Mind the gender gap on corporate climate action

Good day from London. Rishi Sunak kicked Alok Sharma out of the UK cupboard yesterday with lower than two weeks to go till COP27, showing to make use of his first day as prime minister to punish the COP26 president for backing Boris Johnson’s abortive comeback bid.

Sharma will nonetheless lead negotiations on behalf of the UK authorities in Sharm-el-Sheikh however is now not a authorities minister — which raises questions on how massive a job local weather issues will play in Sunak’s authorities.

As chancellor, Sunak dedicated the UK to the considerably inscrutable purpose of changing into the world’s first “internet zero aligned monetary centre”. However throughout this summer season’s bitter management contest, he additionally promised to repeal all legal guidelines inherited from the EU, which features a entire raft of environmental protections, and backed Liz Truss’s controversial pledge to repeal a moratorium on fracking for shale fuel within the UK.

So local weather geeks could also be feeling much less relieved after Truss’s departure than the common Brit. Regulators might step in to fill these gaps: on Monday the Monetary Conduct Authority introduced a package of measures to tackle greenwashing by investment managers.

As we speak, Patrick appears to be like at proof that feminine board members are much more keen to take costly motion on local weather change than their male counterparts. And I ask why blended finance — a a lot vaunted mixture of focused private and non-private capital — has dropped off so sharply.

And don’t neglect to tune in to the Moral Money Summit Americas as we speak and tomorrow in New York, to listen to from Mark Carney, John Kerry, Desiree Fixler and lots of extra. As a premium subscriber, you’ll be able to be part of with a complimentary digital move while you register with the promo code: Premium2022. (Kenza Bryan)

Large hole in how women and men administrators take into consideration local weather change, says PwC

As Kenza wrote final week, diversity in corporate boardrooms is woefully lacking. However as Europe and a few states within the US write guidelines to require extra ladies on boards, new knowledge recommend women and men can have very completely different opinions about local weather change and its relationship with earnings.

Accounting agency PwC just lately revealed an annual survey of board members. Greater than 700 administrators responded, representing firms in a dozen industries that sometimes had greater than $1bn in annual revenues.

This yr’s survey uncovered a stark revelation: feminine board members prioritise motion on local weather change excess of males.

Two-thirds of feminine board administrators stated decreasing the affect of local weather change was a precedence “even when it impacts short-term efficiency”. Solely 45 per cent of males stated the identical.

To change into a board member, women and men need to climb the identical company ladder. They often have comparable educations and incomes (and certainly are married to one another in some circumstances).

So why is there a 20 share level distinction regarding how female and male administrators understand local weather change? That query can not simply be answered but, Maria Castañón Moats, head of the company governance insights centre at PwC, instructed me. Causation right here doesn’t result in correlation, she stated. And firms with extra ladies on the board may already be considering extra about local weather considerations, she stated.

“On the finish of the day, boards with feminine administrators are more likely to spend extra time debating local weather points,” Moats stated.

The survey outcomes may debunk the concept mandating ladies on boards is just a box-ticking train. Sceptics of board quotas say extra ladies within the boardroom won’t assure extra variety of thought. But when there may be an underlying distinction between how women and men suppose, then that implies the appointment of extra feminine administrators may deliver a extra proactive method on local weather points.

However the survey additionally confirmed indicators that administrators’ enthusiasm for sustainability points is cooling. Solely 57 per cent of administrators stated ESG points have been necessary to firm technique, down from 64 per cent final yr. And solely 45 per cent of administrators suppose that ESG points enhance efficiency, down 9 share factors from final yr.

Barely one in 10 board administrators stated environmental or sustainability experience was necessary for his or her board.

But when extra ladies change into administrators within the years forward, the survey suggests boards will probably be taking local weather considerations extra significantly. (Patrick Temple-West)

Local weather finance partnerships fall by greater than half

“We’ve left this concern [until] very, very late, and it’s a really slim path to get to the place the world must be”, former Financial institution of England governor Mark Carney instructed the UK’s Environmental Audit Committee earlier this week, referring to the purpose of limiting international warming to 1.5 levels. “Occasions of this yr have made it rockier and extra treacherous, and as you recognize the carbon funds is brutal,” he later added.

Carney was answering questions from members of parliament on Monday about how the Glasgow Finance Alliance for Web Zero, a company local weather initiative that claims to incorporate 40 per cent of world property below administration, can transfer the dial on decarbonisation. He defended the group’s file on encouraging banks and others to plan transition plans, however admitted that a few of its members have been “lagging” and persevering with to spend money on new coal, oil and fuel tasks with no clear power safety justification.

Carney launched Gfanz in April 2021 with the purpose of marshalling non-public capital in direction of nationwide internet zero targets. A technique to do that is by combining non-public and public funds to attain the heightened affect of so-called blended finance. For instance, a growth financial institution may prolong the riskiest “first-loss” tier of financing for a challenge, encouraging private-sector lenders and traders to supply the remainder.

However this form of funding is below severe stress in line with Convergence, a membership community and grant-making physique for public, non-public and philanthropic traders. It discovered that blended finance offers associated to the local weather amounted to $14bn between 2019 and 2021 — a pointy drop from $36.5bn within the earlier three-year interval.

That contrasts with the pattern in general worldwide growth help, which reached a file determine final yr of $178.9bn, in line with the OECD (though the accounting behind this determine has come under fire).

Up to now three years, blended finance offers centered on climate-related points (together with decarbonisation, water techniques and air air pollution) have been of decrease worth and more and more centered on adaptation somewhat than mitigation. These tasks have been additionally more likely to be backed by private equity and venture capitalists than commercial banks, in line with Convergence.

The drop-off in climate-related blended finance might be right down to lack of co-ordination amongst non-public actors, inefficiency within the public sector, low knowledge availability or a scarcity of regulatory co-ordination, together with on rule books for inexperienced investments, in line with Joan Larrea, chief government of Convergence.

Larrea stated the outcomes of the survey have been “disappointing and surprising” when assessed within the context of pledges made by the local weather finance motion. “The purpose of blended finance is to unravel very giant issues . . . local weather change is the last word common downside,” she added. (Kenza Bryan)

Sensible learn

The Guardian’s Helena Horton has written a smart dive into what Rishi Sunak’s arrival as prime minister means for UK inexperienced coverage. Whereas he talked recreation on climate-friendly finance throughout the COP26 summit, Horton writes, “Sunak has definitely by no means been a passionate environmentalist”.