment Decision-Making explores current methods for assessing and mitigating climate risk in real estate, including physical risks such as catastrophes and transitional risks such as regulatory changes, availability of resources, and attractiveness of locations. It also highlights proactive measures by Heitman and other leading firms to stay at the forefront of mitigation strategies and accurately price risk into investment decisions. Presently, the industry relies on insurance to cover the majority of the shorter term, financial risks related to climate change. But insurance does not protect investors from devaluation or a reduction in asset liquidity. This report explores ways to build these new climate risks into investment processes.