How Green is Your Bailout? - POLITICO

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The coronavirus pandemic is about to show us the truth behind the ESG — Environment, Social and Governance — commitment of many companies.

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Despite facing massive economic turbulence, airlines cleared the way for the world’s civil aviation authority (ICAO) to adopt its carbon offset scheme, known as CORSIA, as planned last weekend. But Alexis Crow, head of PwC’s geopolitical investing practice, warns that for some companies, “their power to deliver” on climate change commitments “may be eroded” by coronavirus. To retain overall ESG credibility, Crow said it’s crucial for companies to consider how the social aspect of ESG is implemented if they are putting their environmental work on hold.

The U.S. private sector has so far led the way globally — for better and worse. American companies are helping more staff work from home than anywhere else, but they're also firing workers and refusing them sick leave in massive numbers. Some of the world’s richest companies (including Amazon) don’t offer sick leave to some staff, while billionaires who burnish their progressive image are asking staff to go on unpaid leave (Richard Branson’s Virgin Atlantic).

Companies and governments struggling to ensure an effective social contribution can turn to organizations like the Social Progress Index (SPI), a Washington, D.C.-based non-profit that sucks in data from all over the world to present open source quality of life indicators. Organizations from the European Commission to the Indian prime minister’s think-tank and local authorities around Silicon Valley are using SPI’s data to redirect their resources.

While SPI focuses purely on social data, CEO Michael Green says there are economic lessons to draw from the data. “Long-term economic success is built on strong social foundations,” he said, adding that “we can also point to a lot of supply chain risk” through social data.

With coronavirus now slamming into the American economy, and potentially trillions in bailout support about to become available, SPI has good timing with its next target: getting U.S. states and local authorities to see and address widely diverging levels of social progress. SPI gives Massachusetts scores of 64 in its index, and Mississippi just 27.

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HOW GREEN IS YOUR BAILOUT? By the end of next week, we will likely have more than $3 trillion in financial commitments on the table from governments around the world aimed at stabilizing the global economy.

While South Korea’s ruling party this week upped its existing plans for a Korean Green Deal in its platform ahead of an April 15 election, and a group of Democratic senators in the United States wants to place green conditions on airline bailouts, few have rushed to make green projects a feature of emerging stimulus and bailout plans. U.N. Secretary General Antonio Guterres has made green noises in the stimulus debate — ”we must keep our promises for people and planet” — but has no power.

Green skeptics on both sides of the Atlantic have wasted no time pushing for delays or cuts to climate initiatives. Czech Prime Minister Andrej Babiš wants Europe to “forget about the Green Deal'' and Poland requested the bloc’s carbon trading scheme be paused. Some U.S. oil refiners are preparing to ask the Environmental Protection Agency to postpone a government-mandated shift requiring retail fuel stations to sell only cleaner-burning gasoline to minimize air pollution in the warmer months, starting on June 1.

Wherever the economic stimulus money goes, it will dwarf the resources that have been on offer to stabilize the planet. Even at the height of global generosity, Ed King of the Global Strategic Communications Council (GSCC), a climate network, points out that rich nations pledged $100 billion a year in climate finance to poorer nations. They never delivered the cash. “After years of saying there was no cash, it turns out there is lots,” King said in an emailed statement.

CORONAVIRUS MEETS CLIMATE CHANGE MAILBOX Zack Colman asked two frontline players — Bill McKibben, activist and co-founder of 350.org, and Rep. Ryan Costello (R-Pa.) — what the pandemic tells us about the climate challenge.

“It means that we should always remember the physical world is, in a word, real — you can't spin or negotiate or compromise with the physics of climate change any more than you can with the biology of Covid-19 ... If we'd started 30 years ago we could have easily 'flattened the curve' of temperature rise. If you want to bail out oil companies, banks, and airlines, make damned sure that they're forced to commit to meeting the Paris targets. It means listen to scientists.” — Bill McKibben

“It means that the need to get our citizenry focused on the urgency and seriousness of the climate issue takes a backseat to the pandemic. The global pandemic demonstrates in very understandable terms that a problem on one continent will find its way to other continents, with serious economic and public health consequences.” — Rep. Ryan Costello (R-Pa.)

BIODIVERSITY IS DOWN WHILE DISEASE OUTBREAKS ARE UP: Hundreds of disease outbreaks occur each year. While the intense connections generated by globalization explain some of that disease spread, so do environmental shifts: namely loss of biodiversity and climate change. Deforestation has been linked to three out of every ten recent disease outbreaks. John Scott, Zurich Insurance’s head of sustainability risk, wrote for the World Economic Forum that climate change has altered and accelerated the transmission patterns of infectious diseases, such as Zika, malaria and dengue fever.

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COP OUT? Debate is raging in green networks about whether this year’s United Nations climate conference (known as COP26) can or should proceed in Glasgow this December. U.K. Foreign Secretary Dominic Raab tweeted: "It might be doable.” A decision is likely in June.

This week, COP26 President Alok Sharma and his team held virtual diplomatic meetings with South Africa and India but it's hard to see that scaling to 14 days of non-stop meetings involving 200 national delegations. China also has a huge biodiversity summit scheduled for October and deadlines to hit along the way.

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