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Week 53: How can we deliver a just transition?
In this issue: ▸ Interview with Nick Robins on just transition ▸ The ESG investment industry is broken ▸ Is green growth and decoupling possible? ▸ The Great Reset, whatever that means…
I hope everyone is well and ready for the first edition of ‘ESG on a Sunday’ in 2021!
How can we deliver a just transition?
This issue is first and foremost about just transition. I’ve been wanting to do an issue on that for a while, but I wanted it to be something special. More specifically, I wanted to feature Nick Robins who is Professor in Practice for Sustainable Finance at the London School of Economics.
Over the past 3 years, Nick has been focusing on how to mobilise finance for a just transition. I wanted to learn more about the crucial role investors will need to play to deliver a just transition.
Before linking to the interview, here are a few quotes/highlights from the article:
We’re simply not going to ‘win’ on climate unless the process is fair, and seen to be fair — in other words, a ‘just transition’.
The net-zero economy is the economy of the future and offers fantastic opportunities in terms of jobs and innovation and so on.
The financial centres where all ESG is taking place are the cities — whether it’s Zürich or Frankfurt or London or New York or Paris. But the transition is often taking place elsewhere, affecting the livelihoods of people in the so-called ‘hinterland’.
One of the big themes for next year (2021, ed.) is how central banks, such as the ECB and the Bank of England, are going to start joining the dots between their role supporting economies in crisis with their potential to support the type of economy we want, and we need, to see coming out of this which is greener and much more inclusive.
We have no name for the moment we are in. Globalisation is finished…. [and] we lack a clear sense of the new regime that will follow.
I hope you find the interview interesting. Here’s the link:
IN RELATED NEWS…
The ESG investment industry is broken
In this opinion piece in The Globe and Mail, activist investor James Rasteh lash out at ESG investors. Rasteh argues that investors must work much harder to actually understand the operations of their invested companies, and devise suitable paths to make these more sustainable.
Failing that, ESG funds will remain a marketing ploy at best.
I couldn’t agree more, as I think you can tell from this piece.
Green growth is not possible
The notion of green growth (and decoupling) has emerged as dominant policy response to climate change and ecological breakdown. But is green growth even possible? Can we decouple the economy?
The concept of “decoupling” means promoting economic growth while reducing the use of natural resources and GHG emissions. It’s an idea that has even been proposed as a path towards sustainability by the OECD and UN.
However, according to three different bibliometric studies, it’s simply not possible. Let’s look at the conclusions in those studies:
Study no. 1: “There is no empirical evidence that absolute decoupling from resource use can be achieved on a global scale against a background of continued economic growth.” (link)
Study no. 2: “We conclude that large rapid absolute reductions of resource use and GHG emissions cannot be achieved through observed decoupling rates, hence decoupling needs to be complemented by sufficiency-oriented strategies and strict enforcement of absolute reduction targets.” (link)
Study no. 3: “There’s no evidence of the kind of decoupling needed for ecological sustainability. In the absence of robust evidence, the goal of decoupling rests partly on faith.” (link)
So what does it mean? Not much really. Low or no growth is not necessarily a problem. There will be plenty of opportunities. But for some, it will take some getting used to.
The Great Reset, whatever that means…
We end with a smile, with this interesting and hilarious article about how a new war to control the meaning “The Great Reset” is now raging.
On the Internet, the “The Great Reset” is a conspiracy theory that blends together some legitimate critiques with anti-vaccination fantasies and coronavirus denialism.
But it’s also the latest concept by the World Economic Forum. Back in June, the concept, the seminar, and the book by WEF founder Klaus Schwab was launched. All under the name… The Great Reset.
Announcing the whole thing was Prince Charles who stated that the pandemic is a chance to reset the global economy. What Prince Charles should have said was: “The Great Reset, whatever that means…”
That’s it for now. Have a great week!
Best regards, Sasja