Shaken Not Burned

Highlighting changemakers and solutions

What we’ve been reading this week

• Little hope to keep global warming below 1.5°C

The latest Emissions Gap report suggests that we are unlikely to keep average temperatures under 1.5°C. Under the carbon budget and with current emissions pathways, we have roughly four years to cut emissions sufficiently to meet 1.5°C and 17 years to reach 2°C. The UN Environment Programme (UNEP) warns there is a “massive gap between rhetoric and reality” that must be closed by new climate pledges being drafted under the Paris Agreement. Greenhouse gas emissions reached record levels in 2023, up 1.3% from 2022, and are rising notably faster than the average over the past decade. While the global trajectory is far more encouraging than it was 20 years ago, there is still insufficient action on the ground and it appears unlikely that we’ll manage to hit 2°C, either. Yet, effective action is now more affordable than ever. Zeke Hausfather at Carbon Brief points out that global emissions could be cut by 54% by 2030 and 72% by 2035 at a cost of less than $200/ tonne of CO2. 

• Banks back off net zero as the cost of extreme weather worsens

HSBC has joined Morgan Stanley in backing away from its net zero targets. Even though these targets were always going to be a struggle to meet, it’s frightening that the financial system is still focused on short term returns without thinking about the implications of extreme weather and the fact that what we’re seeing today is only the beginning. As analysts suggests Hurricanes Milton and Helene in the US could cost over $50 billion, the floods in Spain (where a month’s worth of rain fell in a few hours) once again are highlighting the human and physical cost of inaction on climate change.

• Finance focuses on nature positive as COP 16 continues

The Taskforce for Nature-related Financial Disclosure (TNFD) has announced that over 500 companies, together representing $6.5 trillion in annual turnover and almost $18 trillion in AUM, have committed to reporting nature risk under their guidelines. Emily McKenzie, technical director at TNFD, said: “Every business has impacts and dependencies on nature. They also face growing physical, transition and systemic risks as the resilience of nature underpinning our economies and societies continues to erode.” Meanwhile, the Science Based Targets Network (SBTN) announced the first companies adopting its science-based targets for nature. This includes luxury group Kering, which has adopted the first science-based targets for freshwater and land, pharmaceutical company GSK and building materials company Holcim, which have adopted science-based targets for freshwater.SBTN’s year-long corporate pilot programme concluded last year, with the majority of participating companies receiving validation for some or all targets. Kering, GSK and Holcim are now the first companies who will move ahead with adopting and publicly disclosing these targets. Let’s hope that companies take their risk management requirements seriously, and focus on implementation rather than simply targets and headlines.

• WWF launches toolkit to tackle environmental crimes

With forests around the world under threat, the WWF has launched its environmental crimes financial toolkit. The idea is to help financial institutions in monitoring the risks related to deforestation and land conversion – and, more broadly, environmental crimes – that could be linked to financial operations. By highlighting red flags and risks associated with different types of environmental and financial crimes, the Toolkit helps financial institutions (FIs) strengthen their screening capacity when reviewing existing clients, onboarding new ones, and assessing sectoral risks.

• NGOs set up nature debt coalition

Six environmental organisations have launched a coalition to scale climate and conservation outcomes through sovereign debt conversions. The world is facing dual crises: rapid biodiversity loss and devastating impacts of climate change, both affecting human wellbeing – but many of the companies most at risk are suffering under high debt burdens, meaning that they can’t pay for conservation. Scaling sovereign debt conversions could be part of the solution and has the potential to unlock up to $100 billion in climate and nature finance, according to estimates by the new coalition. As part of a debt conversion project, a government works with an NGO and other stakeholders to develop a set of ambitious climate and conservation commitments that are paid for through savings that come from refinancing externally held commercial sovereign debt.