The Climate Spectrum (#2)

Welcome to the latest edition of “The Climate Spectrum.” In this issue, we delve into the transformative world of climate activism and sustainable investment. Discover how major investors are pushing for change at oil behemoth Shell, learn about Europe’s latest legislative efforts to curb greenwashing, and explore the significant strides in green energy production made in 2023. Each story is a piece of the larger puzzle, reflecting our global journey towards a more sustainable future. Join us as we uncover the challenges and triumphs on this path, offering you a comprehensive view of the climate landscape.

The Rise of Shareholder Power in Environmental Action

Shell, an industry leader in the oil sector, is experiencing mounting pressure from shareholders to make its operations more climate-aligned. Follow This, a grassroots non-profit organization with a 10,000-strong membership, is at the forefront of this movement, driving significant change by urging oil giants to shift their vast resources toward clean energy—a vital step in combating the climate crisis.

Follow This: Catalyzing Corporate Change

Conceived by Mark van Baal, Follow This began with the vision of affecting change from within by engaging as shareholders. The group has since 2016 mobilized a growing body of investors (in 2023, it won the support of around 20 per cent of Shell’s shareholders), advocating for climate resolutions at shareholder meetings. Although initially met with skepticism, their sustained efforts prompted Shell to declare a ‘climate ambition’, a pioneering commitment in the oil industry.

The Impact of Resolutions and the Future of ESG

Follow This’s resolutions (page 7) have seen increasing support, compelling Shell to review its stance. The organization contends that Shell’s plan to halve its carbon footprint by 2050 falls short of the Paris Agreement’s targets, and calls for more decisive action.

Joining this initiative, a powerful coalition of investors, managing assets exceeding €3.9 trillion, including the colossal European investor Amundi, has rallied behind Follow This. They’ve presented a resolution demanding Shell’s compliance with the Paris Agreement. Representing about 5% of Shell’s shares, these investors are shaping a pivotal moment in shareholder activism.

“This exceptional step highlights the investors’ dedication to addressing the climate crisis at its core,” remarks Mark van Baal. Looking ahead, this robust shareholder engagement is poised to significantly influence corporate strategies, aligning with the principles of ESG. Such actions by institutional investors are set to inaugurate a new chapter in environmental accountability and sustainable investment.

Europe Cracks Down on Greenwashing

With a sweeping majority, the European Parliament has passed a law to eliminate misleading advertising on sustainability. Claims of “environmentally friendly hotels,” “climate-neutral cheese,” “eco-cotton,” or “recycled plastic bottles” will soon face stringent scrutiny. By 2025, products can only be marketed with such labels if their sustainability claims are scientifically substantiated and verified.

This move comes as a response to the proliferation of over 230 ecolabels in Europe, many of which currently lack verifiable credentials. The new directive mandates that general sustainability claims like “eco-friendly,” “natural,” or “biodegradable” must be backed by solid scientific evidence and monitoring.

Furthermore, claims of carbon neutrality through ‘carbon offsetting‘ will no longer suffice. For instance, airlines will be prohibited from labeling flights as ‘green’ by promising to plant trees. Promotions claiming to achieve climate targets by 2035 will also need concrete, objective validation.

The directive aims to empower consumers with more reliable labels and advertisements regarding sustainability, durability, and repairability of products. It also addresses the lifecycle of products, prohibiting unsubstantiated longevity claims and encouraging transparency about repair costs and availability of spare parts.

This legislation marks a significant win for consumers and is a step towards more honest and responsible marketing. However, some environmental groups like the European Environmental Bureau, while welcoming the directive, express that it should also enforce the extension of product lifespans, not just provide better information.

2023: A Record Year for Green Energy

The past year marked a pivotal advancement in renewable energy production, a 50% increase in renewable energy capacity, setting the stage for the world’s commitment at COP28 to triple green energy use by 2030. The International Energy Agency (IEA) expresses cautious optimism, noting significant progress with a nod to China’s ambitious solar and wind energy targets that are expected to be met ahead of schedule.

In Europe, Germany achieved a historic reduction in emissions, hitting a 70-year low as the nation curbed its coal dependence. For the first time, more than half of Germany’s electricity in 2023 was generated from renewable sources. However, experts caution that most emission reductions may not reflect a sustainable trend from an industrial or climate policy standpoint. Only an estimated 15% of 2023’s emission reduction represents “permanent emissions savings,” underscoring the need for continued, substantive climate action.

Your curiosity and passion for the health of our planet drive this publication. We invite you to be part of the conversation — share your thoughts, spread the word, and join us as we continue to explore the ever-expanding horizon of sustainability and climate action.

Together, let’s keep the momentum going. The future is green, and every edition of “The Climate Spectrum” aims to keep you informed and inspired. Until next time, stay eco-conscious!

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