News From New York City Climate Week
Every year, thousands of entrepreneurs, investors, and activists gather in New York City for a week-long environmental extravaganza known as New York City Climate Week. The timing of NYC Climate Week is centered around the United Nations annual General Assembly, a special summit to discuss the most ambitious climate policies being proposed world-wide. The week includes a smorgasbord of events highlighting the latest climate tech innovations, the future of climate solutions, and the challenges facing the planet.
As LongView’s Sustainability Manager and a new student in Columbia University’s Sustainability Management master’s program, I got to spend the week participating in the action. Here are some of the highlights from New York City’s Climate Week 2023.
The Climate Movement is Growing, and So Are the Opportunities
The day before world leaders met in New York City to discuss climate policy, 75,000 people marched through the city streets demanding an end to global investment in fossil fuels. The march was the largest climate protest in the US since the beginning of the pandemic, and the energy of the crowd was infectious.
Despite the many obstacles that stand in the way of a transition to a sustainable economy, this sense of defiant optimism pervaded the panels and events that took place over the course of the week. New solutions are being discovered every day, and more money than ever before is being channeled toward them. US Treasury Secretary Janet Yellen announced the launch of the agency's nine Principles for Net Zero Financing and Investment, which offer guidance to banks and asset managers on how to engage in climate finance and how to credibly back up net-zero commitments. She expects $3 trillion in global climate investment annually.
On the corporate side, Salesforce launched its Corporate Climate Finance Playbook, designed to help companies understand climate financing options such as sustainable bonds, internal carbon pricing, philanthropic grants, venture capital, and carbon credits. Salesforce announced $8.3 million in grants for climate justice and nature nonprofits, and was among a number of companies to make similar commitments.
We Must Stop Financing Fossil Fuels
Despite urgent warnings from scientists about climate change and pressure from investors, demand for fossil fuels continues to grow. Earlier this month, crude oil hit its highest year to date price per gallon. Speakers at Climate Week identified fossil fuel subsidies as one of the greatest obstacles in convincing companies to stop investing in new fossil fuel projects. Last year government subsidies for fossil fuels hit a record $7 trillion globally. Another issue is that banks continue to finance long-term fossil fuel projects. Even though many banks have set net-zero targets, in 2022 the world’s largest private banks provided $42.1 billion in financing for new fossil fuel projects. It’s time to call on lawmakers and the financial services industry to stop financing the fossil fuel industry.
The meeting of global leaders at Climate Week did not yield any new policy proposals or targets for reducing investment in fossil fuels, and even coincided with UK Prime Minister Rishi Sunak announcing plans to delay a ban on new gas and diesel cars that had been due to take effect in 2030 by 5 years. While the focus at Climate Week was on solutions, these must be followed up with financial and policy commitments.
There is No Climate Solution Without Protecting Nature
In the past, it’s been easy to see climate change and biodiversity loss as two separate issues. But a predominant theme at Climate Week was connecting these issues and making it clear that protecting biodiversity is a key step in preventing climate change. Why? Because natural “carbon sinks” are one of the most important mechanisms the earth has for removing carbon from the atmosphere. These include rainforests and grasslands that store carbon in the soil and in living plant matter. Ecosystems require a wide diversity of plants and animals to stay healthy. Rain forests, for example, depend on animals and birds to distribute seeds for new trees to grow, and these birds and animals depend on a vast array of different plants for food. Grasslands depend on insects, microbes and grazing animals to replenish the soil, which allow it to absorb CO2 from the atmosphere.
In line with this theme, the Taskforce on Nature-Related Financial Disclosures announced a new framework of 14 disclosure recommendations to help companies meet growing investor demand for information about the private sector’s impact on nature.
To Invest or Engage?
The question of whether to divest or engage has become one of the most hotly debated issues in the sustainable investing world, and heated debates about the issue took place across dozens of Climate Week events.
For decades, ethical investors have focused on excluding companies from their portfolios that don’t align with their values. The call to divest from fossil fuels has galvanized investors large and small to start thinking about how to invest more sustainably.
When enough people divest, it can send a powerful message to companies while also influencing popular culture. However, divestment by itself has no direct impact on how these businesses are run.
That’s why an increasing number of activist investors are opting to buy into these companies rather than divest from them. Being a shareholder comes with the right to vote on and introduce shareholder resolutions, elect board members, and engage directly with company management in an effort to force the companies to change their behavior.
Both approaches have their champions and detractors. Neither is without tradeoffs. While investors who divest give up a seat at the table, ethical investors following an engagement strategy must still grapple with the dilemma of making a profit from companies that don’t align with their values.
Regulators Tighten Rules on Naming ESG Funds
Smack in the middle of Climate Week, the US Securities and Exchange Commission adopted a new rule that will make it a lot harder for funds to get away with greenwashing. If the name of a fund includes words like “sustainable,” “green,” “ESG,” “socially responsible,” etc, managers will now have to prove that at least 80% of their assets are in alignment with whatever the name suggests. This new rule will make it much easier for investors to identify funds that truly reflect their values.
Fun Fact: Real Milk Doesn’t Have to Come From Cows
A day tasting futuristic vegan delights at the Climate Week Vegandale Festival felt like stepping into a scene from a science fiction movie where people zap meals from thin air. And in some cases, that is not far from the truth. I tasted meat that is made from protein grown from nothing but live cultures, air, water and energy; artificially created honey that is molecularly identical to actual honey; and artificially created milk that tastes EXACTLY like real milk. These exciting developments show that we don’t need to rely on animals to enjoy the same foods we are used to. And that’s a good thing, because according to Project Drawdown—an organization devoted to finding and promoting climate solutions—switching to a plant-based diet is one of the most important things we can individually do to prevent climate change.
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