Welcome to Shaken Not Burned

Glossary

Being Paris-aligned means establishing a corporate or investing strategy that will help achieve the goals set by the Paris Agreement, namely to limit the temperature increase to 2°C above pre-industrial levels with an ambition of 1.5°C.

Busting a myth

"Nothing individuals can do personally can affect climate change, it's all in the hands of the big players"

While it's important to keep those in power accountable, we can all contribute to the sustainable transition with the choices we make in our daily lives. We can drive demand for sustainable products with our purchasing choices - many industries are already seeing a shift - and vote for politicians aligned with our values. Our personal finances can also play a crucial role: if we all moved our investments and pensions into sustainability-oriented funds, it would create a seismic shift in the financial industry. Other small actions we can take include recycling, taking public transport, signing petitions and simply talking to our family, friends and colleagues to spread the word about sustainability. "

What we’ve been reading this week

• The European Council and Parliament have reached an agreement on the forthcoming regulation of ESG ratings providers. Lack of consistency in ratings approaches had led to confusion in the market. Agreement on regulation is the first step towards transparency and an important step in standardising approaches to ESG. It’s a sign of market maturity, and reassurance for investors that ESG claims are transparent and robust.

• The Science Based Targets initiative has gained charitable status as it reports doubling the number of companies with targets validated in 2023, to over 4,000. Normalising the need to act in line with the science is important, and while there are questions about when and how companies will shift from targets to action the scaling up of the initiative only increases pressure on the market to be open and honest about what they’re doing.

• Barclays has long been under attack for its financing of fossil fuels. The bank has finally revised its climate strategy and committed to ending direct finance for new oil and gas. While that means the bank will continue to finance the oil and gas sector for the moment, clients such as Shell and ExxonMobil will be required to submit credible decarbonisation plans by 2025, or be booted from its portfolio. Whether this is an example of the power of protest, a genuine change of heart or another example of greenwash, the announcement sends a message that financed emissions (and the role of private investment in climate action) will be centre stage in 2024.

• The European Council and Parliament have agreed a provisional deal on the forthcoming Net-Zero Industry Act. The scale of the Act doesn’t compete with US or Chinese support for green technologies, and the inclusion of support for technologies that are not commercial has worried some. Yet the EU must invest in technologies for today and tomorrow – it’s just vital that the focus remains on action now and not simply on what might be possible for the future. And if concerns about trade and industry leadership make governments support net zero technologies and the transition, that’s a plus in anyone’s book.

• CDP has published its analysis of corporate disclosures made in 2023, including its annual ‘A lists’ of companies leading on transparency in terms of climate, forests and water. While there’s been a steady rise both in the number of disclosures provided, still only ten have been awarded the coveted ‘triple A’ rating. It’s worrying that a KPMG survey shows half of companies using spreadsheets to manage ESG data as that begs the question of how robust the data actually is, but what’s important here is to recognise that a company can have strong disclosures, but still be operating against the needs of the climate and nature. Disclosure is the first step but we need to accelerate action on those disclosures.