Newsletter - Week of Sep 4, 2023

Hi All,

There were some interesting geopolitical developments brewing this week. Climate change poses severe risks worldwide, with extreme weather already causing major economic losses; Africa faces escalating physical climate threats like droughts and cyclones leading to displacement and food crises, yet its constrained governments require debt relief and financing to respond urgently. At the Africa Climate Summit, leaders were pressed to make ambitious pledges and commitments under a "Pledging and Commitment Framework" to embrace bold ideas that can help turn the tide on climate change in Africa and globally. Outcome? - The Summit proposed a new financing architecture responsive to Africa's needs including debt restructuring and relief and the development of a new Global Climate Finance Charter through the United Nations General Assembly and the COP processes by 2025

🌍 Sustainability

• World way off track to meet Paris climate goals, says UN report (FT, Sep 8, 2023). Bottomline: The UN report finds the world is way off track from meeting the goals of the 2015 Paris Agreement to limit global warming to well below 2°C and ideally 1.5°C.

1. Current country climate plans and actions put the world on track for 2.6°C of warming. Much more ambitious emissions cuts are needed, like 43% by 2030 and 60% by 2035 compared to 2019.
2. Renewable energy trends are promising but investment in clean energy remains far below what's needed. Fossil fuel investment and subsidies still outweigh green energy finance.
3. Global climate finance reached $803 billion in 2019-20 but estimates suggest $4 trillion is needed annually. More private sector investment is required, especially in developing countries.
4. The UN and architects of the Paris Agreement urge governments to study the findings and take more ambitious climate action in this critical decade, as emissions need to peak before 2025 to meet the 1.5C goal.
5. The report increases pressure on countries to strengthen commitments and accelerate the transition from fossil fuels ahead of the COP28 climate summit this year.

• UK subsidy auction fails to attract any offshore wind bids in blow to net zero plans (FT, Sep 8, 2023). Bottomline: The UK government's failure to award offshore wind contracts in the renewable energy auction represents a major setback for the country's net zero emissions strategy.

1. The UK government failed to attract any bids from offshore wind developers in the latest auction for renewable energy subsidies.
2. This is a major setback for the UK's plans to triple offshore wind capacity to 50GW by 2030 to reach net zero emissions.
3. No offshore wind projects won contracts due to developers warning subsidies were not high enough to offset rising costs.
4. Other renewable technologies like solar and onshore wind did secure small amounts of capacity in the auction.
5. But the total 3.7GW awarded was the lowest since 2017 and only a third of last year's total.
6. Industry experts and politicians criticized the failure and urged the government to increase subsidies to rebuild investor confidence.
7. The government highlighted the contracts for other renewables but admitted adjustments may be needed for next year's auction.
8. The lack of offshore wind projects puts the UK's emissions targets and net zero plans at risk.

• Allianz announces first net-zero transition plan with 2030 intermediate targets for core business segments (Sep 7, 2023). Bottomline: Allianz announced its first comprehensive transition plan to achieve net-zero emissions by 2050 in its investments and insurance underwriting.

Key takeaways

1. It sets intermediate emission reduction targets for 2030:

• Reduce emissions in property & casualty insurance by 30% for retail motor and 45% for commercial insurance versus 2022 levels.
• Halve greenhouse gas emissions in its investment portfolio versus 2019.
• It will grow revenues from renewable energy and low-carbon technologies in commercial insurance by 150% by 2030.
• It aims to invest an additional €20 billion in climate and cleantech solutions by 2030.
• It will strengthen engagement with clients and investee companies to encourage their net-zero transitions.
• This builds on past progress, as Allianz already surpassed its 2025 emissions targets for investments.
• The operational net-zero goal by 2030 remains unchanged.
• The plan increases transparency and demonstrates Allianz's leadership in supporting the transition to a low-carbon economy.
• Climate impasses could undermine G20 meeting (ClimateWire by Politico, Sep 8, 2023). Bottomline: deep divides exist among G20 members on key climate issues, and consensus will be difficult amid geopolitical tensions. The lack of agreement doesn't bode well for substantial progress or joint commitments at COP28.

Key takeaways:

1. The summit comes amid the world's hottest summer on record, but geopolitical disagreements have prevented agreement on tackling climate change.
2. A failure to reach consensus on phasing out fossil fuels would make it harder to achieve global climate progress at COP28 later this year.
3. Key issues dividing G20 countries include climate finance, debt relief, and energy transitions away from fossil fuels.
4. Developing nations are calling for more climate finance from wealthy polluting countries. India aims to prioritize this issue as G20 president.
5. The U.S. wants G20 support for reforming multilateral development banks and providing debt relief, but needs Congress to approve climate funding. (Note - It has also sought to offer developing nations an alternative to Beijing’s Belt and Road Initiative, a global infrastructure investment program that Sullivan insisted was not the reason behind changes at the U.S.-led bank.)
6. Previous G20 climate and energy ministerial meetings failed to reach consensus on phasing out fossil fuels and boosting renewables.
7. Saudi Arabia, China, and Russia have blocked G20 climate action. Disagreements also exist over carbon capture and fossil fuel subsidies.
8. The absence of China's President Xi could hinder progress, as U.S.-China tensions have risen since their meeting spurred climate action at last year's G20.

• IMF, World Bank to step up cooperation on climate, debt, digital transition (Reuters, Sep 7, 2023)

Key takeaways:

1. The IMF and World Bank issued a rare joint statement pledging to increase cooperation on addressing climate change, debt vulnerabilities, and countries' digital transitions.
2. This comes ahead of the G20 summit in India this week, where these challenges facing the global economy will be discussed.
3. The IMF and World Bank will collaborate more on climate change, including through the IMF's new Resilience and Sustainability Trust which provides climate financing.
4. They will enhance joint work on preventing further debt vulnerabilities in countries and support debt restructurings.
5. They aim to help countries increase benefits and reduce risks from digital technologies, including improving cross-border payments.

• More than four in five US homebuyers are factoring in climate risks when they shop for a new house, according to a new survey of 12,000 prospective buyers. Some 83% of respondents said they weighed at least one climate risk—such as floods, extreme temperatures, wildfires, hurricanes or drought—in their purchase plans. (Bloomberg, Sep 6, 2023)
• The idea of cooling the planet by reflecting some of the sun's heat back into space is attracting attention and raising concerns, according to the Financial Times.
• The rising tide of climate-related disasters is creating a market boom for bonds that allow the insurance risk to be transferred to investors, the Wall Street Journal reports.
• A glacier baby is born: Mating glaciers to replace water lost to climate change (NPR, Sep 3, 2023):
• Bill Gates: Big Ideas on Digitalization and Clean Energy (Morgan Stanley, Aug 9, 2023)

🧘🏽 Conscious living

Check out my other two posts on mental health (in honor of neurodiversity awareness) and conscious leadership.

Mental Health | Decoding the Differences: HSP, Autism (Asperger’s), and ADHD Explained

Explore the key differences between HSP, Autism (ASD), and ADHD, their characteristics, and coping strategies for each

EJ's WorldEJ Shin

Leadership | Marcus Aurelius - The Stoic Leader in Turbulent Times

Explore the Stoic leadership of Marcus Aurelius, a beacon of wisdom during chaos, embodying eudaimonia and conscious leadership for the modern world.

EJ's WorldEJ Shin

😍 My Favorites

• Winston Churchill is one of my heroes and role models. He was the guiding light that brought me to London all the way from NYC. Here is an awesome 'Founders' podcast about his life and leadership by Paul Johnson. He was inspired by the book Hero of the Empire: The Boer War, a Daring Escape, and the Making of Winston Churchill by Candice Millard.
• This is the reason why I call 'trees' in the city - 'warrior trees.' Check out this Economist article for more.  Plants don't have ears but can still detect sound through sensing vibrations. a) One 2021 study found traffic noise led to stunted growth and stress compounds in marigolds and sage. b) Plants may even produce their own sounds, such as the clicking noise made by some roots and stems growing. More research is needed on plants detecting and creating sounds.
• Spotify's CEO Just Taught a Powerful Lesson in Leadership. It Starts With Just 9 Words (Inc., Sep 5, 2023)

👍 Quote of the week