NetZero and what investors should be doing
Benjamin Yeoh in conversation with Chris Stark at Chatham House
Corporate net zero commitments have increased significantly in the past 5 years, reflecting greater awareness and ambition on climate change. However, many commitments lack substance or rely too heavily on cheap offsets. Investors should scrutinize net zero plans and push for real emissions reductions.
- Alignment between corporate climate plans and national/global pathways is important. Companies should focus efforts where policy support is lacking rather than easy wins like adding solar panels.
- Carbon pricing is useful but works best alongside sectoral policies and regulations. Recent US inflation legislation shows that production subsidies can also be impactful.
- More work is needed on quantifying adaptation goals and tracking progress. Improved climate risk disclosure over 5-10 year horizons would aid corporate planning.
- The "net zero" slogan has downsides, including associations with culture wars. Emphasizing co-benefits like jobs, energy security, clean air may resonate more.
- Onshore subsidies and local content requirements in the US Inflation Reduction Act could prove inflationary. The UK will need to be selective in supporting key sectors to remain competitive post-Brexit.
- Disruptive protests have kept climate prominent but may also contribute to polarization. A 'just transition' for oil producers is still lacking.
- Overall, continued focus on bipartisan #climate solutions, not political extremes, is needed. Many impactful steps are non-controversial but get drowned out.
Watch the full interview here
#investing #policy
