COP washing

I RECEIVED an email alert last week: ‘Companies losing focus on climate action, survey finds’ went the headline.

It went on to explain…‘corporate progress on sustainability initiatives, and on actions to address climate change in particular, is stalling amid economic and geopolitical turmoil, as the pace of emissions reductions slows... according to a new survey of chief sustainability officers released by global professional services firm... ’

They could have saved themselves the cost of the survey just by reading the Guernsey Press. I went over all these issues a couple of months back in this column. You’ve got to hand it to the big four’s management consultancy groups, not content with charging the earth for pointing out the obvious to clients, it seems the same approach is wired into their marketing departments. Just a caveat. Nothing personal, but the marketing of the big management consultancy groups never lacks for chutzpah.

But back to progress on sustainability. Here’s some figures to ponder. In 2019, the European Commission estimated that Europe was 260bn. Euros short of annual green investment to meet climate change targets. This September, Goldman Sachs reported that the cumulative flows into Article 8 and 9 funds from 2019 to 2023 was some $1.12 trillion – around three times more than all other funds combined. Yet, this summer, that is in mid-2023, the European Commission said that it estimated the EU was now 700bn. Euros short of annual green investment to meet climate change targets. Square that circle. It’s probable that the levels of investment required has genuinely increased. But isn’t it also probable that the trillion-plus Euros flowing into article 8 and 9 funds isn’t funding sustainable investments, but repackaged products?

I posted that paragraph verbatim on social media last week. Comments were pretty much unanimous that compliance with the EU’s sustainable finance regulations has added up to little more than large-scale greenwashing. And it’s indicative of the wider societal malaise that particularly afflicts sustainable finance where the objective is to be seen to be doing good rather than doing good. It’s a not-so-subtle difference. If people put just half as much effort into trying to secure funding of climate mitigation as they do into using ESG marketing to promote themselves, we’d be in a far better place.

COP28 starts today and is being touted as a ‘milestone moment’, admittedly by the COP28 Secretariat, which claims to be undertaking the first global stock-take and comprehensive assessment of progress on climate action since adopting the Paris Agreement.

My view is that if we’re to conduct a stock-take, let’s be honest and stop the let’s pretend. And let’s start with the location of COP28 itself. Another COP in the Middle East after the pointlessness of Sharm el Sheik is just exasperating. Never mind sports washing, this is COP washing – greenwashing on an industrial scale. BBC reports on Monday that the UAE planned to use its role as the host of UN climate talks as an opportunity to strike oil and gas deals with 15 nations was saddening. It undermines trust and confidence in the COP process.

A while back a good friend of mine asked for my advice on what they should be doing about COP28. My short, immediate answer was ‘Don’t go’. Not if you’re a believer in action on climate change mitigation. Take a stand. Stay at home. Buy some carbon credits with the saved airfare.

My view is that right now it’s difficult enough trying to keep public support for action on climate change together what with all the economic strife and wars without condoning a COP process that undermines its own legitimacy and that of climate action.

And with 2022 average global temperatures a degree higher than pre-industrial times, it’s a legitimacy that we can do without undermining.

But the circus is in town, it’s too important to be seen to be doing good, and flights and hotels booked. People are off. Our own island delegation, with representatives from government, regulator and promotional agency is impressive, given we’ve yet to legislate for any COP21 targets. Guernsey Finance announced with some bravado that it’s sending four members of staff, saying: ‘It’s a wonderful opportunity to go out and share our journey.’

That ‘sharing of our journey’ obviously won’t include policy tips on how we’ve been achieving our nationally determined contribution to reducing global climate emissions, since we haven’t set any. Seems the UAE isn’t the only jurisdiction prone to a bit of COP washing. It’s marketing chutzpah management consultants would be proud of.

Mind, it’s probably a good job we’ve not legislated yet for any net zero commitments as I’m not sure we’ve got any idea on how we might achieve or pay for them. It’s the interim 2030 targets – reducing emissions to 57% of 1990 levels – that are part of the package that would cause the biggest headache. They are presently not much more than five years away, yet totally out of our reach.

The only development of significance that has reduced our carbon emissions in the last 25 years was the building of the interconnector with France. And let’s be honest, the reduced emissions was a happy by-product. Admittedly a large happy by-product.

Hitting 2030 targets would require us to reduce our carbon emissions by another third from where they are now and that’s going to cost. To give some idea of the scale, back in 2019, speaking at the YouthAction4ClimateGSY at the Grammar School, using estimates of global costs as a reference, I suggested the level of investment by 2030 needed to meet climate targets was in the region of £750m. Last time I checked I don’t think we’re burning through anything like the required sum to meet that kind of level of investment. Let’s also be honest, while doing our own COP28 ‘mini stock-take’ on progress, I suspect the actual figure is closer to zero.

I’ve recently been doing some work on looking at raising capital to fund Guernsey’s necessary climate action. As part of that I’ve done a bit of running the slide rule over some hypotheticals to sense-check the scale of costs. Back-of-the-fag-packet stuff, but I’d back my fag packet against one of those £200k consultants reports. And as Warren Buffet says, it’s better to be approximately right, than exactly wrong.

So how about getting rid of all current on-island oil-fired domestic and commercial heating? That removes around 100Ktes of carbon emissions emissions and would get us pretty close to, but still materially short of, 2030 targets. We’d be looking at replacing the heating of 12,000-15,000 properties, doubling electricity supply capacity and doing more than a little bit of strengthening of grid infrastructure. A few minor developments. And costing north of half a billion. And that’s giving little thought to the cost of practicalities. But it reconciles with previous estimates of scale.

Getting to net zero is going to cost. Sticking our head in the sand pretending it’s not, isn’t a viable long-term strategy. We’ve got to start to try to work out how to pay for it. As well as figuring out how to do it.

If you read my musings on this topic, you’ll appreciate I’m a pragmatist. I wouldn’t suggest trying to meet the 2030 interim targets just for their own sake. They’re not an end in themselves but they are there to be a signpost on the journey to net zero. There’s no point making economically mad decisions just to meet an artificial interim target. But while I may be a pragmatist, I’m a believer that we need to do something. Do nothing, and we’ll end up an international pariah a second time.

Footnote: This is, I think, the third month on the bounce that I’ve wittered on about climate change in part or in full in this column. I make no apologies for that. Why not? It’s COP28, but in any event, my continuing to try and maintain public interest in climate change and climate action as an issue was a promise I gave to the youth representatives at the My Guernsey Future event last month at Government House. And I figured readers would welcome a break from columnists bemoaning the state of local politics.