19/11/2020

(AU) Climate Change To Inflate Insurance Costs In Flood And Bushfire-Prone Communities

ABC News - Sinead Mangan | Alex Hyman | Sofie Wainwright

A leading climatologist says Australians love living among trees and by the sea, but that may not be safe in future. (ABC News: Megan Hendry) 

Key Points
  • A climate risk analyst says home insurance premiums could increase to the point where many areas become unaffordable
  • An insurance spokesman says that has not happened yet, but wants the Government to invest more in disaster mitigation
  • In a NSW town hit by fire in 2018, only 16 of the 69 houses had been rebuilt due to insurance issues
Severe weather has rendered parts of Australia uninhabitable, properties will become uninsurable, and people will be priced out of their homes, leading climate scientists warn.

Across Australia, 383,330 addresses were classified as high risk in 2020.

That number will almost double to 735,654 by 2100, according to a report produced for local government by analysis platform Climate Risk Engines.

Leading climate risk analyst Karl Mallon, chief executive of Climate Valuation, which provides extreme weather analysis on construction and development to banks and the property industry, said an increasing number of properties were in the insurance "red zone".

"Premiums are going to increase and they may become unaffordable," Dr Mallon said.

Insurance Council of Australia spokesman Campbell Fuller said no region in Australia was uninsurable — for now.

"However, it is possible some regions may become difficult to insure in the future," he said.
"Unless governments invest in appropriate mitigation and adaptation strategies."
Leading climatologist Greg Holland says climate change is no longer a future problem. (Supplied: Greg Holland) 

This week, the CSIRO and the Bureau of Meteorology produced data that found Australia's climate had warmed by 1.44 degrees Celsius, plus or minus 0.24C, since 1910.

Leading climatologist Greg Holland, a fellow of the Australian Meteorological and Oceanographic Society, said the science clearly showed Australia's climate was continuing to warm and that the frequency of extreme events was increasing.

"We've been talking about climate change as something in the future — it's now in the past," he said.

"The reason people are experiencing things like massively increased intensity and types of bushfires, along with the other extremes weather brings along, is because it is here now."

Jo Dodds says even with the best insurance many Tathra residents have not been able to replace their homes. (Supplied: Tony Dean)
First the fire, then the finance

Bega Valley councillor Jo Dodds has witnessed the devastation of a major bushfire firsthand.

In early 2018, her home near Tathra, New South Wales, was threatened on three sides by bushfire.

She could see smoke rising from the homes of her friends and could hear gas bottles exploding.

Cr Dodds said 69 houses were lost in that fire — to date only 16 had been rebuilt.


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A major impediment to rebuilding, she said, had been insurance.

"Even people with gold-plated insurance … are still finding they can't replace the house they had with a similar house," Cr Dodds said.
"Some people may be finding they can't afford the level of insurance, and in some cases there are no insurers that are willing to insure.
"I haven't heard of cases of that yet, but there is no doubt it is in everybody's minds."

Dr Mallon described communities like Tathra as victims of a changing climate.

"These are people who, through no fault of their own, are facing costs and financial threats to their families that they can't afford," he said.

Insurance premiums have skyrocketed for businesses in Mackay. (Supplied: Beck McPherson)

'Data 30 years out of date'

Retiree Erna-Jean Pozzetti and her husband, Claudio, own a large stake in Ocean Resort Village, a unit complex in Mackay in northern Queensland, an area vulnerable to cyclones and floods.

When they bought 14 years ago in 2006, insurance on the property cost $18,000 a year.

Their latest strata commercial bill quote was for $174,000 — more than triple last year's amount.

Karl Mallon says insurance premiums are rising as climate change causes more weather extremes.

Dr Mallon said this type of inflation would become commonplace for areas prone to natural disasters.

"When you buy a house or issue a mortgage you are taking on a 30-year commitment," he said.
"Thirty years is a long time in climate change.
"In principal an insurance company only takes a one-year view of the future.

"But what we are seeing is over 30 years there will be substantial changes.

"Someone might be able to afford an insurance bill today, but it doesn't mean they can later on in their mortgage."

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Dr Mallon said insurance companies had been caught off guard by the severe weather caused by climate change.

"[Insurance premiums] are based on data that is frankly 20 or 30 years out of date," he said.
"They are playing catch-up to get their premiums to where they need to be.
"We have got properties not just in the north of Queensland, but big cities like Melbourne and Sydney, where the risks are extremely high because the wrong properties are being built in the wrong place."

Moving away from disaster zones

 Australians love to live among the trees and by the beach, but Dr Holland said in parts of Australia this would simply be too dangerous.

He said governments would have to move people en masse from areas prone to severe weather.

"It's happening around the world," he said.

"We have gone for the sea change and tree change option and moved into these glorious areas without taking too much notice of the stark danger that exists there and existed there even 30 or 40 years ago.

"We could put that thought off because it was a relatively rare event — but as it has become more common we do have to make that decision."

Dr Holland says living among the gum trees is becoming increasingly dangerous. (Supplied: Adam Meredith) 

Dr Holland said governments could not sit back and watch people get priced out of their homes.

"There are some hard decisions that have to be made," he said.

"I understand this, because I live on a farm where we live with the fear of smelling smoke every day during summer.
"But the facts are there are some regions that are uninhabitable, that we are in at present — unless you have the money.
"We put a lot of blame on the insurance company because they are the sort of people who are charging you that money, but they are caught by the same thing. 

"The Government has done very little in the way of helping out those who are in trouble and it has done pretty much zero in stopping the climate change happening."

Dr Mallon said governments needed to provide grants and investment to help communities build appropriately in areas of bushfire and flood.

"It is not their fault," he said.

"They are not the polluters, but we need to step in and support these communities financially."

Mr Fuller said governments needed to invest in mitigation to future-proof communities.

"Implementation of stronger building codes, improved land use planning and permanent mitigation measures, where necessary, will be key to ensuring an insurable future," he said.

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(AU) The Australian philanthropists spending big and fast to fight catastrophic climate change

ABC Radio National - Belinda Sommer 

Julie and Jeff Wicks' foundation is designed to run out of money. (Supplied)

When Jeff Wicks retired, he and his wife Julie reflected on their life in Queensland. They asked themselves, how much is enough?

They decided they had more than enough money to live on and they wanted to give the rest away.

Now.

So the Wicks set up a private philanthropic foundation — one of 1,600 in Australia.

"We're probably giving away each year maybe 10 times what we need to live," Jeff says.

Most foundations operate through the investment of a main sum, or the 'corpus', and profits are used for grants.

But a growing number of Australian philanthropists, like the Wicks, are establishing foundations designed to run out of money.

They see no point in continuing giving beyond the next decade — which will be critical in the fight against climate change.

It's called spending down.

Throwing everything at the climate problem

Sue McKinnon and her husband John also run a philanthropic foundation, which will give away about $10 million over 10 years.

Sue McKinnon runs a philanthropic foundation with her husband aimed at avoiding catastrophic climate change.(Supplied)

Initially, the family foundation was to have continued well into the future.

But Sue says "the best legacy we could leave is one of avoiding catastrophic climate change".

"I know Australia is a small place, but it's a big actor on the world stage when it comes to fossil fuels, social license and the control and influence that various players here have," she tells RN's The Money.

"We decided that more needs to be thrown at it, we need the best brains and the most money in the room."

The McKinnon Foundation fights climate change through the legal and financial sectors.



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For example, they've been able to support the work of lawyer David Barnden, who this month settled a landmark case against super fund Rest over its climate change disclosures.

"Finding other really terrific people to do it with really helps. Whether they're some of the amazing staff in these organisations, the lawyers, the finance experts, and so on," Sue says.

In other circumstances, it might be deploying capital to obtain a major shareholding or a seat on the board.

Sue notes that advocacy can be frustrating and difficult to measure — but that's where her business background comes into play.

"Our whole selves come to this. Our skills, education, networks, and the energy and the time that we can put into this. That's what we work on."

A 'big, hairy, ambitious goal' 

Norman Pater wants to spend $40 million in the next 10 years. 

He's just returned from a trip to the mid-west wheat belt of Western Australia where he bought three farms, each about 2,000 hectares, which are being reforested as part of his Carbon Farming Foundation.
    
Norman Pater and his wife, Gita Sonnenberg. (Supplied)
 

"Our immediate goal is to revegetate biodiversity, at least one million hectares," the former IT entrepreneur says.

"This is the big, hairy, ambitious goal that we've set ourselves.
"I get the sense that the neighbours think we are loco."
In 2011 Norman attended a training weekend with former US vice-president and environmentalist Al Gore.

That, he says, "was really the big awakening for me".

A farm being revegetated in Western Australia as part of a project funded by the Carbon Farming Foundation. (Supplied)

His new farms will develop, test and scale carbon farming models.

"At the end of the day, we want to make carbon farming profitable, such that many other farmers start to engage in the same activity," Norman says.
The farms are aimed at developing carbon farming models that can be scaled-up. (Supplied) 

Accredited farmers can currently receive about $16 a tonne under the Australian Carbon Farming Initiative, but Norman says that isn't enough to encourage farmers to plant trees.

"We're approximately $10 a tonne south of where we need to be to break even, on our own land," he says.

"What we're trying to do is to develop the metrics and the success factors that would give the highest possible chance of success in the plantings."

He says this is a way he can make a real difference.

"The Carbon Farming Foundation is intended to be absolutely real and tangible and long lasting, irrespective of what the political twists and turns may take in the future."
Norman and Gita planting in the WA wheatbelt this winter. (Supplied)

Something worth more than money

And then there's the Wicks.

Jeff started buying property as a hedge against his career in aviation.

"The trouble with pilots, if you lose your license, you're not really qualified for a easy transition to another career," he says.

With no children, the Wicks have set up their foundation to spend down over the next decade.

"Our view is that what we do in the next 10 years, or maybe even the next five years, will absolutely be absolutely key to the eventual outcome. Let's do it now," Jeff says.

The ACME Foundation directs money to about 25 or 30 different organisations. One of them is the climate change think tank, Beyond Zero Emissions.

"They've recently come out with their Million Jobs Plan in response to the recovery from COVID-19," Jeff says.

"That's quite an ambitious plan and they're getting quite a bit of traction with that, so that's quite a stunning plan that they're rolling out and trying to get government support, both state and federal."

The feel-good factor has Jeff and Julie hooked.

'It's something we can't stop doing. This is our path for the rest of our lives, so we're pretty committed, and we really enjoy it," Jeff says.

And he remains optimistic.

"The one cause for hope is that from the millennials, down into the younger generations, they're no longer focused solely on money," he says.

"In fact, quite often they'll work for less than they could earn just to be connected with organisations they're proud to be connected with.

"It's probably a change from my generation, a baby boomer. Money is not the driving force quite so much and that's a really positive thing for our future."

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(AU) Victoria Pledges $797m For Australia's Biggest Household Energy Efficiency Drive

The Guardian - 

Measures include a $1,000 rebate for low-income residents to replace old heaters and upgrades to 35,000 social housing properties

The Victorian government says it will extend existing incentive schemes for home solar and battery systems as part of its $797m household energy efficiency drive. Photograph: David Mariuz/AAP
Victorians have been promised Australia’s biggest household energy efficiency drive, with the Andrews government pledging $797m to programs it says will cut power bills and greenhouse gas emissions.

Measures include a $1,000 rebate for low-income households to replace old heaters with modern split-systems, upgrades to 35,000 social housing properties and a new requirement that landlords keep rental properties at a minimum efficiency standard.

The state government said it would also extend existing incentive schemes for home solar and battery systems and offer a one-off $250 payment for concession card holders to help with bills.

Social welfare and environment groups said the commitments were likely to have an immediate impact, particularly for vulnerable households. They followed the government’s weekend announcement that it would spend $5.3bn building more than 12,000 public and community homes with a 7-star energy efficiency standard.

Luke Menzel, the chief executive of the national Energy Efficiency Council, said it was a “transformative investment” that would create thousands of local jobs, help the climate and save lives. He cited evidence that a similar New Zealand program led to $7 in benefits for every $1 spent, mostly through reductions in health costs and deaths.

Victoria’s energy, environment and climate change minister, Lily D’Ambrosio, said the Covid-19 lockdown meant most people had spent more on power bills than usual this year. “This pandemic has been hard enough without worrying about whether you can pay the power bill,” she said. “Not only will we help cover the cost, we’ll help Victorians make their home more efficient and fight climate change.”

The Coalition’s energy and renewables spokesman, Ryan Smith, said the help with energy efficient appliances was welcome but followed a substantial increase in electricity bills under Labor. He said a Coalition government would have given concession card holders a bigger rebate on electricity bills – $1,000 – and paid it directly to retailers, rather than require people to sign up online to receive it.

The Victorian commitment follows a cross-community push for governments to invest in improving energy efficiency to both stimulate the economy to drive a recovery from Covid-19 and help set up a long-term response to the climate crisis.

In May, groups representing business, the energy industry, property owners, unions and major investors wrote to the national cabinet arguing that Australia’s prosperity depended on eradicating greenhouse gas emissions, and that fixing inefficient buildings and industry should be a primary focus. They estimated a major national drive to improve buildings could create tens of thousands of jobs.

A similar case has been made overseas as part of a global call for a “green recovery”. The International Energy Agency has said energy efficiency upgrades are “job-intensive and strongly support economic stimulus goals”.

The Victorian announcement, which will form part of next week’s state budget, includes:

  • $335m for 250,000 low-income households to replace old wood, electric and gas heaters with energy efficient split systems.

  • $112m to seal windows and doors and upgrade heating, cooling and hot water in 35,000 social housing properties.

  • $14m to expand a rebate scheme for efficient appliances.

  • Increased funding for rebate schemes for rooftop solar, household batteries and efficient appliances.

  • New minimum energy efficiency standards for rental homes, which the government estimated would benefit tenants in about 320,000 poor-quality properties.

Emma King, the chief executive of the Victorian Council of Social Service, said the commitments were “good for people, good for the economy and good for the planet”.

The Brother of St Laurence’s executive director, Conny Lenneberg, said for many low-income households they would be the difference between “living in a bitterly cold home through the winter and a warmer, healthier home”.

Nicholas Aberle, a campaign manager with conservation group Environment Victoria, said the scale of the investment made Victoria “a clear leader” on energy efficiency. “It’s exactly the kind of economy-stimulating and job-creating climate solutions we wanted to see,” he said.

But Beyond Zero Emissions, a climate change think tank that recently released a “million jobs plan” to hurry the shift to a clean economy, called on the Victorian government to go further. Michael Lord, the group’s research lead, said it should aim to create net-zero energy “all-electric” homes that no longer relied on gas, and generated at least as much renewable energy as they consumed over the course of a year.

He said the nearly $800m commitment was “a good start” but the government could do more to stimulate private investment by setting up pilot schemes that showed net-zero energy homes were possible. “The closer to net-zero energy we build new homes and retrofit existing homes, the lower the running costs for the Victorians living in these homes,” he said.

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18/11/2020

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

Washington Post - Steven Mufson

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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