Globe Climate: At the water cooler of Canadian sustainable finance

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Good afternoon, and welcome to Globe Climate, a newsletter about climate change, environment and resources in Canada.

As climate change makes many catastrophes more intense and more frequent, the official who heads the United Nations’ office for disaster risk reduction said that fewer people are dying globally thanks to planning and resilience efforts.

There is still much more that needs to be done, reducing deaths is only part of the battle to lower risk. But compared to 20 years ago, he says the world hasn’t really noticed how the type of storms that once killed tens or hundreds of thousands of people now only claim handfuls of lives “We often take for granted the progress that we’ve made,” said U.N. Assistant Secretary-General Kamal Kishore.

Now, let’s catch you up on other news.

Noteworthy reporting this week:

1. Research: Climate change threatens millions in low and coastal areas in Latin America, study finds
2. Water: Klamath dam removal aims to return salmon to waters they could not reach for decades
3. Cities: Federal government creates $530-million fund for Canadian cities to adapt to climate change
4. The Lately podcast: Hollywood’s climate consultant teaching filmmakers and showrunners on how to weave in climate narratives – without killing the vibe
5. Wildlife: Grizzly bears kill 17 sheep in unusual attack on Alberta ranch
6. Politics: B.C. Conservatives envision sweeping changes to schools, housing, climate and Indigenous policies if elected
7. Resources: ReconAfrica cancels stock promotion campaign led by company connected to sanctioned Canadian adviser
8. Wildfires: Alberta wildfire that forced thousands out of Fort McMurray officially under control

A deeper dive

Diving into polarization and responsible investment

Jeffrey Jones reports on ESG and and Sustainable Finance for The Globe. For this week’s deeper dive, he talks about an climate-finance conference he attended last week.

Last week, more than 300 investment professionals who concentrate on sustainability met in Vancouver for two days of discussions about everything from climate-related financial disclosure to Indigenous inclusion to the growing impact of populism.

The Responsible Investment Association’s annual conference is a great way to soak up what’s hot in Canadian sustainable finance and get a handle on the kinds of discussions that take place at the water coolers and in the hallways of banks, asset managers and pension funds.

There were nuanced talks on how environmental, social and governance pros try to nudge companies within their portfolios to set tougher climate-related targets and prepare for a low-carbon economy, while also pushing them to generate attractive returns for investors. Environmental activists often complain there is too much of the latter and not enough of the former.

The crowd got a rare window into a historic fight over that tension from Michael O’Leary, partner at U.S. consumer-products fund manager L Catterton. Mr. O’Leary focuses on impact investing, the growing corner of the industry that puts sustainability performance alongside financial results. Before signing on there, he made waves as managing director at Engine No. 1. That’s the firm that launched a campaign in 2021 to get Exxon Mobil Corp. to improve its operations and, most notably, deal with the risks associated with climate change.

Ultimately, Engine No. 1 won out, attracting enough support from other major investors to replace three of the oil giant’s directors. Mr. O’Leary pointed out that the victory came after showing how climate was just one factor dragging Exxon Mobil’s performance, and that institutional investors saw that as indicative of an series of ways the company was lagging peers on operations and strategy. It all affected its stock price, he argued.

He also brought sober reflection to the fundamentals that have affected sustainable investments, and the backlash that ESG is receiving – in the U.S. especially – while asset values have fallen from the pandemic highs. Mr. O’Leary pointed out that data has shown most of the investments themselves did not skyrocket or plummet as much as was hyped, and that most have experienced long-term gains. This, as consumers repeatedly show they prefer products that can demonstrate sustainable attributes.

“I appreciated his reference that in a capitalist system, the capitalist is king and whether that’s a good thing or a bad thing depends on what values investors bring to the market,” says Patricia Fletcher, RIA’s chief executive officer. “Despite the current noise, responsible investing must stay true to its purpose - enabling those investors to build an economy that’s more sustainable, inclusive and prosperous.”

- Jeff

What else you missed

• Spring rains welcome, but drought risk lingers in Western Canada
• Climate change altering the face of Canadian mountaineering
• Judge approves settlement agreement for Nova Scotia’s Northern Pulp mill
• Plastics plant owner asks for time to comply with federal orders to end benzene leaks
• Scientists are on a quest for drought-resistant wheat, agriculture’s “Holy Grail”
• Forecasters warn B.C. to prepare for hot summer
• Nature Conservancy of Canada buys B.C. grasslands for new conservation area
• Quebec homeowners recall scramble to safety as tornado touched down west of Montreal
• Animals collapse, water shortages persist as Delhi’s temperature remains in high 40s during Indian heat wave
• Tiny organism has power to reduce persistent greenhouse gas in farm fields, researchers find

Opinion and analysis

Rachel Doran and Mark Zacharias: If the Liberals fall, Canadians may experience a deeply fragmented energy future

Tanya Talaga: Ontario’s legislature takes a small, smart step toward reconciliation

Green Investing

Developed countries met global climate finance goal two years late, OECD says

In 2009, developed countries promised that from 2020 they would transfer $100-billion a year to poorer nations buckling under the costs of worsening climate change-fuelled disasters.

They provided $115.9-billion in climate finance in 2022, meeting the goal for the first time, the Organization for Economic Co-operation and Development said in a report. The total also includes private finance mobilized by public funds. But the missing $100-billion has become politically symbolic, stoking mistrust between nations at recent UN climate talks, as some developing countries argue they cannot agree to curb CO2 emissions faster if the world’s economic powers do not deliver promised financial support.

• Secret shopper survey finds reluctance to discuss ESG with clients
• Lobby group says emissions cap would cost oil and gas sector $75-billion in lost investment
• Exxon Mobil shareholders re-elect two directors targeted by activists
• Glencore’s climate action plan wins more support from shareholders

Making waves

Do you know an engaged individual? Someone who represents the real engines pursuing change in the country? Email us at GlobeClimate@globeandmail.com to tell us about them.

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Guides and Explainers

• Want to learn to invest sustainably? We have a class for that: Green Investing 101 newsletter course for the climate-conscious investor. Not sure you need help? Take our quiz to challenge your knowledge.
• We’ve rounded up our reporters’ content to help you learn about what a carbon tax is, what happened at COP28 and just generally how Canada will change because of climate change.
• We have ways to make your travelling more sustainable and if you like to read, here are books to help the environmentalist in you grow, as well as a downloadable e-book of Micro Skills - Little Steps to Big Change.

Catch up on Globe Climate

• Indigenous impact fund champions outcomes-based finance
• The one with great gardening advice
• Prevention and preparation as wildfire season beings
• Can floating nuclear power plants serve remote Northern communities?

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