37% of the total areas scorched by forest fires in the western United States and southwestern Canada since 1986 can be attributed to emissions traced from the world’s 88 largest fossil fuel producers and cement manufacturers

Praveen

Or should we say... climate maladaptation?

Praveen Gupta, former CEO and illuminem Thought Leader, interviews Dr. Hailong Wang, an earth scientist at the Pacific Northwest National Laboratory

Praveen Gupta interviews Dr. Hailong Wang, a scientist at the forefront of some fundamental aspects of climate change.
<h2>About Dr. Hailong Wang</h2>
Dr. Hailong Wang is an Earth Scientist and Team Leader at Pacific Northwest National Laboratory (PNNL). Wang&nbsp;has wide-ranging research expertise in atmospheric aerosols, cloud physics and dynamics, aerosol-cloud-precipitation-climate interactions, light-absorbing impurities in snowpack and sea ice, radiative feedback, and high-latitude climate change and its associated impacts.&nbsp;His research has generated important scientific discoveries and advanced fundamental understanding of the role of aerosols in various critical components of Earth&rsquo;s climate system.&nbsp;
Wang serves as an editor for the <a href="https://www.atmospheric-chemistry-and-physics.net/editorial_board.html" target="_self">Atmospheric Chemistry and Physics</a> journal, is a member of the&nbsp;<a href="https://na01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fusclivar.org%2Fpanels%2Fpsmi&amp;data=05%7C01%7C%7C8bdae8d22ecd432c490808dba58c400d%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C638285794049690702%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=ipfgV%2Bnl5%2F7lkXVlfWMXhTWW9baAdYtaH0LW%2FZN2ffQ%3D&amp;reserved=0">US CLIVAR Process Study and Model Improvement&nbsp;Panel (PSMIP)</a>, and is a co-lead of the <a href="https://na01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.iarpccollaborations.org%2Fmembers%2Fpeople%2Fteams%2Fprofile%2FArctic-Systems-Interactions%23scope&amp;data=05%7C01%7C%7C8bdae8d22ecd432c490808dba58c400d%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C638285794049690702%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=%2FzA%2BHeFjv3AAeBxN%2BDOgF7ljTOJxVAiZ9Syjbvd8FRg%3D&amp;reserved=0">IARPC Arctic Systems Interactions Priority Area collaboration team</a>.&nbsp; &nbsp;
Praveen Gupta: Does arctic warming contribute to extreme wildfires in the western US?
Hailong Wang:&nbsp;While the relationship between Arctic warming and western US wildfires is not direct, the warming of the Arctic can influence atmospheric circulation patterns and conditions that increase the likelihood and severity of wildfires in the western US. In a recent study (Zou et al., 2021, Nature Communication) we show that increasing large wildfires during autumn over the western U.S. are fueled by more fire-favorable weather associated with declines in Arctic sea ice during preceding months on both interannual and interdecadal time scales.
<blockquote>
&ldquo;Increasing large wildfires during autumn over the western U.S. are fueled by more fire-favorable weather associated with declines in Arctic sea ice during preceding months on both interannual and interdecadal time scales."
</blockquote>
Our analysis based on observations and climate model sensitivity experiments demonstrates and explains the Arctic-driven teleconnection through regional circulation changes with the poleward-shifted polar jet stream and enhanced fire-favorable surface weather conditions over the western US.&nbsp;
PG: What is the impact of intruding atmospheric rivers into the Arctic?
HW:&nbsp;Atmospheric rivers are long, narrow corridors of moist and relatively warm air that transport large amounts of moisture from lower latitudes to higher latitudes. When these atmospheric rivers extend into the Arctic, they can bring about various changes and consequences. Intruding atmospheric rivers can introduce warmer air into the Arctic region. Warmer air brought by atmospheric rivers can accelerate the melting of sea ice by promoting direct melting and reducing ice growth during the winter months. Atmospheric rivers can bring increased moisture to the Arctic, potentially leading to enhanced precipitation and snowfall. While this might contribute to increased snow accumulation in some regions, it can also lead to more rapid melting if warmer temperatures follow, particularly during the spring and summer.
<blockquote>
&ldquo;Changes in the Arctic can have cascading effects on global climate and weather patterns, highlighting the interconnectedness of the Earth&rsquo;s climate system."
</blockquote>
The changes in temperature, precipitation, and sea ice due to atmospheric rivers can have profound effects on Arctic ecosystems. These changes can impact the distribution and behavior of plant and animal species that rely on specific environmental conditions. Additionally, changes in the Arctic can have cascading effects on global climate and weather patterns, highlighting the interconnectedness of the Earth&rsquo;s climate system.
PG: How do black carbon (BC) and dust warm the Earth?
HW:&nbsp;Both black carbon (BC) and dust are types of aerosols that have complex effects on the Earth&rsquo;s climate system, including the potential to contribute to climate warming. BC particles absorb sunlight strongly in the visible and near-infrared wavelengths. When these BC and dust particles are suspended in the atmosphere, they absorb sunlight and convert it into heat. This heats up the surrounding air and, in some cases, even the underlying surface. BC and dust particles can also land on snow and ice surfaces, reducing their reflectivity (albedo). Darker surfaces absorb more sunlight and melt faster, which can contribute to the melting of glaciers, ice sheets, and snow cover.
PG: What are the implications for the Third Pole?
HW:&nbsp;Changes are happening over the third pole; it contains the largest area of glaciers and ice outside the polar regions. This region is highly sensitive to climate change, and its changes have significant implications for both local and global environments. The third pole is also experiencing warming at a rate higher than the global average, causing the retreat of glaciers and reductions in snow cover. This also impacts the availability of freshwater resources through melting runoff and river flows, especially during the dry seasons. The warming also increases the speed of permafrost to thaw, leading to changes in soil stability and release of greenhouse gases.
<blockquote>
&ldquo;The third pole is also experiencing warming at a rate higher than the global average, causing the retreat of glaciers and reductions in snow cover."
</blockquote>
Precipitation patterns including timing and intensity of rainfall and snowfall are also changing, which may cause floods and landslides. Changes in glacier melt and snowmelt also impact regional rivers, agriculture and hydropower generation. These changes eventually have complex effects on the Third Pole region&rsquo;s environment, societies, and economies as well as global sea level rise and communities worldwide.
PG: Recent events across the globe point towards climate modelling deficiencies?
HW:&nbsp;Climate models are never perfect. They are designed to study climate and climate changes in response to changes in greenhouse gases, solar radiation, land cover, and aerosols, rather than the prediction of weather events, by representing the interactions of various components of the earth&rsquo;s climate system.
<blockquote>
&ldquo;Constraints in computing resources can still limit the level of detail and complexity that can be included in climate models."
</blockquote>
Climate models require immense computational power. Constraints in computing resources can still limit the level of detail and complexity that can be included in models. Given these challenges, climate scientists continuously work to improve models by refining processes, incorporating new knowledge, and comparing model outputs with observations. Uncertainties and biases in models are acknowledged, and ensemble approaches (using multiple models) are often employed to provide a range of possible future climate scenarios.
PG: What needs to be done to prevent irreversible outcomes?
HW:&nbsp;This is beyond a scientific question. Preventing irreversible outcomes or tipping points requires urgent and comprehensive action on multiple fronts. The severity of the situation calls for global cooperation, policy changes, technological advancements, climate research, and societal shifts. Here are some examples of key actions:
<ul>
<li>Reducing greenhouse gas emissions.</li>
<li>Promoting sustainable land use and agriculture (with less emissions).</li>
<li>Protecting forests (acting as carbon sinks).</li>
<li>Adopting climate-resilient infrastructure and urban planning that can withstand climate impacts.</li>
<li>Conserving ecosystems as natural carbon sinks.</li>
<li>Strengthening international collaboration (such as the Paris Agreement).</li>
<li>Researching and developing innovative climate solutions.</li>
<li>Increasing public awareness and understanding of climate change and its impacts.</li>
<li>Considering carbon pricing mechanisms and regulations that limit emissions.</li>
<li>Building resilience adaptation measures that help communities cope with climate change impacts.</li>
</ul>
<blockquote>
&ldquo;The window of opportunity to take meaningful action is narrowing, emphasizing the importance of immediate and sustained efforts."
</blockquote>
Preventing irreversible climate change requires a collective effort at all levels &ndash; from individual actions to international cooperation. Governments, businesses, communities, and individuals all have roles to play in shaping a sustainable and resilient future. The window of opportunity to take meaningful action is narrowing, emphasizing the importance of immediate and sustained efforts.
PG: Many thanks for your brilliant insights into some very intricate challenges. My best wishes for your ongoing efforts towards preserving our planet&rsquo;s well-being.
<div class="css-16rcf8n">
<div>
<div class="css-16rcf8n">
<div>
This article is also published on the <a href="https://thediversityblog.com/2023/08/27/in-conversation-with-dr-hailong-wang-preventing-irreversible-outcomes-or-tipping-points-requires-urgent-and-comprehensive-action-on-multiple-fronts/" target="_blank" rel="noopener">author's blog</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
</div>
</div>
</div>
</div>

An interview with Dr. Hailong Wang: “Preventing irreversible outcomes or tipping points requires urgent and comprehensive action on multiple fronts”

Praveen Gupta, former CEO and illuminem Thought Leader, interviews Richard Heinberg, Senior Fellow of Post Carbon Institute and author of 14 books

Richard

<h2>Introduction</h2>
In exploring Polycrisis, readers may recall Praveen alludes to &ldquo;The Great Unravelling: Navigating the Polycrisis of Environmental and Social breakdown&rdquo; by Richard Heinberg and Asher Miller of the Post Carbon Institute:<a href="https://illuminem.com/illuminemvoices/climate-adaptation-step-one-insurers-to-shed-silos-and-linearity" target="_blank" rel="noopener"> Climate adaptation step one: insurers to shed silos &amp; linearity!</a>
<blockquote>
&ldquo;Because we have adopted our collective behavior and assumptions to economic opportunities opened by vast amounts of energy unleashed via fossil fuels, we have adopted unrealistic expectations for the levels of human population and consumption to be sustained over the long term...&rdquo;
</blockquote>
Here Praveen talks to Richard and picks some candid thoughts and a tough prescription.
Richard Heinberg, Senior Fellow of Post Carbon Institute, is regarded as one of the world&rsquo;s foremost advocates for shifting away from our current reliance on fossil fuels. He is the author of fourteen books, including some of the seminal works on society&rsquo;s current energy and environmental sustainability crisis.
<h2>The interview</h2>
Praveen Gupta: Why is it important to find the agency and means to navigate the unraveling of environmental and social systems?
Richard Heinberg:&nbsp;If we don&rsquo;t squarely face the limits to our agency, we will hallucinate unreal solutions to our proliferating problems. In my view, technologies to capture carbon from the atmosphere are an example of such a hallucination. Same with fusion power. Actually solving problems often requires hard work and the sacrifice of some previous benefit. We should be spending more time negotiating the hard work and sacrifices that lie ahead, and less time hallucinating.
PG: How do you foresee society and nature evolving?
RH:&nbsp;It is impossible to pin down an exact scenario because the world (human and non-human) is a chaotic complex system, and therefore difficult to predict. However, there are constraints on how society and nature will evolve over the next few decades &ndash; including climate change, resource depletion, and increasing loads of toxic chemicals in the environment. These constraints will make continued economic growth more difficult to achieve with each passing year. Since global society uses economic growth to avert financial collapse, the end of growth will have profound consequences.
<blockquote>
In my view, technologies to capture carbon from the atmosphere are an example of such a hallucination.
</blockquote>
The most likely trajectory is toward chaotic and episodic global economic contraction, a peak and decline in human population, social distress, further political polarization, and geopolitical conflict. Meanwhile, natural systems will be severely impacted, further reducing human carrying capacity. The worst-case scenario would result from a series of self-reinforcing feedbacks in which environmental collapse and social collapse would feed on each other, perhaps triggering nuclear war. However, that worst case can still be avoided.
PG:&nbsp;&ldquo;Fortifying resilience at the community level will be especially important&rdquo;?
RH:&nbsp;When disasters happen, the first responders are members of the affected community (i.e., neighbors). Soon, help arrives from outside. In the future, however, &ldquo;outside&rdquo; will increasingly be dealing with its own disasters. So, more of a burden for disaster response will fall on local communities. Also, supply chains and transport systems will likely be in at least a partial state of disarray. The good news is that building community resilience increases everyone&rsquo;s quality of life. Having good neighbors and lots of friends makes life more enjoyable as well as more secure.
<blockquote>
We will need lots of cooperation to survive the challenges ahead, and extreme inequality destroys the incentive to cooperate.
</blockquote>
PG: Why must rationing scarce resources be prioritised?
RH:&nbsp;Resources will inevitably become scarcer in coming decades &ndash; including both renewable resources like timber and fish, and non-renewables like minerals and metals. If we don&rsquo;t learn to ration (i.e., fairly distribute) these scarce resources, the world will fall into deadly competition. Reducing inequality is also vital: when inequality increases (as it has been doing in recent decades), the social fabric becomes strained. People who are on the losing end say to themselves, &ldquo;Why should I continue to support a society that treats me this way?&rdquo; We will need lots of cooperation to survive the challenges ahead, and extreme inequality destroys the incentive to cooperate.
<blockquote>
Richard&rsquo;s latest book traces how humans have come to overpower the earth&rsquo;s natural systems and oppress one another&hellip;with catastrophic implications.
</blockquote>
PG: How should the money-pipeline be relaid to ensure resilience?
RH:&nbsp;The entire monetary-financial system will have to be rethought. I offered some suggestions along those lines in my book <a href="https://richardheinberg.com/bookshelf/the-end-of-growth-book">The End of Growth</a>, including more restrictions on the charging of interest on loans. Charging interest works (more or less) in a growing economy; indeed, it adds fuel to the fire, helping economies grow at unsustainable rates. But, in an economy that&rsquo;s shrinking, charging interest results in steep and growing economic inequality and widespread deprivation and suffering. That&rsquo;s why traditional cultures often banned it (they called it usury). In general, we will need to meet human needs in more direct, cooperative ways that don&rsquo;t involve money.
<blockquote>
In an economy that&rsquo;s shrinking, charging interest results in steep and growing economic inequality and widespread deprivation and suffering.
</blockquote>
PG: Is climate fiction (cli-fi) inspiring enough?
RH:&nbsp;I see climate fiction as not just a source of inspiration, but as a means for using our imagination and emotions to process what&rsquo;s happening to us. Without some opportunity for processing, the natural human response is simply denial &ndash; and we see plenty of that. So far, denial is winning, but for young people especially, cli-fi is increasingly playing a useful role in enabling them to cope.
PG: Many thanks for your candid assessment and tough prescriptions, Richard. Hoping this will serve as a wake-up call.
This article is also published on the <a href="https://thediversityblog.com/2023/08/17/my-interview-with-richard-heinberg-we-should-be-spending-more-time-negotiating-the-hard-work-and-sacrifices-that-lie-ahead-and-less-time-hallucinating/" target="_blank" rel="noopener">author's blog</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

An interview with Richard Heinberg: “We should be spending more time negotiating the hard work and sacrifices that lie ahead, and less time hallucinating”.

Praveen Gupta, former CEO and illuminem Thought Leader, interviews Jérôme Tagger, CEO of Preventable Surprises

Jérôme

<a href="https://preventablesurprises.com/" data-saferedirecturl="https://www.google.com/url?q=https://preventablesurprises.com/&amp;source=gmail&amp;ust=1691485872315000&amp;usg=AOvVaw1UUtdI1qmziXJzNaoHFn72">Preventable Surprises</a>&nbsp;recently released its latest discussion&nbsp;note: The Great Wake-Up - why investors must act on women&rsquo;s health. The note analyses the current state of play on investor and corporate action on women&rsquo;s health. It proposes a series of steps and actions investors can take to give women&rsquo;s health a suitable and effective place among their ESG practices.
With notable exceptions, the gender lens is absent from health frameworks and discussions, and the health lens is absent from gender frameworks or discussions. Neither is women&rsquo;s health to be found in ESG approaches.
These issues are particularly relevant for investors who have embraced stewardship, believes Preventable Surprises. Jerome Tagger shares some candid insights with&nbsp;Praveen&nbsp;Gupta. This bold exploration has a universal relevance - as the world we live in braces for multiple #polycrises.
<h2>About Jerome</h2>
J&eacute;r&ocirc;me Tagger explores the intersection of financial markets and society. He joined Preventable Surprises as CEO in 2020 after 15 years of field building in responsible finance. He was a Director at the Global Impact Investing Network, the founding COO of the UN-backed Principles for Responsible Investment (PRI), Head of Research at Eurosif and Chief Revenue Officer at ImpactAlpha. He most recently advised UNEP FI&rsquo;s Positive Impact Initiative and the World Benchmarking Alliance.&nbsp;
<h2>The interview</h2>
Praveen Gupta: What steps and actions can investors take to give women&rsquo;s health a suitable and effective place among their ESG practices?&nbsp;
Jerome Tagger:&nbsp;We started exploring this topic after the US Supreme Court changed the Federal rules of the game on abortion. It was a momentous event for people and for business, and we wanted to understand the ramifications of this decision. This opened a much larger discussion about health and women&rsquo;s health specifically &ndash; a set of questions with significant social and economic ramifications. We observed that women&rsquo;s health as a topic is largely absent from the ESG and corporate responsibility conversations and reporting frameworks.
From there, our guide outlines concrete steps investors can take learning &ndash; for its own sake but also to socialize often taboo questions on women&rsquo;s health and reproductive health, and to access lessons learned from investors on other issues. That, by the way, is where we had to start ourselves. Setting priorities &ndash; in terms of policy and portfolio focus. Acting on ESG data provision, on processes, on shareholder engagement. We include a set of guiding questions that investors can ask companies. And activating systems &ndash; to set agendas, in collaboration with others, to ensure society establishes what good looks like in terms of women&rsquo;s health and the role of the private sector, and to ensure that the most at-risk populations are not left behind.
But really the most crucial step, whenever it takes place, is for investors to decide if they want to do something about it. On that front, we are grateful for the leadership of organizations such as Rhia Ventures and investors who are out in front challenging the private sector and society. We are also grateful for the support of DAWN Worldwide in enabling our project.
PG: Why has it taken so long to focus on women&rsquo;s health?
JT:&nbsp;With some exceptions, mainstream institutional investors move slowly, they primarily focus on protecting their reputational risk. It will take continued pressure from campaigners to make progress. Add to this the overwhelming role of men in leadership in finance, and we have our work cut out. I have to say, some of our usual friends have been notably silent on this topic.
PG: US Supreme Court&rsquo;s June 2022 Dobbs v. Jackson decision does not fit into the mainstream of corporate sustainability and ESG practice?
JT:&nbsp;I think of the children&rsquo;s book, &ldquo;we&rsquo;re going on a bear hunt,&rdquo; with its famous chorus: &ldquo;can&rsquo;t go over it, can&rsquo;t go under it, we&rsquo;re gonna have to get through it.&rdquo; Meaning, you can&rsquo;t really overcome it if you are in the US. You can on a strategic level take a different orientation, but the reality here is that the Dobbs decision will be the anchor of much of women&rsquo;s health landscape for the foreseeable future. Elsewhere, that&rsquo;s a different story and there will be other ways for investors to enter the fray.
PG: What kind of systems ought to be activated and any particular challenges enroute?
JT:&nbsp;There is an opportunity to have a much more active stakeholder dialogue on women&rsquo;s health between the private sector and NGOs. That is one worth focusing on. There is very little in the way of shared goals, no general agreement on what good corporate practice looks like for example, and more broadly what it takes for women to strive in society. This requires a groundswell. The challenges will be those faced by women since the beginning of time in many societies &ndash; there isn&rsquo;t really a simple &ldquo;on/off&rdquo; switch for that.
PG: A roadmap to making women&rsquo;s health an integral part of ESG practice is not just about navigating through the red and blue states?
JT:&nbsp;Absolutely, which means navigating a range of cultural, social, and political systems. In absolute terms, many more humans are concerned. This merits its own focus.
PG: Do you see any wakeup signs within institutional investors? What kind of stewardship is expected?
JT: I do. Not nearly enough, but I do. I also see the chasm between what professionals in ESG want, and what their institutions will let them do. That has always been true on well-trodden issues like climate change, but on gender questions writ-large there is a lot of pent-up energy that is working to liberate itself. I mentioned our report proposes questions that investors can ask of their portfolio companies to initiate a dialogue. That would be a good place to start as far as stewardship is concerned.
PG: Is there an adequate spotlight on the intersection of race, gender, and health?
JT:&nbsp;There isn&rsquo;t.
PG: Do you see litigation driving desired change?
JT:&nbsp;In America you can always expect litigation to drive change, for better or for worse.
PG: Many thanks for sharing your candid thoughts, Jerome. My best wishes in your ongoing endeavours to ensure such a critical outcome.
<div class="css-16rcf8n">
<div>
This article is also published on the <a href="https://thediversityblog.com/2023/08/01/in-conversation-with-jerome-tagger-i-also-see-the-chiasm-between-what-professionals-in-esg-want-and-what-their-institutions-will-let-them-do/" target="_blank" rel="noopener">author's blog</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
</div>
</div>

An interview with Jerome Tagger: “I also see the chasm between what professionals in ESG want, and what their institutions will let them do”.

Praveen Gupta, former CEO and illuminem Thought Leader, interviews Garima Poonia, founder of The Kachrewaale Project

Garima

Praveen Gupta interviews Garima Poonia, who engages in an inspiring project endeavoring to keep the Andamans - an <a href="https://en.wikipedia.org/wiki/Archipelago" data-saferedirecturl="https://www.google.com/url?q=https://en.wikipedia.org/wiki/Archipelago&amp;source=gmail&amp;ust=1690537265561000&amp;usg=AOvVaw02yCrioTBFC4AoXUzWYH-G">archipelago</a>&nbsp;in the northeastern&nbsp;<a href="https://en.wikipedia.org/wiki/Indian_Ocean" data-saferedirecturl="https://www.google.com/url?q=https://en.wikipedia.org/wiki/Indian_Ocean&amp;source=gmail&amp;ust=1690537265561000&amp;usg=AOvVaw2FFX5dbMr3pKoxrC-iOt4R">Indian Ocean</a> - pristine and trash free. A big chunk of the trash is plastic that ends up from faraway places with the ocean current. Praveen believes this is a&nbsp; very compelling case for:
<ol>
<li>Women as caretakers of biodiversity and guardians against pollution.</li>
<li>Entrepreneurial mitigation of the climate crisis powered by the young inheritors of the planet.</li>
</ol>
<h2>About Garima</h2>
Garima Poonia is founder of The Kachrewaale Project (TKP) &ndash; Andaman Islands&rsquo; first solid waste management (SWM) project aimed at reducing methane emissions and marine pollution. The project undertook one of Andaman&rsquo;s first underwater clean-up drives to mitigate climate change via conservation of coral habitats.
Garima is also a Program Director of The Kachrewaale Foundation &ndash; India&rsquo;s first such program on ocean plastics' recovery and advocacy. It is conducting a study on marine litter to understand the origin and types of plastic that come to Andaman beaches, and is also creating long-term frameworks for marine litter recovery and funding, applicable to coastal areas in India. It generates awareness regarding the marine litter crisis in the Andamans for local communities and people from south-east Asia.
<h2>The interview</h2>
PG: What beckoned you to the ocean?
GP: I hail from north-western India, my father from Rajasthan and mother from Haryana. Most of my school vacations were spent in a village in Rajasthan, where to date, there is no public transport connectivity.
In 2017, I had just wrapped up a project in Jamshedpur, focused on revamping the city waste management system by inclusion of waste pickers. My parents and I were planning a vacation after this, and I had wanted to learn scuba diving for a long time. That was the first time I came to the Andamans, in Feb 2017. As far as life-changing moments or trips go, this was one of those, and more. It was the start of a journey, as much within as outside.
I have several beautiful memories from diving. However, one that stands out is when I was swimming in the ocean, between two dives. No scuba gear, just a mask and fins. It was the first time in my life I had swum in the open ocean, by myself. The ocean was very kind, crystal clear, a bright sunny day, and waves that were like playful and gentle nudges. I looked at the bottom of the ocean, and there were no fish, but just the way the sunlight entered the ocean and turned into columns of golden lights, sharp and fading at the same time, it was an endless moment. The taste of salt in my mouth, the warm embrace of the ocean, the blues, the sound of the ocean, these experiences can never be translated into words or language.&nbsp;
I was content but then came a huge school of Moorish idols. Hundreds. A few meters below me. Just as I thought the ocean had gifted me enough, came a giant school of hundreds of Barracudas. Thin, long fish that were about a meter long, with thin, straight lines, parallel to each other, on their bodies.
What I felt in those moments was an unending awe for the ocean, for this world. But there was one last spectacle. Thousands and thousands of diamonds or mirrors started coming towards me and were slowly all around. Only when they came closer, I saw that they were small silver fish, reflecting sunlight like the shiniest jewels. I was swimming right in the middle, surrounded. It is in moments like these that one gets a glimpse of God. Without realising it, I did.
Someone who hails from the desert had found love in the ocean.
PG: And what got you back?
GP: Perhaps my first conscious memory of the sea is from Kanyakumari and then Mumbai. I was perhaps 3 years old when I visited the former, an ocean raging in waves. In Mumbai, I remember sitting on the beach and feeling delighted with how the waves kept coming at me. My parents had to work really hard to keep me from walking off into the water. My father learnt to swim in a waterfall, after nearly drowning twice. When I was five, my sister and I were thrown into the deep end of the pool. We learnt the same way he did.
Swimming and spending time in the water quickly turned into the best play time for me. As I grew up, watching shows about the ocean on Nat Geo or Discovery, reading about the ocean, and simply thinking about it, created a longing to be near it. The desert in me longing for the ocean that covered it once, millions of years. Call it fantastical thinking. But it was there, and scuba diving was simply an excuse to spend time in the ocean. The trip to Andamans just put a seal on it. It ensured that I was so entranced that I would come again. And with the aim of doing something for it.
PG: What is 'The Kachrewaale Project' about?
GP:&nbsp;I never thought I would have a foundation of my own. I started &lsquo;The Kachrewaale Project&rsquo;, as an initiative aimed at finding and implementing solutions to the vast problem of waste in the Andaman Islands. It was very shocking to me that such a gorgeous and fragile place had no systems in place to manage waste. Burning and dumping were rampant. I had seen dumping grounds before, but somehow even a small dump in this beautiful place had a much larger impact on me than what I had seen in urban, mainland India.
Within a few months of its inception, the project was able to successfully implement a pilot, wherein waste from rural Andamans was shipped off to the mainland. It was the first time in the history of rural Andamans that something like this had happened. The system was also incorporated and scaled by the local government.
Today the Project has grown into the Kachrewaale Foundation. The Andaman Islands have gently but firmly guided our decision to continue working on preserving this unique ecosystem by trying to reduce the impact of ill managed waste. Our latest program is about understanding the scope of marine litter, especially plastics, that travel thousands of kilometres from nearly twenty countries, to land up on the shores of Andamans.
Our conservative estimate after this project is that the islands receive hundreds of kilos of marine litter every week, perhaps even daily. Beach clean ups and underwater waste recovery are among the ways we try to get as much waste out as possible. Such clean ups by themselves are not the solution, we need to stop dumping waste in the ocean and produce much less as a species. However, even if production stopped today, there would still be an unimaginable amount of waste in the ocean threatening both marine life and humans. And thus, we are trying to raise awareness among the locals, especially children, so they understand what they stand to lose.
Going forward, the foundation hopes to continue such work in different parts of the Andamans. We are also planning to expand our activities and interactions with locals and tourists alike. It is often the most fragile place, located in the remotest areas that feel the burden of ill managed waste. It is imperative that such places get the attention they deserve so they do not end up turning into mountains of waste.
PG: And how did the rights and duties related to waste management come about?
GP: For me, plastic is not the main problem. It is a symptom of a problem that plagues our world today: short-sightedness and greed. Hardly any of us realise the life cycle of plastics: how oil is extracted, how plastics are made, the twenty thousand chemicals used to manufacture such plastics, their impact on environment and human health, the energy footprint of mass-producing plastic packaged goods and transporting them for consumption to different parts of the world.
The first time I found out that not all plastics are recyclable, I made some drastic changes to my lifestyle. In nature, nothing goes to waste, everything is truly circular. Waste is a complete anti-thesis to a circular system. It has also been, one of the most neglected areas of intervention when it comes to climate change. It was all these thoughts that drove me to understand this problem and try to find solutions. Both at a personal level and at scale. I have moved to making my own bath powders, shampoos, cleaning agents, mosquito repellents etc, in an attempt to live a more mindful life, and to advocate the same.
PG: The corals faced two massive bleaching events in 2010 and 2016. This being an El Nino year &ndash; does it scare you?
GP: After COVID, in certain areas, we have seen some corals recover. And even fish life seems to have recovered a little from before, at certain reefs. The monsoons have come now, and not much diving will happen till about October. I am not scared. I am terrified. What will we see in October? Or next year? Documentation about reefs in the Andamans is sparse. Will this turn into another anecdote that no one will care about?
This summer, there were several nights I had to sleep in wet clothes, or on the floor, just so I would feel less heat. I have never felt like this in the Andamans. I wondered, what the corals and the fish were feeling. When we get a fever, a spike of one or two degrees can make functioning very hard. And if that sustains over days, we humans are left utterly spent and exhausted, and if the fever doesn&rsquo;t go down, we can die. Imagine what marine life must be going through.
Weeks and months of high temperatures, days when we entered the water and we felt it was too hot. As per the visual observations of some divers, some of the corals had the kind of colours they show just before bleaching or dying - a last cry for help visualised in the documentary Chasing Corals. So, they are shouting, screaming as well as they can, telling us they are dying. As one person, as one foundation there is only so much that can be done.
We are not just who we are as singular people. We are all made up of all the relationships we have. Not just with humans, but with other creatures we share this planet with. I am scared of coming back and finding a part of myself missing. Of finding fewer corals, fewer fish, and less life in the ocean.
PG: Does the prospect of rising seas worry you? How about the locals?
GP: Yes, ever since I first visited the islands, I have wondered how much time they have. As per an IPCC report, the islands may not be habitable by as early as 2050. Neil, the island where most of Kachrewaale&rsquo;s work is based out of, does not have much high ground. Several islands in the Nicobar group of islands are also very flat. Sadly, however, when it comes to the locals, there is hardly any awareness about this. And it&rsquo;s not just the prospect of rising seas.
As the temperature rises, the ocean chemistry changes in many ways. We are losing more and more marine life. The locals as well as the tourist industry are heavily dependent on the ocean for food and tourism. Who will come to Andamans if the corals are all dead and there is hardly any aquatic life? How will people adapt &ndash; when more than 90% of the population depends on fish as a main source of food?
PG: What next?
GP: When Kachrewaale started as a project, I had not started registering a foundation. It was only through the work that I realised that the islands need more systematic intervention with respect to waste management.&nbsp;
Our latest program is focused on understanding marine litter, as a country we know so little about the waste that comes to our beaches from other countries. Further, recovery efforts are few&nbsp;and far between and often do not focus on what happens to the waste once it is recovered. There have several instances across India where money and resources have been spent to clean beaches or sometimes to recover ghost nets, but once recovered, all the waste is left at the beach or best case, diverted to a landfill.
For the immediate future, a core focus area for the Foundation is to design and set up systematic interventions for marine litter. This also means that we will be showcasing the unique data we have collected with regards to marine litter, to different agencies and government departments so it can be used for policy interventions. This goes hand in hand with the work we are doing with the local community.
Children have been an important part of our activities and this year we have piloted some activities with them wherein some of them got to dive and see corals for the first time. We have taken them for beach clean ups, and informative sessions about the ocean. We want to scale these initiatives, so they have a chance to look at the ocean as more than a commercial resource that provides food and makes marine tourism possible. It is our hope that they will come to care for their islands a little more.&nbsp;
In the long term, Kachrewaale may also take up similar work in other remote parts of India where waste management remains a dream. We like to work in areas that are tough, challenging, and where often nobody else is working. These are also the places that require the most attention due to their ecological fragility.&nbsp;
PG: Best wishes for all that you aspire to do, Garima.
This article is also published on the <a href="https://thediversityblog.com/2023/07/17/my-interview-with-garima-poonia-for-me-plastic-is-not-the-main-problem-it-is-a-symptom-of-a-problem-that-plagues-our-world-today/" target="_blank" rel="noopener">author's blog</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

An interview with Garima Poonia: “For me plastic is not the main problem. It is a symptom of a problem that plagues our world today.”

Praveen Gupta, former CEO and illuminem Thought Leader, interviews Aarti Khosla, founder and director of Climate Trends

Aarti

<h2 style="font-weight: 400;">Background</h2>
<a href="https://www.linkedin.com/in/praveenguptafcii/" target="_blank" rel="noopener">Praveen&nbsp;Gupta</a> was recently in&nbsp;conversation with&nbsp;<a href="https://www.linkedin.com/in/ACoAAALjAZ8BN9elvWceiq3eQIHC1TK6a-U8QZE" data-saferedirecturl="https://www.google.com/url?q=https://www.linkedin.com/in/ACoAAALjAZ8BN9elvWceiq3eQIHC1TK6a-U8QZE&amp;source=gmail&amp;ust=1689263272529000&amp;usg=AOvVaw3mfxIgrqxlqeUvligD1r-W">Aarti Khosla</a>.&nbsp;Aarti is a seasoned communications professional with a demonstrated history of working on the subjects of climate, energy, and the environment. She is passionate about communicating climate change in a better way. As founder and director of <a href="https://climatetrends.in/" data-saferedirecturl="https://www.google.com/url?q=https://climatetrends.in/&amp;source=gmail&amp;ust=1689263272529000&amp;usg=AOvVaw1fWx73Vf5HLqBGQosxutnU">Climate Trends</a>, she focuses on building public and policy understanding on issues of climate change, clean energy and clean air.&nbsp;Aarti also runs&nbsp;<a href="https://carboncopy.info/about-us/" data-saferedirecturl="https://www.google.com/url?q=https://carboncopy.info/about-us/&amp;source=gmail&amp;ust=1689263272529000&amp;usg=AOvVaw1Z4yqsEcyaMthgRvLrvOKc">CarbonCopy</a>, an editorial venture with an aim to expand coverage of climate change issues in India.
All I was seeking, says Praveen Gupta, was a well-informed perspective on India's poor ratings in climate action tracking. However, it turned out to be a lot more insightful - covering geopolitics, the global south, corruption, and climate financing.
<h2 style="font-weight: 400;">The interview</h2>
Praveen Gupta: Which way is the climate discourse headed?
Aarti Khosla:&nbsp;Climate discourse is such a geopolitical agenda these days that nations are using it more to manipulate other nations than to be in any race to the top. It has come to a point where the world is already on a path of runaway climate change. Wildfires in Canada, and heat waves in India are a clear signal that the global climate is at a point of no return. While there is ample and urgent domestic imperative to act, and climate change is influencing all aspects of the lives of people across the world. Yet the politics of climate remains divisive and a downward spiral.
It&rsquo;s important to acknowledge here that the argument of low per capita carbon emissions was developed to hammer home just how little the Global South was responsible for the climate crisis. And nobody&rsquo;s denying it. But the planet&rsquo;s climate system is sensitive to how much CO2 it has to deal with, not how many people are behind it. Also scratching the surface reveals some of the reasons why climate financing has been hard to come by.
For one, allocating blame is tricky at the best of times, and it&rsquo;s unpleasant at a time when burying the differences and working together is critical. Secondly, the Global South is termed so because of its track record with corruption as well. Not every country in the bloc is equally guilty of course, but there is the prospect of the funds being misappropriated.
<figure>
<blockquote>
The way China has tackled its infamous air quality by embedding air quality management into the heart of its industrial policies makes for a blueprint that other countries would be wise to follow.
</blockquote>
</figure>
PG: Whither are the two largest emitters?
AK:&nbsp;The notion that US enthusiasm to act first is the answer to global problems like climate needs to change. The cloud of false notions that the US is taking an unfair share of the global burden is also not true. And that is evident &ndash; China generates almost twice as much wind electricity as the US. China has outpaced the automakers of the US and Japan on EV tech.
The way China has tackled its infamous air quality by embedding air quality management into the heart of its industrial policies makes for a blueprint that other countries would be wise to follow.
PG: Where do you see India?
AK:&nbsp;Notwithstanding politics, even on matters of domestic policy implementation, India is a tough one. Having said that, India is fast becoming the de-facto voice of the Global South. It&rsquo;s the only developing country to be a member of the US-led Minerals Security Partnership (MSP) despite the intense scrutiny of its climate policies and even the occasional bit of scathing criticism. For e.g.,&nbsp;<a href="https://climateactiontracker.org/">Climate Action Tracker</a>&nbsp;ranks India&rsquo;s overall efforts as &ldquo;Highly Insufficient&rdquo; and its 2070 target of net-zero as &ldquo;Poor&rdquo;.
Is there much merit to the evaluation? Unlike the criticism itself, the answer is complex. India&rsquo;s primary energy consumption is set to double between now and 2050 and its population rightly demands access to a higher standard of living. The way the world has developed we know that this comes with a sharp rise in energy consumption and emissions. Of course, now we&rsquo;re faced with the crisis of climate change, and pressures on natural resources, so we&rsquo;re tasked with developing the fifth-largest economy without the luxury of ballooning emissions.
<figure>
<blockquote>
We&rsquo;re faced with the crisis of climate change, and pressures on natural resources, so we&rsquo;re tasked with developing the fifth-largest economy without the luxury of ballooning emissions.
</blockquote>
</figure>
India has shown climate action by ramping up its share of renewables, and India&rsquo;s emissions intensity has dropped by 24% over 2005 levels and it posted a 9.10 pc growth rate in 2022. These are remarkable by any measure and the country is not just focussed on itself. The International Solar Alliance (ISA) expressly wants to propagate solar power throughout the Global South and is currently raising USD $700 million. This is to pave the ground for private investors &ndash; most of them from the West &ndash; to feel confident about financing solar projects in some of the poorest countries and the challenges they come with.
India&rsquo;s electric vehicles market meanwhile is projected to grow at a staggering CAGR of 66.52% through to 2029 and the country aims to produce 5 million tonnes of green hydrogen by 2030. A large percentage of it will go towards feeding its industries, and this is timely as the West is looking for a trustworthy and politically cooperative alternative to China.
PG: Is there a clear flight path?
AK:&nbsp;India for its part, though, could be a lot more proactive. Bringing up historical responsibilities for climate change has unfortunately become a staple of climate meets and try as it might, the Global South has been unable to unlock much climate financing. The most recent dismissal came at Bonn on June 16 and more may follow.
More distrust will lead to bigger chasms in the global climate conversations. Either we can wait for miracles to happen in the climate geopolitics, or we can look at how the markets and investors are already beginning to act.
<figure>
<blockquote>
Bringing up historical responsibilities for climate change has unfortunately become a staple of climate meets and try as it might, the Global South has been unable to unlock much climate financing.
</blockquote>
</figure>
India is uniquely placed to work with the Global South and develop the bloc&rsquo;s gigantic trove of resources. It has the trust of the less developed nations and together they can manifest the solutions they need for themselves. This includes mining for critical minerals and rare earth metals, manufacturing zero emission vehicles and tapping into the bloc&rsquo;s vastly underdeveloped potential for solar, wind, hydro and tidal power.
India needs to take the first steps and capitalise on the goodwill it enjoys. It&rsquo;s the US&rsquo;s, NATO&rsquo;s and Australia&rsquo;s preferred geopolitical ally in South Asia and could also become a magnet for investments. Deployed correctly, this vehicle is potentially a more palatable alternative to the sanctioning and debt servicing of billions in development loans.
Perhaps equally important is the fact that India protects intellectual property rights by law. So what&rsquo;s needed is for it to lower the barriers for foreign entrants &ndash; like slashing the import duties for Tesla &ndash; and use the funds to massively expand its capacity to manufacture EVs, batteries and clean energy components.
The edge it holds over every other developing nation is its abundance of a low-cost, young, and bright workforce and its port infrastructure and location make it an ideal centre for exports to the Global South. So instead of locking itself into debates, it&rsquo;d be a smart move for India to revamp itself as a profitable destination for Western investments.
PG: Many thanks for this interesting perspective, Aarti. Look forward to following your excellent work.
This article is also published on the <a href="https://thediversityblog.com/2023/07/08/my-interview-with-aarti-khosla-a-proactive-india-is-just-the-answer-for-the-global-south/" target="_blank" rel="noopener">author's blog</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

An interview with Aarti Khosla: “A proactive India is just the answer for the Global South”

Insurers need to reinvent themselves as healers. Aiding and abetting the climate crisis is the surest path to extinction.

Any discipline that is seriously siloed, linear and retrospective rather than prospective has a problem grappling with ever-evolving perma and polycrisis. Perhaps none would rival insurance. To expect it to comprehend and navigate geopolitics in flux and align with threats to biodiversity and the ecosystem - is a tall order. Needless to mention the dampening influence it exerts on the contiguous risk management space.
<h2>Silos</h2>
Six or so years ago, I was making a courtesy call to the CFO of a global hotel chain just as one of their properties next to the Mumbai international airport was going through finishing touches. We have done it all, he boasted about the sprinklers, hydrants, segregation, fire-proofing et al. And even mentioned having paid the inspection agency a hefty fee!
Can you think of anything else? He asked me.
What will be the dependency of this hotel on the airport?
Meaning?
Well, I said, if the airport were to shut down for some reason - how would it impact the expected cash flow?
Can that happen? Is there coverage for it?
I recall telling him that being part of a multinational network, the new property might have access to such a facility. Hence worth exploring. The body language said - nothing is going to happen to us!
The rest is history.&nbsp;
<h2>Mitigation</h2>
Wimbledon, however, learned the value of retaining an infectious diseases extension from the SARS breakout. One of the rare international sporting events well protected during the pandemic. It was guided by a well-honed risk mitigation measure.&nbsp;
I witnessed how instinct works, in July 2019. At an event in Chengdu, Szechwan, I met up with a professor from the University of Illinois, Urbana-Champaign. I heard him say at least 3 times during a sightseeing trip - what if these guys do not turn up? I couldn&rsquo;t resist asking what that was supposed to mean.&nbsp;
The University of Illinois, like other US universities, drew a large number of students from mainland China. As a practitioner of financial risk engineering, he was concerned about protecting their balance sheet from any unforeseen event. In this case - Chinese students not turning up. On his return, he put together a risk solution which came in handy. What kept them away during 2020-21 may look quite obvious in hindsight.
<h2>Biodiversity &amp; ecosystem services</h2>
<blockquote>
&ldquo;More than half of the world's economic output depends highly or moderately on nature and its benefits, such as fertile soils, food supply, clean water, climate control, erosion prevention and flood control. For insurance companies, the impacts of biodiversity loss could translate into growing underwriting risks, notably for insurance lines such as flood, crop, liability, life and health&rdquo;,
</blockquote>
explain Cody Dong &amp; Arne Philipp Klug of Digital Insurance on how&nbsp;the biodiversity crisis could impact insurers.
<blockquote>
&ldquo;There is a direct link between biodiversity loss and higher underwriting risks, point out Cody and Arne. The relationship is especially evident for insurance services covering floods,&nbsp;crops, life, health and environmental liabilities, and mispricing these risks could impact a carrier's profitability&rdquo;.&nbsp;
</blockquote>
Alejandro Litovsky highlights a refreshing development, howsoever modest a beginning. &ldquo;Insurance companies in the Philippines are open to thinking about pricing the 'protection value' of coastal ecosystems like mangroves into their insurance policies. This is one of the first emerging markets where a business shift in the industry towards natural capital is now possible&rdquo;.
In his piece, The Coming Business Insurance Apocalypse, <a href="https://www.greenbiz.com/joel-makower">Joel Makower</a> of greenbiz.com reminds us how &ldquo;homeowners&rsquo; insurance is the latest climate casualty. Could business coverage be next?&rdquo;, he asks. Californian homeowners, for instance, are still trying to reconcile with the announcements by State Farm and All State on quitting the segment.&nbsp;
<h2>Emerging order</h2>
Ms. Mottley, the Barbados Premier, describes the financial systems&nbsp;created three-quarters of a century ago as &ldquo;imperial,&rdquo; set up as they were before many countries in the world had become independent. She has called for a major overhaul so that developing countries most prone to climate change disaster - and already facing debt crises - could access capital to address poverty and damage, and to pay for their transition to a green economy.&nbsp;
Talking of transition, Alessandro Blasi says,
<blockquote>
&ldquo;While all countries have a legitimate ambition to gain a first-row seat in the new global energy economy&nbsp;that is emerging, as things are now - there are two elements that are set to remain central: the first is that while there might be a certain degree of diversification away from China, the Asian giant very unlikely will be pushed on sidelines of the sector; and the second is that international collaboration and cooperation will still be a key effective and efficient way to move forward and ensure that critical minerals would not be a major hurdle to clean energy transition&rdquo;.
</blockquote>
<h2>Polycrisis</h2>
Richard Heinberg, Asher Miller and the Post Carbon Institute put together a systemic analysis in &lsquo;The Great Unraveling: Navigating the Polycrisis of Environmental and Social Breakdown&rsquo;.
<blockquote>
"Because we have adapted our collective behavior and assumptions to economic opportunities opened by vast amounts of energy unleashed via fossil fuels, we have adopted unrealistic expectations for the levels of human population and consumption to be sustained over the long term. The dashing of those expectations against hard natural limits is one way of characterizing the Great Unraveling.
While a complete and sudden end of humanity is theoretically possible, our more likely near-term future will consist of decades of social, economic, political, and ecological turmoil punctuated by periods of rescue and recovery. By the end of the century, both the overall human population and the overall economy will be smaller, perhaps significantly smaller, and humanity will inhabit a world of damaged but rapidly adapting ecosystems and largely depleted resources. 
That&rsquo;s not a future that many of us would willingly choose, but it is one that we have collectively determined through decades of fossil-fueled overpopulation and overconsumption. The point to remember is that it is a future in which we will still have agency. We can optimize the Great Unraveling with cooperation and foresight, or we can ensure a worse outcome through denial and conflict.
Behaviors, attitudes, and strategies that seemed to make sense before the Unraveling (such as efforts to grow national and local economies) need to be replaced by different attitudes, behaviors, and strategies. Building resilience at the community scale will be especially important: as global supply chains grow brittle and shatter, humanity will depend more upon local economies for survival and opportunities to thrive. Cooperative strategies to ration scarce resources and reduce inequality will also be required in order to defuse conflict and ensure optimal outcomes for as many as possible.
If humanity descends into blame and desperate efforts to maintain a status quo that by its very nature cannot persist, the future looks dark indeed. Perhaps, if we work together to build a truly sustainable way of life, future generations will have some reasons to thank us."
</blockquote>
<h2>Perils of linear and siloed thinking</h2>
<blockquote>
&ldquo;Linear thinkers view a problem as a process with a starting point and a sequence of connected steps, ultimately leading to a solution. Simple, isolated problems can often be effectively managed using this kind of thinking. However, when problems are not isolated but interact across technological, social, and environmental systems, linear thinking can then obscure the real situation and lead to outcomes that are unsatisfactory or even catastrophic.
Siloed thinkers tend to stay within a strictly defined range of expertise (such as poverty elimination, environmental pollution abatement, or energy management) and have difficulty seeing how developments within their field are tied to those studied by different sets of specialists.
The Arab Spring in 2011 serves as an illustration of both of these dynamics at play: chronic conditions of corruption and economic stagnation in the Middle East/North Africa (MENA) region combined with a spike in global grain prices as a result of climate change-influenced droughts created explosive political upheaval throughout the region&rdquo;.
</blockquote>
<h2>In conclusion</h2>
<a href="https://www.theguardian.com/profile/simontisdall">Simon Tisdall</a> of the Guardian: &ldquo;What manner of new global order will ultimately emerge? It&rsquo;s plain the old great-power games are unsustainable when the planet&rsquo;s on fire, the ice is melting - and existing rules are ignored. To survive, let alone prosper, in the 21st century, the world needs to replace nationalistic, zero-sum rivalries and power blocs with a more equitable, genuinely multipolar dispensation&rdquo;.
&ldquo;While most insurers within the&nbsp;<a href="https://www.msci.com/our-solutions/indexes/acwi">MSCI ACWI Index</a> acknowledge climate-change risks to their business, biodiversity loss is emerging as a parallel challenge. Deforestation, land-use change, overfishing, pollution, climate change, and the introduction of invasive species have resulted in increasing biodiversity losses&rdquo;, point out Cody and Arne. Notwithstanding IFRS and ISSB have failed on the double materiality front. Insurers would need to ensure a balancing act on both fronts.
If political leaders need the courage to adapt to the new order - insurers need to shed the silos and linearity that blinkers them. The pushback from nature is creating a new playfield. Insurers need to reinvent themselves as healers. Aiding and abetting the climate crisis is the surest path to extinction. A path neither meant for the faint-hearted nor the na&iuml;ve.
<div class="css-16rcf8n">
<div>
<div class="css-16rcf8n">
<div>
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
</div>
</div>
</div>
</div>

Climate adaptation step one: insurers to shed silos & linearity!

While the American insurers have remained wedded to the fossil fuel industry, it was the Europeans who demonstrated early resolve and got together as a Net Zero Insurance Alliance (NZIA)

European insurers and reinsurers have begun to abandon the Net-Zero Insurance Alliance (NZIA) bandwagon even faster than they got on to it. There may be several reasons for backtracking. At the core is economics. Driven by quarterly outcomes and professional shelf-lives of those in &lsquo;control&rsquo;. Losing growth markets is their biggest nightmare. Then there is the Chinese and Arab bogey! And ooh those Russians can be menacing, too&hellip; let&rsquo;s look at these and some more!&nbsp;
The NZIA was incarnated at the speed of the virus. The spotlight was compelling. At the G20 Venice Climate Summit, eight of the world&rsquo;s leading insurers and reinsurers made a historic commitment to play their part in accelerating the transition to a net-zero emissions economy, as required by the Paris Agreement. The eight founding members of the NZIA are AXA, Allianz, Aviva, Generali, Munich Re, SCOR, Swiss Re and Zurich Insurance Group. Convened by <a href="https://www.unepfi.org/psi">UNEP Finance Initiative&rsquo;s Principles for Sustainable Insurance (PSI)</a>, they committed to transitioning their insurance and reinsurance underwriting portfolios to net-zero greenhouse gas (GHG) emissions by 2050, consistent with a maximum temperature rise of 1.5&deg;C above pre-industrial levels by 2100.
<h2>Gold standard</h2>
<blockquote>
&ldquo;By committing to join the gold standard alliance for net zero, the Net-Zero Insurance Alliance will ultimately make underwriting contingent on underlying companies having credible net-zero transition strategies,&rdquo; 
</blockquote>
predicted Mark Carney, the UN Special Envoy on Climate Action &amp; Finance, and Chair of the Glasgow Financial Alliance for Net Zero.&nbsp;
<blockquote>
&ldquo;I urge the rest of the global insurance industry to respond to the climate emergency and urgently follow the example set by the founding members of this pioneering alliance,&rdquo;
</blockquote>
said <a href="https://www.unep.org/people/inger-andersen">Inger Andersen</a>, Executive Director of the UN Environment Programme (UNEP). These utterances must have been music to the ears of the signatories.
Thomas Buberl, CEO of the AXA Group, and chair of the NZIA was already playing God: 
<blockquote>
&ldquo;With this new Net-Zero Insurance Alliance, we are raising our climate ambition further by using our underwriting, claims, and risk management practices to help ensure and enable the transition to a resilient net-zero global economy.&rdquo;
</blockquote>
Why would the rest be too far behind? Based on the&nbsp;<a href="https://www.unepfi.org/psi/wp-content/uploads/2021/07/NZIA-Commitment.pdf">NZIA Statement of Commitment</a>, these global insurers and reinsurers also announced individually setting science-based intermediate targets every five years and independently reporting on their progress publicly and annually. They also committed to advocating for and engaging in governmental policies for a science-based and socially just transition of economic sectors to net zero. &nbsp;
<h2>Hard landing</h2>
Back at their headquarters, they would have encountered stakeholders&rsquo; pushback and an unfolding drama. BlackRock for instance has a stake in all the founding NZIA players, ranging from approximately 5 to 10%. Could it be a quiet front?&nbsp;
But the Paris Agreement has no teeth. Donald Trump has already made an exit. Why are there no American insurers? Why is there no guidance from the International Association of International Supervisors (IAIS)? And who is UNEP? What happens to our US book? With the Environment, Societal and Governance (ESG) rebellion from the Red States, much of the world&rsquo;s largest market revenue would be impossible to count upon. In the meantime, Ukraine Russia conflict gave a new twist to the green taxonomy. Gas and nuclear are back in. Is a possible reversion to coal possible? They had no clue how to deal with degrowth. But then, who has?
<h2>Too hot to handle</h2>
Let&rsquo;s look at growth markets. They account for the world&rsquo;s largest industrial growth; trade; personal lines expansion, asset class buildup, and aviation. Fossil fuel is their dominant engine and is here to stay. We have a strong presence - direct, joint ventures and subsidiaries, built over years of hard work. No US, no emerging markets, Europe headed for a recession - but let us revisit our rems and reward policies, the operating teams would have said. 
If ESG is the new deliverable, our incentives and bonuses should be linked accordingly. Suddenly the hard reality would have dawned upon the owners. Shrinking books and market share, no abatement of claims, share price under severe pressure, demanding institutional investors&hellip; the Arab and Chinese capital would make big moves. Perhaps Brazil, Russia, India, China, and South Africa (BRICS), too! All this was when pricing across the markets was beginning to harden.
The CEOs who basked in their 15 minutes of fame were in panic mode! Mark Carney&rsquo;s charms were fading. His new employer Brookfield has stakes in AIG and Travelers - steadfast in supporting the fossil fuel industry. Anti-trust suddenly appeared as a pretty cool tool for the deserters to cling to! The unforeseen stress test failed European insurers in their climate resolve. People and the planet before profit - must wait! They had rushed into making big commitments; the rank and file were unprepared hence no buy-in; stakeholder conviction and engagement were amiss. It all translated into empty rhetoric.&nbsp;
<h2>In conclusion</h2>
As serious wildfires rage in North America, is redlining such areas the only option insurers are left with? State Farm and Allstate recently exited the homeowners' segment in California. How does one stop investing in and insuring what hurt the planet rather than not insure the ones who are consequently harmed? The NZIA just let go of one such opportunity.
<div class="css-16rcf8n">
<div>
<div class="css-16rcf8n">
<div>
<div class="css-16rcf8n">
<div>
<div class="css-16rcf8n">
<div>
<div class="css-16rcf8n">
<div>
<div class="css-16rcf8n">
<div>
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>

Global warming fails to insure risk carriers stay glued to NZIA

Climate change impacts women’s health, seriously affecting their natural body rhythms and cycles

Climate change can surely be accused of its own biases &ndash; the Global South and women being two of the worst affected.
While the sub-Saharan region of Africa reels under the unfolding tragedy of climate change and small island states bear the existential brunt of rising seas, there are close to a billion women across South Asia facing a myriad of consequences &ndash; floods, droughts, heat, precipitation, deforestation, pollution and health conditions.
Furthermore, for those working in the unorganised sector &ndash; characterised by small and scattered workplaces, largely outside the control of the government &ndash; the climate crisis endangers women&rsquo;s health as well as their livelihoods. Social injustices only add to this perilous situation.
<blockquote>
&ldquo;Because women and girls constitute an estimated 80% of the population displaced by climate change, as the crisis intensifies it will amplify gender inequality and uniquely threaten women&rsquo;s livelihoods, health and safety,&rdquo;
</blockquote>
warns Arup Chatterjee of the Asian Development Bank.
<blockquote>
&ldquo;It will also hamper their capacity and potential to lead, make decisions and take action to combat climate risks.&rdquo;
</blockquote>
<h2 style="font-weight: 400;">Predicted impact</h2>
A report by the World Bank on the impact of climate change in South Asia arising from changes in average temperature and precipitation, titled 'South Asia&rsquo;s Hotspots: The Impact of Temperature and Precipitation Changes on Living Standards', highlights two future climate scenarios.
One is classed as &ldquo;climate-sensitive&rdquo;, where some collective action is taken to limit greenhouse gas emissions; and the other as &ldquo;carbon-intensive&rdquo;, in which no action is taken. Both scenarios show rising temperatures throughout the region in the coming decades, with the carbon-intensive scenario leading to greater increases. Expected changes in rainfall patterns are more complex in both scenarios.
Changes in average weather are projected to have overall negative impacts on living standards in Bangladesh, India, Pakistan and Sri Lanka, with negative impacts even more severe under the carbon-intensive scenario. Unlike sea-level rises and extreme weather events, changes in average weather will affect inland areas the most.
The report also reminds us that it is estimated more than 800 million people &ndash; almost half of South Asia&rsquo;s population &ndash; currently live in areas that are projected to become moderate to severe hotspots by 2050 under the carbon-intensive scenario.
<blockquote>
&ldquo;Climate change impacts women&rsquo;s health, seriously affecting their natural body rhythms and cycles. With women taking on more responsibilities &ndash; well beyond the primary nurturer role &ndash; severe climate disruption will act as a double whammy for most women in South Asia,&rdquo;
</blockquote>
says Dr. Rasika Birewar, a healthcare professional.
Incomes also suffer for South Asia&rsquo;s female home workers as heat rises in cities across India, Nepal and Bangladesh, meaning increasing numbers spend less time at their informal jobs and earn less, according to HomeNet South Asia.
Durreen Shahnaz, founder of Impact Investment Exchange, says conferences in the Global North talk often of the important role of women. She wonders, however, how many truly recognise the power of women within Global South economies and see them as being part of the solution rather than victims of climate change.
<blockquote>
&ldquo;Women form the gender-climate nexus as solution providers. They hold the key to climate adaptation and mitigation, yet more often than not, they are left out of the conversation,&rdquo;
</blockquote>
says Shahnaz.
<h2 style="font-weight: 400;">Leading the response</h2>
So, what action is being taken? Climate Change Adaptation and Disaster Risk Reduction in Bangladesh is one example &ndash; a women&rsquo;s initiative that helps communities in Bangladesh adapt by addressing extreme weather conditions. The initiative, implemented by ActionAid Bangladesh, brings together groups of women who lead vulnerability assessments of climate risks, then identify and implement action plans.
The Clinton Global Initiative recently announced the creation of the Climate Resilience Fund for Women, with India&rsquo;s Self-Employed Women&rsquo;s Association (SEWA). Partnering with Adrienne Arsht Rockefeller Foundation Resilience Center, the fund aims to help 2.5 million female workers in the informal economy who are disproportionately affected by climate impacts &ndash; especially extreme heat &ndash; causing health conditions and illnesses, so greatly diminishing their income.
The fund has also launched the Extreme Heat Income Insurance, a parametric microinsurance cover that replaces lost income for 21,000 women in seven trades &ndash; head loaders, ship breakers, construction and home-based workers, street vendors, farmers, salt pan workers and waste recyclers &ndash; in which the women of the SEWA work. This income replacement will arrive in members&rsquo; bank accounts when health-harming extreme heat conditions (not just temperature) exist. The offering is intended to quickly migrate to a forecast-based parametric and will include other interventions, health early warnings, infrastructure and participant engagement.
<blockquote>
&ldquo;Therefore, in addressing climate change, gender mainstreaming can provide an endorsed pathway to advance investments in mitigation and adaptation solutions,&rdquo;
</blockquote>
continues Chatterjee.
In addition, he suggests, a population-based response to the crisis is needed, in which women are seen as individuals with their own needs, limitations and contexts. Mitigation policies should then be designed appropriately.
Gender parity, according to the Global Gender Gap Report 2022, is not recovering. It will take another 132 years, it says, to close this gap.
As crises compound, female workforces suffer and the risk of global gender parity backsliding further intensifies. The situation in much of South Asia remains challenged. As environmentalist and author Naomi Klein warns:
<blockquote>
&ldquo;Every disaster will intensify pre-existing inequalities. It is inequality that kills.&rdquo;
</blockquote>
<div class="css-16rcf8n">
<div>
This article is also published on <a href="https://thejournal.cii.co.uk/2023/05/03/esg-climate-inequality" target="_blank" rel="noopener">The Journal</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
</div>
</div>

ESG - climate of inequality

Nagraj Adve is a founder member of Teachers Against the Climate Crisis (TACC) in India. This interview takes a deep-dive into his thoughts on the future of climate action in India.

An interview with Nagraj Adve

Our marine activities - including shipping - ensure we pollute the waters and keep harming rich biodiversity. All this, however, comes back to us. And we insure such causes of damage.

Every day humanity pumps 400,000 Hiroshima bombs equivalent to heat - to borrow from environmentalist Bill McKibben - into the planet. How much of it is generated on land and how much off of it is a moot point. As much as 90% ends up in the oceans.
<blockquote>
 &ldquo;Excess heat added into our oceans in 2022 is 100 times the total world electricity generation in 2021&rdquo;, according to Assaad Razzouk of Gurin Energy. 
</blockquote>
Our marine activities - including shipping - ensure we pollute the waters and keep harming rich biodiversity every which way. All this, however, comes back to us. And we insure such causes of damage. &ldquo;Recent, rapid ocean warming ahead of El Nino alarms the scientists&rdquo;, says the BBC. These record temperatures put Earth in &lsquo;unchartered territory&rsquo;.&nbsp;
Shipping, like aviation, does not come under the purview of the Paris Agreement. The IMO is yet to demonstrate the rigour and vigour of disciplining shipping. 
<blockquote>
&ldquo;It is alarming to witness the upcoming COP President, UAE, being one of the leading voices for lower ambition at the International Maritime Organization (IMO) meetings&rdquo;, says Aoife O&rsquo;Leary of Opportunity Green. 
</blockquote>
With cracks developing in the Net Zero Insurance Alliance (NZIA), the <a href="https://www.poseidonprinciples.org/insurance/principles/">Poseidon Principles</a> adopted by a small set of marine insurer ecosystems is like a band-aid for a terminal injury.
Even though insurers have resolved to move from IFRS 4 to 17, where is sustainability in the reporting standards? Despite taking over the International Sustainability Standards Board (ISSB), the IFRS foundation continues to drag its feet both on double materiality as well as the Science Based Targets initiative (SBTi). Given this backdrop, can insurers step aside from the business-as-usual mode in these exceptional times? Revisit what they have been doing all this while? Do what they haven&rsquo;t done thus far?
Says James Corbett, professor of marine policy at the University of Delaware: 
<blockquote>
"Ship pollution affects the health of communities in coastal and inland regions around the world, yet pollution from ships remains one of the least regulated parts of our global transportation system." 
</blockquote>
It sounds serious, but how bad could it be? According to the Guardian, just one of the world's largest container ships can emit about as much pollution as 50 million cars. Further, the 15 largest ships in the world emit as much nitrogen oxide and sulphur oxide as the world's 760 million cars. This is the best-known harm shipping inflicts.
<blockquote>
&ldquo;Every day the clothes, tech and toys that fill the shelves in our shopping centres seem to arrive there by magic. In fact, about 9 out of 10 items are shipped halfway around the world on board some of the biggest and dirtiest machines on the planet. It has been estimated that just one of these container ships, the length of around six football pitches, can produce the same amount of pollution as 50 million cars. Most of the pollution occurs far out at sea. Out of the sight and minds of consumers. And out of the reach of any government."
</blockquote>
<h2>Pollution&nbsp;</h2>
"If shipping were a country, it would be the sixth largest CO2 emitter&rdquo;, writes The Guardian.&nbsp;
However, it is not just the greenhouse gases turning our seas feverish. Most ships burn bunker fuel - an environmental nightmare. It is heavy and toxic, does not evaporate, and emits more sulphur than other fuels. There is also sound pollution, oil spillage, and sewage. We now have what Anna Turns of BBC Future calls &lsquo;&rsquo;industrialised oceans&rsquo;&rsquo;. 
<blockquote>
&ldquo;Marine mammals depend on their senses to communicate, navigate, feed, hear and detect danger. Besides impacting their senses, marine pollution can impair mammals' fertility and immune systems&rdquo;, she says. 
</blockquote>
The rich marine life, both plants and animals capture carbon, regenerate and recharge the oceans. Vessel hits leading to injury and killing keystone species such as whales are commonplace.&nbsp;
<blockquote>
&ldquo;Between 2017 and 2019, fishing vessels disabled their transponders for around 1.6 million hours each year. This represented roughly 6% of their global activity, not reflected in global tallies of what types of fish are being caught where. Enforcement of Automatic Identification System (AIS) laws is generally poor, and although these are getting better in some jurisdictions, the sanctions are not severe enough to act as deterrents. The insurance industry enables the practice of switching off AIS through weak due diligence practices. Insurers have a role to play in curbing such illegal behaviour, and it is not discretionary,&rdquo; says Heather Welch. 
</blockquote>
Bottom trawling flourishes, despite being&nbsp;entirely incompatible with the objectives of Marine Protected Areas (MPAs).
<h2>Some emerging risks</h2>
<blockquote>
&ldquo;Existing bodies already responsible for regulating human activities like fisheries, shipping or deep-sea mining can, for now, continue to do so without having to follow the environmental impact standards laid out in the treaty. Given the declining health of the ocean and the persistent failure of current systems to tackle the issue, these exemptions represent a major loophole&rsquo;,&rsquo; according to The Nature Conservancy.
</blockquote>
<blockquote>
&ldquo;Will we create dual systems in one jurisdiction where there is one definition of marine protected areas within jurisdiction and another definition for beyond national jurisdiction? Will all countries legislate with rigour or will some see the opportunity for profit with weaker regulations?&rdquo; Angelique Pouponneau has these concerns. 
</blockquote>
Will they play around with Flags of Convenience, yet again, thereby diluting any form of ownership? Insurers need to take a call as to which side of history they wish to be.
Distracted by OPEC and the decision to cut oil production, there has been little debate on the risks associated with the increasing number of the so-called "shadow fleet" transporting oil - and often Russian oil - around the world, apprehends Alessandro Blasi of the IEA. The point is not "only" about what insurance would pay in case of environmental disaster, but the fact that the risk is exponentially increasing as the shadow fleet tends to have a much higher share of old vessels, being also more than 25 years old.... believes Blassi.
Dr. Sylvia Earle terms it deep sea mining devastation! 
<blockquote>
&ldquo;Independent science deems deep-sea mining unnecessary and risky. However, due to financial interests, there&rsquo;s pressure to expedite the Mining Code, enabling large-scale mining. The UN International Seabed Authority (ISA) governs 50% of Earth&rsquo;s surface in international waters and has already granted 31exploitaton licenses. If executed, this would be history&rsquo;s largest mining operation, spanning over 1.5 million square km, more than twice France&rsquo;s size&rdquo;.
</blockquote>
 Would insurers wish to be a party to this calamity?
<blockquote>
&ldquo;We know that carbon dioxide and methane are only about 25% of climate change yet the world is fixated with net zero, which will be the death of us all. Even if we achieve net zero by the end of the decade, atmospheric carbon dioxide still passes 500 ppm and oceanic pH drops below pH7.95, and we lose marine life in the oceans, the Surface Microlayer (SML), and end up back with catastrophic climate change. Unless we stop marine pollution by 2030, this will happen with 100% certainty as reported by the IPCC. Ocean acidification is the Evil Twin of climate change, Evil because it will be far more serious, the process is half way through and in 20 years there will be no way to stop the process once we pass pH7.95,&rdquo; a stark warning from Dr. Howard Dryden of Goes Foundation. 
</blockquote>
<h2>Taming the wild west</h2>
<blockquote>
&ldquo;The high seas are the modern world&rsquo;s Wild West where outlaws engage in illegal activities like&nbsp;<a href="https://www.penguinrandomhouse.com/books/538736/the-outlaw-ocean-by-ian-urbina/">unauthorized fishing and human trafficking</a>. Is it time to celebrate the recently concluded high seas treaty? The 30 x 30 campaign is an ambitious campaign to protect 30% of the global ocean by the year 2030 under fully and highly marine protected areas. This &lsquo;agreement in principle&rsquo; provides the tools and a process to contribute to achieving this target. However, the devil is in the detail&rdquo;.&nbsp;&nbsp;
</blockquote>
The agreement on &lsquo;Marine Biodiversity of Areas Beyond National Jurisdiction&rsquo; (BBNJ) provides a legal framework for the conservation and sustainable use of the marine biological diversity of our ocean beyond national jurisdiction. How does the ISA impinge upon it? How do you ensure there is no dual legislation by countries who wish to get away via the flags of convenience route? Last but not least, how do you transition the net-zero route ideally ahead of time?&nbsp;
If some of these signals are to be believed, there is room for hope. Fiona Harvey of the World Bank is among those urging levy to fund climate action in the developing world and encourage fleets to upgrade. Many questions are being asked. Should we aim for true zero or net zero, with the latter leaving wiggle room to use carbon offsets? Should we set interim emissions reduction targets? And if so, how do we put a carbon price on shipping emissions? asks Climatechangenews.com.
In the meantime, Maersk, the world&rsquo;s <a href="https://qz.com/2109787/msc-surpassed-maersk-as-the-worlds-largest-shipping-line">second-largest shipping line</a>, pledged to make its business&nbsp;<a href="https://www.maersk.com/news/articles/2022/01/12/apmm-accelerates-net-zero-emission-targets-to-2040-and-sets-milestone-2030-targets">carbon-neutral by 2040</a> instead of its previously stated goal of 2050, according to Nicolas Rivero of qz.com. The company also expanded its net-zero emissions pledge to include the emissions produced by its energy consumption and its supply chains.&nbsp;
If the IMO walks the talk on decarbonisation and insurers price all the externalities, avoid the unmanageable, manage the unavoidable, penalise, thereby making repeat errant behaviour expensive, and facilitate proactive regulations, would we steer away from the cowboy territory? Far away from the neoliberal terrain where the gunboats meet the stock market? Surely they would have tried not to aid and abet damaging our oceans.&nbsp;
<div class="css-16rcf8n">
<div>
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
</div>
</div>

Where gunboats meet the stock market!

The Securities and Exchange Board of India proposed Business Responsibility and Sustainability Report ironically has no mention of nature anywhere in the draft report

Viswanathan

The Securities and Exchange Board of India&rsquo;s (SEBI) proposed Business Responsibility and Sustainability Report (BRSR) calls for 1,000 listed companies to "disclose their material Environmental, Social, and Governance (ESG) risks and opportunities, their approach to mitigating the risks or adapting to them, and the financial implications involved in this process." BRSR, which requires robust information relating to social metrics apart from audited data about employees, communities, and consumers, is also meant to increase the transparency of corporate disclosures and help companies examine sustainability-related risks and opportunities. It is also meant to be more robust, covering a broader spectrum as compared to other ESG reporting frameworks.
And yet, ironically, we find no mention of nature anywhere in the draft report, even if we are among the top rankers in the world on pollution and biodiversity loss metrics.
Sir Partha Dasgupta of the University of Cambridge calls nature a &ldquo;blind spot&rdquo; in economics and warns: &ldquo;We can no longer afford for it to be absent from accounting systems that dictate national finances or ignored by economic decision-makers.&rdquo; The Stern Review on the Economics of Climate Change is even starker: &ldquo;Climate change could lead to the greatest market failure ever.&rdquo;
Regulators, more than politicians and business leaders, therefore, must realise that &ldquo;the economy is a wholly-owned subsidiary of the environment.&rdquo; This message does not come through the BRSR.
After China and the US, India is the most vulnerable country to physical climate risk. A recently released report by the Cross Dependency Initiative (XDI)&mdash;the Platform, which brings together asset-level data sets with extensive climate models to provide deep analysis of an organisation&rsquo;s exposure&mdash;alludes to Gross Domestic Climate Risk.
Ranking over 2,600 jurisdictions around the world, it lists 14 Indian states among the top 100 most climate-risk-prone territories in the world in 2050. This is based on modelled projections of damage to the environment from extreme weather and climate change, including from flooding, forest fires, and sea level rise.
The XDI findings from the XDI Gross Domestic Climate Risk ranking underscore the importance of pricing physical climate risk in financial markets, given the amount of capital investment represented by the assets at risk in the provinces identified, the vulnerability of global supply chains, and the need for climate resilience to inform investment. For the first time, it has become possible for the finance industry to directly compare Mumbai, New York, and Berlin using a like-for-like methodology.
The 2005 floods and the recent pandemic vividly demonstrate how a disabled Mumbai impacts the national economy. Author Amitav Ghosh, among others, has from time to time highlighted some scenarios exposing the megapolis&rsquo;s vulnerabilities, including the increased frequency and severity of cyclonic activity on the west coast.
In their report, ShareAction, a charity that promotes responsible investing, ranks the responsible investment policies and practices of 77 of the world&rsquo;s largest asset managers. They &ldquo;assess the ambition, scope, and transparency of these firms' approaches to responsible investment to help determine how far they are safeguarding against key social and environmental risks&rdquo;. While all money pipelines converge&mdash;be they banks, insurers, or asset managers&mdash;they need to be laid anew in a sustainable direction.
How do corporate India&rsquo;s actions tie into the country&rsquo;s net-zero commitment of 2070 unless all those concerned work towards steering it in that direction? Some broad challenges stand out, fragmented regulatory architecture being one of them. While SEBI appears ready to champion ESG, others like the RBI, IRDAI, and PFRDA are at varying stages of waking up to this fundamental reality. Given the paucity of time, regulators cannot fritter away energies in intra-regulatory turf wars. After all, the Unit Linked Insurance Plan (ULIP) put the SEBI and IRDAI on a collision course not too long ago. Despite the government&rsquo;s concerns about safeguarding pension money, one of the top preferred allocations by many National Pension Scheme (NPS) managers ends up with the fossil fuel industry. Does the BRSR address these challenges? Alas, no!
And finally, can climate change issues be merely left for auditors to certify? That brings us to the matter of greenwashing. Who measures it, how, and who calls out any greenwashing attempts? Professor Alison Taylor of NYU Stern School of Business says, &ldquo;The problem with treating climate change as an auditing task is that you end up with a bunch of auditors signing off on destruction, placing mindless faith in certification schemes, and not knowing basic stakeholder engagement approaches that are supposed to be at the centre of this whole sustainability thing... The reality is that ESG exists because investors, citizens, customers, suppliers, and employees want businesses to be more responsible about their impacts. It is simple; it&rsquo;s a change from older ideas, and it is definitely about ethics&rdquo;.
What the BRSR needs to do is put nature at its very core, build a unified regulatory architecture to deal with the ESG rollout, maintain the integrity of this process, thereby ensuring a greenwash-free environment, and use a good big stick whenever necessary. All this may sound like a tall order. And yet, if we are serious about staying within the planetary boundaries, do we have a choice? Even though ethics like nature bear no mention in the BRSR brief, one can only hope that after receiving many inputs (including from the first author of this article), SEBI would take heed. The core issue here is not procedural or wordsmithing, but substantive. Faced with a serious existential climate crisis, how do we rejig our businesses with a single-minded urgency? This is not about making our balance sheets resilient enough to face a crisis of our own making. It is also about balance sheets that account for externalities when pricing their wares. Double materiality in letter and spirit. How else do we ensure sustainability for the coming seven generations?
This article was originally published in <a href="https://www.deccanherald.com/opinion/panorama/regulators-must-realise-economy-is-a-fully-owned-subsidiary-of-ecology-1204855.html" target="_blank" rel="noopener">Deccan Herald</a><span data-slate-node="text" data-slate-fragment="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">. Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Regulators must realise economy is a fully owned subsidiary of ecology

Today, the climate crisis is pushing for a green transition to renewable energy. This shift offers unique challenges and opportunities not just to insurers, but other financial institutions and players at the grassroots level in uniquely synergistic ways. It calls for re-laying the money pipelines. All these present blue-sky opportunities. 

India has come a long way since the early 1990s when the country commenced power sector reforms and started wooing big international producers. The focus then was on thermal energy and the dialogue &mdash; including with some Hong Kong-based big boys &mdash; but was bogged down by endless negotiations on Purchase Power Agreements (PPAs), something I was privy to as I was based there back then. They were happy to focus on Mainland China and everyone knows why &mdash; all action and no discussion &mdash; or the Philippines and Indonesia.
The latter urgently needed to fix their notorious brownouts. Today, the climate crisis is pushing for a green transition to renewable energy. This shift offers unique challenges and opportunities not just to insurers, but other financial institutions and players at the grassroots level in uniquely synergistic ways. It calls for re-laying the money pipelines. All these present blue-sky opportunities.
<h2>Delayed and disorderly carbon transition</h2>
Insurers do three things. They are risk managers, risk carriers and investors. They have a pivotal role to play. However, there are disconnects, divergences and manifestations of oxymorons when it comes to what they actually do and what they ought to do.
Moody&rsquo;s believes the credit impact of &ldquo;a delayed and disorderly carbon transition&rdquo; is the greatest threat to financial firms, as the increasing frequency of catastrophic weather events will lead to loan defaults and rising insurance claims.&nbsp;If insurers were serious, they would think hard before insuring anything that accentuates the burgeoning climate crisis. Nor would they invest in it. They need to be nudged to facilitate the green transition. There is no stopping them from insuring projects in seismically sensitive locations and patronizing the fossil fuel industry both as insurers and investees. The top four National Pension Scheme (NPS) players make similar allocations of their funds to the same fossil fuel company. Perhaps because they get the best returns for the pensioners and thereby also comply with the regulations. Stranded assets do not exist in their glossaries yet.
Environmental, Social and Governance (ESG) is slowly beginning to make inroads into the stock market (SEBI) and the central bank (RBI) regulators&rsquo; narrative. It struggles with the insurance (IRDAI) and pension funds (PFRDA) regulators. Thanks to the government&rsquo;s push on sovereign green bonds, there is a fleeting reference by the IRDAI in this circular where &ldquo;insurers are encouraged to consider investing in sovereign green bonds.&rdquo; Removing investment barriers to fund India&rsquo;s energy transition calls for improving climate disclosures and ESG ratings to encourage investments.
The total investment corpus of the insurance industry is Rs. 5868948 crores (1 USD = 82.50 INR) as of 31st December 2022 (Life: Rs.&nbsp; 5,370,834 crores and General: Rs. 498,114 crores). Add another Rs. 500,000 crores of the national pension scheme (NPS). Despite a rapid erosion vis-&agrave;-vis the US dollar, imagine what a small portion of this, channeled into solar energy rather than fossil fuel, can do.
Vibhuti Garg of the Institute for Energy Economics and Financial Analysis (IEEFA) throws some light on this: &ldquo;India is currently investing around $18-20 billion in energy generation capacity and a further $20 billion in the grid on an annual basis. To achieve the Sustainable Development Scenario (SDS) in the International Energy Agency&rsquo;s India Energy Outlook 2021, the country would need to triple its current rate of annual investment to $110bn&rdquo;. An affirmative guidance from the regulator can surely help overcome what appears to be a &ldquo;daunting&rdquo; task. While most Indian general insurers would insure the asset side of solar power generation, only two private insurers provide a parametric cover. Insurers could also help the renewable energy cause by means of guarantees and credit insurance.
<h2>ABCD</h2>
To get to the alpha of solar energy, &lsquo;BCD&rsquo; (<a href="https://en.wikipedia.org/wiki/Blended_finance">Blended</a>, Cooperatives, Diversity &amp; Inclusivity) is a possible way forward. Imagine a consortium of Azim Premji Foundation (philanthropy), SEWA Bank (financing a self-help group of women entrepreneurs), Asian Development Bank (ADB), Bandhan Bank (origins in microfinance for women), PFC (Power Finance Corporation) and, let&rsquo;s say, Life Insurance Corporation of India (LIC) working towards financing solar power generation and transmission grid in rural India. Sounds challenging and would raise many an eyebrow.
Imagining is the easiest part but a patchwork of siloed regulations, if any, for respective entities is where blended finance is the solution. Sovereign green funds mean the credit rating of the country will apply, however &lsquo;deficient&rsquo; the startup&rsquo;s rating. Again, each participant in the fund is free to decide their share of risk appetite and who takes how many hit and when. Multiple financial services regulators must, however, converge to ensure efforts toward decarbonisation.
<h2>Cooperatives</h2>
Yes, an <a href="https://en.wikipedia.org/wiki/Amul">Amul</a> for Solar Energy. Tapping into the proven genius of a community. Calls for a <a href="https://en.wikipedia.org/wiki/Verghese_Kurien">Verghese Kurien</a>-like leader for solar power.&nbsp;He and the team saw merit in pioneering the cooperative model: farmers willing to associate together for produce and to be led by professionals while being owners of the cooperative. In a newly independent resource-constrained nation, where food security was of utmost importance, focus on social capital rather than the formation of capital assets bode well. The rest is history.
Moreover, investing in projects that improve one's community, increases one's sense of connection and social responsibility. Given the size and complexity of the country, a top-down approach to clean energy alone would not work. It calls for a grassroot approach.
<h2>Diversity &amp; inclusion</h2>
I had the pleasure of <a href="https://www.linkedin.com/posts/praveenguptafcii_studies-evidence-positive-correlation-between-activity-6906498986497179648-Matg?utm_source=share&amp;utm_medium=member_desktop">interviewing</a> Vibhuti Garg of IEEFA India last year on the IWD. Here are some brilliant, assorted thoughts:
<blockquote>&ldquo;With greater access to electricity, more women are able to free their time from general household chores and divert their time on income generating opportunities&hellip; many women in small towns are now selling solar lamps and solar house systems which enhance energy access but also create opportunities for them to become entrepreneurs&hellip; Also, it allows more girls to undertake education and be part of the formal workforce. Women feel more protected with improved street lighting in their areas. Further, in some households shifting to electric cooking will also save them the time and hard work of collecting biomass, cow dung and wood pellets for cooking. It will also have a positive impact on their health as they will not be exposed to indoor pollution using traditional fuels which are polluting&hellip;</blockquote>
<blockquote>Most of the micro-enterprises set up by women are self-financed, which makes them more vulnerable. A lot more supportive ecosystem needs to be created for them to thrive and have better livelihood opportunities&hellip; They do not have the finance for upfront payment to start a business&hellip; a low proportion work in science, technology, engineering and mathematics (STEM) roles. It has been demonstrated that a lack of gender equality in the energy sector puts utilities at a disadvantage, boards with at least 30% women have higher profit margins than those that do not. It has also been suggested that energy sector organisations that improved gender equality can boost innovation.</blockquote>
<blockquote>Women in rural India are now getting opportunities in high earning jobs and because of improved energy access they will have more options.&nbsp;<a href="https://www.signify.com/global/our-company/blog/people/solar-sahelis-india">Solar Sahelis in Rajasthan</a>&nbsp;is a classic example of how women have turned into entrepreneurs. They rope in more women to their network and demonstrate improved sales through after-sales services. By participating in income-generating activities, their welfare and both physical as well as mental wellbeing has improved&rdquo;.</blockquote>
<a href="https://www.bbc.com/news/business-43837484">Women-power</a> also focuses on the business of solar power generation and distribution.
<h3>Stranded assets</h3>
IEEFA warns that:
<blockquote>&ldquo;Power Finance Corporation (PFC)/Rural Electrification Corporation (REC) growth will not come from&nbsp;coal. Their share of&nbsp;coal&nbsp;lending to loan book has been declining, down from 71% to 47% for PFC and 45% to 40% for REC, since FY 18. New&nbsp;coal&nbsp;plant construction over the next decade will be marginal at best and&nbsp;<a href="https://www.linkedin.com/company/climate-risk-horizons/">Climate Risk Horizons</a>&nbsp;estimates that the growth in conventional generation loan books for both companies will be negative over the coming years.</blockquote>
<blockquote>PFC/REC are failing to adapt to the&nbsp;energy transition&nbsp;underway, it says. The proportion of renewable energy&nbsp;in PFC&rsquo;s gross loan assets has grown from 4% to just 11% between FY 2018-21; its share in REC&rsquo;s loan book has been stagnant at 3-4%... We estimate that without course correction in favour of investments in the energy transition, PFC and REC&rsquo;s net profit will grow at a mere 0.2% and 2.5% CAGR respectively from FY 2022-2025, due to slowdown in loan book growth and lower yields.&nbsp;PFC and REC will need 142% and 156% CAGR growth in their&nbsp;renewable energy&nbsp;loan book over the next 3 years in order to deliver a 10% net profit CAGR.</blockquote>
<blockquote>To achieve this loan book growth PFC and REC would need to disburse approximately Rs. 497,315 crores over the next three years. If achieved, this quantum of lending will meet the debt capital requirement of approximately 89 GW of&nbsp;solar and 38 GW of&nbsp;wind&nbsp;capacity&rdquo;.&nbsp;</blockquote>
This tells us that unless a course correction towards green energy is adopted, these lenders will surely be in real trouble. Big investors like the LIC ought to see the writing on the wall, as should others investing in and insuring these assets or for that matter pensioners expecting continued returns. Access to low-cost capital via&nbsp;green&nbsp;bonds in international markets will be key for PFC/REC. Continued lending to new&nbsp;coal&nbsp;projects will pose a material risk in this regard, as ESG-aligned investors become wary of&nbsp;greenwashing.
<h2>In conclusion</h2>
In a report published in February this year, IEEFA highlights that India requires a further US$500 billion in investments in new wind and solar infrastructure, energy storage, grid expansion and modernisation&nbsp;to&nbsp;<a href="https://www.hindustantimes.com/india-news/independence-day-2021-hydrogen-energy-hub-solar-energy-india-climate-goals-modi-101629012924744.html">reach 450 gigawatts</a>&nbsp;of capacity by 2030. Given its investible corpus and the expected growth, insurers have the transformative power to exceed this expectation. While almost all of the fresh capacity installed during 2022 is renewable energy, the fact remains that fossil fuel still accounts for almost 80% of energy. Solar is the way forward but it must proceed both top-down and bottom-up &mdash; drawing on all the blue-sky opportunities it can.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
<h6>Photo by <a href="https://unsplash.com/fr/@redzeppelin?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Red Zeppelin</a> on <a href="https://unsplash.com/photos/UVGE-o757-g?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a>​</h6>

Ensuring the success of solar - India's green energy transition

As the world of governance increasingly encompasses an ‘E’ and a ‘S’ - thereby the Environmental Social Governance (ESG) - the stakeholders’ universe promises to go way beyond the binary obsession. The existing patriarchy, regulations and protocols fall terribly short. Hence a compelling reason to seek answers for a sustainable and equitable world. A world that is not just inclusive in a male and female sense or enabling the coming generation or democratizing corporate ownership but beyond the anthropocentric - thereby bringing Nature on boards. 

As the world of governance increasingly encompasses an &lsquo;E&rsquo; and a &lsquo;S&rsquo; - thereby the Environmental Social Governance (ESG) - the stakeholders&rsquo; universe promises to go way beyond the binary obsession. The existing patriarchy, regulations and protocols fall terribly short. Hence a compelling reason to seek answers for a sustainable and equitable world. A world that is not just inclusive in a male and female sense or enabling the coming generation or democratizing corporate ownership but beyond the anthropocentric - thereby bringing Nature on boards. Early days for the latter but the experiment has commenced. Readying ourselves for, as Kate Raworth known for &lsquo;doughnut economics&rsquo; puts it: &ldquo;What would Nature ask the business to do?&rdquo;
Stephanie Stacey writes in the Insider: &ldquo;One-third of Gen Zers in a&nbsp;<a href="https://home.kpmg/uk/en/home/media/press-releases/2023/01/climate-quitting-younger-workers-voting-esg.html#:~:text=New%20research%20released%20by%20KPMG,a%20more%20environmentally%20friendly%20job">recent KPMG survey</a>&nbsp;said they'd rejected a job offer because they didn't like a company's green credentials&hellip; one in three Gen Z respondents said they'd rejected a job offer based on a company's ESG record - higher than the figure of one in five for the respondents of all ages&hellip; The growing group of climate-conscious job seekers is part of the wider movement of "<a href="https://www.bloomberg.com/news/features/2023-01-05/how-to-quit-your-job-to-fight-climate-change">climate quitters</a>" - people seeking environmentally friendly companies and leaving their jobs to join them&rdquo;. Here is Clinical Professor Alison Taylor reinforcing it, as she comments on a recent story by Adrian Wooldridge in Bloomberg - &lsquo;McKinsey&rsquo;s Missteps Point to an Industry-Wide Mess&rsquo;: &ldquo;Because if you were to have meaningful principles, you would sure attract the best and brightest. This is clear to me in the classroom every day&rdquo;. Alison teaches at NYU Stern.
<h2>Hub culture</h2>
So what is it that will be diverse enough and sustainably stimulating which will draw the Gen Zers?
Let us look at some of the live ongoing experiments drawing attention. <a href="https://hubculture.com/hubs/hubnews/news/1523#.Y85oJqNfSll.linkedin">Hub Culture</a>,&nbsp;a digital ecosystem with a mission to push the boundaries of sustainability with evolving technology, will become the first company to replace its entire board with Nature by appointing the Atlantic Ocean to replace all seven of its current board members.
<blockquote>
Our aim is to put the rights of nature at the heart of the boardroom governance process for Hub Culture, our products and services," said founder Stan Stalnaker. "This idea is a culmination of actions set in motion during the UN biodiversity Summit (COP15) in Montreal, where discussions on the rights of nature took center stage.
</blockquote>
To ensure legal viability, Hub Culture will use its&nbsp;<a href="https://hubculture.com/propel">Propel</a>&nbsp;governance system to assign nine&nbsp;proxy board&nbsp;advocates to act on behalf of the Atlantic Ocean. One of these advocates includes&nbsp;<a href="https://zeke.ai/">Zeke.ai</a>, which will become the first Artificial Intelligence (AI) to&nbsp;participate in the company's board-level decisions. The board transition and new board member proxies will be announced June 28, 2023 at the&nbsp;<a href="https://hubculture.com/776/events/442/index">Hub Culture Frontlines Summit in Bermuda</a>, a&nbsp;forum for stakeholders interested in ocean health and sea level rise response to frontline ocean communities.&nbsp;Stalnaker says the company will &ldquo;ensure no company decision occurs without first hearing from Nature&rdquo;.
<h2>Faith in nature</h2>
Isabella Kaminski of The Guardian <a href="https://www.theguardian.com/environment/2022/sep/22/eco-beauty-company-faith-in-nature-board-directors">has another fascinating story</a>: &ldquo;This Edinburgh-based company sells soap and haircare products, as well as household cleaners and shampoo for dogs, says it is the first company in the world to give nature a formal vote on corporate decisions that might affect it taps into a growing global movement to assign nature legal rights, although it has had&nbsp;<a href="https://www.theguardian.com/environment/2021/jul/17/laws-of-nature-could-uk-rivers-be-given-same-rights-as-people-aoe">little traction to date in the UK</a>.
Simeon Rose, Faith In Nature&rsquo;s creative director, said he hoped other businesses who take their responsibility to the natural world seriously would follow suit&hellip; We&rsquo;ve always wanted nature to be at the heart of what we do, and this felt like the next serious step we could take to make that a reality.
Working with lawyers from &lsquo;Lawyers for Nature&rsquo; and the US-based Earth Law Center, as well as a pro bono team of corporate experts at international law firm Shearman &amp; Sterling LLP, the company updated its corporate documents to say that, as well as benefiting shareholders, it would do its best &ldquo;to have a positive impact on nature as a whole&rdquo; and &ldquo;to minimise the prospect of any harmful impact of its business operations on nature&rdquo;.
The first person to hold the position as a non-executive director is Brontie Ansell, senior lecturer in law in Essex Law School and director of &lsquo;Lawyers for Nature&rsquo;, her role would be similar to a guardian acting on behalf of a child in a court of law. Brontie would be a spokeswoman for the natural world.
<blockquote>
We&rsquo;re really happy to share details of how and why we did this&rdquo; says Rose. We&rsquo;ve always wanted nature to be at the heart of what we do, and this felt like the next serious step we could take to make that a reality.
</blockquote>
<h2>In conclusion</h2>
Appalled by what kind of a depleted world we could leave behind; Lord Nicolas Stern and Nobel Laureate Joseph Stiglitz assert: &ldquo;There is no ethical justification for giving so little weight to future generations&rsquo; welfare.&rdquo; Notwithstanding the hubris of our race, we must bear in mind Richard Feynman&rsquo;s belief that&nbsp;<a href="https://www.themarginalian.org/2022/04/22/richard-feynman-yo-yo-ma/">the imagination of nature will always exceed that of the human animal</a> (source: www.themarginalian.com by Maria Popova). A Gen Zer rebellion moderated by Nature bodes well for the future direction of the boards. And it may not end here. Would Ireland&rsquo;s referendum give nature the same rights as people?
<blockquote>
Sometimes evolution feeds on the weirdest mutations&rdquo;, says John Elkington - an authority on corporate responsibility and sustainable development. I draw this excerpt from his thoughts on Hub Culture. Certainly a long overdue course correction and a welcome mutation!
</blockquote>
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
<h6>Cover photo by <a href="https://unsplash.com/fr/@robertlukeman?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Robert Lukeman</a> on <a href="https://unsplash.com/photos/zNN6ubHmruI?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a>​</h6>

“Sometimes evolution feeds on the weirdest mutations”: boards powered by the Gaia!

“Much, if not most, of humanity today lives as colonialists once did - viewing the Earth as though it were an inert entity that exists primarily to be exploited and profited from, with the aid of technology and science, Yet even the sciences are now struggling to keep pace with the hidden forces that are manifesting themselves in climate events of unprecedented and uncanny violence”.

&ldquo;Much, if not most, of humanity today lives as colonialists once did - viewing the Earth as though it were an inert entity that exists primarily to be exploited and profited from, with the aid of technology and science, Yet even the sciences are now struggling to keep pace with the hidden forces that are manifesting themselves in climate events of unprecedented and uncanny violence&rdquo;. I draw this and a lot more from noted author <a href="https://amitavghosh.com/bio.html">Amitav Ghosh</a>&rsquo;s &lsquo;The Nutmeg&rsquo;s curse&rsquo;.
Such is the power of indigenous practices, wherever they are, that we ought to look at them seriously. Their faith and customs emanate from the deep and longstanding intimacy with Nature. The following <a href="https://en.wikipedia.org/wiki/Ojibwe">Ojibway</a> prayer, for instance, diagnoses the malady and prescribes the healing of natural forces unleashed by our irreverent actions:
&ldquo;Grandfather,
Look at our brokenness.
We know that in all creation
Only the human family
Has strayed from the sacred way.
We know that we are the ones
Who are divided
And we are the ones
Who must come back together
To walk in the sacred way
Grandfather,
Sacred one,
Teach us love, compassion, honor
That we may heal the earth
And heal each other&rdquo;.
Amitav Ghosh provides a brilliant context to the colonization of the Americas and thereby the colonization of its indigenous people. He explains: &ldquo;What makes the European colonization of the Americas distinctive, however, is the sheer scale and the rapidity of environmental transformation that accompanied it, radically altering more than a quarter of the Earth&rsquo;s land surface in a few hundred years. That these transformations may even have contributed to planet-wide climatic disruptions suggests something of the scale and speed at which changes occurred&rdquo;. I seek hope and wisdom from some news stories on Indigenous communities in North America.
<h2>Spiritual beliefs of indigenous peoples</h2>
As Shari Narine <a href="https://www.hopestandard.com/news/spiritual-beliefs-of-indigenous-people-valid-grounds-for-govt-decisions-supreme-court-confirms/">reported</a>, &ldquo;The Supreme Court of Canada has recently refused to hear an appeal of a 2017 British Columbia (BC) government decision that turned down an application to allow a small-scale hydroelectric generation plant to operate on a creek that has spiritual significance for the <a href="https://cheam.ca/">Cheam First Nation</a>&hellip; However, both the BC Supreme Court in its 2020 decision and the BC Court of Appeal in its 2022 decision held that the director was not evaluating religious dogma but was recognizing the Cheam&rsquo;s spiritual beliefs and practices &ldquo;as worthy of protection as part of the mandate process of reconciliation.&rdquo;&rdquo;
Tim Dickson who as former legal counsel for Cheam First Nation <a href="https://www.hopestandard.com/news/spiritual-beliefs-of-indigenous-people-valid-grounds-for-govt-decisions-supreme-court-confirms/">points out that</a> the decision may be reflective of a &ldquo;growing social awareness of the importance of protecting Aboriginal rights and respecting Indigenous people&rsquo;s values and concerns.&rdquo; However, Dickson believes that Indigenous peoples&rsquo; spiritual practices are still at risk of interference by other land uses that government may approve&rdquo;.
Amitav informs about the situation in the neighbouring USA: &ldquo;Thus in 1883, in a country where freedom of religion was a foundational creed, the US Department of the Interior instituted a Code of Indian offences that essentially banned the practice of native religions. Not till the passage of the American Indian Religious Freedom Act, in 1978, were native beliefs legalized&rdquo;.
<h2>The ancient cedar trees</h2>
For BBC News, Eloise Alanna <a href="https://www.bbc.com/news/world-us-canada-63980557">writes</a>:
&ldquo;Nootka island is bountiful in natural resources. It is abundant in fish and covered in dense ancient forests. It is home to highly sought-after old-growth red cedar trees that can live for over 1,000 years. Red cedars can grow to become giants in the forest, and have a distinctive cinnamon red bark. The largest in BC soars 56 metres (183 feet) towards the sky on a trunk base that is six metres wide (19 feet). These ancient trees were among the most unusual pieces of evidence the <a href="https://www.nuchatlaht.com/">Nuchatlaht</a> have presented to prove that their people continuously lived on the claim area on Nootka Island.&rdquo;
&ldquo;[This] small indigenous community is <a href="https://www.bbc.com/news/world-us-canada-63980557">fighting a historic land rights claim</a> in Canada - and they are using ancient trees and famed British explorer Captain Cook's journal to help make their case&hellip; [The Nuchatlaht case] is being watched for its potential impact on indigenous land claims in Canada and what it means for the provincial government's commitment to reconciliation.
As one expert put it, the decision could be "the first tile in the Aboriginal rights game of dominos". And to help win their case, the Nachatlaht are using a unique piece of evidence that they say is not only a part of their cultural heritage, but also an important living artefact that must be cared for to restore a damaged land.&rdquo;
To win, one of the things the Nuchatlaht must prove is that they continuously and exclusively occupied the land in 1846, when Britain gained sovereignty over what is now BC in a treaty signed with the United States.&rdquo;
They are raring to help heal the earth and want to show that they can own and manage better.
<h2>Paradigm shifts</h2>
Drawing from Carl Smith&rsquo;s <a href="https://www.governing.com/now/california-seeks-native-american-help-after-years-of-environmental-abuse">story in Governing</a>: Native people including the Indigenous Paiute have &ldquo;been living in California&rsquo;s Owens Valley since time immemorial when the first permanent settler arrived in 1860. &hellip;The need for smarter approaches to natural resource management and climate mitigation has never been greater, and many in government believe that Indigenous stewardship practices <a href="https://www.governing.com/now/california-seeks-native-american-help-after-years-of-environmental-abuse">deserve</a> a bigger place in their plans.&rdquo;
&ldquo;L'eaux Stewart, the chair of the tribal council for the <a href="https://bigpinepaiute.org/">Big Pine Paiute tribe</a> in Owens Valley, recently had an opportunity to contribute to an assessment of climate change impacts by California&rsquo;s Office of Environmental Health Hazard Assessment (OEHHA). &hellip;The 2022&nbsp;<a href="https://oehha.ca.gov/climate-change/report/2022-report-indicators-climate-change-california">Indicators of Climate Change in California</a>&nbsp;report, published in November, is OEHHA&rsquo;s first effort to tell the state&rsquo;s &ldquo;climate change story&rdquo; with input from more than 40 California tribes.&rdquo;
&ldquo;It&rsquo;s a standard practice in Indigenous cultures to recognize that all around us are relatives - some are human, some are other species or other forms,&rdquo; says Shawn Lum, administrator of the Eastern California Museum. &ldquo;Stewardship involves consideration of these relationships and the connections between a landscape and those who are making it their home&rdquo;.
For Grist, Carly Graf <a href="https://grist.org/article/montana-flathead-reservation-indigenous-climate-plan/">covered a unique case,</a> "<a href="https://www.csktribes.org/">The Confederated Salish and Kootenai Tribes</a> (CSKT) live among some of the most spectacular landscapes in the USA. Their home, the Flathead Reservation, covers 1.2 million acres dotted with soaring mountains, sweeping valleys, and lush forests. Flathead River bisects the land and drains into Flathead Lake, the largest body of fresh water west of the Mississippi River.&rdquo;
Indigenous communities tend to be &ldquo;excluded from any discussion on how best to mitigate the impacts of climate change - even as they bear a disproportionate share of them. The CSKT are a notable exception. They have, since 2013, written and twice revised a <a href="https://grist.org/article/montana-flathead-reservation-indigenous-climate-plan/">comprehensive strategy</a> to manage and protect their lands. One that draws heavily from an unwavering belief that the land, its ecosystems, and its people are intrinsically interdependent.&nbsp;The CSKT&nbsp;<a href="http://csktclimate.org/downloads/Climate%20Change%20Strategic%20Plan/CSKT%20Climate%20Change%20Adaptation%20Plan%204.14.16.pdf">Climate Change Strategic Plan</a>, and how it came together, provides a model of how community engagement, making it as easy as possible for people to participate, and respect for diverse perspectives and experiences can help with the changes wrought by a warming world.&rdquo;
<h2>Settlers versus natives</h2>
The modern conception of matter as inert - or &ldquo;as an inanimate object of inquiry&rdquo; - emerged out of several intersecting processes of violence: between Catholics and Protestants; between various Protestant sects; between elite European men and poor women; and perhaps most significantly between European colonizers and the Indigenous peoples of the Americas, many of whom believed that earthly forces and material entities of all kinds had innate powers and agency; explains Amitav Ghosh. The struggle over these diametrically opposed views was a metaphysical conflict that mirrored the violence of the terrestrial wars that were then being fought between settlers and natives. The aim at eradicating &ldquo;the belief that spirit existed in all matter&rdquo; thus came to be seen as &ldquo;a final stage of English conquest - over nature, and over those who had improper views of nature.&rdquo;
<h2>Way forward?</h2>
Are we ready to reconcile with the larger reality - the central role of Nature, thereby restrain the extractive urge and think of the generations ahead? <a href="https://www.bing.com/videos/search?q=oren+lyons&amp;docid=603537334259160699&amp;mid=8D414AA536887CEE73BF8D414AA536887CEE73BF&amp;view=detail&amp;FORM=VIRE">Chief Oren Lyons</a>, a Native American Faithkeeper of the Turtle Clan, tells us how his people think seven generations ahead when making decisions: &ldquo;In our way of life, in our government, with every decision we make, we always keep in mind the Seventh Generation to come. It&rsquo;s our job to see that the people coming ahead, the generations still unborn, have a world no worse than ours - and hopefully better, When we walk upon Mother Earth we always plant our feet carefully because we know the faces of our future generations are looking up at us from beneath the ground. We never forget them&rdquo;.
&ldquo;Would that we consider those unborn generations as we trample our forests and pollute our skies in the name of progress and our present-day entitlement&rdquo;? Asks <a href="https://en.wikipedia.org/wiki/Wayne_Dyer">Wayne Dyer</a>.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Colonialism to climate crisis: indigenous wisdom to the fore

That we are onboard a heating planet into a full-blown climate crisis, everything and everyone here will be impacted if not already. Billionaires are no exception. Pathological greed keeps them on the hook as they ensure this theatre of the absurd keeps unfolding. On the other hand - faced with doomsday rather than stop doing the obvious - they are indulging in escape fantasies.

&lsquo;Dying light&rsquo; is a survival horror game set in a post-apocalyptic world full of zombies and inhumane characters. It claims to take gaming to the next level and offers you one of the most entertaining and exciting gaming experiences. Set in the year 2102 after the nuclear bomb destroyed the world. The main protagonist and other vault dwellers are saved. But now, you must leave the vault and explore the horrific and dangerous wasteland to reclaim it. These can be played on:&nbsp;Linux, Microsoft Windows, PlayStation, Xbox, Nintendo. If it whets your appetite, you may wish to <a href="https://www.technewstoday.com/best-post-apocalyptic-games/">check this out.</a>​
&ldquo;I think the most interesting reason why such games are relevant to our contemporary reality is that they exist as models for imagining possible future scenarios around climate change, fuel and food security, or social and technological collapse so that these possibilities can be explored within popular culture. There is a great deal of denial, whether unconscious or conscious, around such challenges facing our wider society. We don&rsquo;t want to think about such dystopian or uncomfortable possibilities, therefore there is real value in &lsquo;imagining the unimaginable&rsquo; and games, in my opinion, are perhaps the best artform for doing this and driving positive change&rdquo;. Gaming enthusiast <a href="https://profiles.waikato.ac.nz/anthony.richardson">Dr. Anthony Richardson</a> throws light on the growing global obsession with post-apocalyptic games and its potential to promote and address sustainability challenges that lie ahead.
<h2>Games billionaires play</h2>
That we are onboard a heating planet into a full-blown climate crisis, everything and everyone here will be impacted if not already. Billionaires are no exception. Pathological greed keeps them on the hook as they ensure this theatre of the absurd keeps unfolding. On the other hand - faced with doomsday rather than stop doing the obvious - they are indulging in escape fantasies.
Journalist <a href="https://www.linkedin.com/in/petersgoodman/">Peter S. Goodman</a>'s &lsquo;Davos Man: How the Billionaires devoured the World&rsquo; is an eye opener, of the global billionaire class. Goodman&rsquo;s work is billed as "an essential read for anyone concerned about economic justice, the capacity of societies to grapple with their greatest challenges, and the sanctity of representative government". These manifest as &ldquo;widening wealth inequality, the rise of anti-democratic nationalism, the shrinking opportunity to earn a livable wage, the vulnerabilities of our health-care systems, access to affordable housing, unequal taxation, and even the quality of the shirt on your back&rdquo;.
And what got us here? Author <a href="https://www.commondreams.org/author/kate-aronoff">Kate Aronoff</a> argues, since the 1980s and 1990s, economists, pro-business Democrats and Republicans in the US, and global organisations like the UN and the World Economic Forum have all made concessions to the oil and gas industry that they have no intention of reversing. What's more, they believe that climate change can be solved through the market, capitalism can be a force for good, and all of us, corporations included, are fighting the good fight together. These assumptions, Ms. Aronoff makes abundantly clear, will not save the planet. And the billionaires know it.
<h2>Toxic masculinity</h2>
&lsquo;Survival of the Richest: Escape Fantasies of the Tech Billionaires&rsquo; author <a href="https://en.wikipedia.org/wiki/Douglas_Rushkoff">Douglas Rushkoff</a> says billionaires &ldquo;not only know they're the cause of the real world coming apart; they mean to escape it by doubling down on tech-focused solutions more interested in saving themselves, rather than the wider population&rdquo;. And interestingly, "they're willing to disrupt the cab industry, the hotel industry, the book industry... but they're not even thinking once about disrupting the underlying architecture of kind of extractive capitalism&rdquo;.
He believes the billionaires are "testing the underlying philosophy" of what he calls "the Mindset" - a Silicon Valley-style certainty that they can escape a catastrophe of their own making so long as they have enough money and the right technology. The Mindset is about investing in underground bunkers, rocket ships or anything else that allows them to get away from an apocalyptic event on Earth. the influence of toxic masculinity and the questions we should be asking our leaders.
Toxic masculinity fuels much of this mindset. Unfortunately, with a growing fan club this rub on effect of billionaires has a systemic challenge. In one of his recent interviews, Rushkoff shares this warning:
<blockquote>
&ldquo;We do need to unwind this need to dominate, and the way to do that is to encourage the kinds of things that maybe we associate with women and female archetypes like sharing and nurturing and community. Also learning how to break down boundaries rather than erect more of them. Reducing our fear of intimacy. Creating a sense of belonging without feeling you have to beat somebody up. So yeah, it&rsquo;s the simple stuff but it also requires some sort of a shift in the way we understand security and economics&rdquo;.
</blockquote>
Kate Aronoff charts out this simple stuff in her book &lsquo;Our Future&rsquo;. &ldquo;A radical reimagining of our politics and our economies, in 12 years includes: decarbonizing the economy;&nbsp;nationalizing utilities and the fossil fuel industry;&nbsp;public sector - private sector partnerships in the public interest;&nbsp;a jobs guarantee;&nbsp;climate reparations;&nbsp;equitable planning for inevitable warming;&nbsp;low-carbon luxury.&rdquo; But the billion-dollar question is, are we going to get anywhere near this?
<h2>How prepped are you?</h2>
I am afraid we are not getting anywhere near it. &ldquo;It's by building some piece of incredible technology - like a bunker or spaceship -&nbsp;that hides them from the externalized problems of what they've done&rdquo;, as Rushkoff puts it, that they continue to delude themselves. Let&rsquo;s look at some manifestations. The notion of &ldquo;doomsday prepping&rdquo; was popularized in the mainstream by&nbsp;<a href="http://channel.nationalgeographic.com/doomsday-preppers/">the National Geographic channel&rsquo;s show by the same name</a>. The show&rsquo;s website offers a quiz titled &ldquo;<a href="http://channel.nationalgeographic.com/doomsday-preppers/interactives/how-prepped-are-you1/">How prepped are you?</a>&rdquo; so you can test your own likelihood of surviving an apocalypse. Here is an all-rounded story: <a href="https://www.theguardian.com/news/2022/sep/04/super-rich-prepper-bunkers-apocalypse-survival-richest-rushkoff">The super-rich &lsquo;preppers&rsquo; planning to save themselves from the apocalypse | The super-rich | The Guardian</a>.
<a href="https://d.docs.live.net/476bccae610ef839/Catherine%20Clifford%20of%20CNBC">Catherine Clifford</a> of CNBC talks about Steve Huffman, the 33-year-old co-founder and CEO of the online community&nbsp;<a href="https://www.reddit.com/">Reddit</a>, got Lasik so that he&rsquo;d be able to be more independent in case of emergency. In addition to the eye surgery, Huffman has accumulated guns, ammunition and motorcycles so that&nbsp;<a href="https://www.cnbc.com/2017/01/25/elon-musk-moving-forward-on-plan-to-build-underground-tunnels-for-cars.html">he won&rsquo;t get caught in traffic jams</a>&nbsp;during an evacuation. These &ldquo;preppers&rdquo; are making other investments too. The top 5 destinations to manage the "de-complexification" to come: New Zealand, Iceland, the United Kingdom, Australia, and Ireland.&nbsp;Billionaire Peter Thiel acquired a home and nationality of NZ.
<h2>Self-fulfilling prophecy (SFP)</h2>
Doug Rushkoff says,
<blockquote>
&ldquo;the billionaires of today are in positions of power unlike anything seen before - and they've adopted the most kind of rapacious form of venture capitalism as their religion&hellip; Yet they feel utterly helpless to avoid the inevitable event; you know, the climate crisis or pandemic or social unrest that leads to a revolution or mass unrest and renders the world unlivable for any of us&rdquo;.
</blockquote>
All this notwithstanding the hubris that accompanies the billions!
<blockquote>
&ldquo;<a href="https://en.wikipedia.org/wiki/Glass_Onion%3A_A_Knives_Out_Mystery#Plot">Glass Onion</a> mocks silver-bullet solutionism and skewers tech-bro climate saviours&rdquo;, says <a href="https://www.theguardian.com/profile/ketan-joshi">Ketan Joshi</a> about this fascinating movie. &ldquo;Bad, counter-productive climate solutions come in many flavours, and from many different sources. But the brilliant billionaire climate saviour has to be among the most obnoxious. The Glass Onion swings and hits at a time when, gloriously, that mythology is accelerating in its downfall. That feels fun to watch&rdquo;, he says!
</blockquote>
If and when the billionaires tumble off the tiger&rsquo;s back is a moot point. It is critical that we steer away from dystopian narratives. &ldquo;How might we grow learning ecosystems conducive to well-being, collective intelligence and shared abundance while regenerating Life on our Planet&hellip;?&rdquo; These words from <a href="https://www.linkedin.com/in/danielkinzer/">Daniel Kinzer</a> are music to my ears. Shouldn&rsquo;t games <a href="https://www.bing.com/search?q=Coral+Bleaching+%7C+NASA+Climate+Kids&amp;amp;form=WNSGPH&amp;amp;qs=SW&amp;amp;cvid=337b239e61094565a6b5364eefb418fe&amp;amp;pq=Coral+Bleaching+%7C+NASA+Climate+Kids&amp;amp;cc=IN&amp;amp;setlang=en-US&amp;amp;PC=DCTS&amp;amp;nclid=8C3CA0C6565F2684C94DA5481C573A4D&amp;amp;ts=1673603565358&amp;amp;wsso=Moderate">such</a> <a href="https://www.bing.com/search?q=These+4+Games+Will+Teach+Kids+How+We+Can+Tackle+Climate+Change+%28fastcompany.com%29&amp;amp;form=WNSGPH&amp;amp;qs=SW&amp;amp;cvid=0bec1b5365e34909bc788508a8df4dbf&amp;amp;pq=These+4+Games+Will+Teach+Kids+How+We+Can+Tackle+Climate+Change+%28fastcompany.com%29&amp;amp;cc=IN&amp;amp;setlang=en-US&amp;amp;PC=DCTS&amp;amp;nclid=8C3CA0C6565F2684C94DA5481C573A4D&amp;amp;ts=1673603621954&amp;amp;wsso=Moderate">as these</a> be the building blocks for the much desired SFP?
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Dystopian billionaires are riding the climate tiger

A visit to the Pacific Northwest - with much of the noise muffled - the signals are back. Sights and sounds of an orca couple in rhythmic motion off San Juan island, a lot more in the interim, and it is serendipity yet again! Explorations, revelations, discoveries unravel the magical and incredible biodiversity we are born into. And now at the end of the year, a year of mind boggling climate and biodiversity catastrophes, I am left with no choice but to introspect and contemplate as to what we stand to lose and at what price?

A visit to the Pacific Northwest - with much of the noise muffled - the signals are back. Sights and sounds of an orca couple in rhythmic motion off San Juan Island, a lot more in the interim, and it is serendipity yet again! Explorations, revelations, and discoveries unravel the magical and incredible biodiversity we are born into. And now at the year's end, a year of mind-boggling climate and biodiversity catastrophes, I am left with no choice but to introspect and contemplate what we stand to lose and at what price.
<h2>Incredible</h2>
A brilliant exposition from <a href="https://en.wikipedia.org/wiki/Maria_Popova">Maria Popova</a> shines a light on the magical genius of our planet: Fungi, neither plants nor animals, are the evolutionary cardinals of the Earth - the first to conquer it and the last to inherit it, composing the living substratum beneath every forest and every field and every backyard ecosystem. Each cubic inch of mycelium compresses eight miles of fine filaments folded unto themselves - the original superstrings of this terrestrial universe. Wildly unlike us, they are inseparable from our creaturely inheritance. Since the dawn of our adolescent species, they have been touching our cuisine and our consciousness in ever-evolving ways, the underlying mystery of which we are <a href="https://www.themarginalian.org/2018/07/11/how-to-change-your-mind-michael-pollan/">only just beginning</a> to unravel.
In the early 2000s, a series of groundbreaking studies began revealing yet another facet of that mystery - the way mushrooms respond to sound, despite having no auditory organs. One found that high-frequency sounds inhibit spore generation and mycelial growth. Another affirmed the correlation from the other side, finding that low-frequency sound waves stimulate mycelial growth. The aptitudes and abilities of every organism - ours included - are puppeteered by evolutionary adaptation. This means the curious relationship between sound vibration and mycelial growth must confer some substantive evolutionary advantage upon mushrooms, honed over the eons.
In an&nbsp;<a href="https://www.singforscience.org/episodes/isaac-brock-paul-stamets">episode</a>&nbsp;of musician Matt Whyte&rsquo;s altogether wonderful&nbsp;<a href="https://www.singforscience.org/">Sing for Science</a>&nbsp;podcast, <a href="http://paulstamets.com/">Paul Stamets</a>, master mycologist, is author of the millennial bible&nbsp;<a href="http://www.amazon.com/exec/obidos/ASIN/1580085792/braipick-20">Mycelium Running: How Mushrooms Can Help Save the World</a> offers a possible - and deliciously plausible - hypothesis, says Maria. In that peculiar and recurring way, indigenous wisdom has of anticipating the discoveries of science, the folkloric traditions of many first nations across Europe, North America, Japan, and Russia hold that lightning strikes mushrooms more readily than other organisms. Stamets observes that we now know this to be true in measurable ways that contour a measurable evolutionary advantage - the 50,000 volts of electricity a log incurs when struck by lightning greatly stimulates the yield of the shiitake mushrooms growing on it.
This is where Stamets&rsquo;s deduction gets interesting: Before lightning strikes, thunder sounds - a rolling tide of low-frequency waves unspooling from the horizon. Having had hundreds of millions of years of evolutionary training and triumph by harnessing the elements and the environment, mushrooms would want something to awaken them to the impending rain event in order to get ready to absorb the water and electricity so beneficial to their propagation. Low-frequency sound waves, under this hypothesis, act as a warning bell - a mycelial clarion call for duty.
<h2>Into nature&rsquo;s realm</h2>
<a href="https://amp-theguardian-com.cdn.ampproject.org/c/s/amp.theguardian.com/commentisfree/2022/nov/30/science-hear-nature-digital-bioacoustics">Digital bioacoustics</a> demonstrate we&rsquo;ve been deaf! Did you know that non-humans are in continuous conversation, much of which the naked human ear cannot hear? <a href="https://karenbakker.org/">Dr. Karen Bakker</a> of UBC tells us how by placing digital microphones all over Earth, from the depths of the ocean to the Arctic and the Amazon, scientists are discovering the hidden sounds of nature, many of which occur at ultrasonic or infrasonic frequencies, above or below human hearing range. Digital Bioacoustics helps us hear these sounds, by functioning as a planetary-scale hearing aid and enabling humans to record nature&rsquo;s sounds beyond the limits of our sensory capacities. With the help of artificial intelligence (AI), researchers are now decoding complex communication in other species.
Scientists are now attempting to use these digitally enabled discoveries to develop tools for interspecies communication with creatures as diverse as honeybees and whales, raising both ethical and philosophical questions. Do we have the right to eavesdrop on non-humans and gather data without their consent? Does the existence of complex communication in animals challenge the claim that humans, alone, possess language? What are the risks of engaging other species in AI-mediated conversations, when we know about the biases embedded in AI systems?
We should not forget about the pressing challenge of noise pollution, the reduction of which can have immediate, positive and significant impacts on non-humans and humans alike. Hushing the human cacophony is a major challenge of our time. Digital listening reveals that we have much more to learn about non-humans, and provides new ways to protect and conserve the environment. Perhaps one day we will invent a zoological version of Google Translate. But first, we need to learn how to listen. &ldquo;Can we mobilize digital tech to fight back against biodiversity loss? The Sounds of Life gives us a rare gift: hope in a time of environmental emergency,&rdquo; says author <a href="https://en.wikipedia.org/wiki/Naomi_Klein">Naomi Klein</a>, about the book by Karen Bakker. John Borrows, University of Victoria, has this fascinating observation: &ldquo;If whales, fish, bats, turtles, plants, and bees could write endorsements, I think they would highly recommend this book.&rdquo;
<h2>Cacophony</h2>
Our oceans are a symphony. Sound is essential to the survival and prosperity of marine life. But man-made noise is threatening this fragile world. <a href="https://www.sonicsea.org/watch-now">Sonic Sea</a> is about protecting life in our waters from the destructive effects of noise pollution. All the noise caused by man-made sources, primarily shipping, builds up stress levels in marine creatures. Putting oceans at risk is putting all of us at risk, say scientists.
&ldquo;Understanding the role of&nbsp;whales&nbsp;in the&nbsp;carbon cycle&nbsp;is a dynamic and emerging field that may benefit both marine conservation and climate-change strategies,&rdquo; according to a team of scientists, led by <a href="https://uas.alaska.edu/dir/hcpearson.html">Heidi Pearson</a>, a biologist from the University of Alaska Southeast. The ocean is by far the world&rsquo;s largest carbon sink, having absorbed about 40 percent of all carbon dioxide emitted from the burning of fossil fuels since the Industrial Revolution. Marine biologists recently discovered that whales, particularly great whales, also play an important role in capturing carbon from the atmosphere. They can weigh up to 28 tons and live over 100 years, according to the researchers, their size and long lives mean they accumulate more carbon in their bodies than other small animals. When they die, they sink to the bottom of the ocean, taking carbon out of the atmosphere for centuries, reminds <a href="https://www.linkedin.com/in/george-a-zoto-ph-d-m-s-b-a-86a52489/">George Zoto</a>. &ldquo;Whales consume up to 4 percent of their massive body weight in krill and photosynthetic plankton every day. For the blue whale, this equates to nearly 8,000 pounds,&rdquo; the scientists say. &ldquo;When they finish digesting their food, their excrement is rich in important nutrients that help the krill and plankton flourish, aiding in increased photosynthesis and carbon storage from the atmosphere.&rdquo; A&nbsp;2019 report&nbsp;published by the International Monetary Fund, shares George Zoto, estimated that a great whale sequesters 33 tons of CO2 each year on average, while a tree absorbs only up to 48 pounds a year - a figure the report&rsquo;s authors suggest that conservationists could be better off&nbsp;saving whales than planting trees.
<h2>The aliens</h2>
<a href="https://environment.uw.edu/faculty/maya-tolstoy/">Maya Tolstoy</a> is a renowned marine geophysicist. She specialises in seafloor earthquakes and volcanoes. Tolstoy was also in the&nbsp;<a href="https://en.wikipedia.org/wiki/James_Cameron">James Cameron</a>&nbsp;film about the deep ocean&nbsp;<a href="https://en.wikipedia.org/wiki/Aliens_of_the_Deep">Aliens of the Deep</a>. Her work covers <a href="https://d.docs.live.net/476bccae610ef839/What%20is%20a%20hydrothermal%20vent?%20(noaa.gov)">hydrothermal vents</a>. Scientists first discovered them in 1977 during an exploration near the Galapagos Islands. These are the result of seawater percolating down through fissures in the ocean crust in the vicinity of spreading centers or subduction zones (places on Earth where two tectonic plates move away or towards one another). The cold seawater is heated by hot magma and reemerges to form the vents. Seawater in hydrothermal vents may reach temperatures of over&nbsp;700&deg; Fahrenheit. To their amazement, they have their own unique&nbsp;<a href="https://en.wikipedia.org/wiki/Ecosystem">ecosystem</a>, which supports diverse organisms such as&nbsp;<a href="https://en.wikipedia.org/wiki/Riftia_pachyptila">giant tube worms</a>, swarms of blind white crabs, and vast amounts of&nbsp;shrimp&nbsp;which are capable of "seeing" water that is heated by the vents. These creatures do not require&nbsp;sunlight, and instead obtain their energy from the vents themselves. They are able to survive in the superheated and&nbsp;<a href="https://en.wikipedia.org/wiki/Sulfur">sulfurous</a>&nbsp;water. The documentary, therefore, suggests that this is what alien life beyond&nbsp;<a href="https://en.wikipedia.org/wiki/Earth">Earth</a> might look like. Jupiter&rsquo;s moons Europa and Mars are known to have volcanic activity and liquid water beneath the surface which could mean hydrothermal vents! Could these, instead of light, be causing life to be formed on these planets?
<h2>In conclusion</h2>
This quote &lsquo;From The Outermost House&rsquo; by Henry Beston - that I spotted neatly framed at the Whale Museum, San Juan - is spot on:
<blockquote>&ldquo;We need another and a wiser and perhaps a more mystical concept of animals&hellip; We patronize them for their incompleteness, for their tragic fate of having taken form so far below ourselves. And therein we err, and greatly err. For the animal shall not be measured by man. In a world older and more complete than ours they move finished and complete, gifted with extensions of the senses we have lost or never attained, living by the voices we shall never hear. They are not brethren. They are not underlings; they are other nations, caught with ourselves in the net of life and time, fellow prisoners of the splendour and travail of the earth&rdquo;</blockquote>
Before we know what we stand to lose - we need to know what we have. The stock-taking just commenced. Not the world of animals alone, but plants and the in between. The Living Planet Report 2022 is a comprehensive study of trends in global biodiversity and the health of the planet. This flagship WWF publication reveals an average decline of 69% in species populations since 1970. Shouldn&rsquo;t we hold steadfast to our humility and let go of arrogance instead?
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

The silence and sounds of biodiversity: are we listening?

As an effective tool for climate risk mitigation and adaptation, insurers ought to fend for their own resilience as well. Blind spots in the form of existential chinks keep growing. Here are a handful of threats that get driven directly or indirectly - thanks to our penchant for fossil fuel resulting into anthropocentric behaviour. How do we anticipate and measure the fury of nature unleashed in response to our collective lifestyles? Do we provide and price them adequately? Are we even mindful of the extent and the central role nature and biodiversity play in our scheme of things? How do we deliver climate justice to ensure a just and equitable order? Many of the signals coincided with the COP27. Just one of them that I pick here - whether insurers, particularly in the Global North realise or not - almost drew them in.

As an effective tool for climate risk mitigation and adaptation, insurers ought to fend for their own resilience as well. Blind spots in the form of existential chinks keep growing. Here are a handful of threats that get driven directly or indirectly - thanks to our penchant for fossil fuel resulting into anthropocentric behaviour. How do we anticipate and measure the fury of nature unleashed in response to our collective lifestyles? Do we provide and price them adequately? Are we even mindful of the extent and the central role nature and biodiversity play in our scheme of things? How do we deliver climate justice to ensure a just and equitable order? Many of the signals coincided with the COP27. Just one of them that I pick here - whether insurers, particularly in the Global North realise or not - almost drew them in.
<h1>Reducing loss and damage from climate change</h1>
With the countries at COP27 <a href="https://unfccc.int/news/cop27-reaches-breakthrough-agreement-on-new-loss-and-damage-fund-for-vulnerable-countries">agreeing</a> to a loss and damage fund - the proposed Global Shield is behind us. Hopefully insurers can heave a sigh of relief? Loss and Damage in the international policy debate broadly refers to efforts to “avert, minimise and address loss and damage associated with climate change impacts, especially in developing countries that are particularly vulnerable to the adverse effects of climate change” (<a href="https://unfccc.int/resource/docs/2012/cop18/eng/08a01.pdf#page=21">UNFCCC Decision 3/CP.18</a>). Generally, the terms ‘avert’ and ‘minimise’ are used to refer to mitigation and adaptation respectively, whereas the term ‘address’ refers to actions to deal with climate change impacts that have not been or cannot be avoided.
Ways to reduce loss and damage from climate change include increasing resilience before the occurrence of an extreme weather or slow-onset event - for example, by strengthening flood defences - and establishing mechanisms to provide financial or social protection support to those who have already experienced loss and damage. <a href="http://pure.iiasa.ac.at/id/eprint/15615/1/Linnerooth-Bayer2019_Chapter_InsuranceAsAResponseToLossAndD.pdf">Insurance is one important tool</a> but is not affordable or accessible to all. There are also opportunities to reduce loss and damage after extreme weather events by incorporating resilience into recovery, such as rebuilding infrastructure to be more climate-resilient in the future. The Loss and Damage debate has been contentious within the international climate negotiations because of questions of <a href="https://politicalanthropologist.com/2016/11/08/loss-damage-climate-change-managing-risks-politics-compensation/">fairness and equity</a>﻿, and proving historical responsibility for climate change.
The Global Shield was being presented as a solution to help the 20 most vulnerable nations (“V20”), writes Teresa Anderson. Insurance has been pitched as an approach to climate risk management. But the contribution of insurance to addressing loss and damage would have been limited at best. The Global Shield was a political football being used to undermine the push for a real loss and damage financing facility, believes Teresa. By contributing millions to the Global Shield, G7 countries hoped to persuade insurance companies to provide more coverage in regions that are at greater risk of climate impacts. But insurance companies, by their very nature, are often either reluctant to provide coverage, or <a href="https://urldefense.com/v3/__https:/actionaid.org/publications/2017/wrong-model-resilience__;!!GFN0sa3rsbfR8OLyAw!fS8s4rBYzuCOp8-Hzr_gMsNvbfL7LU9HUXd2nO_TqVO6Uh4huYvutpuCWaZJ2dK__WxMGALBRwAwmT01QPFOXliaJGaQOTVWeF4$">reluctant to pay out</a>, says Teresa. Moreover, this would have amounted to governments in the Global North subsidising their own insurance corporations.
<h1>Top ten US P&amp;C insurers</h1>
In its early days, the Biden administration sent out very strong signals by precisely addressing some of the serious concerns Professor Shiva Rajgopal of Columbia Business School flags in his three-part analysis of top ten US P&amp;C insurers. I highlighted how the Federal Insurance Office (FIO) was <a href="https://www.linkedin.com/posts/praveenguptafcii_taking-the-wheel-on-climate-change-activity-6879782631211339776-T5Up?utm_source=share&amp;utm_medium=member_desktop">poised to pivot the actionables</a>. “So what did we learn”, asks Shiva? He benchmarks AXA insurance as the gold standard when measuring the top 10 American P&amp;C insurers on their balance sheet capabilities to cope with climate risk.
“Some might say that American firms are simply different and respond to different social, political, and economic incentives. Fair enough. However, I worry that continued silence about climate risk might create a world where the premiums charged every year keep going up substantially. One would expect insurers should be front and center in climate risk modeling, adaptation, and mitigation. Eventually the risks involved will become so large that conventional market mechanisms may no longer be suitable, and the insurer simply exits the market making the taxpayer responsible for bailouts”.
He goes on to say: “For instance, I would not be surprised if more insurers simply exit the Florida market after Hurricane Ian. One has to wonder what kind of role should state insurance regulators and the Federal Reserve play in nudging U.S. insurers to factor in climate risk into their risk assessments or capital requirements? Should insurers work more closely with building codes and standards and states and local municipalities? Some of the insurers say they do but do we need more? We need to build better and in better locations.Insurance is the lifeline that facilitates private sector risk taking. It is perhaps in our collective self-interest to ensure that the private market functions well and the industry manages oncoming climate risks in a cost-effective manner. If the industry fails or falters in that endeavor, the collective costs we may bear, as residents, property owners and taxpayers, in the future might be immense”.
<h1>Climate models fail to capture strengthening wintertime North Atlantic jets and impacts on Europe</h1>
Europe accounts for a significant asset class concentration. The recent spate of floods, hurricanes, heatwaves and droughts represent a new normal. The winter time North Atlantic jet streams have different implications for North, South Europe and the Mediterranean. Are the climate models letting us down?
<a href="https://www.carbonbrief.org/qa-how-do-climate-models-work">Climate models</a> are one of the primary means for scientists to understand how the climate has changed in the past and may change in the future. These models simulate the physics, chemistry and biology of the atmosphere, land and oceans in great detail, and require some of the largest supercomputers in the world to generate their climate projections. They are constantly being updated, as different modelling groups around the world incorporate higher <a href="https://www.carbonbrief.org/qa-how-do-climate-models-work#what">spatial resolution</a>, new physical processes and <a href="https://en.wikipedia.org/wiki/Biogeochemical_cycle">biogeochemical</a> cycles. These modelling groups coordinate their updates around the schedule of the <a href="https://www.ipcc.ch/">Intergovernmental Panel on Climate Change</a> (IPCC) assessment reports, releasing a set of model results - known as “runs” - in the lead-up to each one. These coordinated efforts are part of the <a href="https://www.carbonbrief.org/qa-how-do-climate-models-work#cmip">Coupled Model Intercomparison Projects</a> (CMIP). The 2021 IPCC sixth assessment report (AR6) introduced the new state-of-the-art CMIP6 models.
CMIP6 allow researchers to investigate specific aspects of the climate system, from clouds to deep ocean circulation to an interactive carbon cycle. However, it confronts a number of new challenges. More centers will run more versions of more models of increasing complexity. An ongoing demand to resolve more processes requires increasingly higher model resolutions. Archiving, documenting, subsetting, supporting, distributing, and analyzing the petabytes of CMIP6 model outputs challenge the capacity and creativity of the largest data centres and fastest data networks.
Projections of wintertime surface climate over Europe, for instance, depend on reliable simulations of the North Atlantic atmospheric circulation from climate models. However, it is unclear whether these models capture the long-term observed trends in the North Atlantic circulation. Over the period from 1951 to 2020, the wintertime North Atlantic jet has strengthened, while model trends are, on average, only very weakly positive. “Whatever the cause or causes, <a href="https://www.science.org/doi/10.1126/sciadv.abn3112">our results</a> show that regional climate projections of the winter atmospheric circulation and associated impacts over Europe that rely on CMIP6 models may not be reliable”. With a CMIP7 task force in place - will it lead to overcoming such challenges?
<h1>Pricing risk and investments</h1>
Climate change is increasingly being viewed as a systemic risk, and the valuation of climate change risks (both physical and transition risks) represents a complex and multi-dimensional process for which there is currently no agreed-upon industry standard. Due to the inherent complexities of climate change risk, many investors are not factoring these risks into their investment valuations, or they are doing so at a broader sector or industry level, leaving investment / company level climate change risk as a largely unknown, unpriced, and yet very material risk in their portfolios. If there was a sudden repricing of climate change risk, we could <a href="https://issuu.com/prmia/docs/intelligent_risk-apr_2022-issuu/s/15637771">see the same impact</a> that we witnessed during the financial crisis, warns Tamara Close. Moreover insurers ought to be also mindful of all the externalities when pricing a risk not just investments. Needless to mention fossil fuel segment which is expected to end up as a stranded asset.
<h1>Climate: Where is the litigation train heading, and how much speed will it gather?</h1>
Environmental, Social and Governance (ESG) for sure is the engine. A path breaking report ‘Riding The Dragon’, by The Blended Capital Group, charts the evolution of ESG law and its implications. On a more positive note, there is growing understanding of the importance of nature and biodiversity in the fight against climate change. The Taskforce for Nature Related Financial Disclosures (TNFD) promises to grow in relevance, as has the Taskforce for Climate Related Financial Disclosures (TCFD). Litigants are starting to turn their gaze to the protection of nature and biodiversity, and legal practitioners have started to conceptualise a new “framework by which biodiversity-related liability risks should be considered by financial sector supervisors and participants in their broader assessment of biodiversity-related financial risks.” With clearer and clearer evidence of the interdependence of climate and biodiversity, it is hoped that strategic climate litigation will play a positive role in ensuring that a comprehensive approach is adopted to tackle the twin climate and ecological crises. Just as it has in the past, it is expected that climate litigation will continue to play an important role in holding decision-makers in the public and private spaces accountable to the law, and in clarifying and refining legal obligations in a fragmented landscape posing multiple, urgent challenges.
Climate litigation has grown vertiginously in recent years, alludes the report. The LSE Grantham Institute’s Global trends in climate change litigation: 2022 snapshot notes that “globally, the cumulative number of climate change-related litigation cases has more than doubled since 2015. Just over 800 cases were filed between 1986 and 2014, and over 1,200 cases have been filed in the last eight years, bringing the total in the databases to 2,002. Roughly one-quarter of these were filed between 2020 and 2022.” The range of cases filed touches on an increasing number of wildly different issues - they go from cases where individuals sue states for the state’s failure to limit emissions or adapt to climate change, to cases where states sue high-emitting corporates to recover the costs of adapting their cities to climate change, to greenwashing or climate washing claims, to claims seeking to hold directors personally liable for climate-related breaches of duty.
<h1>In conclusion</h1>
These are but some of the chinks. Fossil fuel as well as impaired biodiversity and pollution driven losses are set to rise and we should be getting into a growing litigation mode. Given the trends, does it call for much imagination to see Prof Shiva Rajgopal’s apprehension coming to fruition? From steady redlining of rising uninsurable risks to a flood of climate related claims could see many insurers and reinsurers disappear. Rather than physical and transition risks, liability risk could become preeminent. With all the good that insurers do, they deserve not to be caught with their heads in the sand. The signals are clear if only they switch off all the noise! The prescription is simple. Stop underwriting and investing whatever runs counter to the Planet’s health. Loss and damage will not compensate insurers.
Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Chink in the armour 

As regulators tighten the screws and media sharpens its scrutiny, several manifestations of greenwashing emerge. Sports and events, outside of financial services and fossil fuel industry, throw up growing challenges. Columbia professor Shiva Rajgopal is optimistic: “Regulation, enforcement and awareness of greenwashing issues has increased… Some of the charlatans that entered the space will leave”. Will they or is it wishful thinking?

As regulators tighten the screws and media sharpens its scrutiny, several manifestations of greenwashing emerge. Sports and events, outside of financial services and fossil fuel industry, throw up growing challenges. Columbia professor Shiva Rajgopal is optimistic:<a href="https://thediversityblog.wordpress.com/2022/06/29/regulation-enforcement-and-awareness-of-greenwashing-issues-has-increased-some-of-the-charlatans-that-entered-the-space-will-leave/">&ldquo;Regulation, enforcement and awareness of greenwashing issues has increased&hellip; Some of the charlatans that entered the space will leave&rdquo;.</a> Will they or is it wishful thinking?
<h2>Climate pledge arena</h2>
Standing face to face with the Climate Pledge Arena, in downtown Seattle - the first time - I could not take my eyes off the large signage atop the venue. When lit up post sunset - it glows bright green. Greenwashing is all that rushes and echoes in my head.
My exploration leads me to the innovative features and how it&rsquo;s setting new <a href="https://climatepledgearena.com/sustainability/">sustainability standards</a> for arenas around the world:
<ul>
<li>Carbon Zero: The first&nbsp;<a href="https://living-future.org/">International Living Future Institute</a>&nbsp;certified zero carbon arena in the world.</li>
</ul>
<ul>
<li>Zero Single-Use Plastic: The first arena and NHL Team to announce an intention to eliminate single-use plastics, committed to being 100% free of by 2024.</li>
</ul>
<ul>
<li>Water Conservation: Arena owners&nbsp;<a href="https://theseattlecenterarena.com/sustainability?spMailingID=5598489&amp;spUserID=MTA1ODg3NDc0NzkzS0&amp;spJobID=1040979753&amp;spReportId=MTA0MDk3OTc1MwS2">promise to create</a>&nbsp;the &ldquo;greenest ice in the National Hockey League (NHL)&rdquo;. However, the claims are much more dubious, says Todd Myers - Director, Center for the Environment at Washington Policy Center.</li>
</ul>
<ul>
<li>Zero Waste: By greatly simplifying supply chain it targets a 95%+ diversion rate, which is considered &lsquo;zero waste&rsquo; in the industry.</li>
</ul>
<h2>Formula One</h2>
Are Singapore Formula One Grand Prix green claims <a href="https://www.eco-business.com/news/are-singapore-formula-one-grand-prix-green-claims-glossing-over-huge-carbon-footprint/">glossing over</a> a huge carbon footprint? The flood-lit F1 night race says it is going green by encouraging the use of public transport, digitising tickets and using LED lights. Critics say communications to promote these measures overlook the carbon cost of a sport that consumes as much energy as 30,000 homes in a&nbsp;year. Four-time World champion Sebastian Vettel has <a href="https://www.thehindu.com/sport/motorsport/vettel-calls-for-independent-body-to-monitor-f1s-environmental-targets/article65954488.ece#:~:text=Four-time%20World%20champion%20Sebastian%20Vettel%20has%20called%20for,his%20concerns%20for%20the%20environment%20and%20climate%20change.">called for</a> an independent body to monitor and hold Formula One accountable. To ensure it meets its target of being Net Zero Carbon by the end of the decade.
<h2>British cycling</h2>
&ldquo;Cycling is the epitome of environmentally friendly travel,&rdquo; says a statement from Friends of the Earth. They are deeply disappointed that British Cycling could think it is appropriate to <a href="https://edition.cnn.com/2022/10/11/sport/british-cycling-shell-partnership-spt-intl/index.html">partner</a> with a fossil fuel giant.
Shell, they remind, is continuing to invest billions in oil and gas projects, while using cynical PR initiatives like this partnership to attempt greenwash its harmful activities.
&ldquo;Tobacco firms are rightly banned from sports sponsorship due to the damaging health effects. The same should apply to oil and gas companies which are devastating the health of our planet. Shell should have been told to get on its bike.&rdquo;
<h2>Football world cup: a yellow card</h2>
Qatar&rsquo;s upcoming World Cup is already a <a href="https://www.fastcompany.com/90793932/qatar-says-its-world-cup-will-be-carbon-neutral-experts-gave-it-a-greenwashing-award-instead#:~:text=Qatar%E2%80%99s%20upcoming%20World%20Cup%20has%20already%20been%20a,fans%20to%20face%3A%20its%20devastating%20environmental%20impact.%20advertisement">human rights disaster</a>, as the rapid construction of multiple stadiums has caused the reported deaths of 6,750 migrant workers since FIFA awarded the tournament to Qatar. And there&rsquo;s yet another controversial issue for soccer fans to face: its devastating environmental impact.
Wherever they take place, World Cups generally produce high emissions due to the construction of stadiums, hotels, and updated infrastructure -plus the air travel of soccer teams and millions of spectators from around the world.&nbsp;But Qatar is claiming its November tournament will be the first-ever carbon-neutral World Cup. In response, an anti-carbon advertising campaign has <a href="https://d.docs.live.net/476bccae610ef839/Qatar%20World%20Cup%20given%20a%20'greenwashing%20award'%20for%20carbon%20neutral%20claims%20(fastcompany.com)">conferred</a> on the organisers of this year&rsquo;s Men&rsquo;s FIFA World Cup an ironic&nbsp;<a href="https://www.badverts.org/latest/bad-sport-awards-2022-winners-announced">Bad Sports Award</a>. The campaign calls Qatar&rsquo;s claims dubious, casts doubt on its offset programs, and criticizes its fossil fuel sponsors. Not to mention, Qatar has a record of discrimination, including against gay people; LGBTQ fans have been warned to exercise caution if travelling to the event.
Run by British think tank New Weather Institute,&nbsp;<a href="https://www.badverts.org/latest/bad-sport-awards-2022-winners-announced">Badvertising&nbsp;</a>is a campaign that pushes back against the advertising of fossil fuels and other high-carbon projects. It has recently begun to highlight how these are promoted in sports advertising. Something that can be even more effective because of fans&rsquo; emotional connection to their teams - according to Freddie Daley, a research associate at the Centre for Global Political Economy.
Daley says the aim of the awards is to raise awareness about the polluters, comparing them to the original <a href="https://en.wikipedia.org/wiki/Sportswashing">sportswashers</a>. That&rsquo;s when companies (or countries) try to use sports to improve tarnished reputations.&nbsp;Daley says if future hosts continue to make the same claims, there&rsquo;ll be no environmental progress.
The country has announced ways in which it will offset its carbon emissions from hosting the World Cup, primarily through a carbon credit marketplace, which will invest in renewable projects. But&nbsp;<a href="https://carbonmarketwatch.org/wp-content/uploads/2022/09/Poor-tackling_-Yellow-card-for-2022-FIFA.pdf">a May report</a> from Carbon Market Watch, which outlines why Qatar is not on track to reach carbon neutrality, says it would need to buy 3.6 million or more credits to offset all the emissions. (It is estimated that the country will emit 3.6 million metric tons of pollutants in preparing for and hosting the World Cup).
Needless to mention: &ldquo;Offsets can <a href="https://www.theccc.org.uk/2022/10/13/business-use-of-offsets-risks-delaying-net-zero/#:~:text=Offsets%20can%20mask%20insufficient%20efforts%20from%20firms%20to,the%20impact%20of%20voluntary%20carbon%20markets%20and%20offsetting.">mask insufficient efforts</a> from firms to cut their own emissions, they often deliver less than claimed and they may push out other environmental objectives in the rush to capture carbon.&rdquo;
The current low price of many offsets, which can be purchased from exchanges for less than $4 a ton of carbon dioxide, are providing a cheap way for companies to meet net zero goals which could reduce the incentive for them to directly cut emissions&rdquo;, a report by Britain&rsquo;s Climate Change Committee (CCC) said.
<h2>Skiing: Saudi</h2>
Greenpeace has <a href="https://www.msn.com/en-in/news/other/dangerous-greenpeace-slam-saudi-arabia-ski-resort-as-kingdom-wins-2029-asian-winter-games-bid/ar-AA12Fu4k#:~:text=Campaign%20group%20Greenpeace%20has%20slammed%20a%20%E2%80%9Cdangerous%E2%80%9D%20ski,will%20operate%20on%20%E2%80%9Csustainable%20infrastructure%E2%80%9D%20and%20renewable%20energy.">slammed</a> a &ldquo;dangerous&rdquo; ski resort being built in Saudi Arabia. The warning comes days after the&nbsp;desert kingdom won its bid to host the 2029 Asian Winter Games. Saudi authorities claim that the new Trojena resort, in the country&rsquo;s north west, will operate on &ldquo;sustainable infrastructure&rdquo; and renewable energy.
But&nbsp;<a href="https://www.euronews.com/green/2022/09/07/greenpeace-is-using-boulders-in-the-fight-against-bottom-trawlers-but-why">Greenpeace</a>&nbsp;campaigners have questioned the project&rsquo;s environmental credentials. &ldquo;If you change something in one place, it may change something else in another place, and so on, and it can have impacts on neighbouring ecosystems&rdquo;.
<h2>#COP27</h2>
Coca-Cola - the biggest Plastic Polluter - paradrops into the climate ring as a Sponsor for COP27. John Hocevar of Greenpeace calls it &ldquo;baffling&rdquo;. According to the Greenpeace <a href="https://www.greenpeace.org/international/press-release/55960/coca-cola-biggest-plastic-polluter-sponsor-cop27-greenpeace-reaction/">press release</a>: Coca-Cola produces 120 billion throwaway plastic bottles a year - and 99% of plastics are made from fossil fuels, worsening both the plastic and climate crisis. This partnership undermines the very objective of the event it seeks to sponsor.
<h2>In conclusion</h2>
Haven&rsquo;t we had enough of <a href="https://greenwishing.climatesites.net/greenwishing">greenwishing</a> leading to greenwashing, greenwashing disguised as <a href="https://en.wikipedia.org/wiki/Sportswashing">sportswashing</a> or <a href="https://grist.org/accountability/nature-rinsing-how-polluters-use-the-beauty-of-nature-to-clean-up-their-image/">nature rinsing</a>? Borrowing from Greta Thunberg: &ldquo;We&rsquo;ve been greenwashed <a href="https://www.theguardian.com/environment/2022/oct/08/greta-thunberg-climate-delusion-greenwashed-out-of-our-senses">out of our senses</a>. It&rsquo;s time to stand our ground&rdquo;.
We need to ensure a speedy transformative change so that the climate goal does not remain a climate delusion. Can we afford to lose time playing games with the likes of cheap carbon offsets? There is an urgency - it is the need for guidance, standards, regulations and to blow a whistle for any deviation from them. Just in time to ensure we sustain a climate for our continued well-being. Is it too tall an order for the COP27? Could this one end up as a fizz, too?
Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Sportswashing or what?

India's central bank, the Reserve Bank of India (RBI), has recently embarked upon a consultation process on Climate Change, with various stakeholders. Climate risk is inherently systemic - a siloed approach is, therefore, dangerous. Other financial services regulators should be drawn into the exercise. This submission made to the RBI discusses a few emerging risks and good practices across many economies:

The breadth and scope of the RBI exploration is impressive. However, there are some critical missing components. Moreover, looking at policies and their implementation there is many a slip between the cup and the lip. The endeavour here is to highlight them and point at some successful global approaches. Needless to mention, that a siloed approach to financial services is a rather dangerous approach.

Reserve Bank of India consultation on climate change: many a slip 'twixt cup and the lip!

Dr. Kinnari Bhatt is founder of Surya Advisory, an ethical business and just transition legal advisory firm. Kinnari is a practicing solicitor, has a PhD and is widely published. She is the author of the book Concessionaires, Financiers and Communities: Implementing Indigenous Peoples Rights to Land in Transnational Development Projects published with Cambridge University Press and is a panel expert on land rights and indigenous rights with the Independent Redress Mechanism of the Green Climate Fund.

This interview was originally published on <a href="https://thediversityblog.com/2022/08/18/sadly-i-think-that-the-international-community-has-largely-left-out-the-important-role-of-indigenous-peoples-and-forest-dwellers-from-climate-conversations/">The Diversity Blog</a>. 
Dr. Kinnari Bhatt is founder of Surya Advisory, an ethical business and just transition legal advisory firm. Kinnari is a practicing solicitor, has a PhD and is widely published. She is the author of the book Concessionaires, Financiers and Communities: Implementing Indigenous Peoples Rights to Land in Transnational Development Projects published with Cambridge University Press and is a panel expert on land rights and indigenous rights with the Independent Redress Mechanism of the Green Climate Fund.
Praveen Gupta: Why are land rights so important? Particularly forest lands?&nbsp;What makes indigenous people a critical component of this?
Kinnari Bhatt: Simply put, because of the relationships that indigenous peoples, local communities and forest dwellers have to land. It is a non-monetary, reciprocal&nbsp;and respectful relationship of human tendering, stewarding and protection of intact forests. That is not something to be explored and exploited based on economic commodification of land.
We know that the successful human tendering, stewarding and protection of intact forests, nature and forest landscapes is now directly linked with secure, formal or customary community tenure over land, territory and resources. And heavy hitting science publications tell us that securing indigenous peoples and forest dwellers rights to land, particularly in forested areas will go a long way in reducing carbon emissions, protecting our largest carbon sinks and keeping carbon in the places where it is meant to be.
Climate change generally tends to frighten people but nature strikes a different chord in the heart. It is valued and this is a very different narrative. If we value nature, we value intact forests, biodiversity in all its forms. Securing land rights, strengthening local indigenous led governance and sustaining those has to be our number one priority. Sadly, I think that the international community has largely left out the important role of indigenous peoples and forest dwellers from climate conversations.
Lawyers also need to get on board but I think that this topic falls into the &lsquo;too radical&rsquo; box for many of them. Actually I think it would be very helpful for lawyers to start to understand property rights in their relationship with indigenous rights as our legal frameworks are systemically rooted in dispossessing indigenous people. Many practising lawyers sitting in global legal centres like London do not see these connections or do see them and think of them as part of normal costs of doing business. This is an out of touch legal mentality and at its essence, quite colonial.
We need to understand these problems at the root and find solutions which go back to first principles of equity, inclusion and sustainable development. This means re-writing basic rules. So it&rsquo;s radical but that sort of transformative change in legal thinking and practice is urgently needed. It cannot be &lsquo;Business As Usual&rsquo; (BAU). Lawyers need to support this although for many that&rsquo;s a controversial proposition.
PG: How effective is the UN Declaration on the Rights of Indigenous Peoples (UNDRIP)?
KB: I think it&rsquo;s been an effective law and development tool for two reasons. First, as it finally puts the rights of indigenous peoples to social justice, equality, non-discrimination, development and dignity into a legal document &ndash; albeit one that is not binding on states. Crucially, the UNDRIP places indigenous peoples&rsquo; rights into part of an historical set of rights based on land and a history in which indigenous peoples&rsquo; had rights forcibly removed. That includes the right to freely pursue ones economic, social and cultural development and the right not to be forcibly removed without consent or just compensation.
Second, I see the UNDRIP as a living document which has been valuable for articulating the special rights of indigenous peoples&rsquo; and placing them in both an historical and contemporary lens. These are as important today as they were in the past. Indigenous peoples&rsquo; face threats from governments and companies for scaling up projects for natural resource extraction, biodiversity preservation, energy and infrastructure needs and the critical minerals needed for our capital and technology heavy energy transition &ndash; think of all those batteries and components for solar, for instance.
Toady&rsquo;s conflicts, even killings and criminalisation, are actually still based on the same historical problem &ndash; the lack of legal recognition of land rights at the local level. This lack of legal recognition creates a vacuum which can be framed by governments, politicians and companies as trumped up charges of indigenous peoples&rsquo; causing environmental or biodiversity destruction, being anti-development or anti-green.
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/c016aa052fb605158b95f4c1bd4eccaf1aa992fc.png" alt="Figure 1: &ldquo;The book is original as it traces the hybrid structuring of a global jurisprudence of indigenous rights, one which includes public forms of law and regulation, private contractual mechanisms, compliance and project finance arrangements. It is the first book which elaborates on the role of financial institutions in project finance lending regarding energy projects and includes helpful steps to adapt traditional legal approaches exacerbating these issues. It speaks of current debates on how we can implement sustainable finance and just transition outcomes for indigenous communities into our economic value chains&ldquo;." />
In our pursuit of a sustainable future it is imperative that decisions around the land and resources needed for our global transition and to meet the Sustainable Development Goals (SDGs) include at the earliest stage of planning, local community and indigenous led participation. For that we need to build multi-level and multi-stakeholder capacity about the social, environmental and developmental value of indigenous rights and I think for this endeavour the UNDRIP is useful. Especially when it is discussed alongside things such as the IPCC report which makes the strong case for indigenous rights and stewardship as a natural solution.
That said, there is room for improvement in the implementation of the UNDRIP as part of the UN Guiding Principles on Business and Human Rights (UNGPs). This hasn&rsquo;t been comprehensively looked at yet. As a starting point we need to conduct large scale private sector awareness raising and then go deeper into a number of practical issues such as the development of effective mechanisms at project and national level and free, prior and informed consent (FPIC) protocols for engagement. The UNDRIP has not had a fruitful &lsquo;implementation&rsquo; conversation with the UNGPs yet but hopefully this will change.
PG: Local communities and indigenous people continue to live under several threats. Scaling-up efforts to secure community land rights represents the world&rsquo;s single greatest opportunities to act?
<blockquote>We also now know that there is a link between protecting land rights, keeping forests intact and the prevention of future pandemics. So there is a multiplier effect and securing land rights is a completely viable option.</blockquote>
KB: Yes, I agree. We know that ensuring indigenous land rights leads to two to three times less deforestation, increased levels of biodiversity and reduced emissions &ndash; making this approach more effective than virtually any other strategy. We also now know that there is a link between protecting land rights, keeping forests intact and the prevention of future pandemics. So there is a multiplier effect and securing land rights is a completely viable option.
Many great organisations and people have been working in this area for years. I think the global community has to give them far more support so that they can continue this and double down on the work that has already been done. This entails not only using policy, law and legislation that recognise rights to land and biodiversity but also nail that through the lens of intergenerational guardianship. We now have to take and apply this to many different contexts of just transition, business and finance.
PG: How do the design and coherence problems within financial &amp; commercial legal and regulatory frameworks work to routinely displace land rights?
KB: There are a number of design and coherence deficits. Corporates and financiers have developed a variety of tool and standards aimed at identifying, measuring and mitigating the risks of investing in sustainable development projects that have the potential to harm local communities and indigenous people (LCIPs). I think that these tools have the potential for empowering and including LCIPs in development projects but current market standard legal terms and ESG frameworks are focused on shifting ESG risk away or relegating risks from the responsibility of financiers and companies. Over 20 years of complaints to ombudsman mechanisms that while these instruments are good at identifying and mitigating risk to corporations, investors and financiers &ndash; they are not adequate for producing human rights or environmentally compliant outcomes for communities.
There are shortcomings in the content, timing, authenticity and a lack of understanding of the private financial architecture in which they are embedded. Here are three design and coherence problems:
1. Current tools and standards are embedded within the private financial legal architecture of a given project and its surrounding terms, practices and culture &ndash; all of which have the capacity to sideline LCIP considerations at key moments in the project life cycle.
2. Market practice around the design and implementation of action plans, performance standards and loan agreements, mean that the legal content fails to capture the full constitutional, national, regulatory and ombudsman legal ecosystem which applies to a project.
3. Action plans and lender performance standards enter the project ecosystem too late to make any meaningful impact. Project timeframes do not allow for developing preemptive and practical FPIC policies and protocols, land and benefit sharing agreements or for inserting a culture of do no harm at early design stage.
There are more. I am producing a policy paper on this issue (coming out soon) and what we can do to fix it.
PG: Why are communally held land rights or those under traditional and collective ownerships often not recognised? What in your view is the status of women?
KB: Many reasons but in my experience, most of them come down to economics &ndash; governments and investors want to exploit land and natural resources &ndash; and prejudice that indigenous people are not capable or able to govern their own territories. This has been the rationale since colonial times and it continues &ndash; those with power treated the indigenous people as dispensable and forests as commodities. Governments were and continue to be instrumental to dispossession and criminalisation of communities, and now more and more so along side with companies and financiers. Our economic and legal systems are weighted in favour of continuing this situation.
I think things are changing (slowly) due to societal pressures, litigation and investor concerns. And we also have growing attention to these issues within EU laws and the British government is taking indigenous rights seriously in its international climate finance agenda. We need to see if the commitments are honoured and how the money is disbursed.
<blockquote>From what I understand, women face specific barriers to accessing their land rights so it is important to look at these issues. Experiences of indigenous women are different from indigenous men and women&rsquo;s issues tend to be neglected or subsumed by male perspectives.</blockquote>
From what I understand, women face specific barriers to accessing their land rights so it is important to look at these issues. Experiences of indigenous women are different from indigenous men and women&rsquo;s issues tend to be neglected or subsumed by male perspectives. I think that women&rsquo;s land rights are being talked about more now. However more investment is needed to help NGOs on the ground address legal barriers and provide legal, institutional and empowerment support for reforming and implementing land frameworks to take women&rsquo;s issues into account.
I mean we can all find commercial and constitutional laws of a country but is it that easy to find family , inheritance and succession laws &ndash; laws governing household and familial relations, if they even exist in the first place. And this is a problem but a problem that lawyers can help to fix.
I would like to stress that I am not a women&rsquo;s rights expert and for those that are interested in knowing more I encourage them to follow to the trailblazing work of Resource Equity.
PG: What needs to be done to secure land rights as part of the ESG?
KB: Well we need to get to the heart of the matter &ndash; money and the economic incentives and supporting legal structures which cause dispossession and deforestation.
At the national and local state level there is a need for legal and institutional capacity building and then policies/subsidies that incentivise protection and sustenance of land and forest rights. There is also the work that need to be done in empowering local communities to know and use their rights. This obviously comes with hazards for those communities and so this needs to be done and scaled very carefully.
Another pathway would be for companies to first of all educate themselves on the &lsquo;S&rsquo; in ESG and do risk assessments of whether there are human rights and land related exposures within their supply chains &ndash; not just tier one but further down. They need to allocate money and time to this process. They need to set up funds to assist suppliers further down the chain to do the due diligence and they need to think about their supply contracts. There needs to be a more than compliance &lsquo;tick the box&rsquo; approach but I think the vast majority of companies and C-suite first need to educate themselves on this issue and take it seriously by devoting senior time and budget to the work and hiring of experts if those are not available in-house.
Beautiful corporate policy statements will no longer cut it and in fact, companies should be far more concerned about litigation, negative publicity and loss of customers if they are unable to back up their statements with action and implementation. Or for banks that invest in these sorts of projects &ndash; worried about having to put more money into their prudential regulatory obligations for maintaining capital as that is coming, I think.
<img src="https://illuminem.b-cdn.net/articlebody/0399833598e78e474545ba95690af36bde3fd4c5.png" alt="Figure 2: Picture of the &lsquo;Kinnera&rsquo;: &ldquo;A rare stringed musical instrument that my mother named me after &ndash; with a slight spelling change. The origin of the &lsquo;Kinnera&rsquo; can be traced back &ndash; to the 4th century AD &ndash; to the Chenchu tribe who were part
of the Nallamalla forest (and later to other forest tribes &amp; forest dwellers in India)." />
PG: Why and how are land rights coming under pressure from greenwashing &ndash; say carbon credit projects?
KB: This is an area that we need to be really mindful of. There is so much to say. I&rsquo;ll start with what we don&rsquo;t want and then what we do want.
What we do not want at any cost are situations where any type of investment and finance to or with communities is done through traditional market based legal and compliance methods which can have disastrous impacts on communities. We need to heed lessons from some of the awful outcomes of microfinancing in places like India where vulnerable people lost land and livelihoods and committed suicide because they could not repay loans. Any investment vehicle designed for sustaining long term stewardship and economic independence of communities must be structured and governed in new ways.
We need new finance norms and principles based on trust and crucially, rooted in legal norms found in the human rights and loss and damage fields. This is not unheard of as the mandate of the Green Climate Fund (GCF) &ndash; the funding mechanism for the UN Framework Convention on Climate Change (UNFCCC) is grounded in principles of equity and addressing vulnerabilities. And the GCF emphasises transformation and paradigm shift approaches to finance &ndash; not BAU.
We need to translate these broad legal principles into indigenous led structures and compliance mechanisms so that direct access to finance for communities becomes possible and scalable. I think that this is going to be a challenge for our legal and economic structures and BAU mindsets &ndash; we need more spaces for radical thinking. Large donors and funders must be prepared to give up space by re-thinking traditional modes of compliance and verification requirements, if they want to be part of this solution.
We will need to investigate what types and kinds of partnerships are possible with different players and whether they are open to being more flexible. We need to do things differently &ndash; that is a big responsibility and a challenge but an exciting one. I think that for too long they have overestimated risk and underestimated the benefit of giving direct funding to groups.
I am also quite concerned about the push towards conservation and biodiversity finance and the overall 30&times;30 agenda as this has the potential for new forms of encroachment and displacement. I am beginning to see human rights principles being developed but as with all things, the devil will be in the implementation. But with all of the instruments that will be put on the table soon &ndash; carbon credits, cooperatives, debt for nature swaps etc, the essential point is that they must be driven by indigenous communities and local intermediaries that hold trust with those communities.
PG: Many thanks Dr. Bhatt for throwing light on some very critical and sensitive areas of your work. Also, appreciate insights into your book. I am sure it will prove to be a pathbreaking work.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Interview with Dr. Kinnari Bhatt

At 4C plus, much of what we can and do insure becomes uninsurable. The Arctic has warmed four times faster than the globe since 1980. Our current pathway assures us of a 5C plus trajectory. We are already at 420 ppm of CO2 and have breached seven out of nine planetary boundaries. Whilst on this track, the world’s largest asset manager Blackrock, backtracks on Scope 3 emissions from its portfolio. With shipping and aviation outside the scope of Paris Agreement, two most polluting portfolios remain unleashed. Growing space launches will put more pressure on the ozone layer. Needless to mention the rising clamour for seabed mining. And now the war makes gas and nuclear compelling. In all this (and much more) melee - the insurance industry should remember fence sitting is not the best option.

At 4C plus, much of what we can and do insure becomes uninsurable. The Arctic has warmed four times faster than the globe since 1980. Our current pathway assures us of a 5C plus trajectory. We are already at 420 ppm of CO2 and have breached seven out of nine planetary boundaries. Whilst on this track, the world’s largest asset manager, BlackRock, backtracks on Scope 3 emissions from its portfolio. With shipping and aviation outside the scope of Paris Agreement, two of the most polluting portfolios remain unleashed. Growing space launches will put more pressure on the ozone layer. Needless to mention the rising clamour for seabed mining. And now, the war makes gas and nuclear compelling. In all this (and much more) melee - the insurance industry should remember fence sitting is not the best option. The newly created International Sustainability Standards Board (ISSB) has invited feedback on its role and responsibility. Insurers ought to be in the ring.
Before venturing any further on expanding frontiers of human ‘advancement’ let us be reminded that we inject daily - to borrow from environmentalist Bill McKibben - 400,000 Hiroshima atomic bombs equivalent of heat into the planet. Some of the most damaging human actions would not be possible without insurance. In seeking unlimited growth from the planet’s limited resources, we are now witnessing Mother Earth beginning to push back Father Greed.
Picture a world that is uninsurable. As humanity lets Earth’s temperature climb ever higher and massive natural effects take place, one day we could find ourselves living in a world that is too steeped in risk to balance insurance premium costs with pay-outs. The claims are too many, and too large. By then, it’s not just the insurance system that has collapsed, but the economic system. For insurers imagining that kind of future, the word ‘sustainability’ takes on multiple meanings.
<h1>“Can insurers catalyse climate action?”</h1>
Vanessa Otto-Mentz and Marco Vet reflect on the insurance industry’s role in decarbonising the global economy, in the context of Deloitte’s report “Europe’s turning point: Accelerating new growth on the path to net zero”. My point is, why not? Rather, do they have a choice? Can ISSB facilitate ESG integration into risk management, underwriting (physical, transition &amp; liability risks) and investment - the three key functions of insurers? It could! Thereby taking insurers out of the existential mess they find themselves in.
ESG has been a much misunderstood and often ‘maligned’ concept. Perhaps more greenwashed than rightfully applied. Any business that does not align environmental and societal aspects with its governance is unlikely to be sustainable. Needless to mention, the reactionary push will continue to question the precedence of people and planet over profits. Having said that, an ESG compliant business need not always be sustainable. Nor would a sustainable business always be ESG compliant.
<h1>Glaring disconnects</h1>
Interestingly, to pivot this right - businesses, including insurers, call for a paradigm shift in how accountants think. Accountants understand financial accounting. That is what they are trained for. Their job has been to measure the financial value created by enterprises and provide information on the effectiveness with which that is being done, for the leaders of the enterprise (management accounting) and for investors (corporate accounting). The challenge for accountants has been the massive and rapid shift in the way enterprises create value, and the way in which investors value them.
Added to this challenge has been the way in which costs are accounted for. Many costs created by the firm that were once externalised to others, such as CO2 emissions, must now be internalised, for example. Additionally, many ‘costs’ should rightly be regarded as investments, in people, for example.
Despite the long-recognised flaws in Gross Domestic Product (GDP) as a measure they have so far failed to find a good alternative. The same core issues are at the heart of the problems faced by economists and accountants, “how is value to be defined and by whom?” Today, the most important sources of value, such as reputation, are intangible.
Despite being intangible they are, nevertheless, the most material factor in determining future value creation potential. This change means accounting thinking and practice must change. If chief finance officers are unable to provide boards with information that is material to their decision making, what chance have they of telling investors what is material to their decisions, given investors are concerned with what will be material to future value creation potential?
Traditionally accountants do not look forward. They consider what &#x27;was&#x27; and &#x27;is&#x27; material, rather than what will be. Insurers too are conditioned alike. Climate change has to be dealt with on a prospective basis and not retrospectively. The tipping points in the earth systems have non-linear outcomes. Insurers’ obsession with linearity and predictability needs a revisit.
It is not just the accountants in particular, actuaries as well. And to get carbon out of their way, the fossil fuel industry must be distanced. Having Oil &amp; Gas representation on insurer boards certainly justifies an ISSB oversight on the governance function, too.
<h1>ISSB consultation</h1>
The ISSB is running a consultation on proposed international standards for climate and general sustainability-related financial disclosures. Here are brief highlights from Prof. Carol Adams on what CFOs and accounting professional bodies think of the <a href="https://www.linkedin.com/company/international-sustainability-standards-board/">International Sustainability Standards Board</a> Exposure Drafts:
<ul><li>More technical work needed to align with other internationally recognised global standards, particularly those of the Global Reporting Initiative (GRI).</li></ul>
<ul><li>Investors need #GRI impact reporting.</li></ul>
<ul><li>The conceptual framing around <a href="https://www.linkedin.com/feed/hashtag/?keywords=materiality&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6945884423271645184">#materiality</a> and <a href="https://www.linkedin.com/feed/hashtag/?keywords=enterprisevalue&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6945884423271645184">#enterprisevalue</a> in the <a href="https://www.linkedin.com/feed/hashtag/?keywords=issb&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6945884423271645184">#ISSB</a> proposals is problematic.</li></ul>
<ul><li>In their current form they will not lead to <a href="https://www.linkedin.com/feed/hashtag/?keywords=harmonisation&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6945884423271645184">#harmonisation</a> - there are issues with definitions and methodologies.</li></ul>
<ul><li>Information disclosed should lead to positive action (the current requirements will not).</li></ul>
<ul><li>Focussing on <a href="https://www.linkedin.com/feed/hashtag/?keywords=climate&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6945884423271645184">#climate</a> only is not enough.</li></ul>
Moreover, there is more to <a href="https://www.linkedin.com/feed/hashtag/?keywords=climatechange&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6886295814378004481">Climate Change</a> than just <a href="https://www.linkedin.com/feed/hashtag/?keywords=climaterisks&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6886295814378004481">Climate Risks</a>, as EY highlights. Following are some implications they highlight that the changing <a href="https://www.linkedin.com/feed/hashtag/?keywords=climate&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6886295814378004481">climate</a> has on <a href="https://www.linkedin.com/feed/hashtag/?keywords=financial&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6886295814378004481">financial </a><a href="https://www.linkedin.com/feed/hashtag/?keywords=accounting&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6886295814378004481">accounting</a>:
<ul><li>There is an increased focus on the measurement and disclosure of climate-related matters in an entity’s financial statements.</li></ul>
<ul><li>The determination of the effects of climate change on an entity’s financial statements may require significant effort and judgement.</li></ul>
<ul><li>Entities are required, at a minimum, to follow the specific disclosure requirements in each IFRS standard.</li></ul>
<ul><li>Entities are required to carefully evaluate whether users of financial statements are able to assess the effects of climate change on their financial position, financial performance and cash flows.</li></ul>
Professor Robert Eccles pitches hard for sustainability in the Harvard Business Review:
<ul><li>Sustainability is going <a href="https://hbr.org/2019/05/the-investor-revolution">mainstream</a> in the corporate and investment communities, and the ISSB will help to further accelerate this.</li></ul>
<ul><li>It will give us the same high-quality standards for measuring and reporting on sustainability performance that we have for financial performance.</li></ul>
<ul><li>Along with this will go much higher-quality internal control and measurement systems and, ultimately, the same degree of internal and external audit rigor that goes into the financial statements.</li></ul>
<ul><li>Finally, financial and sustainability reporting will be on par in terms of quality and relevance. This will enable true integrated reporting. Companies and investors will be able to rigorously understand how sustainability performance and financial performance contribute to each other.</li></ul>
Dr. Shiva Rajgopal alludes to climate reporting as “the third best option”. He believes Carbon tax and Environment Protection Agency (EPA) look seemingly unviable. ISSB thereby might become the default standard setter for the world in the area of sustainability unless the SEC can push through the climate disclosure rule in some form or the other.
“Regulation, enforcement and awareness of greenwashing issues has increased and that to me is a welcome development. Some of the charlatans that entered the space will leave. ESG 2.0 will, at the very least, move the conversation forward with greater rigor and authenticity” he says. Shouldn’t insurers leverage this opportunity?
<h1>Carbon dilemma</h1>
The price of carbon may be zero in many places today, but it’s unlikely to remain zero for long. That means that many companies have hidden liabilities on their books, says a recent HBR. Economic models and the experience of the EU Emissions Trading System suggests that a price could likely be between $50 and $100 per ton of CO2 in the near term and rise from there. At $100 per ton that would represent five percent of the global economy. Five percent of the global economy is a huge number. But where does this liability sit? With the world’s corporations. The <a href="https://www.linkedin.com/company/bank-of-england/">Bank of England</a> increased its <a href="https://www.linkedin.com/feed/hashtag/?keywords=carbonprice&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6950874051720466432">#carbonprice</a> forecast to $150 per ton by the end of the decade and warned banks that they face a tipping point similar to a “Minsky moment” if they fail to prepare.
The European Central Bank (ECB) recently announced the results of its climate stress test, indicating that banks urgently need to accelerate the incorporation of climate risk into their risk management frameworks, and that banks remain heavily exposed to emissions-intensive industries. The International Association of Insurance Supervisors (IAIS), having abdicated this responsibility, cannot ignore this any longer.
<h1>Exxon Mobil case study</h1>
In 2020 Exxon Mobil released 112 Mn metric tons of CO2 ‘equivalent’ (other GHGs including methane). At $100/ ton they would owe $11bn annually on their own emissions. Since the company has earned only $ 8 bn on average over the past 5 years this means they would rapidly be bankrupt. That surely is a good way to finally get the attention of their board. Add in company’s share of the annual $ 60 bn from pricing the roughly 600 Mn metric tons of its Scope 3 emissions (it’s not clear how much they could pass on to purchasers) and the situation is even more dire. This case study from Dr. Eccles ought to be a revelation for insurers in a business-as-usual mindset.
<h1>‘BES’ and Colonialism</h1>
While the disconnects between insurers and sustainability make a long list, the intent here was to put spotlight on a few critical ones. Nature has never had the attention and significance it merits. Biodiversity and Ecosystem Services (BES) which account for half the global GDP can be ignored only at our peril. “TNFD (Task Force on Nature Related Financial Disclosures) needs to be integrated into investors’ financial strategies to test &amp; understand how to assess nature-related risks”, reminds Antoine Denoix CEO, AXA Climate. The bean-counters in the insurance industry need to also internalise this compelling reality. Mind you this is not about green taxonomy. With this backdrop it would at best be a lip service.
Last but not the least, the just-published Lancet Planetary Health study highlights how &quot;Existing climate mitigation scenarios perpetuate colonial inequalities&quot;. Perhaps the only room for manoeuvre is to address where the IPCC climate scenarios fail to take Global North / Global South inequities into account. Global South, therefore, deserves a longer runway, says Bill Baue.
<h1>In conclusion</h1>
Notwithstanding the glaring disconnects discussed here, it is possible for insurers to drive sustainability and be ESG compliant. Likewise, to be ESG compliant as well as sustainable. Having said that, ESG ought to be integrated into Risk Management, Underwriting &amp; Investments. That is how insurers can drive the money-pipeline towards de-carbonisation. “90% of all known fossil fuel reserves and resources held by all companies must stay in the ground to limit global warming to 1.5°C. But if more than 40% of reserves are extracted and burned the world will comfortably pass 2°C, with devastating consequences”, warns Mark Campanale.
While the war in Europe has taken its toll and has given a ‘life line’ to fossil fuel, the regulatory actions from SEC, BaFin to FCA and the likes will catch up with insurers. So would climate litigation. Insurers have to learn to deal with physical, transition and liability risks not just in context of protecting their respective balance sheets but also the Planet. The way forward is not about mere lip service to NetZero Insurance Alliance (NZIA) but to demonstrate real intent for fulfilling sustainability and ESG.
Insurance providers play a role as protectors - safety nets for society. Today, they are acutely aware that this role extends to responding to climate change. They too are challenged - by clients, shareholders, competitors and society itself - to help secure all of our futures… around the world. They’re compelled to rise to the challenge, and starting to figure out how best to accelerate action and make a positive impact. What the Principles of Responsible Investments (PRI) and Principles of Sustainable Insurance (PSI) failed to achieve, can we ensure the ISSB succeeds?
PS: <a href="https://www.ifrs.org/content/ifrs/home/projects/open-for-comment.html">The ISSB is seeking feedback on the proposals over a 120-day consultation period closing on 29 July 2022</a>.
Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Expectations from International Sustainability Standards Board (ISSB) in making insurers ESG aligned

For most insurers, marine amounts to a miniscule component of their portfolio. However, in terms of implications for sustainability - it is a function of the havoc marine trade wreaks upon our oceans, and the cascading effect. While the externalities tend to remain out of sight, business as usual is no longer an option. Can insurers take it upon themselves as International Union of Marine Insurers (IUMI) and turn the tide, rather than await International Maritime Organisation (IMO) to act? In the meantime, is it important to take a stock of the few triggers, unlike the high-profile oil spills, that tend to stay off the radar and cause grievous harm to our oceans?

For most insurers, marine amounts to a miniscule component of their portfolio. However, in terms of implications for sustainability - it is a function of the havoc marine trade wreaks upon our oceans, and the cascading effect. While the externalities tend to remain out of sight, business as usual is no longer an option. Can insurers take it upon themselves as International Union of Marine Insurers (IUMI) and turn the tide, rather than await International Maritime Organisation (IMO) to act? In the meantime, is it important to take a stock of the few triggers, unlike the high-profile oil spills, that tend to stay off the radar and cause grievous harm to our oceans?
71 per cent of the Earth’s surface is water-covered, and the oceans hold about 96.5 per cent of all the Earth’s water. “The Oceans are the primary regulator of the climate and the life support system for the entire planet. Humanity cannot survive without a healthy marine ecosystem”. And the reason why it makes a long list according to <a href="https://www.goesfoundation.com/media/1939/goes-report-march-2021.pdf">Dr. Howard Dryden</a>: 1. Plankton absorb more than 50% of our carbon dioxide. 2. Plankton produce more than 50% of our oxygen, in reality it is probably closer to 95%. 3. &quot;Plankton control surface water evaporation, energy transfer to atmosphere and the strength of the winds.&quot; 4. Plankton bodies along with a chemical called DMS, are the primary reason for clouds, rain, and solar reflection. 5. Oceans regulate humidity, which is more than 50% of all greenhouse gas. 6. Marine snow and the abyss are the main carbon bank for the planet. 7. 30% of the world depends upon food from the sea.
<h1>Unsustainable blue economy</h1>
Imagine 6 million tonnes of plastic enter the oceans every year, and 20 million tonnes of partially combusted carbon enters the oceans every year just from the shipping industry, reminds Dr. Howard Dryden. The carbon contains toxic heavy metals as well as polycyclic aromatic hydrocarbons. The carbon is as toxic as plastic and there is 3 to 4 times more of the stuff. Ships now scrub their flue gases and dump the waste into the sea. I am not against the shipping industry, but surely there must be a way of filtering the water to prevent this horrific pollution of the oceans. For sure it is going to be expensive, but this is a price we have to pay.
According to the Guardian newspaper, just one of the world&#x27;s largest container ships can emit about as much pollution as 50 million cars. Further, the <a href="https://www.industrytap.com/worlds-15-biggest-ships-create-more-pollution-than-all-the-cars-in-the-world/8182">15 largest ships in the world emit as much nitrogen oxide and sulphur oxide as the world&#x27;s 760 million cars</a>.
&quot;And if the shipping industry were a country, it would be ranked between Germany and Japan as <a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">the sixth-largest contributor to global CO2 emissions</a>.&quot;
Most of the pollution occurs <a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">far out at sea</a>, out of the sight and minds of consumers - and out of the reach of any government. 
&quot;Ships are the polluting &#x27;elephants in the room&#x27; <a href="https://phys.org/news/2021-02-hidden-pollution-shipping-threatens-sustainable.html">nobody is talking about </a>despite a global drive to make oceans cleaner, according to new research.&quot;
&quot;Nearly every vessel, from <a href="https://phys.org/tags/commercial+vessels/">commercial vessels</a> to day-tripper yachts, are continually releasing substantial amounts of toxic metals into the sea, according to the study.&quot;
The study, led by Dr. Gordon Watson, of the University of Portsmouth, coincides with the launch of the United Nations Decade of Ocean Science to focus on healthy seas and a &#x27;sustainable blue economy.&quot; 
Dr. Watson: “It&#x27;s ironic that highly polluting vessels continue to pollute the seas right under our noses. <a href="https://www.azocleantech.com/news.aspx?newsID=28924#:~:text=According%20to%20a%20new%20study,drive%20to%20make%20oceans%20cleaner.">Toxic metals from shipping</a>, is a hidden threat to healthy seas and nobody&#x27;s really talking about it.&quot;
Alongside educating boat owners on using less toxic anti-fouling paints and anodes, Dr. Watson and colleagues call for urgent legislation to ensure that shipping is front and centre of sustainable ocean policies.
&quot;The researchers calculated that all vessels from a sailing boat to a cruise liner release substantial amounts of metals such as copper, zinc and nickel, which then accumulate in the ocean&#x27;s sediments.&quot;
Copper is used as a biocide in paints to prevent organisms from growing on hulls. These anti-fouling paints are recoated regularly to ensure that the hull remains clean of encrusting barnacles and other marine organisms that slow down boats, making shipping more expensive.
Nearly all boats also have <a href="https://phys.org/tags/metal/">metal</a> blocks attached beneath the waterline. Often called sacrificial anodes, their role is to degrade first, thereby protecting the hull from corrosion and these are often made of zinc.
Finally, increasing numbers of diesel-powered ships have had scrubbers fitted to reduce the emissions of harmful gases to the atmosphere. An unintended consequence of this is the discharge of wastewater with high concentrations of metals such as nickel during the exhaust-gas cleaning process.
The study is published in Environment International.
<h1>The worst fuel in the world?</h1>
Today, most ships burn bunker fuel. Typically, it’s the dregs left over at the end of the refinery process. <a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">It is an environmental nightmare</a>. It is heavy and toxic, doesn’t evaporate, and emits more sulphur than other fuels. It is poisonous to fish and crustaceans and isn’t much good for seabirds – or for humans living near ports.
Many analysts believe that the only way that the industry is going to be weaned off its dirty habit is by the introduction of tough new regulations by the IMO. However, that may be some way off.
The pressure group InfluenceMap recently caused controversy when it accused the shipping lobbying groups of “having unmatched power” over IMO decisions.
“The shipping industry understandably is reluctant to make large investments until regulations that could make the alternative technologies economically viable are on the horizon,” says Smith.
“And there are groups in the shipping industry taking more conservative and less evidence-based positions in the negotiations on reducing emissions than those being taken by many of the countries involved.
“There are also many in the shipping industry who see the inevitability of decarbonisation and are already working on solutions, and they are going to be in a better position when the transition starts.”
“There won’t be any change without regulation,” agrees Dr. Jenifer Baxter, head of energy and the environment at the Institution of Mechanical Engineers. “This due to the simple reason that money talks. Companies fear being driven out of the market if they change their behaviour and others don’t.
“It is the IMO’s responsibility to make sure that shipping has a minimal negative impact on the ocean and atmospheric environment.&quot;
<h1>Hopes for the future</h1>
&quot;<a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">Ultimately</a>, they want to do away altogether with the need to burn oil to transport goods overseas.&quot; Instead, projects such as the Smart Green Shipping Alliance and the Carbon War Room want ships to be propelled by renewable energy that produces little in the way of CO2 emissions.
The campaigners are in a race against time. They want to persuade the industry to <a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">reduce emissions by 50 per cent by 2050</a>. Yet the industry is facing increased demand thanks to population and economic growth that is set to drive emissions from shipping as many as six times higher than they are today. 
“<a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">To achieve a 50 per cent cut</a> we need to get wind turbines and batteries to store the energy they produce, and alternative fuels like hydrogen or ammonia on to these vessels sooner rather than later,” adds Meehan. “We need to convince ship owners that they need to take a risk on early-stage tech.&quot;
“Then we need to look at the trading routes the ship sails on and what fuel is most suitable for which route. The <a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">availability of any alternative fuels</a> on that route is also an issue. It has to be a case of the right fuel for the right ship.” 
&quot;Electric-powered ships, for example, could be a good option on short hops, though not so much on longer journeys across an ocean or two – <a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">at least not for now.</a>&quot; 
The Smart Green Shipping Alliance’s plan is to <a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">launch a 100 per cent renewable-powered ship in five years’ time</a>. This retrofitted ship would be powered by waste-derived liquid biomethane to power off-the-shelf gas engines and future automated sail technology. 
<h1>The future of cargo ships</h1>
“Shipbuilders are not seeing an end to internal combustion engine ships <a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">anytime soon</a>. Anything that requires a different fuel or batteries is still a while away. 
“Ultimately, nothing is going to change without regulation and that will depend on how much pressure is put on the industry.&quot; 
“Consumers need to start asking about the shipping policies of the companies whose products they are buying.”&quot; 
Just like other industries, the shipping industry also has several detrimental effects on the environment. Being associated with water, most of these effects cause damage to marine flora and fauna and that indirectly affects humans. The shipping industry also <a href="https://www.worldatlas.com/articles/what-is-the-environmental-impact-of-shipping.html#:~:text=Ships%20also%20contribute%20to%20air,to%20climate%20change%20on%20Earth.">contributes significantly to air pollution</a>. Some of the adverse effects of this industry on the environment such as sound pollution; oil spillage; sewage; loss of marine life and emission of greenhouse gases are well known.
&quot;By the end of 2022, the container-shipping industry will have earned a staggering <a href="https://www.bloomberg.com/opinion/articles/2022-05-23/shipping-s-500-billion-profit-can-take-on-amazon">half a trillion dollars of operating profit</a> from two years of supply-chain misery, estimates research firm and consultancy Drewry.&quot; 
&quot;<a href="https://www.bloomberg.com/opinion/articles/2022-05-23/shipping-s-500-billion-profit-can-take-on-amazon">Just eight companies control 80% of the world’s container shipping capacity</a>, and they’re organized into three major alliances.&quot; More than four-fifths of the international trade in goods is carried by sea, so this high-level concentration - made possible by the sweeping antitrust exemptions they enjoy - confers immense power.
<h1>The uncontainable nature of modern life</h1>
Mark Levinson is best known for “<a href="https://www.amazon.com/Box-Shipping-Container-Smaller-Economy/dp/0691136408?ots=1&amp;tag=thneyo0f-20&amp;linkCode=w50">The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger</a>.” It also has had an unintended consequence - having made global trade fragile. Storms and high winds, long the chief culprit in container loss, are growing both more frequent and more intense as the climate becomes more volatile. <a href="https://www.newyorker.com/magazine/2022/06/06/when-shipping-containers-sink-in-the-drink">Another is the trend toward ever-larger container ships</a>, which has compromised the steering of the vessel and the security of the containers (in both cases because the high stacks on deck catch the wind), while simultaneously rendering those ships vulnerable to parametric rolling, a rare phenomenon that places extreme stress on the containers and the systems meant to secure them. 
<h1>Whose job is it to clean up shipping?</h1>
Like aviation, shipping isn’t covered by the Paris Agreement on climate change because of the international nature of the industry. The Paris deal aims to limit the global temperature rise to below 2°C this century by reducing emissions. &quot;Instead, it is the <a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">job of the International Maritime Organisation (IMO)</a> to negotiate a reduction in emissions from the industry.&quot; Environmentalists blame the organisation for the industry’s slow response.
“International shipping produces nearly one billion tons of CO2 emissions, which is approximately 2 to 3 per cent of total man-made emissions,” says Tristan Smith of UCL Energy Institute and leader of the UCL Energy Shipping Group. “This needs to reduce rapidly if we are to avoid the risks of dangerous climate change – at least halving in magnitude between now and 2050.”
“Reducing emissions from shipping is not an easy thing to do,” agrees Maurice Meehan, director of global shipping operations with the Carbon War Room, an international think-tank working on market-based solutions to climate change.
“The industry will say that they are doing a good job building more efficient vessels and retrofitting older ships. However, efficiency is only up because these ships are carrying more cargo. <a href="https://cosmoschronicle.com/ships-burn-the-worst-bunker-fuel-in-the-world/">The biggest ships are emitting more because they are speeding up.</a> 
However, even “If we become carbon neutral tomorrow, atmospheric carbon dioxide will still pass 500ppm, and oceanic pH will drop below 7.95 and all carbonate base life including coral reefs will dissolve within 25 years. We could survive climate change, we will not survive the loss of marine life and the Ocean Drifters upon which Life on Earth depends.’’ Further warns Dr. Howard Dryden.
<h1>In conclusion</h1>
“Bilateral agreements will be needed between the EU and non-EU recycling countries to agree on how best to address the glut of recycling supply with yard space operating in a sustainable and environmentally-sensitive manner”, <a href="https://insurancemarinenews.com/insurance-marine-news/esg-an-integral-part-of-insurance-value-chain-says-aegis-underwriter/">believes Jonathan Humm</a>, Class Underwriter for Hull and War at AEGIS London.
“<a href="https://insurancemarinenews.com/insurance-marine-news/esg-an-integral-part-of-insurance-value-chain-says-aegis-underwriter/">About 20% of fish were caught illegally</a> according to Oceana, an organization dedicated to the protection of our oceans. IUU (Illegal, unreported, unregulated) fishing had a devastating impact on Marine ecosystems. According to Humm, the ESG group intended to work with Maritime stakeholders to use available insurance levers to help subvert this practice. the IMO’s target to halve greenhouse gas (GHG) emissions by 2050 was looking increasingly difficult to achieve without urgent action. ESG performance had become an integral part of the insurance value-chain which insurers ignore at their own peril, the responsibility to find solutions to sustainability challenges lay beyond the traditional underwriting model”. 
&quot;<a href="https://inews.co.uk/news/long-reads/cargo-container-shipping-carbon-pollution-114721">Every day the clothes, tech and toys</a> that fill the shelves in our shopping centres seem to arrive there by magic.&quot; In fact, about nine out of 10 items are shipped halfway around the world on board some of the biggest and dirtiest machines on the planet.
Can the IMO live up to the responsibility vested on it or will it succumb to the alleged corporate capture? Will marine insurers demonstrate leadership when general insurers and reinsurers are struggling making up their mind? Asia is where action is converging. A notch higher than Europe in terms of fleet ownership, topmost ports turnover wise, most biodiversity hotspots - the gravity and urgency necessitate getting the act right. Can <a href="https://www.poseidonprinciples.org/insurance/principles/">Poseidon Principles</a> navigate the insurance industry and all of us out of the dire strait?
Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

A drama on the high seas: Are we watching?

Who would not agree with Ukrainian scientist Svitlana Krakovska: “Let me assure you that this human-induced climate change and war against Ukraine have direct connections and the same roots. They are fossil fuels and humanity’s dependence on them”. That insurers, like the rest of the financial world, end up being facilitators of this process ought to not surprise anyone either. As we navigate ourselves into dire straits, we seem to be enacting a theatre of the absurd.

Who would not agree with Ukrainian scientist Svitlana Krakovska: “Let me assure you that this human-induced climate change and war against Ukraine have direct connections and the same roots. They are fossil fuels and humanity’s dependence on them”. That insurers, like the rest of the financial world, end up being facilitators of this process ought to not surprise anyone either. As we navigate ourselves into dire straits, we seem to be enacting a theatre of the absurd.
Not everything people insure is benign. Insuring - and reinsuring - anything has its unintended consequences for the climate. With the growing realisation of the environmental and societal implications of insurance, insurers should distance themselves from anything that adversely affects overall sustainability. Globally, enlightened insurers are moving towards a principle of sustainable insurance, thereby attempting to create a more risk aware and resilient society dealing with climate change proactively.
Insurers are known for their expertise in pricing and quantifying risk - underwriting. Unfortunately, in the process, they not only end up insuring what contributes to carbon footprint but also <a href="https://economictimes.indiatimes.com/blogs/et-commentary/ensure-insurers-know-the-climate/">investing their surplus funds into such businesses</a>. So, ‘inadvertently’, they end up aiding and abetting climate change. <a href="https://economictimes.indiatimes.com/blogs/et-commentary/ensure-insurers-know-the-climate/">Two camps are already emerging</a> - players in the US who allegedly continue to support the fossil fuel industry; and the Europeans, who are increasingly distancing themselves from it. The line of divide, however, is not very clear and it remains a messy affair.
The American insurers remain largely wedded to Oil &amp; Gas. Europe is a mixed bag, some like the Lloyd’s are still holding on. The executive in the US is keen to transform the insurance industry. However, American banks and asset managers unfortunately fund the biggest fossil fuel money pipeline. Much of European regulatory system is steadily aligning to the Paris Agreement and pushing for the green new deal. <a href="https://economictimes.indiatimes.com/blogs/et-commentary/ensure-insurers-know-the-climate/">Asia is an overall laggard</a> - given its heavy fossil fuel energy dependence.
A new report discovered that 30 of the largest asset managers have $550 billion holdings in oil, gas, and coal companies, all of which have fossil fuel expansion plans. That is $550bn invested in companies that are, quite literally, destroying our planet. &quot;The “divestment versus engagement” debate is a big distraction. Asset managers are not engaging companies on the key climate issues when it comes to limiting global warming to 1.5°C. It’s also striking that they are actually sending the opposite signal because <a href="https://www.bankingonclimatechaos.org//wp-content/themes/bocc-2021/inc/bcc-data-2022/BOCC_2022_vSPREAD.pdf">they are still buying new debt from fossil fuel developers</a>. &quot;Asset managers that provide fresh cash to companies that are ignoring climate science are purely and simply pouring more fuel in the fire.” Ironically, insurers insure what harms its customers and also invest in the harmful businesses. Some oxymoron! The resulting fire is triggering what the <a href="https://unfccc.int/blog/what-is-the-triple-planetary-crisis">UNFCC call the Triple Planetary Crisis</a>.
<h1>Threats to biodiversity</h1>
<a href="https://parade.com/1364580/kmccleary/species-in-danger-of-extinction/?utm_source=dlvr.it&amp;utm_medium=twitter">Nearly 1 million species</a> face extinction in the coming years, thanks to warming temperatures, deforestation, development, overfishing and other human activities. What do those disappearances mean for us?
“Biodiversity is a little like an airplane,” says Collin O’Mara, president and CEO of the <a href="https://www.nwf.org/">National Wildlife Federation (NWF)</a>. “If you start taking out screws one at a time, you don’t know which one is going to make the wing or the engine fall off, but eventually the system is going to collapse.”
Butterflies, bees, <a href="https://parade.com/1056227/marynliles/best-bird-names/">birds</a> and even some small mammals help pollinate more than 1,200 crops, having an impact on one of every three bites of food you eat. More than half of all plants depend on wildlife to disperse their seeds.
&quot;As climate warms, millions of species are shifting poleward in a dramatic reorganization of life on earth. However, our understanding of these dynamics has largely ignored a key feature of life -- animals and other organisms must eat. The researchers have filled this knowledge gap by examining how the basic need for nourishment affects species’ movements. “These dynamics will not only be in one place but globally,” Pinsky said. “That does not bode well for marine life, and this is not an effect that has been widely recognized.”​ 
<h1>The Great Starvation is coming​ </h1>
While the world endured global supply chain issues and delays for over two years throughout the course of the Covid-19 pandemic, markets suffered, economies buckled, and there were real fears that it would mean potential shortages of essentials, and even food across the globe.
<a href="https://www.middleeastmonitor.com/20220421-the-great-starvation-is-coming-and-the-world-must-prepare-for-it/">Such a fate is finally arriving</a> with the Russian invasion of Ukraine impacting the planting, production and harvesting of wheat and other vital commodities in the region. Known as the &quot;breadbasket of Europe&quot;, it does not only feed a few tens of millions in the neighbourhood, but at least hundreds of millions elsewhere in the world.
The result is set to be almost apocalyptic. At the time of this writing, <a href="https://hungermap.wfp.org/">data</a> by the UN&#x27;s World Food Programme (WFP) show that around 890 million people worldwide lack sufficient food consumption and subsist on an inadequate amount of calories needed. <a href="https://www.middleeastmonitor.com/20220421-the-great-starvation-is-coming-and-the-world-must-prepare-for-it/">That number is constantly on the rise</a>, and is a few hundred million higher than statistics from 2020.
<a href="https://www.middleeastmonitor.com/20220421-the-great-starvation-is-coming-and-the-world-must-prepare-for-it/">As the billionaire astrophysicist and entrepreneur</a>, David Friedberg, said in a widely-circulated <a href="https://twitter.com/WallStreetSilv/status/1511921482275999754">video</a>, the entirety of the planet&#x27;s food supply operates on only a 90-day cycle which constantly replenishes. With people consuming produce made and exported from that previous cycle, any delay or obstruction to the current or next cycle greatly impacts the amount of food and commodities supplied to populations. In short, &quot;humans run out of food in 90 days&quot;.​ 
<a href="https://amp-theguardian-com.cdn.ampproject.org/c/s/amp.theguardian.com/environment/2022/apr/22/climate-food-biodiversity-five-charts">Crops are already seeing losses from heat and drought</a>. Can genetic diversity - a return to foods’ origins - help combat the climate challenges ahead?
&quot;The industrialization of agriculture in the last century boosted production around the world – but that success also made our food systems much <a href="https://amp-theguardian-com.cdn.ampproject.org/c/s/amp.theguardian.com/environment/2022/apr/22/climate-food-biodiversity-five-charts">more vulnerable to the growing climate crisis.</a>&quot; &quot;Modern agriculture depends on high-yield monocrops from a narrow genetic base that needs lots of fertilisers, chemicals and irrigation.&quot; But why does this matter?
​Because a richer genetic diversity of foods, like we had in the past, will help make our crops more resilient to higher temperatures and changing rainfall patterns.
&quot;<a href="https://www.theguardian.com/food/ng-interactive/2022/apr/14/climate-crisis-food-systems-not-ready-biodiversity#:~:text=All%20our%20food%20systems%20%E2%80%93%20agriculture,provide%20most%20of%20our%20calories.">The climate breakdown is already threatening many of our favorite foods</a>.&quot; In Asia, rice fields are being flooded with saltwater; cyclones have wiped out vanilla crops in Madagascar; in Central America higher temperatures ripen coffee too quickly; drought in sub–Saharan Africa is withering chickpea crops; and rising ocean acidity is killing oysters and scallops in American waters.
All our food systems - agriculture, forestry, fisheries and aquaculture - are buckling under the stress of rising temperatures, wildfires, droughts, and floods. &quot;Even in the best-case scenario, global heating is expected to make the earth<a href="https://www.theguardian.com/food/ng-interactive/2022/apr/14/climate-crisis-food-systems-not-ready-biodiversity#:~:text=All%20our%20food%20systems%20%E2%80%93%20agriculture,provide%20most%20of%20our%20calories."> less suitable for the crops that provide most of our calories</a>.&quot; If no action is taken to curtail the climate crisis, crop losses will be devastating. No form of insurance protection will help pre-empt all this. Insurers and the rest of the financial services ought to promptly withdraw from these triggers.
&quot;<a href="https://www.middleeastmonitor.com/20220421-the-great-starvation-is-coming-and-the-world-must-prepare-for-it/">To put the situation into perspective</a>, the spring planting season for wheat began weeks ago, at the end of March and beginning of April.&quot; Due to the war in Ukraine, there has reportedly not been an adequate amount of planting being undertaken, spelling disaster for the summer of 2022 and beyond.
When approximately 30 per cent of the world&#x27;s total wheat supply – and 15 per cent of the world&#x27;s total calories consumed – is cut off from export and the seriousness of the situation begins to properly set in within the coming months, the number of those stuck in food insecurity and potential starvation is predicted to enter the billions.
<h1>Energy wars?</h1>
“Internationally, there are many conflicts over energy because, with fossil fuels, there is a lot of transporting of energy across international boundaries. Many countries rely on the import of fossil fuels.” “We have found, based on plans we have developed for 145 countries, that every single country has enough renewable energy resources to power their own energy for all purposes.” “Clean, renewable energy will never run out. &quot;Fossil fuels will run out, and their prices fluctuate quite a bit due to changes in supply and demand, and they cause international conflicts.&quot; Countries can hold other countries hostage over energy right now.”
<h1>Not so clean energy</h1>
Clean energy transitions mean more <a href="https://oecdonthelevel.com/2022/04/22/more-mining-more-due-diligence-dealing-with-the-clean-energy-paradox/">mining</a> - cobalt, lithium, copper, rare earths and so on, often found in remote underdeveloped areas where governance is spotty and conflict is endemic, highlights Rob Karpati.
<h1>Theatre of the absurd</h1>
Interestingly, colonialism and imperialism too have been fuelled by the pursuit of resources including fossil fuel and rare minerals. As the pendulum of history swung back - colonised have found place besides the colonisers. UK’s Home Secretary Priti Patel is the key architect of the <a href="https://www.hrw.org/news/2022/04/14/uk-plan-ship-asylum-seekers-rwanda-cruelty-itself">proposed arrangement</a>. Send back all asylum seekers, including climate refugees, to Rwanda! Africans and pacific islanders in particular have been the most affected by global warming with a bare minimal role in it. They will increasingly flee hostile geographies but thanks to an ingenious arrangement - could end up in Africa. The theatre of all climate tragedies.
Shirking its obligations to persons seeking asylum at its shores, the UK government has <a href="https://www.gov.uk/government/news/world-first-partnership-to-tackle-global-migration-crisis">signed an agreement</a> with <a href="https://www.hrw.org/africa/rwanda">Rwanda</a> to send asylum seekers crossing the English Channel there.
Under the new <a href="https://www.gov.uk/government/publications/memorandum-of-understanding-mou-between-the-uk-and-rwanda/memorandum-of-understanding-between-the-government-of-the-united-kingdom-of-great-britain-and-northern-ireland-and-the-government-of-the-republic-of-r">Asylum Partnership Arrangement</a>, people arriving in the UK irregularly or who arrived irregularly since January 1, 2022 may be sent to Rwanda on a one-way ticket to have their asylum claim processed and, if recognized as refugees, to be granted refugee status there. Climate refugees beware!
<h1>Global South versus Global North</h1>
At this point, no one can doubt the urgency of acting on climate, as the most recent IPCC analyses show the world <a href="https://www.ipcc.ch/report/ar6/wg3/">far off course</a> from a trajectory to 1.5 degrees Celsius - <a href="https://www.npr.org/2021/11/08/1052198840/1-5-degrees-warming-climate-change">passing that point</a> would greatly increase the likelihood of extreme heat waves and floods, while damaging <a href="https://www.reuters.com/business/cop/whats-difference-between-15c-2c-global-warming-2021-11-07/">coastlines and coral reefs</a>. While wealthy nations like the US have largely driven this trend, the impact of climate change is <a href="https://www.ipcc.ch/report/ar6/wg2/">being felt most acutely</a> in countries that have contributed the least to global greenhouse gas emissions.
This injustice follows a litany of historical - and ongoing - wrongs, from the centuries of colonial plunder and enslavement that enriched Europe, and then the US, <a href="https://www-thenation-com.cdn.ampproject.org/c/s/www.thenation.com/article/environment/climate-reparations/tnamp/">at the expense of the Global South</a>, to the austerity measures of the 1980s and ’90s in response to the Third World Debt Crisis, which stifled development and locked many countries into decades of debt dependency. The results of that dependency are, along with the pandemic’s economic impacts, congealing into <a href="https://foreignpolicy.com/2022/03/16/global-south-sovereign-debt-crisis-covid-economy-imf-reform/">a new debt crisis</a>, with <a href="https://www.imf.org/external/Pubs/ft/dsa/DSAlist.pdf">58 of the 65</a> of lowest-income countries somewhere between moderate risk of debt distress to full-blown default.
<h1>International Actuarial Association</h1>
The IPCC Working Group addresses the most up-to-date physical understanding of the climate system and climate change. &quot;As Climate Science: A Summary for Actuaries<a href="https://www.actuaries.org/IAA/Documents/Publications/Papers/Climate_Science_Summary_Actuaries.pdf"> describes</a>: “It brings together the latest advances in climate science, combining multiple lines of evidence from paleoclimate, observations, process understanding, and global and regional climate simulations to get the clearest picture of past, present, and possible future climate.”
&quot;Actuaries, it emphasises, as risk professionals need to understand the physical impacts of climate systems and climate changes.&quot; Such impacts will affect how risks are underwritten, priced, managed, and reported, whether for general, life or health insurance, pensions, other financial institutions, or social security. &quot;It is important for actuaries to understand the magnitude of the potential changes, the uncertainty of their frequency and intensity, and the inherent volatility of such risks.&quot;
&quot;Each of the physical changes analysed in the latest IPCC Working Group I report could have an <a href="https://thejournal.cii.co.uk/2022/04/22/paving-paths-decarbonisation">impact on human well-being</a> and the long-term sustainability of the environment.&quot; Within these changes, actuaries are particularly interested in the effect of climate change on floods, droughts, fires, storms, rise of sea level, air pollution and the long-term effects of climate change.
The Ukraine invasion has suddenly driven the US to drill more oil and gas. Thereby, furiously gnawing into the global carbon budget. The resulting greenhouse gases are bound to precipitate nasty climate outcomes, thereby affecting the insured, uninsured and uninsurable. &quot;<a href="https://thejournal.cii.co.uk/2022/04/22/paving-paths-decarbonisation">With climate losses now touching US$120bn per year</a> and expected to grow if greenhouse gas emissions continue unabated.&quot; The burden of economic losses increasingly comes on the federal government. Not accounting for them would be a recipe for a bigger disaster.
<h1>Is there hope? Lesson from Africa!</h1>
With all eyes on Ukraine, we tend to gloss over protracted conflict zones from LDCs. Here is something inspiring and compelling enough to eject us out of the current theatrics.
 In 2018, <a href="https://news.mongabay.com/2022/04/in-burundi-one-time-combatants-who-razed-forests-now-raise-seedlings/">Burundi launched a vast national reforestation program</a> to boost the country’s dwindling forest cover and reduce conflict after its recent civil war. &quot;Today, the formerly warring factions are working together on the reforestation project that is planting a variety of tree species.&quot; Shouldn’t this be a reason to celebrate ridding the absurdity, howsoever momentary?
Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Theatre of the absurd

By the time I attempt to write a sequel - on how Climate Change is impacting the insurance regulations in the US - everything that seemed linear turns non-linear. What is driving this? IPCC’s code red for humanity; Russian invasion of Ukraine and the Security and Exchange Commission’s (SEC) disclosure of climate rule. It does not stop here. The narrative gets more complex with degrowth, colonialism and Office of Management & Budget (OMB) - something lesser known than the Federal Insurance Office (FIO). These have varying implications which go beyond the USA

By the time I attempt to write a sequel - on how Climate Change is impacting the insurance regulations in the US - everything that seemed linear turns non-linear. What is driving this? IPCC&rsquo;s code red for humanity; Russian invasion of Ukraine and the Security and Exchange Commission&rsquo;s (SEC) disclosure of climate rule. It does not stop here. The narrative gets more complex with degrowth, colonialism and Office of Management &amp; Budget (OMB) - something lesser known than the Federal Insurance Office (FIO). These have varying implications which go beyond the USA.
<h2>SEC and the climate rule</h2>
Here is a sample from a cross section of responses on the proposed way forward:
The US Securities and Exchange climate rule &ldquo;rather disappointed&rdquo;, says INSEAD Professor &amp; Author Claudia Zeisberger. &ldquo;<a href="https://www.newyorker.com/business/currency/how-much-do-things-really-cost">Yes the</a> industry did get what it wanted/ asked for; yes we have a baseline of rules for public companies". But I worry that this bare-minimum of disclosures will become the standard and hence the maximum going forward. And will it be enough to move the needle on climate change... or rather slow progress down?&rdquo;
Alperen A. G&ouml;zl&uuml;g&ouml;l &amp; Wolf-Georg Ringe <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4065115">believe</a>: &ldquo;These disclosures should encompass private companies that are of relevance for the net-zero transition. Such disclosures can be a powerful tool in shedding light on the polluting private companies that have so far been in the dark as well as serving as a disciplining mechanism&rdquo;.
Likewise, Louie-Woodall expresses serious concerns about the &lsquo;money pipeline&rsquo; in <a href="https://manifestclimate.com/">Manifest Climate</a>: &ldquo;The world has moved from the era of voluntary climate reporting to the age of mandatory climate-related disclosure. But this does not on its own guarantee that investors, supervisors, and other stakeholders will get clearer signals from companies - and especially financial institutions - on their climate risks and opportunities. Without a continuous effort to promote standardized reporting of what&nbsp;underpins&nbsp;the metrics that banks and other financial firms use to populate their transition plans and climate disclosures, the problem of white noise will persist&rdquo;.
Moreover, Shiva Rajgopal <a href="https://www.forbes.com/sites/shivaramrajgopal/2022/03/28/the-secs-attempt-to-write-generally-accepted-climate-principlespart-i/">ponders</a> on the best way out of this impasse. &ldquo;Climate reporting may be the third-best, not even the second-best, way of focusing corporate minds on the climate problem. But we live in a world where Congress does not seem to want to act on the climate problem, the political right will fight the new SEC rules as outreach, the Supreme Court wants to curb the Environment Protection Agency (EPA)&rsquo;s mandate and consumers cannot get out of oil because we have not offered them a viable alternative or the incentives to switch to something greener.&rdquo;
Equally profound is David McRobert&rsquo;s <a href="https://www.economist.com/united-states/2022/03/26/american-energy-innovations-big-moment">observation</a>: &ldquo;Disclosure by itself won&rsquo;t force companies to speed up their climate goals. But it will make the reporting more consistent and comprehensive, and [should] make it easier to spot discrepancies between a company&rsquo;s marketing language around climate and its actual business operations. The disclosures will also be used by investors to make better-informed judgments about the risk of investing in high-carbon companies.&rdquo;
&ldquo;This would also boost US president Joe Biden&rsquo;s climate agenda which isn&rsquo;t doing so hot. His big climate spending package has been stalled in Congress for months. The war in Ukraine has the White House begging oil companies to drill more&rdquo;, says David.
<h2>First time in history: OMB formally accounting in the Federal Budget for risks of climate change</h2>
How can I not thank Darius Nassiry for pointing in the direction of the &lsquo;Office of Management and Budget&rsquo; (OMB)? In a nutshell, what it is saying loud and clear is to get rid of fossil fuel.
Climate change threatens communities and sectors across the country, including through floods, drought, extreme heat, wildfires, and hurricanes that affect the U.S. economy and the lives of everyday Americans. Estimated damages from a subset of these events have grown to about $120 billion a year over the past five years. <a href="https://www.whitehouse.gov/omb/briefing-room/2022/04/04/quantifying-risks-to-the-federal-budget-from-climate-change/">Future damages could dwarf</a> current damages if greenhouse gas emissions continue unabated.
The Federal Government plays a critical role in helping American families, businesses, and communities recover from the impacts of extreme weather events -often acting as an insurer of last resort. Growing damages from extreme weather events would add new pressures on the Federal budget and taxpayers.
To better understand and address these risks to taxpayers and the Federal budget, last May, the&nbsp;<a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/05/20/fact-sheet-president-biden-directs-agencies-to-analyze-and-mitigate-the-risk-climate-change-poses-to-homeowners-and-consumers-businesses-and-workers-and-the-financial-system-and-federal-government/">President directed</a>&nbsp;the Office of Management and Budget (OMB) to develop and publish annually an assessment of its climate-related fiscal risk exposure, as well as develop new methodologies to quantify climate risk within the Federal government&rsquo;s economic assumptions.
Today, for the first time in history, OMB is formally accounting in the Federal Budget for risks of climate change. OMB is publishing two new assessments,&nbsp;<a href="https://www.whitehouse.gov/wp-content/uploads/2022/04/ap_21_climate_risk_fy2023.pdf">Federal Budget Exposure to Climate Risks</a>&nbsp;and a new section in the&nbsp;<a href="https://www.whitehouse.gov/wp-content/uploads/2022/04/ap_3_long_term_fy2023.pdf">Long-Term Budget Outlook</a>&nbsp;focused on climate change. The <a href="https://paenvironmentdaily.blogspot.com/2022/04/omb-blog-quantifying-risks-to-federal.html">first of these chapters</a> is supported by an&nbsp;<a href="https://www.whitehouse.gov/wp-content/uploads/2022/04/OMB_Climate_Risk_Exposure_2022.pdf">OMB white paper</a>. Additionally, OMB and the Council of Economic Advisers have&nbsp;<a href="https://www.whitehouse.gov/wp-content/uploads/2022/04/CEA_OMB_Climate_Macro_WP_2022.pdf">released a white paper</a>&nbsp;that outlines how better modelling of the broader economic impacts of climate change can help to quantify economic and fiscal impacts of climate change and climate action. Hopefully the modellers are listening as the president brings off the balance sheet risks on to the federal balance sheet.
<h2>De-growth et al</h2>
It&rsquo;s been fifty years since the Club of Rome gifted us &lsquo;The Limits to Growth&rsquo;, however, we remain obsessed with growth. The indigenous people remind us - It is time to learn to walk with respect on Mother Earth.
Even if technology could decouple growth from climate impacts, we don&rsquo;t actually need higher levels of GDP to achieve a thriving society. Costa Rica matches the US on wellbeing outcomes with only 20% of the GDP per capita. <a href="https://www.jasonhickel.org/less-is-more">In fact</a>, growth in global GDP has, since the 1970s, correlated with a decline in human progress as measured by the Genuine Progress Indicator. Happiness and welfare <a href="http://cup.columbia.edu/book/degrowth/9781911116806">correlate with</a> economic growth only up to a level and after that growth yields diminishing returns, and more and more growth does not improve them. The heterodox option is a degrowth transition to a post growth economy, <a href="https://www.researchgate.net/publication/344545392_What_does_degrowth_mean_A_few_points_of_clarification#:~:text=Abstract,and%20improves%20human%20well%2Dbeing.">calling for</a> &lsquo;a planned reduction of energy and resource use designed to bring the economy back into balance with the living world in a way that reduces inequality and improves human wellbeing&rsquo;. Global systems must radically change to provision universal welfare using a fraction of today&rsquo;s resources and energy. (<a href="https://materiallygood.files.wordpress.com/2022/04/the-degrowth-opportunity_13-april-2022_jennifer-wilkins.pdf">The Degrowth Opportunity by Jennifer Wilkins</a>).
&ldquo;It is no longer responsible to discuss climate mitigation without reference to degrowth. Calls for the development of degrowth have strengthened", says J<a href="https://www.linkedin.com/in/jenniferwilkinsnz/">ennifer Wilkins</a>. Whether it will be yet another far more severe zoonotic disease, a nuclear war or a persistent energy crisis as the world gets pushed towards renewables that triggers degrowth or will it be a voluntary act - is anybody&rsquo;s guess. The global north having usurped the global carbon budget must take the corrective lead and become a role model.
&ldquo;<a href="https://atmos.earth/the-frontline-kyle-whyte-colonialism-climate-change/">Colonialism</a>&rdquo; has finally made its way into the IPCC&rsquo;s sixth assessment report. The panel&rsquo;s working group two&nbsp;<a href="https://www.ipcc.ch/report/sixth-assessment-report-working-group-ii/">report</a>, which looks at the impacts of climate change on people, lists colonialism not only as a driver of the climate crisis but also as an ongoing issue that is exacerbating communities&rsquo; vulnerability to it.
How good are the SEC disclosures? How far and effectively do they cascade? Is the world ready for degrowth? Will the global north become a role model for the south. Or will it be business as usual? I just spot Philipp Ullmann&rsquo;s LinkedIn post appealing Munich Re not to support the East African Crude Oil Pipeline (EACOP) &ndash; &ldquo;that will soon rip through Uganda and Tanzania causing unprecedented damage to local livelihoods and the environment&rdquo;, he fears. As of now the waters look muddied. Or is it the oil spill?
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Navigating through muddied water or is it an oil spill?

“Microplastic pollution has been detected in human blood for the first time”, reports The Guardian. Prof Dick Vethaak, an ecotoxicologist at Vrije Universiteit Amsterdam, calls it a “breakthrough result”!

“Microplastic pollution has been detected in human blood for the first time”, reports <a href="https://www.theguardian.com/environment/2022/mar/24/microplastics-found-in-human-blood-for-first-time">The Guardian</a>. Prof Dick Vethaak, an ecotoxicologist at Vrije Universiteit Amsterdam, calls it a “breakthrough result”!
Huge amounts of plastic waste are dumped in the environment and microplastics now contaminate the entire planet, from the <a href="https://www.theguardian.com/environment/2020/nov/20/microplastic-pollution-found-near-summit-of-mount-everest">summit of Mount Everest</a> to the <a href="https://www.theguardian.com/environment/2018/dec/20/plastic-pollution-mariana-trench-deepest-point-ocean">deepest oceans</a>. (“Microplastics found in human blood for first time”) An estimated eight million tonnes of plastic enters the ocean each year; by 2050 there would be more plastic than fish in the ocean; 64 pounds of trash was found in the stomach of a sperm whale a couple of years ago. The danger is replicated on land with elephants and cows filling their stomachs. People were already known to consume the tiny particles <a href="https://www.theguardian.com/environment/2019/jun/05/people-eat-at-least-50000-plastic-particles-a-year-study-finds">via food</a> and <a href="https://www.theguardian.com/environment/2017/sep/06/plastic-fibres-found-tap-water-around-world-study-reveals">water</a> as well as <a href="https://www.theguardian.com/environment/2019/dec/27/revealed-microplastic-pollution-is-raining-down-on-city-dwellers">breathing them in</a>, and they have been found in the <a href="https://www.theguardian.com/science/2021/sep/22/more-microplastics-in-babies-faeces-than-in-adults-study">faeces of babies and adults</a>.
“More detailed research on how micro - and nano - plastics affect the structures and processes of the human body, and whether and how they can transform cells and induce carcinogenesis, is urgently needed, particularly in light of the exponential increase in plastic production. The problem is becoming more urgent with each day.” Says Vethaak in a <a href="https://link.springer.com/article/10.1007/s12403-022-00470-8">review paper published on Tuesday</a>.
As much as this omnipresence, it is the withdrawal syndrome which should also worry us all. “Oil trickles down to everything,” said Josh Lee, CJ Chemicals LLC. The headlines about high oil and gas prices seem far away from products like plastic wrap or lawn fertilizer. In reality, though, these everyday items need hydrocarbons to get made, and all across the supply chain, the struggle is on over who will bear the burden of<a href="https://www.wsj.com/articles/oil-price-rise-trickles-down-to-everything-even-your-potato-salad-to-go-11648033200"> higher costs</a>.
We urgently need further research so we can find out, <a href="https://www.theguardian.com/environment/2022/mar/24/microplastics-found-in-human-blood-for-first-time">says Vethaak</a>: “what is happening in our body? Are the particles retained in the body? Are they transported to certain organs, such as getting past the blood-brain barrier? And are these levels sufficiently high to trigger disease?” 
&quot;A recent study found that microplastics can <a href="https://www.eurekalert.org/news-releases/924520">latch on to the outer membranes of red blood cells</a> and may limit their ability to <a href="https://www.theguardian.com/environment/2022/mar/24/microplastics-found-in-human-blood-for-first-time">transport oxygen</a>.&quot; The particles have also been found in the <a href="https://www.theguardian.com/environment/2020/dec/22/microplastics-revealed-in-placentas-unborn-babies">placentas of pregnant women</a>, and in pregnant rats they pass rapidly through the lungs <a href="https://www.theguardian.com/environment/2021/mar/18/plastic-particles-pass-from-mothers-into-foetuses-rat-study-shows">into the hearts, brains and other organs</a> of the foetuses. These are not just limited to bottled water or Arctic snow.
<h1>Insurers can ignore this at their own peril</h1>
<a href="https://www.unepfi.org/wordpress/wp-content/uploads/2019/11/PSI-unwrapping-the-risks-of-plastic-pollution-to-the-insurance-industry.pdf">A study</a> published by United Nations Environment Programme (UNEP) - Principles for Sustainable Insurance Initiative (PSI) - identifies how risks related to plastic pollution play out across insurance lines and asset classes in which insurers invest. &quot;It argues that insurers should take an active role in addressing the risks related to plastic pollution and in contributing to global efforts to reduce it.&quot;
Just like climate change-related risks, this study shows that plastic pollution risks can affect insurance and investment portfolios in the form of physical, transition, liability and reputational risks. Risks ranging from threats to human health to evolving liability claims connected to marine litter and plastic pollution should be closely monitored by insurers in coming years.
In particular, insurers can consider the following approaches:
<h2>Lead by example:</h2>
1. <a href="https://www.unepfi.org/wordpress/wp-content/uploads/2019/11/PSI-unwrapping-the-risks-of-plastic-pollution-to-the-insurance-industry.pdf">Introduce policies </a>to reduce plastic use and waste internally. 
2. Include plastic pollution in ESG or sustainability approaches.
<h2>Understand, Prevent and Reduce Plastic Pollution Risks</h2>
3. Support knowledge and build awareness among the public, government and industry.
4. Include plastic pollution risks in risk assessment models for insurance and investment activities.
5. Develop relevant risk reduction measures.
6. Reduce the plastic footprint of reinstating damaged property.
<h2>Insure Risks Associated With Plastic Pollution</h2>
7. Design innovative insurance products to cover the risks associated with plastic pollution.
<h2>Support Alternatives To Plastic</h2>
8. Support innovations for plastic alternatives through insurance products and investments.
<h2>Support Wider Efforts To Reduce Plastic Pollution</h2>
9. Actively engage with key stakeholders as risk managers, insurers and investors.
10. Disclose plastic pollution risks and opportunities in relevant disclosure and reporting frameworks.
At the same time, plastic pollution presents significant opportunities for insurers to position themselves on the frontline in tackling this global issue and helping to secure a more sustainable future. (“Plastics and the Planet: Who Will Bear the Costs? - GARP”) Would they support the desired shift towards a circular economy? While the list of insurers avoiding coal continues to grow, only one player thus far has committed not to insure oil. Unless it’s a no to oil, it will be a yes to plastic.
<h1>Biodiversity under attack</h1>
Plastic is an increasingly high-profile threat to our climate, ocean, wildlife and human health. Its production has increased twenty times since 1964 and almost half of plastic produced is used just once before it is discarded. The mountains of plastic waste generated by people, businesses, food production and almost every other sector of modern life are, on the whole, <a href="https://www.unepfi.org/wordpress/wp-content/uploads/2019/11/PSI-unwrapping-the-risks-of-plastic-pollution-to-the-insurance-industry.pdf">poorly collected and managed</a>. &quot;As a result, plastic pollution is becoming widespread both in the ocean and on land, where it is impacting our ecosystems and <a href="https://www.unepfi.org/wordpress/wp-content/uploads/2019/11/PSI-unwrapping-the-risks-of-plastic-pollution-to-the-insurance-industry.pdf">threatening lives and human health</a>.&quot; 
Many worrying effects have been found. For example, additives in plastics are known to disrupt animals’ hormonal systems, and possible impacts on human health include lung inflammation, carcinogenicity, gene mutilation and repercussions for reproductive health. Furthermore, plastics make a direct contribution to climate change. Plastics, which are made from fossil fuels, <a href="https://www.garp.org/risk-intelligence/operational/plastics-and-the-planet-who-will-bear-the-costs">account for 20% of total oil consumption</a> and their manufacture, recycling and incineration is energy intensive, resulting in high carbon emissions. 
More detailed research on how Micro and Nanoplastics (MNPs) affect the structures and processes of the human body, and whether and how MNPs can transform cells and induce carcinogenesis is urgently needed, particularly in light of the exponential increase in plastic production and the ensuing accumulation of non-degradable MNPs, the problem is becoming more urgent with each day. (<a href="https://link.springer.com/article/10.1007/s12403-022-00470-8">To Waste or Not to Waste: Questioning Potential Health Risks of Micro- and Nanoplastics with a Focus on Their Ingestion and Potential Carcinogenicity | SpringerLink</a>). Given its perceived versatility, can plastic outlive oil? For sure a toothless UNEP and an insurance industry playing in the hands of big oil.
Recycling, unfortunately, is a complete joke. We have no infrastructure to do it properly. We used to send our plastic trash to China, but in 2018, the country decided not to take it anymore. Other countries still take our recycling, but they often end up just burning the plastic rather than actually recycling it (burning plastic, shockingly, is not great for air quality). Plastic loses many of its desirable qualities - its hardness and its malleability - when it is melted down to be recycled into new products, so hard things like bottles are often recycled into softer items.
At this point, recycling is basically just a ploy the petrochemical industry uses to shift the onus of plastic waste from their manufacturing plants onto us consumers and to assuage our guilt about our ridiculously wasteful way of life so that we will continue to buy more plastic. Recycled plastic can’t readily be made into new usable products, so it must be bolstered with the addition of newly manufactured plastic.
Recycled plastic bottles, for instance, pass more harmful chemicals into contents than newly manufactured ones, warned researchers. Over 150 chemicals were found to be passed into drinks from plastic bottles by researchers at Brunel University, London. Around 18 of these chemicals were in levels, <a href="https://www.theguardian.com/environment/2022/mar/18/recycled-plastic-bottles-leach-more-chemicals-into-drinks-review-finds">which exceeded regulations</a>. 
An optimist could view plastics as the death throes of the oil industry, desperate to maintain its profits and power and thus turning to promoting plastics as the ultimate use for oil since people don’t want it for fuel anymore. Erica Cirino, the author of <a href="http://www.ericacirino.com/plastic">Thicker Than Water</a> conveys there is some hope on the horizon, with new laws banning single-use items and technological innovations to replace plastic in our lives. But Cirino shows that we can only fix the problem if we face its full scope and begin to repair our throwaway culture. The book is an eloquent call to reexamine the systems churning out waves of plastic waste. &quot;<a href="https://arstechnica.com/science/2021/10/searching-for-solutions-to-a-crisis-decades-in-the-making/">Cirino ends on this note</a>, reminding us that culture shifts are possible and that even mighty corporations can topple.&quot; 
<h1>In conclusion</h1>
Shouldn’t the UNEP be looking for plastic alternatives rather than ensuring the longevity of the mother industry? Asbestos claims were a bane of insurers for at least a decade. &quot;<a href="https://news.trust.org/item/20110728141200-bfmw8/?source=spotnewsfeed">They nearly brought down the Lloyd’s of London market</a> in the 1990s and have cost some of the industry’s largest players billions of dollars.&quot; It, however, seems like a drop in what is proving to be an ever-ballooning ocean of plastics! Ubiquitously MNPs are all over due to continuous release and accumulation - thereby posing threats to ecology &amp; human health - resulting into irreversible global biodiversity damage. We now deserve a breakthrough in the form of a replacement to the wonder product of the yore, whose destiny intertwines the fossil fuel.
 Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Next Asbestosis: Plastic?

The battle between Russia and Ukraine is also about renewable versus non-renewable sources of energy. Perhaps dependence on Russian gas was as much undermining NATO’s sovereignty as was Ukraine’s perceived posturing driving Russia’s belligerence. However, as the unfortunate drama escalates, fossil fuel pricing keeps scaling new highs. Some optimists believe this is a tipping point for renewables.

The battle between Russia and Ukraine is also about renewable versus non-renewable sources of energy. Perhaps dependence on Russian gas was as much undermining NATO’s sovereignty as was Ukraine’s perceived posturing driving Russia’s belligerence. However, as the unfortunate drama escalates, fossil fuel pricing keeps scaling new highs. Some optimists believe this is a tipping point for renewables.
In this melee what tends to be missed out is that Energy security is not just about fuelling power generation, manufacturing, or mobility. On the eve of International Women’s Day, we need to remember that it is also about putting cooked food on the table. For millions of women and girls particularly in the developing countries - it is a day-to-day war for firewood which gets grimmer with growing deforestation. Securing energy would secure the future of these women and girls.
‘With the price of oil driving the world into fuel poverty, hardworking families unable to afford heating and transport, millions of people dying each year from air pollution and a climate crisis which will cause a catastrophic breakdown of global food systems by 2030, it is staggering that we continue to believe that winding down the carbon economy over the next few decades will be “enough”, says Stephen Fern, Chairman Ark2030.
<h1>Anthropocentrism</h1>
Celebrated author and climate champion Amitav Ghosh brings out an interesting facet: ‘The modern era, it is often asserted, has freed humanity from the Earth, and propelled it into a new age of progress in which human-made goods take precedence over natural products. The trouble is that none of that is true’, he says.
‘We are today even more dependent on botanical matter than we were three hundred years (or five hundred, or even five millennia) ago, and not just for our food. Most contemporary humans are completely dependent on energy that comes from long-buried carbon - and what are coal, oil, and natural gas except fossilized forms of botanical matter?’ (“Excerpt: The Nutmeg’s Curse by Amitav Ghosh - Hindustan Times”)
‘As for the circulation of goods, in that too fossil fuels vastly outweigh any category of human-made goods’. (“The Nutmeg’s Curse: Parables for a Planet in Crisis, Ghosh”) In the words of two energy economists, quotes Ghosh in his recent book The Nutmeg’s Curse: “Energy is the most important commodity in the world today. &quot;And by almost any metric, the energy industry is impossibly large.&quot; (“The Nutmeg&#x27;s Curse: Parables for a Planet in Crisis by ...”) Yearly energy sales at over 10 trillion dollars dwarf expenditures on any other single commodity; trade and transport of energy is immense with over 3 trillion dollars in international transactions driving product deliveries through 2 million kilometers of pipelines and 500 million deadweight tons of merchant shipping; 8 of the 10 largest global corporations are energy companies; and a third of the global shipping fleet is occupied shipping oil. &quot;Given these figures it may not be surprising that world energy consumption takes the energy equivalent of over 2800 barrels of oil per second to quench.” (“The Nutmeg’s Curse: Parables for a Planet in Crisis, Ghosh”) With such entrenched vested interests, ridding the global economy of carbon is a humongous task.
<h1>Keep it in the ground</h1>
Coal, the dirtiest fossil fuel is still raising trillions of dollars of funding, despite finance industry pledges to back net zero carbon targets by the middle of the century. (“Coal Is Still Raising Trillions of Dollars Despite Green ...”) Such is our addiction that Commercial banks have channeled more than $1.5 trillion across the coal supply chain since the start of 2019, according to a report from German researcher Urgewald and its partners. &quot;The findings come just over three months after dozens of banks joined Mark Carney’s global alliance to achieve net-zero emissions from finance.&quot; (“Coal Is Still Raising Trillions of Dollars Despite Green Shift”) 
Most agree it’s necessary to fight rising temperatures, yet few major global banks are willing to shun profitable fossil-fuel clients. The biggest coal lenders included Mizuho Financial Group Inc., Barclays Plc, Citigroup Inc. and JPMorgan Chase &amp; Co., the study showed. Chinese banks dominated the underwriting of capital raised by the coal industry. “This is a clear sign that companies aren’t transitioning”, says Heffa Schuecking, founder of Urgewald. (“Coal Is Still Raising Trillions of Dollars Despite Green Shift”)
Institutional investors have combined holdings of more than $1.2 trillion in the coal industry. BlackRock Inc. and Vanguard Group Inc. are the two largest, with share and bond holdings of over $100 billion each, according to the report. Both firms are members of the Net Zero Asset Managers Initiative. (“Coal Is Still Raising Trillions of Dollars Despite Green Shift”)
There’s growing concern that coal plants could be left as stranded assets during the green transition, with countries favouring renewable power sources. Yet the report’s findings show that banks and asset managers still see opportunities to make a return. (“Coal Is Still Raising Trillions of Dollars Despite Green Shift”) “Vast amounts of cash are provided to an industry that is our climate’s worst enemy,” says Ganswindt. (“Who Is Still Financing the Global Coal Industry...”)
<h1>Leveraging Biodiversity and Ecological Services </h1>
As the extractive industry merrily destroys whatever remains of the green cover, how do we sensitise the billions about the biodiversity and ecological services that we take for granted? Unless we bring out the linkages, much of our society remains distanced from the ‘inanimate’ earth. It is critical to infuse the throb of life and let that be felt. We need to be mindful that every action against the nature too has an equal and opposite reaction. This is precisely what mother nature pushing back father greed is about.
Renowned ethnobotanist Mark Plotkin has a time-tested prescription from his several decades of work inside the Amazon forests. ‘It is all too easy to say that the only news that is coming out of the environment in general - and the rainforest in particular - is bad. That people in general and large conservation organizations are now realizing the central role local societies must be empowered to assume is highly encouraging. (“Ethnobotanist Mark Plotkin: Indigenous knowledge serves as ...”) That the Indigenous peoples themselves are pointing out that they are the best stewards of their ancestral ecosystems is likewise long overdue and to be celebrated’.
‘Of course, there is a win-win scenario here in which shamanism remains an honored profession, Indigenous people are compensated fairly for their healing knowledge and practices, the rainforest is better protected, and cherished, and sick people are cured. Yet achieving these goals have proven more difficult than many had anticipated’, I quote Plotkin from one of his interviews with Mongabay.
‘In my experience, partnering effectively with tribal colleagues and communities does not happen on a western timeline and is certainly not expedited by simply throwing lots of money at the process. For example, for almost four decades, I have been working with the great shaman Amasina - <a href="https://news.mongabay.com/2008/07/an-interview-a-shaman-in-the-amazon-rainforest/">who has been interviewed by Mongabay</a> - and he is still showing me new treatments. Trying to learn information like this in a hurry would have failed’. (“Indigenous knowledge serves as a ‘connective tissue ...”) Indigenous knowledge serves as a ‘‘connective tissue’’ between nature and human well-being’.
<h1>In conclusion</h1>
The mad scramble for fossil fuels to keep building the edifice on the foundations laid by the industrial revolution has outlived its utility. The genie must go back from where it came. Extinction is too heavy a price to pay, and Mars is a mirage. This is the only home we have. Wars, conflicts, coups, autocrats, and now the climate crisis which will only continue to fuel frequent and far more serious manifestations of all these. Why not opt for nature’s wondrous and benign gifts? Let us leave coal, oil, and gas below the ground. The abundant sun and wind can keep us all going without having to worry about the wellbeing of our womenfolk. Biodiversity will keep us healthy and sane. For the sake of our future generations can we say: Power flows from the barrel of oil no more! Can Russia versus Ukraine settle this score?

Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Barrel of oil no more…

Climate Change is nudging insurers out of their comfort zone. As a handmaiden of the industry, insurers have been ensconced at the point of sale for too long. It is time for an urgent course correction and willingly head towards the moment of truth. 

Climate Change is nudging insurers out of their comfort zone. As a handmaiden of the industry, insurers have been ensconced at the point of sale for too long. It is time for an urgent course correction and willingly head towards the moment of truth. What can be a bigger truth than the climate emergency - an outcome of anthropocentric activity hastened by the industrial revolution. Whether it calls for mitigation, adaptation or resilience would depend on how quickly the reality dawns upon them. The signals are writ large and a lip service, as it turns out today, would be catastrophic not only to USD 6 trillion-plus global insurance business but can cause a far bigger damage arising from the investments of its float. Here I pick signals from the Geneva Association, Institute of Public Policy Research, Swiss Re and The Guardian.
<h1>Emerging risks</h1>
A new, highly complex and destabilised &lsquo;domain of risk&rsquo; is emerging - which includes the risk of the collapse of key social and economic systems, at local and potentially even global levels. This new risk domain affects virtually all areas of policy and politics, and it is doubtful that societies are prepared to manage this risk. (&ldquo;Institute for Public Policy Research&rdquo;)
<h1>Embedding sustainability</h1>
This is a welcome move. Yet, what needs to be evaluated is the effectiveness of the recently created International Sustainability Standards Board (ISSB) in beefing up the International Financial Reporting Standards (IFRS). Is it the impact of climate change on the balance sheet of insurance companies alone that concerns it, or will it also account for the adverse implications of insuring harmful businesses and investments into non-sustainable ones?
<h1>Transition to a low-carbon economy: Opportunity or threat?</h1>
<blockquote>"This is a major opportunity for the insurance industry that will, however, also come with certain risks on the liability, investment and the operational sides."</blockquote>
(&ldquo;<a href="https://www.swissre.com/institute/research/sonar/sonar2021/insurers-net-zero.html">Insurers on the road to net-zero | Swiss Re</a>&rdquo;) We need to achieve net-zero emissions by 2050 to avoid a more-than-2&deg;C rise in global temperature, leading to serious and irreversible damage to our planet. To reach this goal, emissions need to be cut by 50% by 2030. The global net-zero target is gaining more traction, with more than <a href="https://www.swissre.com/institute/research/sonar/sonar2021/insurers-net-zero.html">one hundred countries committing to a net-zero by 2050 target</a>. Emissions have to remain net-negative after 2050.
Can the insurance industry play an active role in supporting this critical transition? Risk knowledge, transfer solutions and investments will be key to deployment of green infrastructure and low-carbon technologies. For instance, marine, air and road transport powered by new low-carbon fuels will need appropriate risk management and risk transfer to achieve economic viability and scale. (&ldquo;Insurers on the road to net-zero | Swiss Re&rdquo;)
Insurers can take on the risk of transition where price levels are adequate. The resulting demand for insurance will be new source of premium growth. On the asset side, aligning investments with net-zero targets can help to improve portfolio performance and avoid stranded assets. The new momentum in the transition to a low-carbon economy could also come with new risks for the insurance portfolios. Design and construction of innovative technologies has the potential to change the risk landscape of insurance coverages for architects, engineers and construction. (&ldquo;Insurers on the road to net-zero | Swiss Re&rdquo;)
<h1>Price for fundamental changes in business models</h1>
The underlying risks of certain lines of businesses may change significantly. Stricter emission regulations could lead to increased litigation risks where the targets are not met. (&ldquo;Insurers on the road to net-zero | Swiss Re&rdquo;) In addition, such regulations may impair high-emission companies and industries. Increasing cost pressure on high-emission assets can increase the likelihood of default-triggering losses in Credit &amp; Surety (C&amp;S) lines or stranded assets on the investment side. Moreover, cost pressure and subsequent lower maintenance may increase operating risk. This could lower risk quality for impaired assets and thus impact property insurance. (&ldquo;Insurers on the road to net-zero | Swiss Re&rdquo;)
<h1>Stewardship has its costs</h1>
Insurers face reputational risks not only from own emissions but also from those of their investees and insureds. (&ldquo;Insurers on the road to net-zero | Swiss Re&rdquo;) As the latter account for the sizeable chunk, they can and should play the influencer role.
<h1>Nature &amp; Biodiversity</h1>
The Task Force on Climate-Related Financial Disclosures (TCFD) recommendations are now being implemented through legislation and regulation in many jurisdictions. Under the TCFD recommendations, insurers as well as agents in other industrial sectors should show how climate-change resilient their portfolios are. Implementing climate-change related considerations into actuarial models is one way to do this. (&ldquo;Pricing nature in insurance | Swiss Re&rdquo;) On the life side, the impacts of climate change are currently under investigation. As the World Health Organisation (WHO) and the Lancet Countdown on Climate Change and Health suggest, without action negative impacts on excess morbidity and mortality can be expected.
A Task force on Nature-related Financial Disclosures (TNFD) is about to emerge with the aim of developing recommendations, which could also change how insurers report and write business. A key risk driver for the frequency of pandemics is deforestation in biodiversity-rich tropical areas. (&ldquo;Pricing nature in insurance | Swiss Re&rdquo;)
As the risks related to the loss of nature become more material, the pressure for stringent measures increases. Economic growth is a big driver of nature&rsquo;s decline, and a way to change course is to make the financial impacts in corporate accounts visible. For the insurance industry, this is good news. The increasing transparency on client exposures enables more informed and targetted underwriting and risk selection. (&ldquo;Pricing nature in insurance | Swiss Re&rdquo;)
The nascent carbon removal industry has been a failure till date. While continuing to attract big capital it has been dismissed as a greenwash. The problem on hand is excessive greenhouse gases in our atmosphere. The primary endeavour should, therefore, be to eliminate the very production of such emissions rather than offsets and capturing. It would be best in the interest of insurers to back the right horse.
<h1>Climate litigation</h1>
Governments and corporates are being targeted by a wide range of litigants in many jurisdictions, for allegedly failing in their legal duties. The majority of cases have been brought against governments. However, there is unmistakable evidence that the number of lawsuits against corporates (particularly carbon majors) is on the rise. (&ldquo;Global Growth in Climate Litigation and Legislation ...&rdquo;) Insurers are bound to get enmeshed in this web.
The rise in Climate litigation risk is due to: Increased physical and transition risk; Increasing awareness of the climate crisis; Stronger climate commitments from governments, corporates and investors; Availability of funding for climate litigation; Evolving legal duties; Developments in climate change attribution science; and "The implications of COVID-19 on economic recovery and climate-related actions." (&ldquo;Climate Change Litigation &ndash; Insights into the evolving ...&rdquo;)
<h1>In conclusion</h1>
Emerging standards and risks represent a significant tectonic shift. Not aligning with them and merrily holding on to the supply side in business-as-usual mode has a serious downside. Having said that, the moment of truth can be elusive. As is beginning to be evident, gaming newly established standards and emerging parlance could lead to greenwashing. In the run up to the&nbsp;<a href="https://www.nature.com/articles/d41586-021-03431-4">United Nations climate summit</a>&nbsp;in Glasgow, UK, last year, many of the world&rsquo;s most powerful businesses joined governments in pledging to reduce their carbon emissions to zero in the coming decades. But&nbsp;<a href="https://newclimate.org/2022/02/07/corporate-climate-responsibility-monitor-2022/">an analysis of publicly available corporate documents</a>, such as annual sustainability reports, shows that 25 of those companies - which together are responsible for about 5% of global emissions - are actually committing to do far less.
Insurers can choose to be a litmus test for the sustainability and circularity of societal actions that pass through their fold. Aiding or abetting any such outcomes not only puts reputation at risk but has serious existential implications. The writing is on the wall and the signal is loud and clear: embrace the moment of truth.
Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Writing on the Wall

In this article, Praveen Gupta explains why climate change is driving major changes to insurance supervision and regulation in the US.

With 50 states and as many insurance regulators in the US, the existence of a Federal Insurance Office (FIO) almost sounds implausible. But thanks to climate change, an assertive US Department of the Treasury is nudging the FIO into action.
Moody’s believes the credit impact of “a delayed and disorderly carbon transition” is the greatest threat to financial firms, as the increasing frequency of catastrophic weather events will lead to loan defaults and rising insurance claims. The task on hand for the FIO, therefore, is to identify and assess climate-related issues or gaps in the supervision and regulation of insurers, including their potential impact on financial stability.
The Dodd-Frank Act grants the FIO certain financial stability, monitoring and international responsibilities. The FIO advises the Secretary of the Treasury on major domestic and prudential international insurance policy issues, and it serves as a non-voting member on the Financial Stability Oversight Council (FSOC). Among other things, it is also specifically authorised to monitor all aspects of the insurance profession, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance profession or the US financial system.
President Joe Biden’s 20 May 2021 Executive Order on Climate-Related Financial Risk emphasises the important role that the insurance sector can play in combatting climate change. It instructs the Secretary of the Treasury to task the FIO “to assess climate-related issues or gaps in the supervision and regulation of insurers, including as part of the FSOC’s analysis of financial stability, and to further assess, in consultation with states, the potential for major disruptions of private insurance coverage in regions of the country particularly vulnerable to climate change impacts”.
The FIO intends to initially focus on the three following climate-related priorities, in particular:
<ol><li>Insurance supervision and regulation: Assess climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on US financial stability.</li></ol>
<ol><li>Insurance markets and mitigation/resilience: Assess the potential for major disruptions of private insurance coverage in US markets that are particularly vulnerable to climate change impacts, and facilitate mitigation and resilience for disasters. Also, assess the availability and affordability of insurance coverage in high-risk areas, particularly for traditionally underserved communities and consumers, minorities and low/moderate-income persons.</li></ol>
<ol><li>Insurance sector engagement: Increase its engagement on climate-related issues and take a leadership role in analysing how the insurance sector may help mitigate climate-related risks.</li></ol>
<h1>Insurance supervision and regulation set for a sea-change</h1>
How should the FIO identify and assess climate-related issues or gaps in the supervision and regulation of insurers, including their potential impact on financial stability? In seeking answer to this, the FIO wishes to address: (a) Prudential concerns (b) Market conduct regarding insurance products and services (c) Consumer protection.
The FIO also wishes to assess the effectiveness of US state insurance regulatory and supervisory policies in addressing and managing climate-related financial risks with regard to the threat they may pose to US financial stability. This would include identifying:
<ol><li>The major channels through which climate-related physical, transition, and/or liability risks may impact the stability of the US insurance market</li></ol>
<ol><li>The degree to which insurers’ business models could be affected by each category of risk and the relevant time horizons for such effects.</li></ol>
In the process, identifying and assessing:
<ul><li>The key structural issues that could inhibit the ability of insurance supervisors to assess and manage climate-related financial risk in the insurance sector (for example, accounting frameworks and other standards).</li></ul>
<ul><li>The barriers that could inhibit the integration of climate-related financial risks into insurance regulation.</li></ul>
<ul><li>The efforts of insurers – through their underwriting activities, investment holdings and business operations – to meet the US’s climate goals, including reaching net-zero emissions by 2050.</li></ul>
<ul><li>What role or actions states might take to encourage the insurance sector’s transition to a low-emissions environment and an adaptive and resilient economy?</li></ul>
<h1>The scorecard urgency</h1>
Bloomberg Green recently noted: “The clock is ticking for banks, insurers and asset managers [that are] still providing support to oil, gas and coal producers. It’s not just the moral imperative – that fossil-fuel use is destroying the atmosphere and life on Earth with it. It’s that their financial health requires leaving such companies behind.”
Meanwhile, Sonia Hierzig, head of financial sector research at ShareAction, warned: “It is baffling that most insurance companies still seem happy to invest in companies or provide insurance for projects that continue to fuel this crisis. <a href="https://insureourfuture.co/wp-content/uploads/2020/12/IOF-REPORT-FINAL-1.pdf">Insure Our Future’s most recent scorecard</a> on insurance, fossil fuels and climate change found that insurers in the US, east Asia and the Lloyd’s market, particularly, continue to support this sector with few restrictions – despite its clear incompatibility with the goals of the Paris Agreement.”
The US is the world’s largest historic greenhouse gas emitter. Now, standing on the verge of running out of carbon budget, US insurers need to abandon their fossil-fuel fixation. Would the FIO be able to make that happen? The intent seems right and as of now, it appears to be getting into the driver’s seat.
This article is originally published by the <a href="https://thejournal.cii.co.uk/2021/12/20/taking-wheel-climate-change">JOURNAL, Chartered Insurance Institute.</a>​ Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Praveen Gupta

Praveen Gupta

Or should we say... climate maladaptation?

Recent publications

Readers also like

Want to know more about illuminem Voices?