US President Joe Biden will today host 40 leaders from across world at a White House virtual summit on climate change. His election has seen a dramatic shift in US policy on carbon pledges compared to his predecessor Donald Trump. The scale of Biden’s ambitions is expected to be revealed in a target to halve US carbon emissions by 2030. It’s an ambitious goal but the evidence suggests there is now a genuine push from around the world among both governments and investors to embrace green energy and a sustainable future.
In the last five months Bloomberg reports that more money has been invested in energy transition shares and funds than the last 12 years. Even the bête noires of the climate change battle, oil and gas companies, seem to be committed to a future that relies on cleaner energy. Another Bloomberg study revealed a nine fold increase over the past 12 months among oil and gas companies in the S&P 500 when it came to mentioning ESG or sustainability in official reports or earnings updates. In Q1 of 2020 there were just 36 mentions of “green” ideas. In Q1 of 2021 there were nearly 300. But is it all talk or are the fossil fuel behemoths actually starting to walk the sustainable walk? The answer is complicated and until now has exposed a sharp divide between the approaches of European oil and gas giants and their American counterparts. Both Shell and BP have announced plans to become net-zero emissions energy businesses by the year 2050. The French giant Total is renaming itself Total Energies to reflect its heavy investments in clean energy businesses. Across the pond however the big US players, Exxon and Chevron have, up until recently, seemed less than willing to follow the leads set in Europe. With Trump they had a friend in the White House. Under a Biden administration the view is they should start mending their ways and seriously look at moving away from their traditional homes of oil and gas. Turning back to today’s global summit, it’s clear that the world still has a long way to go before speaking with one voice on the issue of climate change. On the plus side, among those attending will be China’s President Xi Jinping who recently declared that he wanted his country, historically one of the world’s worst carbon polluters, to be carbon neutral by 2060. Despite serious tensions between the US and China on many issues, both sides seem determined to work together on battling climate change. There was even a joint statement from the two countries saying they would tackle the problem “with the seriousness and urgency it demands”.
On the negative side officials have made it clear that some nations are still seen as climate change laggards. Australia for instance was warned by one US official that “there would have to be a shift” in their approach.
As we slowly move on from the Covid-19 nightmare of the past year, we can hopefully turn our united attention to the biggest challenge that we need to overcome to secure our planet’s future.