Hope from San Francisco

This blog originally appeared on GES International’s website and has been republished following Sustainaltyics’ acquisition of the company on 9 January 2019. See the press release for more information.

Thousands of delegates assembled in San Francisco to attend both the PRI in Person conference and the Global Climate Summit. As discussions around climate change, income inequality, and other pressing ESG issues took place indoors, protesters assembled outside hoping and demanding that the world’s attention turn in their direction. It was a week full of innovation, the sharing of ideas, and in many ways, hope.

With the Global Summit on Climate Change taking place at the same time in the same city, it was inevitable that the PRI conference would predominantly focus on climate change. Al Gore spoke of fiduciary duty and urged investors not to turn a blind eye to the immense financial risks of climate change. Meanwhile, at the Summit, Governor Brown announced the passing of a legislative bill that commits California to a 100 per cent use of zero-carbon electricity by 2045 and he also signed an executive order (B-55-18) committing California to total, economy-wide carbon neutrality by 2045.

It was also announced that thousands of cities around the world – led by former New York mayor Michael Bloomberg – have committed to reducing carbon emissions equivalent to taking all US cars off the road or 1.4bn tonnes of CO2 per year by 2030, as part of the Global Covenant of Mayors for Climate & Energy.

However, although the announcements were both ambitious and far-reaching, they were interrupted by protesters demanding further action. Amongst all the turmoil, Michael Bloomberg commented that only in America do we have climate protesters, protesting at a climate change conference!

There were so many topics and statements to reflect on and digest, but the ambitious goals and commitments of American state legislatures in particular stood out and provided a glimmer of hope. Despite the frequent news of the US administration rolling back climate change fighting initiatives and scrapping EPA regulations put in place to protect vulnerable areas, there is a reason to be optimistic and hopeful about America’s potential role in responsible investing. On a state and city level, there is strong support for living up to the Paris Agreement’s targets and obligations and California, the fifth largest economy in the world, is taking a lead role in this. Other major states, such as Illinois, are also taking a firm stance on integrating ESG factors in their investment portfolios, both by demanding their investment managers live up to clear ESG criteria, but also by investing in impact bonds and funds.

Rodrigo Garcia, Deputy State Treasurer and CIO of Illinois, addressed the sceptics in the room and outlined several state and city-level initiatives aimed at combatting economic inequality and fighting climate change. The Treasurer of Chicago, Kurt Summers, spoke of being a young boy walking through impoverished city areas and not understanding why his neighbourhood was being neglected by public funds. Standing on the podium, he vowed to allocate funds to sustainable infrastructure projects, affordable housing, and green bonds.

As the week wrapped up and the programme wound down, the international investor community left with a hope that San Francisco could be remembered as the time and place where the US joined the fight against climate change and launched widespread initiatives to integrate ESG factors into their public and private investments.