With 2020 coming to a close, we at Manifest took a look back at the reports, papers, and articles on climate change that had the biggest impact on us. Despite the enormous challenges presented by COVID-19, the world made important steps this year towards accelerating the transition to a low-carbon economy. Whether it’s better disclosure of climate risk, legislating climate commitments, or mobilizing capital towards low-carbon technologies, the momentum is undeniable.
We asked our consultants to share which climate reads stood out to them at the end of 2020. Some of them you may be familiar with, others you may be seeing for the first time. All of them provide a different perspective on the various ways we can support business, government, and civil society in moving towards a climate-positive future.
2020 was a challenging year but we remain hopeful–indeed, more hopeful than we were this time last year. We look forward to keeping the climate momentum going in 2021!
– The Manifest team
Putting Climate Change Risk on the Boardroom Table
Author: Hansell LLP
Recommended by: Laura Zizzo, Co-founder and CEO
Why recommend it?
“My recommended climate read for 2020 is the in-depth legal analysis of directors’ duties in a corporate governance context by Hansell LLP. Commissioned by the Canadian Climate Law Initiative, it states that directors “may not demur to management or simply wait for management to identify and bring the issue forward. Rather, they must put climate change on the board agenda as more than a discussion point or an education session.” This opinion both (a) acknowledges climate as the strategic issue it is for corporations and (b) clearly states that it is squarely within the directors’ duty to address climate-change risk. It is supporting the growing expectation that investors should be able to understand how directors are guiding companies toward a more resilient future.
“This analysis should clarify any doubt that climate considerations are core to a director’s duty, and that boards have an obligation to both increase their own competency and ask pointed questions of management related to climate-risk and opportunity.”
Mainstreaming the Transition to a Net-Zero Economy
Author: Group of Thirty
Recommended by: Alisa Kinkaid, Senior Advisor
Why recommend it?
“It is exciting to see an acceleration of corporate and government commitments to achieving net zero, but we know that delivering on these promises will require wide-scale effort and collaboration. This report by the Group of Thirty describes the pathways we need to follow to get to net zero, while boosting long-term financial returns at the same time. It explains how government policies and global cooperation can provide critical incentives, and how the financial sector can navigate the transition to a low-carbon economy. There’s a lot of detail in this report but it’s also very accessible, using clear explanations, graphics and case studies.”
The Global GHG Accounting and Reporting Standard for the Financial Industry
Author: Partnership for Carbon Accounting Financials
Recommended by: Joy Williams, Senior Advisor
Why recommend it?
“The PCAF (Partnership for Carbon Accounting Financials) was founded in 2015 and didn’t really get a lot of press in North America until recently. PCAF has quietly worked on establishing standards to calculate emissions in portfolios that any financial institution can use. With the release of their global standard in November of 2020, it is poised to become the industry’s ‘go to’ for calculating emissions in six asset classes. I think that this has the potential to be the standard that is used for consistency across financial organizations. It will render the argument ‘there is no calculation for emissions’ moot and help spur real action.”
Managing Climate Risk in the US Financial system
Author: Climate-Related Market Risk Subcommittee, Market Risk Advisory Committee of the U.S. Commodity Futures Trading Commission
Recommended by: Jeff Horlor, Advisor
Why recommend it?
“With the U.S. lagging behind their global peers on enabling sustainable finance, this report represents the first-ever climate risk report commissioned by a US financial regulator. The consensus-driven report, put together by representatives from banks, investors, insurers, energy companies, academics, and NGOs, put forward 53 recommendations, with the group identifying a price on carbon emissions as the most important initial step to mitigating climate risk in financial markets. With a change in administration taking place, I’d expect to see this report used as a key resource for financial regulators across the US in 2021.”
The Green Swan: Central banking and financial stability in the age of climate change
Author: Bank of International Settlements
Recommended by: Kevin Quinlan, Senior Advisor
Why recommend it?
“This paper came out in early 2020 and makes a clear case for why climate change is within the mandate of financial stability for central banks. Climate isn’t a standalone risk, it’s systemic–and the use of traditional backwards looking metrics won’t help regulators assess risk going forward. Throughout 2020, the Green Swan paper was cited by everyone from the Financial Stability Board to the Superintendent of the NY State Department of Financial Services to the Commodity Futures Trading Commission.”
State of Climate Action: Assessing Progress Towards 2030 and 2050
Author: World Resource Institute
Recommended by: Rinali Roy, Senior Advisor
Why recommend it?
“I highly recommend this report because it provides the reader with an in-depth analysis of global momentum towards the Paris Agreement targets and what needs to change going forward. The report also offers concise, easy to understand snapshots of collective (global and country-level) progress made across six key sectors (power, buildings, industry, transport, forestry, and agriculture) against the targets outlined toward 2030 and 2050. 21 benchmark indicators were used to identify and assess if these sectors are moving in the right direction or if they are falling behind. The statistics provided in this report are strong drivers to start conversations around climate change and/or design programs to enhance climate action.”
Flying Blind: What Do Investors Really Know About Climate Change Risks in the U.S. Equity and Municipal Debt Markets?
Author: Brookings Institute
Recommended by: Katie Blum, Advisor
Why recommend it?
“Issued by the Brookings Institute, this research report is a top read of 2020. What makes this report unique is how it explores the misalignment of financial incentives and climate-related action as government programs shift the responsibility for mitigating losses away from private companies through natural disaster bailouts and insurance programs.
“The report offers recommendations to improve physical risk management and disclosure by way of further collaboration with climate risk modellers, industry-wide best practice exploration, and a shift in responsibility for mitigating losses to private companies.”
A Healthy Environment and a Healthy Economy
Author: Ministry of Environment and Climate Change, Government of Canada
Recommended by: Julie Tartt, Senior Advisor
Why recommend it?
“Better late than never! On December 11, almost five years to the day after the Paris Agreement was reached in 2015, the Canadian Government released its Climate Plan A Healthy Environment and a Healthy Economy. This document is an exceptionally important climate read for 2020 because it outlines how Canada intends to achieve and exceed its 2030 climate target.
“Of particular interest is the Modelling and Analysis of a Healthy Environment and a Healthy Economy annex. This document describes the projected emissions reductions and economic impacts associated with the various components of the Climate Plan. The annex demonstrates that the combined effects of carbon pricing, complementary sectoral policies, the clean fuel standard, and nature-based solutions add up to the reductions needed to exceed our 2030 target.”
Taskforce on Scaling Voluntary Carbon Markets: Consultation Document
Author: Taskforce on Scaling Voluntary Carbon Markets
Recommended by: Peter van Dijk
Why recommend it?
“This year, Mark Carney, the former Governor of the Bank of Canada and Bank of England, launched the Taskforce on Scaling Voluntary Carbon Markets. It’s a private sector-led initiative whose goal is to “scale an effective, efficient and functioning voluntary carbon market to help meet the goals of the Paris Climate Agreement.” Voluntary carbon markets (VCMs) help companies supplement their emissions-reduction efforts and finance climate action, and can play an increasingly important role in limiting global warming as companies are setting more ambitious commitments to reduce global greenhouse gas (GHG) emissions.
“The Taskforce recently published a consultation report aiming to create a blueprint for solutions that could help scale VCMs, and is set to issue its final report in January 2021.”
