Lethal Heating: 11/18/20

18/11/2020

(USA) Bezos Makes First Donations From $10 Billion Earth Fund For Fighting Climate Change

Amazon chief executive and owner of The Washington Post says climate change is most urgent issue facing the planet

Jeff Bezos, founder and chief executive of Amazon. announced the first grants in his plan to award $10 billion to organizations fighting climate change. (Andrew Harrer/Bloomberg)

Jeff Bezos said Monday he is giving $791 million to 16 groups fighting climate change, the first grants from his Earth Fund, saying the money is “just the beginning of my $10 billion commitment to fund scientists, activists, NGOs, and others."

More than half of the donations went to established environmental groups, with $100 million donations each going to the Environmental Defense Fund, the Natural Resources Defense Council, the Nature Conservancy, the World Resources Institute and the World Wildlife Fund.

Bezos, the founder and chief executive of Amazon, also bestowed money on groups concerned with environmental justice, including Dream Corps’ Green For All, the Hive Fund for Climate and Gender Justice, and the Solutions Project.

“I’ve spent the past several months learning from a group of incredibly smart people who’ve made it their life’s work to fight climate change and its impact on communities around the world,” Bezos said in an Instagram post. “I’m inspired by what they’re doing, and excited to help them scale. … We can all protect Earth’s future by taking bold action now.”

Bezos, the world’s richest man, owns The Washington Post.

Leaders of the groups receiving funds said they met earlier this year with Bezos and his partner Lauren Sánchez to discuss what they would do with the grants. Bezos has a small team, including from his personal office, helping to figure out how to parcel out the funds, they said. He will likely hire more people to assist with the Earth Fund.

“He asked a lot of questions. It was very clear that he had already learned a lot about climate change and was very knowledgeable,” said Fred Krupp, president of the Environmental Defense Fund. “He had studied the issue, and he was very focused on having the biggest impact he could with his contribution.”

The new Earth Fund catapults Bezos into the leading ranks of nonprofit climate gifts.

“Climate change is the biggest crisis facing humanity but, despite lots of great work, has been an underfunded area of philanthropy,” said Jules Kortenhorst, head of the Rocky Mountain Institute, which received $10 million. “Mr. Bezos’s grant highlights the urgency and importance of the work being done in civil society to dramatically reduce greenhouse gas emissions.”

Kortenhorst said the money would be used to promote the decarbonization of buildings and stop the burning of natural gas in water heaters, stoves and boilers. In recent years, natural gas has displaced coal, but it remains a fossil fuel that “enormous impact” on health, Kortenhorst said. The Bezos money will be used within two years, he said, an important part of RMI’s $75 million budget this year.

Krupp said that the $100 million grant to the Environmental Defense Fund would be spread over three years, and much of it would go toward fully funding a satellite the organization plans to put into orbit to monitor methane emissions. Methane is a powerful greenhouse gas that can be 80 times more potent than carbon dioxide.

The money would give a boost to the group, which ordinarily has a budget of about $230 million a year.

“Thanks to this and other funding, we will cut methane pollution from the oil and gas industry by 45 percent by 2025, which will be the same 20-year benefit of closing a third of the world’s power plants,” Krupp said.

In 2019, less than 2 percent of $730 billion in global philanthropic giving was spent fighting climate change. But as wildfires in the West and hurricanes in the East turn climate change from an abstraction into a clear and present danger in the United States, that share is starting to rise.

“Solving the climate crisis requires investment in a wide set of solutions,” Krupp said. “The obstacle isn’t finding solutions, it is securing the funding to scale solutions quickly. Our hope is that this gift encourages other philanthropists to support climate solutions on the scale needed.”

The World Wildlife Fund said it would use its $100 million grant to “harness the power of nature” including the protection and restoration of mangroves in Colombia, Fiji, Madagascar, and Mexico; the development of new markets for seaweed as an alternative to petroleum-based products; and the restoration and protection of forests.

The World Wildlife Fund’s U.S. budget is about $300 million a year. Its worldwide budget is about $900 million a year.

“This commitment recognizes that you can’t solve climate change without nature,” WWF’s chief executive Carter Roberts said. He said that the group could use the money from Bezos to leverage an additional $850 million from other partners, including investors, foundations and governments.

The World Resources Institute, which will receive $100 million over five years, said it will use the money for two major initiatives. This first is to develop a new satellite-powered land-use and carbon-emissions monitoring system to measure the impact of conservation and restoration of forests, grasslands, wetlands and agricultural lands on reducing emissions. The other project will try to spur the electrification of school buses, with a goal of converting more than 450,000 to zero-emissions vehicles by 2030, the organization said.

One of the smallest organizations to receive money from Bezos is Green for All, which promotes local, state and federal policies that put low-income people to work retrofitting homes or in other “clean energy” occupations. Michelle Romero, Green for All’s national director, said that it will receive $10 million over three years, doubling the size of the advocacy group, which currently has six full-time employees. The group falls under an Oakland, Calif.-based umbrella group, Dream Corps, which has been active in helping released prisoners find jobs.

Green for All was founded by Van Jones in 2007, before his television career.

Romero said that the group reached out to Bezos when it heard of the grant program. “We knew it would be important to get some of that investment into low-income communities and communities of color,” she said.

The other recipients are: the Climate and Clean Energy Equity Fund, $43 million; ClimateWorks Foundation, $50 million; Eden Reforestation Projects, $5 million; Energy Foundation, $30 million; the Hive Fund for Climate and Gender Justice, $43 million; Natural Resources Defense Council, $100 million; the Nature Conservancy, $100 million; NDN Collective, $12 million; Salk Institute for Biological Studies, $30 million; The Solutions Project, $43 million and the Union of Concerned Scientists, $15 million.

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The Secret Club For Billionaires Who Care About Climate Change

Bloomberg Green - Ben Steverman

Creo Syndicate helps the world’s richest families invest in businesses fighting global warming.

Illustration: Anna Haifisch for Bloomberg Green

A few years ago, the hundreds of members of France’s Mulliez family, with a global retail empire worth more than $38 billion, decided they should take climate change more seriously—or rather, their investment portfolio should.

But where to start? Climate change and the fight against it could transform almost every sector of the economy as companies clamor for ways to cut emissions and even pull carbon dioxide from the air.

“This space is very broad, and it’s complicated,” says Delphine Descamps, managing director at Creadev, the Mulliez family office, which has about €200 million ($236 million) to invest each year.

Then she met Régine Clément, the head of a small, secretive nonprofit called Creo Syndicate. An exclusive club of climate-focused investors, Creo’s mission is to speed up the flow of capital into investments that can slow global warming.

The group focuses on the richest of the rich, working with about 200 families and investment outfits with a total of more than $800 billion under management.

Prominent members include legendary investor Jeremy Grantham and Nat Simons, the son of Renaissance Technologies’ billionaire founder James Simons. Members must pay dues—a “very reasonable” flat fee, Clément says, that makes up about half the nonprofit’s revenue—and they must prove they’re serious by planning to make their first investment in climate and sustainability within six months.

Members must also have assets of at least $100 million and get approved by the nonprofit’s board.

When the Mulliez family joined, its staff met with experts, experienced climate-focused investors, and other family offices, who were surprisingly candid about what they’d learned.

At online seminars and in-person meetings with carefully selected groups, often with fewer than 20 people, they discussed innovations in agriculture and other areas that may cut emissions while feeding a growing population.

“People openly talk about their investments and what worked and what didn’t work,” she says.

“This is not philanthropy, this is investment”

Although it’s a nonprofit and doesn’t have any money of its own to deploy, Creo acts a little like an investment bank, vetting about 300 deals per year, connecting investors with possible partners, and conducting research on technologies.

Members have invested in everything from batteries and hydrogen fuel to regenerative farmland and greener product packaging. Portfolios include still unproven technologies such as methods for carbon capture and true long shots like fusion reactors.

Creo members make a wide variety of bets that might make a difference—and make money. “This is not philanthropy, this is investment,” Clément says.

Superwealthy families, she says, have an advantage over other players: Managing money for future generations, they can afford to wait a decade or more for investments to bear fruit. Some members in Europe have been rich for hundreds of years. Families “are naturally inclined to think long term,” she says.

Many of the investments aren’t mainstream, but “it’s fine, because these families are comfortable being pioneers,” says Spring Lane Capital managing director Christian Zabbal, who co-chairs Creo’s board. “What Creo is doing today is essentially a preview of what institutional capital will do very shortly.”

The Mulliez family owns a giant supermarket chain, Auchan—basically France’s answer to Walmart. Their conversations with other Creo members led to a decision to concentrate on food in their climate-focused portfolio.

Agriculture accounts for about 10% of global greenhouse gas emissions, and better farming practices could fight climate change by both reducing pollution and sequestering more carbon in soils. Sustainable forms of aquaculture, meanwhile, could satisfy demand for protein with far less pollution than other kinds of meat.

The family invested in Gotham Greens, an indoor urban farming company, and two companies involved in aquaculture: Kingfish Zeeland, which runs high-tech fish farms, and InnovaFeed, which raises insects as feed for farm-raised seafood.

“You’re talking about a complete reconfiguration of the global economy”

This year the Mulliez family office led a fundraising round for Hungry Harvest, a startup that sends consumers weekly boxes of produce. When Descamps asked Creo if it knew of any other mission-driven investors looking for deals focused on reducing food waste, she was introduced to Quadia, a Geneva-based impact investor that helped close the $13.7 million investment round in September.

Creo’s families want to “be at the front of the parade,” says Jason Scott, a board co-chair. He bristles when people suggest climate-focused investing is becoming a bubble.

“You’re talking about changing the way food is grown and transported and what people eat, how energy is delivered to people’s homes, what people drive, the way people build cities,” he says. “You’re talking about a complete reconfiguration of the global economy.”

When Creo was formed five years ago from the merger of two climate-focused investor networks, it was just an informal gathering for like-minded families. “People would throw down their credit cards for dinner. It was pretty low-rent,” Scott says.

Clément became Creo’s founding chief executive officer in 2016. “She’s turned it into a powerful platform,” Scott says. “There’s almost an insatiable demand for the kind of support Creo is providing.”

In four years, the nonprofit’s membership has quadrupled, and its members and affiliates’ assets have risen eightfold, from less than $100 billion in 2016. To keep up with the demand, Creo’s staff has doubled in the past year, to 10 in the U.S. and two in the U.K.

The group doesn’t go out and recruit members. “We grow entirely through introductions. We never seek out a family,” Clément says. Although Creo doesn’t require applicants to divest from fossil fuels or other emitters, she wants to make sure all members are fully committed to the mission.

Part of building trust with wealthy families is keeping their secrets. In addition to Grantham and Simons, the group’s ranks include other well-known billionaires whose names Creo won’t disclose. A mantra is “no tourists allowed.”

The key to Creo’s success, members say, is how it gets very wealthy investors in the same room—or on the same Zoom call. “You have people with a decade of experience and people with a month of experience,” says longtime member Reuben Munger, a hedge fund manager who founded Vision Ridge Partners as his family office and later turned it into an investment firm. With more than $1 billion under management, it specializes in sustainable assets.

It helps that families generally aren’t trying to pitch to each other and that Creo makes no fees on any deals. “There’s not a lot of hidden agendas,” Zabbal says. Creo has tried to unlock even more capital by venturing beyond families to large institutional investors that also want a head start on climate investing.

The nonprofit is working with CDPQ, a Quebec pension fund with $333 billion in assets, which launched a $500 million investment strategy around climate and sustainability. The pension’s goal is to invest alongside families or firms in late-stage venture companies.

The first deal, announced in September, is with S2G Ventures, a Chicago firm focused on food and agriculture that’s backed by Lukas Walton. An heir to the Walmart fortune, he has a net worth estimated to be more than $22 billion by the Bloomberg Billionaires Index.

Creo members have seen their investments pay off. QuantumScape Corp., a battery tech company recently valued at $3.3 billion, received early funding from Prelude Ventures—co-founded by Simons—and Capricorn Investment Group, both Creo members.

Participants in the nonprofit also invested in early rounds of Tesla Inc. and Beyond Meat, two of 2020’s best-performing stocks. This kind of success helps convince skeptical family members and advisers of what Creo can do.

“The opportunities are tremendous, but it’s also overwhelming for someone who starts out,” Zabbal says. “By investing in collaboration with others who bring expertise, it allows more investors to take the leap.”

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Wielding $9 Trillion, Investors Warn Firms From BP To BMW To Get Real On Climate Change

Forbes - David Vetter

Performance group The Red Brigade protesting BP's sponsorship of exhibitions at The British Museum in London. BP was one of the firms today urged by a group of institutional investors to account for climate risk in its financial reporting. Getty Images

Investors controlling more than $9 trillion in assets today called on 36 major European firms to clean up their act on climate change—specifically when it comes to their accounts.

The group of 38 institutional investors signed a joint letter urging firms including oil giants Shell and BP, energy provider EDF, airplane manufacturer Airbus and car maker BMW, to account for climate risk in their financial statements, as nations move away from fossil fuels and ramp up efforts to decarbonize their economies.

The firms targeted were identified by the investors as being exposed to the many potential impacts of a wholesale transition away from fossil fuels.

The investors, part of the Institutional Investors Group on Climate Change (IIGCC), including J.P. Morgan Asset Management, Fidelity International and the U.K. Shareholders Association, expressed a concern that the real costs of the transition towards a “Paris aligned” future—limiting temperature increases to well below 2 degrees Celsius and ideally to 1.5 degrees Celsius—are not being reflected in the firms’ financial disclosures.

The investors included with the letter a paper on Paris-aligned accounting, which explained: “Accounts that leave out material impacts (whether in the reported numbers, or in disclosures such as sensitivities) will misinform and thus, result in misdirected capital.”

The paper set out why and how firms should go about disclosing climate risk, and further urged regulators to mandate Paris-aligned accounting and auditing. It then set out three courses of action investors would take when firms failed to meet expectations in their climate-adjusted accounting: engagement, voting and divestment.

“If the accounts leave out material climate risks, too much capital will go towards activities that put shareholder capital at risk,” the letter stated. “Worse still, this puts all our futures at risk.”

Explaining the aim behind the call to action, Stephanie Pfeifer, CEO of the IIGCC, said: “Companies can no longer afford to ignore what climate change means for their business. Investors need financial impacts of getting onto a net zero pathway to be booked and acted on.”

“Climate change is material and the importance of alignment with the Paris Agreement is beyond doubt,” Pfeifer continued. “What investors now need is visibility from companies in their accounts. They are making this clear today and expect companies to report in line with existing global accounting standards.”

There is broad acknowledgement among developed economies that investors could be the key to spurring climate action on the scale required by the Paris Agreement. Government stimulus plans to address the economic turmoil from the coronavirus pandemic are failing to take into account the climate crisis.

In the face of climate-denying leadership and governments apparently determined to pump Covid-19 stimulus cash into fossil fuels, it has in many cases been left to the private sector to demand institutional change.

Brunno Maradei, global head of responsible investment for Aegon Asset Management, one of the signatories to the letter, said: “Ensuring that the Paris Agreement is considered in financial statements is one way to ensure that the firms most exposed to carbon will be held truly accountable against this important global commitment, while also protecting long-term value for investors.”

Henrik Pontzen, head of ESG at signatory Union Investment, added: “Climate change is real. The costs of climate change are material. Financial accounts that do not reflect the costs of climate change are thus incomplete. In view of this we expect all companies to thoroughly examine their financial accounting practices.”

The move by the institutional investors aligns closely with research from Imperial College London that found investment in companies that don’t necessarily fit the “green” definition would be required if countries are to achieve a successful transition to lower-carbon economies.

In the report, released in September, researchers highlighted the “crucial role of transparent criteria in managing continued funding to fossil-fuel producers and energy-intensive firms.”

Noting that while there were not yet sufficient green assets in existence to take up the several trillion dollars of capital required for “deep decarbonization,” researchers Charles Donovan, Milica Fomicov and Anastasiya Ostrovnaya suggested that conventional, “high-carbon” industries could “meaningfully contribute to climate stabilization” if companies were required to adhere to a clear set of mandatory standards.

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