Any legislative measures offering regulatory and tax relief to green bonds demand clearer rules on what constitute such assets if gaming is to be avoided. But such measures will also enrich the nascent green industry.
Carney’s comments on climate change inspired a private sector task force to make recommendations on how companies should disclose climate risk and have finally been decided upon. Kate Mackenzie, a climate finance think tanker, explains why they could be a game changer.
Elsewhere on Tuesday, - “The sugar industry paid scientists in the 1960s to play down the link between sugar and heart disease and promote saturated fat as the culprit instead, newly released historical documents show,” - Prop trading, evidence from the crisis. - The newer, hotter, communism. Click through the pic (which is really begging for a caption comp) for more:
Maybe you’re aware that productivity growth has been abysmal in recent years. Maybe you’ve even read Robert Gordon’s new book — or just one of the many summaries and critical reviews — and you worry gravely about what this means for future living standards.
From Kate Mackenzie, former Alphavillain and current climate-finance think-tanker ______________ Warren Buffett’s annual letter last week badly lets down any reader hoping to understand the implications of climate change for the general insurance and reinsurance sector. If Buffett had said climate change impacts are not a problem for ‘his’ insurance companies, because his managers are managing the risks thusly, that would be fine. It’d also be a fascinating read, if it went into some detail — unlikely though, because that would reveal competitive information. Unfortunately he chose to apply it to all of the insurance sector:
Plunging oil prices mean BG Group will take a $500m charge and Shell’s fourth quarter profits are set to fall 40 per cent. Shell plans to shed 10,000 jobs if its deal to buy BG is approved by shareholders this month. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
- Angela Nagle on identity politics and puritanical internet purges
- Nouriel Roubini outlines the 2020 recession risk
- Will Davies on populism, data and experts.
- Robert Kaplan on jobs, oil and credit
- Mithril Capital's Ajay Royan on the next growth frontier
- Banking culture since the crisis
- Weak spots and worries in the global financial system
- The most complicated debt restructuring in history
- Yanis Varoufakis on “radical Europeanism”, erratic Marxism and... Pamela Anderson
- Alphachat on immigration: This time is (mostly) like the others
- Our Bond villain technocracy
- Is the eurozone fixable?
- Could climate change spark the next financial crisis?
- Mehrsa Baradaran on “opportunity zones”
- The math wizard who became a customer loyalty scheme guru
- Alphachat is back! Vol 2.
- Alphachat is back! Vol. 1
- Jim Millstein discusses the financialisation of America
- Alphachat is on hiatus this week
- Benn Steil explains the Marshall Plan
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One of the problems with green energy finance is the nature of the asset. Unlike fossil fuel developments, which spread the capital cost of development and production across the lifespan of the asset, most renewable projects have to be entirely capital funded up front. According to Citi’s Anthony Yuen and Ed Morse, that means the cost of financing is the key determinant in making these projects competitive and viable — an increasingly pressing objective in the context of falling fossil fuel prices, which reduce the competitive position of renewables in the energy complex.
About three months ago, Dr Simon Stringer, a leading scientist in the field of artificial intelligence at the Oxford centre for theoretical neuroscience and AI, fell down some stairs and broke his leg. The convalescence period proved unexpectedly fruitful.
In two weeks time, 195 delegations at COP21 will gather in Paris in an attempt to tackle climate change. The goal of the 2015 UN climate change talks? A deal to keep global warming below 2 degrees Celsius. But it’s unclear exactly what will come out of Paris. Beyond any overarching agreement or policy, attendees would do well to remember the actual people who would be working in the changing energy landscape. With the difficulties of transitioning from a high carbon to low carbon environment, plus the potential disruption of automation and robots, going green is filled with many potential landmines for the workforce. Just last week, BoE chief economist Andy Haldane sounded the alarm about the threat of robot labour to the tune of 15m UK jobs. And the most at-risk occupations from automation — involving administrative, clerical and production tasks — typically are the lowest paid. Plus, moving toward a low carbon economy will likely require trillions of dollars in investments just over the next 15 years. What will happen to employment as the energy sector and governments make moves to go green?
This guest post is from Kate Mackenzie, a former Alphavillian who now works with The Climate Institute in Australia. ________ Anytime a public figure mentions climate change, you can guarantee a fierce response — and, sure enough, it happened again with Mark Carney’s speech on climate risk.
ESG stands for Environment, Social, Governance. And it’s an increasingly big thing in the asset management world. The basic premise is that if you can get the biggest investment managers to collectively commit to ESG-focused principles in their strategies — whether that be through active engagement as shareholders or divestment strategies — capital will eventually be pulled from the type of corporations that routinely undermine or undercut the standards society judges to be important — from pollution and environment, to labour rights and fraud — forcing them to adapt their behaviour. The idea is to send bad corporates to capital-unavailable Coventry.
Climate campaigners have popularised the notion that fossil fuel assets might one day become “stranded” because, if global warming is to stay within the internationally agreed two degree Celsius limit, they can’t realistically be burned. It’s a view that has gained a lot of traction with investment managers leading to growing debates about strategies to de-risk portfolios by way of active engagement at the shareholder level or outright divestment.