Solutions instead of safety

Green Daily

In climate news today...

Emily Chasan's Good Business

As ESG investing grows, a key question for asset managers and owners will be whether the strategy can be as good at solving the world's most pressing problems as it can be at avoiding risk.

In a world currently defined by the coronavirus pandemic, ESG strategies have shown themselves to be very good at avoiding risk. Bets on health care, technology and companies that prioritized employee safety panned out. Investors have been putting so much capital to work in this space that some are wondering if ESG is becoming a gold-like asset class, one to which investors flee for safety.

But while avoiding risk can protect portfolios, it doesn't solve climate change or social inequities. A paper this month from Harvard University professor George Serafeim argued that companies are "treating ESG efforts like a cell phone case—something added for protection" rather than used to create lasting value for themselves and the world.

There's a need to switch to a more solutions-oriented approach when discussing climate in general, said Ayana Elizabeth Johnson and Katharine Wilkinson, editors of the forthcoming book "All We Can Save," which focuses on solutions for the climate crisis. I asked Johnson, a marine biologist and ocean policy expert, and Wilkinson, a vice president at climate-solutions ranker Project Drawdown, how they prioritize solutions. 

Ayana Elizabeth Johnson and Katharine Wilkinson

"The general public discourse on the climate crisis hasn't really set us up to think in terms of solutions," Wilkinson said, noting how climate change is more frequently associated with storms and floods than carbon sequestration or refrigerant management. "It's really a critical pivot to make: to understand that we have a massive set of problems, but also a massive set of solutions and then to actually move forward at the scale and speed required." 

To move solutions to the center of the conversation is to also think differently about how leaders solve problems with urgency, they said. The authors contend that the focus must move beyond setting goals and changing rules and policies, to changing behavior and building power. Climate problem solvers, Johnson said, are people who are collaborative, comfortable with complexity and take a "nurturing approach" to problem solving. 

"One of the themes that emerges is you can't do this alone—there's no hero that's going to lead us out of this," Johnson said. "It's very much a collective problem that requires a collective solution."

Sustainable Finance in Brief


  • Clean energy ETFs are overshadowing ESG-themed ETFs this year.
  • More than 95% of the letters the Department of Labor received on its proposal aimed at restricting ESG funds in retirement accounts were against it, according to a study of 8,700 public comments. 
  • The world's biggest battery storage is now operating in California, and it's not enough. The state's blackout crisis could have been avoided if it had 12 more gigawatts worth of batteries, potentially costing $19 billion. But there aren't enough out there to buy anyway.
  • Europe wants to see if investors will pay a premium for green. Germany aims to set Europe's benchmark for green bonds in a $4.7 billion issue, and wants to twin green offerings with comparable conventional bonds so investors can see the difference. Denmark will issue green certificates alongside a regular bond to test if it's really getting an ESG pricing advantage.

Emily Chasan writes the Good Business newsletter about climate-conscious investors and the frontiers of sustainability.

Here's what else you need to know in Green

Rain Damps Fires in Southeast Asia
A wetter-than-normal dry season in Indonesia is expected to curb fires.
Snack Bar Maker Goes Green 
Kind Healthy Snacks will exclusively source almonds from bee-friendly farmland by 2025.
America's Miners Need an Energy Revolution
Trump promised a coal comeback, but federal green stimulus investment could be transformative.
The Price of Saving Paradise
Local leaders are proposing an ambitious scheme to protect Paradise, California, from future blazes.


Popular posts from this blog

Stars Unite for Table Reading of Fast Times At Ridgemont High

How to Dance Across Medium with Fantastic Writers

Chicken vs. cow