Countdown to Biden summit, Siemens' hydrogen plan, and ranking ESG

Welcome to Callaway Climate Insights. Look out for special Earth Day coverage leading up to the Biden summit next week.

Natural resources climate stocks holding up: Gold may be losing out to bitcoin as a store of value in some circles, but when it comes to climate stocks, natural resource plays are holding their own. So far this week, the CCI Natural Resources Index is up 0.94 points, or 0.8%, to 116.79. Among standout moves, Vale (VALE) and Albemarle (ALB) both rose almost 4%, while Westwater Resources (WWR) fell more than 7%.

History may judge U.S. climate czar John Kerry’s visit to China today and tomorrow as far more important than drumming up support for President Biden’s climate summit next week. After all, Kerry was Secretary of State at one time, and climate is likely the easiest of several tense topics between the two superpowers he could address.

If he can’t make headway there, the outlook is bleak for issues like human rights, Taiwan, and the South China Sea.

Based on preliminary reports from India, where Kerry visited in the past few days, there isn’t a lot to expect. Talks have also struggled with Brazil, another major polluter, though there has been some progress reported elsewhere, with Japan and Canada prepared to make new climate pledges next week.

On Wall Street, both Citi (C) and JPMorgan Chase (JPM) fired the opening salvos Thursday for a busy week of corporate climate pledges and scientific warnings, committing a combined $3.5 trillion to climate finance initiatives over the next decade. Love to see how that compares to the last decade.

Still, the main event at the summit on Earth Day, April 22, will be the U.S. climate pledge itself. Reports Biden will commit to a 50% reduction in emissions by 2030 are increasing, as are doubts in Washington that it is possible within the proposed framework. An executive order tied to corporate disclosures also is likely.

With money flowing freely and stocks hitting record highs, it’s easy to think big about fighting global warming. But without international cooperation, the wave of investment could be wasted. Kerry is increasingly looking like the Willie Loman of climate change. A big win ahead of next Thursday is a long shot, but stranger things have happened.

More insights below. . . .

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EU notebook: Climate finance to reach $1 trillion in next 10 years

. . . . What do Bank of America’s Anne Finucane, Irish Prime Minister Micheál Martin and rock legend The Edge from U2 have in common? All are betting on impact investing to transform Europe over the next decade, reports Vish Gain from Dublin. With more than $1 trillion set to be invested by 2030, the prospects for renewable energy and the transition from fossil fuels and why the climate culture of shame needs to be re-engineered. Read more about what they have to say in this week’s European notebook. . . .

Read the full EU notebook

What Wall Street really thinks of ESG ratings

. . . . Despite a massive surge in environmental, social and governance investing in the past year, most U.S. investors don’t really weigh ESG factors as the most important in their buying decisions. In fact, barely even in the top 10, reports Mark Hulbert. In Germany, however, ESG is second only to market cap in driving investment decisions, way up from just a few years ago. In this new analysis of the investor psychology behind ESG investing and the uneven performance calculations behind many ESG funds, Hulbert lays out where this will take the asset management industry in the next few years as ESG considerations rise. . . .

Read the full column

Siemens spinoffs join forces to harness offshore wind for green hydrogen

. . . . Two of Siemens’s most important spinoffs, Siemens Energy and Siemens Gamesa, have teamed up to produce green hydrogen using offshore wind turbines in one of the largest projects yet as Europe races toward renewable energy as its primary replacement for fossil fuels. Darrell Delamaide speaks with Siemens Energy’s Alexander Habeder about how the project will come together and analyzes the competitive wind power environment in Europe to assess their chances. . . .

Read the full story

Thursday’s insights: Proxy season battles, scientists become bankers

. . . . With corporate climate pledges flying ahead of Earth Day and the Biden summit next week, it’s easy to overlook the battle shareholders are still fighting during proxy season to get climate resolutions heard. But several companies are still pushing their shareholders to reject resolutions, leaving difficult decisions for the asset managers, who have also pledged to be more climate friendly. Read more here. . . .

. . . . First it was rocket scientists. Then came the Long-Term Capital Management scandal. Now it’s climate scientists getting recruited on Wall Street, ostensibly to varnish the global warming credentials of the largest banks and asset managers. The question is whether anyone will listen to them once they’re corporate insiders. Read more here. . . .

Data driven: Powering a green recovery

. . . . Norway, Denmark and Finland are setting the global standard for a green Covid-recovery plan, with 71%, 65% and 58%, respectively, of their recovery spending dedicated to green initiatives, according to analysis conducted by Oxford University and UN researchers. The vast majority of the countries analyzed by the researchers have dedicated less than 30% of their recovery spending to explicitly green initiatives. . . .

News briefs: Satellites to sniff out pollution perps, solar’s affordable

Watch: The creators of the IMF’s new Climate Change Indicators Dashboard give an overview of the experimental indicators and demonstrate how to use the economic and climate data.

Editor’s picks:

  • Satellites to unmask world’s big polluters via carbon mapping

  • Solar panels aren’t just for the rich anymore

  • Energy giants back Providence wind factory

Read all of today's news briefs

Latest findings: New research, studies and projects

More than a third of the Antarctic’s ice shelf area could be at risk of collapsing into the sea if global temperatures reach 4°C. above pre-industrial levels, new research has shown. A report from the U.K’s University of Reading says the institution has led the most detailed ever study forecasting how vulnerable the vast floating platforms of ice surrounding Antarctica will become to dramatic collapse events caused by melting and runoff, as climate change forces temperatures to rise. It found that 34% of the area of all Antarctic ice shelves — around half a million square kilometers — including 67% of ice shelf area on the Antarctic Peninsula, would be at risk of destabilization under 4°C. of warming. Limiting temperature rise to 2°C. rather than 4°C. would halve the area at risk and potentially avoid significant sea level rise. The researchers also identified Larsen C — the largest remaining ice shelf on the peninsula, which split to form the enormous A68 iceberg in 2017 — as one of four ice shelves that would be particularly threatened in a warmer climate.

More of the latest research:

Words to live by . . . .

“We will not overcome world poverty unless we manage climate change successfully. I’ve spent my life as a development economist, and it’s crystal clear that we succeed or fail on winning the battle against world poverty and managing climate change together. If we fail on one, we fail on the other.”Lord Nicholas Stern, professor, author and economist.