Shaken Not Burned

Highlighting changemakers and solutions

What we’ve been reading this week

• Should companies be acting on climate and sustainability or not?

  Confusion about how to respond to sustainability challenges continues to accelerate. The latest survey from Bain & Co reports that consumers are increasingly concerned about climate change and sustainability, with 60% of respondents saying their worries have risen in the last two years. Yet at the same time the report warns that CEOs are deprioritising action on sustainability.

• Draghi calls for overhaul of EU industrial strategy, but is it in the right direction?

  Mario Draghi has published his review of the EU’s competitiveness and called for €800 billion in investment, alongside significant market reform, to redefine the bloc’s approach to growth. He may have been inspired by supportive policies in the US including the Inflation Reduction Act, National AI Initiative Act, Infrastructure Jobs and Investment Act, focusing on innovation, infrastructure, workforce development, and trade relations. Worryingly, Draghi warns that the "EU’s sustainability reporting and due diligence framework is a major source of regulatory burden.” The report seems focused on the idea that deregulation is needed above anything else, and can be seen as part of a wider backlash to ESG standards. The criticism doesn’t really hold up, though – not only is it hard to ascertain costs for a regulation (CSRD) that has only just launched, but also the regulation on due diligence (CSSD) isn’t even in force yet. Once again the short term focus on ‘growth’ and financial returns without any concern for the impacts of negative externalities risks missing the point. Failing to understand the long-term implications of operational actions cannot be a good thing.

• Google buys Holocene direct air capture credits for $100

  Google has announced a deal with Holocene to buy 100,000 direct air capture credits upfront. Delivery will be in the 2030s, so the $100 is not a price for today. Nonetheless, it’s a significant leap forward in pricing for technological DAC of CO2, which today costs between $600-$1000. Even the US government currently offers a tax credit of $180 for a carbon removal credit. The Google-Holocene deal is an equally significant expectation of scale, given that no developer can currently supply more than a couple of thousand credits a year.

• Half of Australia’s tourist sites face climate risk

  Climate risk is an increasingly important part of the ESG debate, but there remains a mainstream assumption that it will affect ‘somewhere else’ even though extreme weather is hitting everywhere. Zurich Financial Services Australia and Mandala Partners have launched the Zurich-Mandala index, which assesses climate risk to tourism and reports that half of Australia’s tourism sites are at risk. The tourism industry plays an important role in the nation’s economy, contributing more than $170 billion in annual expenditure and over 620,000 jobs. Around 30% (up to 176,000) of these jobs could be jeopardised – 65% of which are outside capital cities – in the event of a disaster scenario similar to that experienced following the bushfires of 2019-20.

  • ICC to consider ecocide a crime

  The International Criminal Court is to consider including ecocide, or the large scale systematic destruction of nature, as a crime. To date, there are only four core ‘international crimes’ outlined in the Rome Statute, the treaty that established the ICC in 2002. These are genocide,: crimes against humanity, war crimes and crimes of aggression. If the ICC were to include ecocide as the fifth international crime, it could have a range of outcomes, from reinforcing environment laws, deterrence on destruction of nature, and legal accountability – leading to new understandings of business risk and therefore investor and insurer behaviour.