Green Exchange

Mixtape #9: Pirates & the Wind of Change (Chapter 2)

Pirates never went away. From the troubling news stories about pirates attacking ships in Somalia, to dangerous digital hacktivists wreaking havoc online, there is plenty to discover – and even more to question. So, what can we learn from modern piracy? One thing is for sure: nothing in this story is black and white.

This mixtape is designed for three specific situations:
  • S1: It’s late and. you can’t sleep. You feel like exploring, taking this idea to the next level. Leaping forward. You wake up and log onto your computer. Go, explore. Make something happen while the world is asleep.
  • S2: While doing some cleanup in your storage room, you found this old computer from the early nineties that you didn’t remember you had. You’re thinking back to was like to work on a computer in the old days, feeling nostalgic and wondering how far the next few decades will take us.
  • S3: You are travelling at night. It’s late, and your thinking about the big things in life, what really matters to you. You decide to never give up on your dreams, and never give up on what you stand for, like a real pirate.
Complimentary Resources:
 
Featuring music from:
This is The Law of Life, Farah
Nightcall, Kavinsky
Zones Without People, Oneothrix Point Never
Tick of the Clock, Chromatics
Lady, Chromatics
Feel It All Around, Washed Out

 

Pirate Resources:

Donate for Famine Relief in Somalia [GoFundMe].

Learn about the Famine: In Somalia with Jarome Jarre [Video].

The eye-patch of the beholder: introduction to entrepreneurship and piracy, Steffen Roth [PDF].

Produced by Camille Duran & Eleen Murphy
Published by Eleen Murphy
Music Credits: License by Ins. Green White Space.

 

TRANSCRIPT FROM THE EPISODE

Camille Duran [CD]: This mixtape is the second chapter of our deep dive into the world of piracy. If you haven’t listened to Chapter One, you may want to start there because there are some important concepts that we will build on moving forward. Today, the focus is a little bit different because – in this mixtape – we will be looking at modern piracy. Piracy on water and on land, or online I should say.

What can we, change makers learn from modern piracy?

Like with all our mixtapes, music will be the central element of this episode. Perfect for moments of the day were you don’t want to think too much. Here we are in a different mood than with Chapter One.

This mixtape is designed for 3 specific situations:

Situation 1:

It’s late. Very late. you can’t sleep. You’re thinking too much, you’re trying to understand what’s going on, ideas are flowing through your head. You feel strangely motivated about making something happen. A project you’ve had for a while, something you’ve always wanted to work on, in your personal life, or your professional one. You feel like exploring, taking this idea to the next level. Leaping forward. You wake up, get to the computer. Log in. The light of the screen is blinding at first. Better now. Go, explore. Make something happen while the world is asleep.

Situation 2:

While doing some clean-up in your storage room, you found this old computer from the early nineties that you didn’t remember you had. You now remember it was working when you put it there. So it should still work? no? You decide to get it out of here and turn it on, just like the old days. Just to feel how far we’ve come. You use this time to remember what it was like to work on a computer back then. What did we do with it? Get your smartphone, count the years, realise the pace of innovation. Yes, it’s crazy. Take a minute to think about how YOU approach new technologies and change in general. Are you an early adopter? do you resist? in the average? Use this old computer story to project yourself into the future. Think.

Situation 3:

You are driving at night. It also works in the train or any kind of public transportation. Maybe you are back from a late meeting, or a dinner with friends you haven’t seen in a while. You’re thinking: “Shit, time passes”. Am I making the most out of it? Maybe, maybe not? How do I feel? What are 3 things I wish I had done last year? How can I make it happen this coming year instead? You look around, catch your own look in the rear-view mirror – or your reflected image on the train window.  You decide to never give up on your dreams, and never give up on what you stand for, like a real pirate.

03:39

CD: I have to say this mixtape may be most effective by night, but hey, use it the way you want, and challenge everything.

I think we’re ready to dive in. Last time we found a pirate nerd in our own team, “Shiver me Timbers” it’s Eleen Murphy, Producer and co-host at Green Exchange, Yo ho ho!

Eleen Murphy [EM]: Ahoy Matey!

CD: Ok, we should probably stop talking like old time pirates because we are back in the 2000’s now.

EM: Yeah true.

CD: So what’s on the menu today?

EM: What do you think about when we talk about modern piracy?

CD: I directly come to think of Somalia and those fishing boats taking over big tankers and merchant ships.

EM: Yes that’s what we are going to talk about. But not only, because piracy doesn’t always happen on water. The word relates to many kinds of activities. Like, did you know that piracy was a word used to describe stealing copyrighted works and information since the 1600’s?

CD: Oh really? I always thought digital piracy was called that because the internet was considered like a giant ocean.

EM: Yes me too, like the whole “surfing the net…”. Anyway, we’ll be talking about those pirates as well – the ones online who are shaking up the world, making waves I can say. And who we can actually learn a lot from.

CD: So today if I understand correctly we will spend some time on Somalia and some time on digital hackers.

EM: Yes, about 50/50

CD: Ok, let’s go!

5:20

[Audio Clip]

Narrator: It’s a voyage made by thousands of ships a year, passing through the Gulf of Aden. It’s also home to every captain’s nightmare…

[Music]

09:12

EM: So pirates never really went away.

CD: They changed their look though thank God.

EM:   …And the Somali pirates are just one example of sea-pirates that operate today – there are others as well. In Somalia – As often with piracy – it was necessity that drove people to raise the black flag. In 1991, the government collapsed and so its territorial waters couldn’t be enforced anymore.

CD: I see it coming…

EM: This lead to foreign fleets swooping in and trawling Somali waters, stealing their fishing stock and dumping pollutants.

CD: Because there was nobody to stop them.

EM: Exactly. And this destroyed the livelihoods of the local fishermen. At the same time, China started massively exporting to Europe from the Suez canal, meaning there was thousands and thousands of dollars worth of cargo floating past the Somali shores all the time.

CD: So…here was their opportunity to survive, and stand up…

EM: Right, and they took it. These people were fishermen first and foremost, but when the situation changed, they pivoted. To be fair, they sort of had to get into this. But they’ve been quick in making the leap towards a very different kind of life. At the beginning, they saw themselves as enforcers of the waters – scaring away the foreign fleets and demanding money from them, which they said was a form of tax for taking their fish and polluting their waters.

CD: And then, snow-ball effect,

EM: Yes, they went from a small band of raiders who started attacking ships, to the well-run criminal organisation we know today.

10:43

[Music]

12:31

EM: “They don’t care if we starve to death – that is what they prefer. They will never arrest anyone for fishing illegally in Somali waters but will arrest anyone for taking a gun to fight the trawlers”.

Those are the words of a local Somalian, Hawa Mohamed Saeed, about the international community at the time.

CD: I didn’t know all this, we have been drinking what the media told us, and as usual when we start digging…

EM: Yeah. As they say, there are at least two sides to every story. Nothing is black and white.

CD: One thing is for sure, some people out there should feel ashamed.

13:09

[Music]

15:22

CD: Anyone in particular we should talk about?

EM: One person who really sticks out, who’s a bit of a celebrity actually, is Abdullahi Abshir – often called Boyah.  Boyah was one of the first to turn to piracy, and was a a bit of a pioneer – he showed others the true potential of piracy and became the chairman of the 500 pirates operating in the region. He says he’s hijacked more than 25 ships.

CD: Do people call him Boyah because everytime he was coming back from battle with cargo and hostages everyone would say “Booyaa”?

EM: Yeah probably, thank you for this very relevant comment…

CD: Sorry..

EM: Booya was a lobster diver, who watched the lobster population disappear because of the foreign ships. So, with a few others, he captured three fishing vessels, kept their catch and ransomed the crew. When other fishermen saw his success, they began to follow.

CD: Where does your lobster come from? Have you checked? So he was a brave man…

EM: Also a quick adapter – he learned to go with the flow. At some point – around 1997, the foreign fishing fleets started getting protection from local warlords.

CD: Oh God, so now there are mercenaries involved in protecting the big boys?

EM: Yes, and those ships became really too dangerous to target. So Boyah and his men started going after commercial shipping vessels instead.

CD: Pivoting again.

16:48

[Audio Clip]

[Music]

18:34

CD: Okay so they put their hands on cash, goods, cargo? What  do they do with it?

EM: The money they took was shared with everyone. Half went to the attackers, a third to investors. The rest went to anyone involved – interpreters who dealt with the hostages, the guards. And 15% always went to the poor and disabled of the community.

CD: Robin Hood style.

EM: He’s been called that, yeah. The local communities did prosper thanks to the pirates. They were often given support, sanctuary, even government help. But if you can imagine, all these young men who come from poor backgrounds, suddenly have access to loads of cash and support…things of course went a bit wrong.

19:13

[Music]

22:38

EM: When all this started to turn into a big criminal organisation, Boyah started to realise their support was dwindling. Around 2008, the communities began to turn on them and demand that they stop. Boyah called for a cease-fire. They were a few of them ready to quit –

CD: Quit?

EM: With conditions. If the local leaders found jobs for their young underlings and help the pirates form a coast guard to protect Somalia from illegal fishing and dumping…

CD: Right

EM: Boyah often says that he knows what they’re doing is wrong. It looks like they wanted to find a way out if possible…

23:16

[Music]

24:40

CD: So…did they ever find that way out? What’s happening there right now?

EM: Well, after their peak in 2012, they almost stopped completely because commercial ships started carrying armed guards. There was also an international anti-piracy fleet, which included a NATO-led component, and an European Union one as well.

CD: There you go, thank you all for addressing the root cause.

EM: Right. But those new resources have been busy the last few years because of the migrant crisis – and the pirate attacks have started up again this year.

CD: Oh really?

EM: Yeah, see, one of the main issues with the response is that they conflate piracy with terrorism, and that this counter-piracy action doesn’t really address the origins, motives, and realities of Somali pirates.

[Audio Clip]

Interviewer: So, this must cost hundreds of millions of dollars to have these navel ships going up and down the African coast – what’s the alternative to this?

Interviewee: Well, it’d be a much better use of the money if they would actually try to prop up Somalia’s government or help the country create a government that could police it’s own coastline. I mean, they’re not catching very many pirates. As we mentioned, there was a shootout in which some hostages were actually killed. They’d be a lot better off putting that money –

Interviewer: Or make a deal with the pirates! Just say, “why don’t we just pay the pirates an annual fee to stay home?”

Interviewee: That would be a lot more efficient.

Interviewer: There must be more imaginative solutions that would actually do something to develop Somalia?

Interviewee: People aren’t that interested in the fundamental problems of Somalia. Piracy gets a lot of headlines, and Al Qaeda activity in Somalia gets a lot of headlines, but no one really talks about spending money on trying to create a system of government that can solve all these problems, or let Somalia solve their own problems.

26:22

EM: Somalia has been struggling with civil war, poverty and violence for decades at this stage. And the problem hasn’t gone away – locals are blaming their government in the Puntland region for granting foreigners permits to fish in Somali waters. So we’re back to square one.

CD: Sh*t they got it rough in Somalia, also with no rain in two years and the famine, they are one of those regions that really need help. We put a link on the episode page if you feel like sending a few euros to help a family, they are some very direct channels to those people now, without all the typical intermediaries that we don’t really like to go through.

EM: Yes it’s very complex in this region.

22:06

[Music]

29:16

CD: Eleen, you’ve changed my whole perspective on the Somalian piracy case. Thank you.

EM: You’re welcome.

CD: Should we now move on to the world of digital piracy. That’s an interesting space as well…

EM: Yes and here there is a lot going on so we are just going to look at a few big picture learning lessons. I thought we would take the hacker group Anonymous as an example – which is probably the most famous out there. But there are many others.

CD: Good idea, they are the ones whose symbol is the iconic Guy Fawkes mask right? Oversized smile, moustache, red cheeks.

EM: They’re one of the most powerful and decentralized movements in the digital world. A lot of people see them as heroes in the face of things like government oppression for instance.

CD: Yes, their story is fascinating and in the episode notes you’ll find a couple of documentaries and resources for you to get the whole picture if you want to hear more about them, I think it’s worth it.

EM: It’s actually amazing how big and powerful they’ve become considering they have no leader or directives though.

CD: No leader or directive you’re saying?

EM: Yes, and that’s our first learning lesson from digital pirates – be a starfish.

CD: Be a starfish?

EM: Yes!

30:28

[Music]

33:04

EM: So, in a formal organisation, you could see there’s a head at the top and if you kill that, the organisation is dead. But if it’s like a starfish…you can kill one arm and it just keeps going and the arm will eventually grow back. So the point is that decentralizing power can make you more effective and resilient.

CD: It’s very inspiring to see that a growing number of organisations manage to operate like this now. The trick is really how to create that movement in the first place. Getting the momentum going.

EM: Yes and there is another dimension to this. Which is the second tip I would like to bring to the table. We seem to operate better in small flexible groups. This way you’re more agile, fast and flexible. Like, on the outside, Anonymous looks like one huge, chaotic organisation. But members can peel off into smaller channels and work together on a specific target. Not everyone has to know everything, which saves time and keeps things flowing.

CD: Yes and this way to operate has made its way into many organisations in the private sector, especially large start-ups with critical mass of employees or NGO movements as well. Some public sector organisations are also experimenting with this management structure. How about you? Did you think about all this for your own project?

34:25

[Music]

36:58

EM: I think one of the biggest keys to their success is how they outsource not just talent but ideas as well. Anonymous is basically a large pool of people with different skills. Those people will come along and see how they can help and jump in. People also jump in and share their ideas for a campaign and if others are interested, it happens. So that gives Anonymous a huge amount of resources to draw from, and keeps their fingers in all sorts of pies.

CD: Ah, I didn’t know this expression. Do you make pies in Ireland?

EM: We sometimes do.

CD: We also see this trend growing in a number of organisations.

EM: …Making pies?

CD: No, I mean open innovation schemes. You bring in your innovation pipeline players from the outside world, partners, customers even, it should be quite inclusive.

EM: Let’s be clear, it does not mean that everything done by anonymous will be good. That’s the price of being a starfish. You have to live with the idea that not everything will be perfect.

CD: What else can learn from Anonymous?

EM: Don’t get comfortable. When it comes to the online world, you really need to stay sharp and ahead of the curve, because there are always weak points and pitfalls that someone’s just waiting to exploit.

CD: That’s right, keep on your toes.

EM: Yeah, and you can expand that idea. We shouldn’t get comfortable with how our lives are right now either. We can fall into habits, learn to ignore or put up with things that just aren’t right…

CD: There’s always opportunities for us to challenge the status quo, find new ways to work, new ways to interact as a society.

EM: Exactly. There is one thing, that makes Anonymous, and sea pirates so dangerous and threatening – putting violence aside: They demonstrate different ways of doing things. Different ways to work, different ways to protect their communities, different ways to live – both online and offline.

CD: Right.  Their existence says a lot about our societies and our failures (economic inequality & exploitation, imbalance of power & right of access to information).

EM: Our fascination with piracy also says a lot about us as well – our love of freedom, adventure, and the rebellious spirit of piracy. Probably because we need more of it in our daily lives.

CD: That’s a good way to conclude, thank you for all those insights Eleen, this was fascinating.

EM: My pleasure!

CD: And you? How do YOU feel about piracy? What can you incorporate into your day-to-day? Let us know what you’re up to. hello@greenexchange.earth twitter, Instagram facebook. You know where to find us. We’ll be back soon with more music, sounds, knowledge, inspiration, entertainment, keep up the good work in the meantime!

39:49

[Music]

END

Climate & Finance #2: The System We Need

This is the second episode of our series about Climate & Finance. Missed the first chapter? You may want to go there first: Episode 1

In this episode, we take a trip to the year 2050 to look at how the financial system should look like, in a scenario where we managed to stay below 2-degree warming of the climate system compared to pre-industrial levels. We review the pre-requisites for institutional investment to align with climate science, guided by insights from our world-class experts. This episode features views from Eric Usher (UNEP FI, Portfolio Decarbonisation Coalition) & Julian Poulter (Asset Owners Disclosure Project).

In the next episode of our series, we will go through a backcasting exercise and discuss the roadmap to reach our 2050 targets. Change management at its best!

Produced by Camille Duran, special thanks to Han Nguyen, Magnus Emfel, Amelia Johannsen & Gabriela Lemos Borba.
Transcribed by Oanh Nguyen

COMPLEMENTARY RESOURCES

  • The Asset Owners Disclosure Project website
  • The UNEP Inquiry:The Financial System We Need (Policy Summary, PDF)
  • The Montreal Carbon Pledge (PDF flyer to share with your investment manager or asset owner clients)
  • The UN PRI ‘Principles for Responsible Investments’ (Website)
  • Guidance for calculation of Scope 3 emissions – The GreenHouse Gas Protocol (Website)
  • The 2-Degree Investing Initiative working paper –  Assessing the alignment of portfolios with climate goals (PDF)
  • The World Energy Outlook (PDF)

MADE POSSIBLE BY:

wwf
WWF’s mission is to stop the degradation of the planet’s natural environment and to build a future in which humans live in harmony with nature.

Music Credits: License by Ins. Green White Space.
Photo by Serendigity/CC BY

EPISODE TRANSCRIPT

INTRODUCTION

CAMILLE DURAN (CD): Our Planet is suffering global warming, and although science is telling us what to do, we are yet to rectify our trajectory. Today we stop for a second… and dream.

Because something is wrong.

Chances are that if you knew how your money is used on global markets via the investments you make, via your pension funds or your insurances. You would disagree.

Today we stop for a second… and dream.

We talked about the problem in detail in the previous episode. You may want to have a listen before going any further – link is on the page.

Because today we are going to paint the picture of the system we need – the system we need.

And as usual, we have very special guests for you.

01:18
Julian Poulter (JP): People don’t understand the links between short-term stock markets and other financial markets, and these longer-term investment problems.

Eric Usher (EU): …Or company like the car manufacturer, take Volvo, Are you responsible for your only the emissions from your factory? Or could you be responsible partly for the emissions from the cars you manufacture?

Per Bolund (PB): My name is Per Bolund. I’m the Minister for Financial Markets and Consumer Affairs and also the Deputy Finance Minister of Sweden.

Sean Kidney (SK): We actually have a whole big toolkit or things that we’ve been successfully applying in the last hundred years in Europe.

 

CARBON FOOTPRINTING, TRANSPARENCY & DISCLOSURE – GREENING INSTITUTIONAL INVESTMENT

02:03
CD: You’re listening to The Green Exchange, special edition about climate and finance, episode 2 of our series. What is the system we need?

So what we’ve learned so far: The main challenges in the investment decision process are:
· That there are powerful interests at stake.
· People or entities who own the capital often lack of knowledge and ask too little about the impact of their investments on climate change.
· Asset owners apply limitation to their responsibility on the markets and ignore the reality of climate change.
· Short-term financial return is by default prioritized over long-term responsibility.
· The narrow definition of risk doesn’t connect investments and climate change.
· The fund managers lack incentive to include climate change data in their investment decisions. They also lack education on the issue and of course it would be much easier if they had a mandate to develop climate friendly investment strategies.

This is where most media channels would stop, right? Pointing fingers, a couple of headlines and we’re good to go! No sir, this is a special edition of The Green Exchange, we’re not tired. We’re going to go to the bottom of this.

03:54
Now it’s time to use our imagination. Let’s do like Neil Degrasse Tyson in the Netflix series, ‘Cosmos’ which I strongly recommend to all human beings on the Planet.

[NEIL’S VOICE]

CD: We love you Neil. Let’s use the shape of the human imagination.

We land in 2050, and you’re there too! You wake up, put your clothes on, ask your robot to prepare breakfast for you. Then you google the latest news report about climate change.

Guess what? Guess what? We made it. We stayed well below 2 degrees of warming of the climate system. We made it.
Yes there are 9 billion people to feed, mega cities all over the globe and energy consumption doubled, but we finally reached the targets that the ‘old’ Paris agreement had set for us.

I know it’s crazy. So how does the system look now? What is the new face of institutional investment now that it aligns with climate science?

05:17
So just to clarify when we talk about institutional investment, we are talking about a kind of investment, which is done by an organization that provides financial services, such as an insurance company, a bank, a hedge fund, a retirement fund or a mutual fund. So I think the term of institutional investment basically covers most of the scenarios we are studying here.

I’m like you. There are words that I just need to google. No problem with that.

OK so we’re in 2050, we stayed under 2 degrees. What framework did we used to drive proper action until today?

If we managed to stay under the 2 degrees, it basically means that we’ve been able to focus capital on the long term. That the financial system has helped us operate this transition, instead of being in the way.
But what does this mean, in practice?

Well first, it probably means that we were able to put in place transparency, visibility on what investments are made where and by who. Where’s the money going? Where’s the money?

How much transparency do we actually need? How does this work?

To try to answer this question, we’re going to London to talk to Julian Poulter, Founder and Chief Executive Officer of the Asset Owners Disclosure Project.

06:50
Julian Poulter (JP): Well, how are you doing?

CD: Hey I’m good. Thanks. How are you?

CD: Julian is also a stakeholder council member of the Global Reporting Initiative. So his focus is global.

07:02
CD: The reason why the Asset Owners Disclosure Project was set up is that they found that there was no information at all…

JP: …about how the institutions at the very top of investment chain are managing the risks of climate change.

CD (aside): The Asset Owners Disclosure Project is a not for profit working with pension funds, insurance companies, sovereign wealth funds, foundations and universities to improve the level of disclosure and industry best practice. They work towards realigning the investment chain to ensure long-term investment practices.

JP: The fact that matters is the investment chain is quite complex. Essentially there are three levels. Asset owners at the very top. They tend to outsource their investments to asset managers, and asset managers investing companies. This is increasing the good level of data for a company level. In fact, some of bigger oil and gas companies and mining companies are some of the best disclosures in the world. But there is a dearth of information at the fund manager and at the asset owner level. We took the strategic view back in 2008 that whilst fund management community was very important, they were more interested in short term returns and perhaps trading more than they were long term investing.

CD: Okay so fund manager’s focus is short term, disclosure efforts should be prioritized on the players with a longer-term interest. It has types of professional asset owners you mentioned.

JP: Yes. And the asset owners all around the world that are the pension funds, insurance companies, sovereign wealth funds, foundations and endowments were the real long term investers. And so, it’s those institutions which you want to capture data about and hold to account.

08:58
[BREAK]

CD: I would like to introduce another guest who has a few points for us on this disclosure elements.

CD: Hi Eric, welcome to the show.

Eric Usher (EU): Hi Camille.

CD: How are you?

EU: Fine.

CD: Would you mind introducing yourself for the record?

EU: Sure. I am Eric Usher. I’m the Head of the UNEP Finance Initiative, which is the long standing organization that’s a partnership between United Nations and a group of 250 of the larger banks, insurers and asset managers global.

CD: Great to have you with us, you have a few points about disclosure.

EU: Sure. So in terms of the very simple ‘what can investors do?’, well obviously the first step comes towards disclosure and assessment, and figuring out what the risks and impacts are with their portfolios, so, essentially, simplistically put the carbon footprint. So the first step is to start to footprint your portfolio.

As we know the majority of large-cap corporates today do report their carbon impacts, but there’s only a very, very small number of investors who want that information but actually don’t report themselves. So there’s definitely an imbalance and a need for investors to also start stepping up, to assess their carbon footprints and to start also making that publicly available to the users of such information. Then there is something called the Montreal pledge which is launched by the Principles for Responsible Investment a year and a half ago, to get investors to sign up…to commit to measuring footprint.

CD: How about we’re going to Montreal pledge very quick to check it out.

[AUDIO OF FLIGHT TO MONTREAL]

CD: “By signing the Montreal Carbon Pledge, investors commit to measuring and publicly disclosing the carbon footprint of their investment portfolios on an annual basis”. This is supported by the Principles for Responsible Investment (PRI) and the United Nations Environment Program Finance Initiative (UNEP FI).

There is a flyer that you can share with your investment manager, or asset owner clients. It also includes all the signatories who made the move. Signatories, thank you, this song is for you, in honor of your forward thinking.

[SONG INTERLUDE].

12:10
CD: Now, there are some question marks around carbon foot-printing.

12:13
EU: Carbon foot-printing is not yet an exact science. It’s an approximate measure and part of the problem is that a snapshot of your current emissions do not say much about where you’re going. In other words whether your business strategy is already phasing down carbon intensive activities. That’s one problem.

The second, more complicated problem is what’s called Scope 3 Emissions or some call them financed emissions. Basically is not your direct carbon emissions from how you consume energy or other activities; it’s the impact up and down the value chain of your business. For instance, for a bank it means if they provide a loan to a factory, they are responsible for part of the emissions from that factory because they partly finance it. If they invest in that factory so they actually own part of factory and once again they are responsible for a share of emissions.

[PHONE RINGS]
EU: Excuse me, Camille. Let’s me take the call for a moment.

CD: Yes, sure.

13:44
CD: In the meantime, let’s go and google Scope 3 Emissions and see what we find….

108 million results, the 3 first links are from the GHG Protocol, (Green House Gas) Protocol website.
“The GHG protocol is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions.” That’s probably where you spend most of your time if you like protocols, and if you like green house gas at the same time…

14:31
[ERIC USHER RETURNS]

EU: Sorry, Camille.

CD: Yeah sure, no problem.

EU: So the other example is for a company like a car manufacturer, take Volvo. Are you responsible for only the emissions from your factory, or could you be responsible partly for the emissions from the cars you manufacture, which starts to be complicated.

So all told, the disclosure assessment is still very young and a lot of work would need to be done there, in terms of perfecting. And certainly governments play a role there eventually in starting to provide or to regulate the standards of disclosure.

15:03
CD: OK so that’s a good conclusion for now.

Disclosure & transparency are necessary components of our dream system, but the way we measure and account for carbon foot-printing needs to be coordinated & regulated by governments. A first thing we can take home.

Now, one very important component of our dream system is a definition of what sustainability means for our investment.

In other words,

– How is “staying well below two degrees translated into portfolios?
– How much is invested? In what, and by what date?

If we are under the two degrees in 2050, it’s that we were able to align financial flows with science and with international agreements.

There is a reference report that came out just before the COP21, in October if I remember, called the UNEP Inquiry: Design of a Sustainable Financial System. They said that in a developed version of 21st century financial system, we should be investing only in assets that improve social environmental outcomes, in home country and internationally.

One point that I have heard several times in my discussions is that we need to move away from the current approach which consists of measuring ‘relative performance’ – by that we mean the performance relative to others, or to ‘Business As Usual’ scenarios. Basically we need to develop and apply sustainability targets.

 

ALLIGNING PORTFOLIOS WITH CLIMATE GOALS

16:47
Another group who is doing very good work on the subject matter is the 2 Degree Investing Initiative. They have a working paper called ‘Assessing the Alignment of Portfolios with Climate Goals’ – you can find it on our episode page.

Basically, they make the case for a two degree benchmark – like a framework that informs policy makers and investors on how far – or how close we are to the policy targets. Of course, they also talk about disclosure and the role of policy but let’s stop for a second on the key elements of the methodology they advise to keep in line with the 2-degree benchmark.

Here is a good illustration of how things could work:

Let’s take Energy technology exposure for instance. I try to make it simple, the idea here is to look at granular data – plant by plant for instance. Take car production per model per country, say we take all the Volvo V70 produced in Goteborg, in Sweden.

And we look at the production forecast. From this forecast we can assess the future exposure to energy technologies. What is the exposure to coal, to oil, to gas, to renewable power, etc.

Now we’re going to compare the exposure of our Volvo factory to those various energy and technologies, to the exposure of the 2 degree benchmark.

Then we just need to extrapolate this approach to all the Volvo models, all the car brands, all the automotive sectors, then do the same for all the other sectors, well actually for all listed companies & equity portfolios on the planet….et voila!

For your information, here are people who do that kind of work for a living anyway; for instance, every year, the International Energy Agency publishes a pretty solid PDF called the World Energy Outlook. Perfect read when the kids are in bed.

The table of contents is 12 pages, the Introduction & Scope consists of 23 pages.
In other words, you’d better keep listening to the Green Exchange instead, because that’s what we do, we digest that kind of stuff so you don’t have to.

We’ll get back to this working paper later on
For now, we just want to know ‘what the system should look like to keep things under control. We’ll see how to get there a bit later.

 

PUTTING A PRICE ON CARBON, AND THE ISSUE WITH CARBON TRADING SCHEMES

20:02
CD: We’ve talked about disclosure, measuring carbon footprints, about the need to define how portfolios should look like to align with climate science. Now it may sound like a stupid question but:

There is a price on gold – it’s currently around 39$ per gram. There is a price on water – it’s usually between 40 cents per 1000 litres to 6 Euros per 1000 liters.
Should we put a price on carbon?

Yes, we should, of course, but how?

20:41
EU: Absolutely I mean it’s very simple to say governments should put a price on carbon…

CD: That’s Eric Usher again, from the UNEP Finance Initiative

EU (continued): And many investors going into Paris were wondering “Are we going to get a price on carbon?”, and then they realized and are understanding that there is not going to be a price on carbon, but if all goes well we’ll have the framework for what will be probably many prices on carbon. Essentially, that carbon will start to be priced, but whether it is done through taxes or carbon trading or other types of approaches, that will vary and the structure behind Paris, which is in the shift of the climate negotiations since Copenhagen six years prior, was that you need governments in the lead to establish the enabling environment essentially from the bottom up, rather than having a multilateral agreements or organizations, such as my own in the UN, expected to design instruments top down.

And yes we know the first experience with carbon trading results have been mixed. Partially maybe criticizing the instrument but more likely probably criticizing the way in which it was implemented in terms of the government involvement.

22:05
CD: I pause here for a second to mention that we you will find two links on our episode page. One is to explain in detail how the Carbon Trading Scheme we have in Europe is structured. And another resource that explains the challenges around Carbon Trading Schemes in general, and why they don’t work. back to the interview

Back to the interview.

EU: And so just a good example would be if you’re aiming to, for example, decarbonize the cement industry in India, who is best to figure out how to do that? The reality is it’s going to be Indian industry and Indian government. And a framework multilaterally, which is from since the Paris agreement can provide a broad agreement, but the reality is that it’s going to be governments and local actors, industries and civil society who figure out how to do it.

And I think that’s the beauty of the Paris agreement. It’s bottom up, and in terms of roles of government it’s essential to get the pricing right in terms of the regulatory environment, the pricing of externalities, and to ensure the other factors that allow economic development in ways that are not impacting on environmental and social factors.

23:24
CD: OK so basically, in a sustainable world, carbon needs to be priced. This is a little utopic for now. In practice, we’ve seen that it’s quite difficult to harmonize and implement. Government play a vital role on that front – we’ll get back to that in a minute. But there is one very important point we should make here.

Yes, a carbon tax is really a good instrument IN THEORY.

And we sometimes hear investors justify their unsustainable practices with arguments like:
“Yeah but there is no price on carbon…” pointing fingers to policy makers.
You know this is an excuse, my friend! If you are a responsible investor, you need to include an internal carbon price in your forecast. We also call it shadow carbon pricing.

24:23
JP: Asset owners and other long term investors…

CD: This is Julian Pouter again, from the Asset Owners Disclosure Project.

JP: (continued): …essentially can run the carbon price across their own portfolio. And they do this because there are so many uncertainties around climate risks and this carbon price put on their portfolio is a way of managing the risk in the same way that governments are concerned with managing the physical risks of climate change by putting price on carbon across the economy.

24:56
EU: Now of course there is a growing number of investors taking that perspective…

CD: Bouncing between Julian and Eric here, but you recognize the voices…

EU: (continued) Others were taking other perspectives. Certainly there are two sides of this. Is it a regulatory action which is going to impair your assets, or is it the actual climate risks that you might be running? As Mark Carney talked about the transition risks, essentially, that certain industries will quite quickly become devalued as market sentiment turns against them.

25:34
CD: So it’s basically a good planning tool to help identify revenue opportunities, risks, and as an incentive to drive maximum energy efficiency to reduce costs and guide capital investment decisions. It gives you a more correct valuation of your company in that long term perspective.
So why not start doing it now, since we don’t have that global price on carbon yet?

GOVERNMENT ROLE IN KEEPING INVESTMENT IN LINE WITH CLIMATE & SUSTAINABILITY GOALS

Another element we need for our 2050 dream system, probably obvious, but very important:

Governments need to play an active role in directing and enabling investment in line with climate science, via policy initiatives, incentives, by issuing green bonds….

We’re also going to dig into this.

And, talking about Sweden, we wanted to get a sense for what’s going on at the moment with government efforts to green up institutional investment.

26:42
[Voice] But I guess you would like to speak to the Minister?

CD: Yes please.

[Voice]: Perfect. I’ll give the phone to him. Just a second.

CD: Yes, sure.

CD: That’s for next episode. An exclusive interview with Per Bolund, Swedish Minister for Financial Markets & Consumer Affairs.

CONCLUSION

27:09
CD: So is that all we need in our dream system? Do we have all ingredients by now?

Well, one last point actually: everyone involved in the investment decision process needs to be well educated on sustainable investment and on how to stay aligned with climate science.
As we’ve seen in episode one, we cannot really expect people in the street to know everything about the system they are putting their money into. But all asset managers, asset owners, and any professional working with institutional investment need to know what they are doing, and receive actual mandates to do the right thing, not only because it’s good for the planet, but also because we’re looking at long term financial stability and returns.

Thank you to WWF for making this series on Climate & Finance possible. It’s because of their support that this special edition is accessible to everyone, and not only to our subscribers. You know that The Green Exchange ‘Plus’ makes your life much easier as a sustainability professional with, even briefings, all special editions and the community as well.
It still helps you to make the right decisions this year, so check how it works on our webpage www.greenexchange.se.

Don’t forget to follow us on twitter @greenXoresund, Facebook at The Green Exchange. The family is growing.

Today we were in 2050, well below the two degrees, looking at a sustainable system for institutional investment. It may be time to do some back-casting and discuss ‘how to get there’ don’t you think?

That’s for our next episode. I’ll get in my time machine again, and see you soon, back in the year 2016. Keep up the good work, in the meantime.

END

 

Mobility: Freight, Bikes, Electric Cars & Intelligent Transportation Systems

[MM_Access_Decision access=’false’]This episode series will address the following questions:

  • How to best combine electric cars, car sharing & car pooling schemes?
  • Electric grid: What needs to happen in the years to come (Policy, financing, infrastructure development)
  • Key topics for ITS 2018 in Copenhagen

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.

[/MM_Access_Decision]

[MM_Access_Decision access=’true’]This episode series will address the following questions:

  • How to best combine electric cars, car sharing & car pooling schemes?
  • Electric grid: What needs to happen in the years to come (Policy, financing, infrastructure development)
  • Key topics for ITS 2018 in Copenhagen

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.

[/MM_Access_Decision]

Resource Efficiency in the Low-Carbon City

[MM_Access_Decision access=’false’]
This episode series will address the following questions:

  • Developing strong industrial symbiosis projects: Learning lessons from the most advanced projects on the planet
  • Beyond recycling: Key success factors in reducing municipal solid waste; review of the best campaigns & incentives around the world
  • The future of district heating: Alternative hot water sources in the Nordics

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]
[MM_Access_Decision access=’true’]
This episode series will address the following questions:

  • Developing strong industrial symbiosis projects: Learning lessons from the most advanced projects on the planet
  • Beyond recycling: Key success factors in reducing municipal solid waste; review of the best campaigns & incentives around the world
  • The future of district heating: Alternative hot water sources in the Nordics

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]

Smart City Development: Case Studies That Accelerate Transition

[MM_Access_Decision access=’false’]This episode series will address the following questions:

  • Rolling out digital infrastructure in large & small municipalities
  • Financing smart city solutions: What we can learn from other countries
  • Tackling privacy issues, engaging citizens
  • Key success factors for your test beds
  • Inspiring cases from around the world

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]
[MM_Access_Decision access=’true’]This episode series will address the following questions:

  • Rolling out digital infrastructure in large & small municipalities
  • Financing smart city solutions: What we can learn from other countries
  • Tackling privacy issues, engaging citizens
  • Key success factors for your test beds
  • Inspiring cases from around the world

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]

rising-sea-level-oresund-7

Nature, Sea & Water: Conservation Strategies for the Øresund Region

[MM_Access_Decision access=’false’]
This episode series will address the following questions:

  • Fighting eutrophication: Best practices from around the Baltic Sea
  • Preventing erosion, climate adaptation strategies for the shores
  • Planning for sea level rise in the Øresund region
  • Preserving bio-diversity, strategies around recreational areas & conservation

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]

[MM_Access_Decision access=’true’]
This episode series will address the following questions:

  • Fighting eutrophication: Best practices from around the Baltic Sea
  • Preventing erosion, climate adaptation strategies for the shores
  • Planning for sea level rise in the Øresund region
  • Preserving bio-diversity, strategies around recreational areas & conservation

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]

Making Things Happen: Tools & Strategies for Change Management

[MM_Access_Decision access=’false’]
This episode series will address the following questions:

  • Developing a new culture for permitting at the municipal level
  • The true impact of sustainable purchasing
  • Anchoring a long-term vision while delivering short term results
  • Communicating vision internally & externally: key success factors
  • Citizen engagement: How/when to use?
  • A collection of best practices from your peers

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]
[MM_Access_Decision access=’true’]
This episode series will address the following questions:

  • Developing a new culture for permitting at the municipal level
  • The true impact of sustainable purchasing
  • Anchoring a long-term vision while delivering short term results
  • Communicating vision internally & externally: key success factors
  • Citizen engagement: How/when to use?
  • A collection of best practices from your peers

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]

Healthy Soil, Healthy Food, Healthy People: A Comprehensive Approach to More Resilient Communities

[MM_Access_Decision access=’false’]This episode series will address the following questions:

  • What makes Denmark the most polluting country per capita
  • Soil health: key strategies for policy & financing, how to engage farmers in better practices
  • Strategies to stimulating carbon farming & organic agriculture
  • Accelerating the ‘buy local movement’, shifting consumption habits in the region
  • Using permaculture as a foundation for community resilience

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.[/MM_Access_Decision]

[MM_Access_Decision access=’true’]This episode series will address the following questions:

  • What makes Denmark the most polluting country per capita
  • Soil health: key strategies for policy & financing, how to engage farmers in better practices
  • Strategies to stimulating carbon farming & organic agriculture
  • Accelerating the ‘buy local movement’, shifting consumption habits in the region
  • Using permaculture as a foundation for community resilience

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.[/MM_Access_Decision]

Energy Efficiency: Financing Building Retrofits

[MM_Access_Decision access=’false’]
This episode series will address the following questions:

  • Review of the retrofit needs in the region per segment
  • International success stories on business models, financing & policy
  • Establishing ‘partners platforms’ & joint offers to maximize output
  • Exporting ‘know-how’ as an ecosystem

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]
[MM_Access_Decision access=’true’]
This episode series will address the following questions:

  • Review of the retrofit needs in the region per segment
  • International success stories on business models, financing & policy
  • Establishing ‘partners platforms’ & joint offers to maximize output
  • Exporting ‘know-how’ as an ecosystem

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line.
[/MM_Access_Decision]

Reaching 100% Renewables: Next Steps to Advance Our Energy Mix

[MM_Access_Decision access=’false’]This episode series will address the following questions:

  • Policy & Financing: Latest strategies to phase out fossil fuels at the municipal level
  • True renewable vs. Slow renewables: Investing & divesting strategies for the regional energy mix
  • Discussing the role of biomass for energy

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line. [/MM_Access_Decision]

[MM_Access_Decision access=’true’]This episode series will address the following questions:

  • Policy & Financing: Latest strategies to phase out fossil fuels at the municipal level
  • True renewable vs. Slow renewables: Investing & divesting strategies for the regional energy mix
  • Discussing the role of biomass for energy

This special edition is currently being produced, we will notify you as the episodes are released.

Any comments or questions? Please drop us a line. [/MM_Access_Decision]