G7 2021 sets out Build Back Better

When the leaders of the G7 met in May / June 2021, the heat wasn't just chasing icebergs. It really is on

The global mood for climate mitigation is finally shifting as we emerge from COVID with a mainstream acceptance and agenda for climate positive. In every corner of the world, language is changing. It's no longer if, but when. Governments, businesses, communities - and lawyers - are all scrambling to comply, plan and in some cases, dodge. But don't sweat the dodgers. They will be swamped by the tsunami of global intent long before the literal waves roll in.

The full communique "agreed concrete actions to address today’s historic challenges and as part of our renewed and urgent effort towards deeper multilateral economic cooperation". Helle Bank Jorgensen summarized in Green Biz what actions mean for boards of directors, but that simply means what actions mean for any business. Under the heading "Transformative effort to tackle climate change and biodiversity loss," the seven economies:

• Commit to a multi-year effort to meet our net-zero commitments and environmental objectives in a way that is positive for jobs, growth, competitiveness and fairness.
• Commit to properly embed climate change and biodiversity loss considerations into economic and financial decision-making.
• Support moving towards mandatory climate-related financial disclosures that provide consistent and decision-useful information for market participants (based on the Task Force on Climate-related Financial Disclosures, or TCFD, framework).
• Agree on the need for a baseline global reporting standard for sustainability, which jurisdictions can further supplement.
• Recognize the growing demand for more information on the impact that firms have on the climate and the environment.
• Look forward to the establishment of the Taskforce on Nature-related Financial Disclosures and its recommendations.
• Recognize that climate change poses increasing physical and transition risks to regulated financial institutions and to financial stability.

Who was at the G7?

G7 Finance Ministers and Central Bank Governors of the G7, met virtually on 28 May 2021, and Finance Ministers met in London on 4-5 June 2021, joined by the Heads of the International Monetary Fund (IMF), World Bank Group, Organisation for Economic Cooperation and Development (OECD), Eurogroup, and (on 28 May) Financial Stability Board (FSB).

What is different?

Convergence of a number of things is driving both mood change and actual change. COVID, obvious climate impacts, grassroots mood and legal challenges. These are just a couple of examples.

Legal challenges

The recent Whithaven ruling in Australia that the Environment Minister owes a duty of care to younger children and vulnerable people and must not act in a way that causes harm. The REST case ruling for investment. The Dutch court ruling in May 2021, that SHELL is required to reduce its total emissions, including those from operation but also those from the use of the products it sells (“scope 3” emissions) by 45% of 2019 levels by the year 2030, to align with global climate goals. (The court’s ruling found that Shell is directly culpable for the climate impacts created by the normal usage of the products it sells, namely oil and gas.)

Shareholder rebellions

A stunning 61% of investors backed a proposal in May 2021, from shareholder activist firm FollowThis calling on Chevron to substantially reduce its scope 3 emissions by selling a lower quantity of fossil fuels. And activist shareholder organisation Engine No. 1 succeeded in the election of two climate-focused shareholders to the board of ExxonMobil.

Information on G7 as linked. Broader information on the Exxon and Chevron cases, Renew Economy original article

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