ESG Essentials: UNFCCC’s wallet tightens and red-state investment funds withdraw billions from Blackrock

ESG CommsESG EssentialsLeave a Comment

UNFCCC feels its wallet tighten

The United Nations Framework Convention on Climate Change (UNFCCC) – the UN entity tasked with supporting the global response to the threat of climate change – is facing significant financial challenges that could jeopardise its mission, according to executive secretary Simon Stiell.

At a recent ministerial meeting in Copenhagen, Stiell highlighted the UNFCCC’s budget currently has less than half of the funding it requires – needing an additional €150mn over 2 years. This includes a €74 million shortfall in its core budget, which was agreed at last year’s COP28.

Financial constraints facing the UNFCCC coincide with mounting concerns that addressing climate change has slipped down the priority list for governments worldwide. The COVID-19 pandemic and energy crisis have strained finances, while the repercussions of climate change, such as extreme weather events, continue to escalate.

US Republican states withdraw $13.3 Billion from BlackRock in anti-ESG campaign

Republican-led states have pulled about $13.3bn from BlackRock since 2022 as part of a campaign to punish the company for insisting that climate change carries financial risk. That figure is roughly one-tenth of 1% of BlackRock’s $10tn assets under management.

The $13.3bn in withdrawals includes last week’s announcement by the Texas Permanent School Fund that it would pull $8.5bn at the end of April, the largest removal to date by Republican state pension funds.

The campaign started in 2022 after the West Virginia state treasurer included BlackRock on the United States’ first list of financial firms deemed to boycott fossil fuel companies. Texas, Florida, Missouri and other red states followed suit with anti-ESG initiatives and divestments.

Whilst these withdrawals are a drop in Blackrock’s ocean of finances, the investor recently stepped back from prominence in the CA100+ climate engagement in a sign that it is seeking to lessen scrutiny of its work to address climate change – which it believes is a material risk to its portfolio.

ShareAction Calls for Mandatory Corporate Reporting on Biodiversity Conservation

ShareAction, a London-based charity, has urged the UK to implement mandatory corporate reporting aligned with the Task Force on Nature-related Financial Disclosures (TNFD) recommendations. 

According to ShareAction’s paper, “From policy to preservation,” introducing legislation by the end of 2027 would support the UK Government’s commitment to Target 15 of the COP15 Global Biodiversity Framework and its mission to lead in nature conservation globally. Target 15 emphasises the importance of governments facilitating businesses to monitor, assess, and disclose their impacts on biodiversity through legal, administrative, or policy measures.

By fostering cooperation among stakeholders and providing regulatory support, the UK can strengthen its position as a leader in nature conservation and align its financial reporting practices with global biodiversity goals.

Global sea surface temperatures threaten marine biodiversity

Oceans have experienced 365 consecutive days of record-breaking global sea surface temperatures, raising concerns about climate change pushing marine ecosystems beyond a tipping point. 

Driven by human-caused climate change and the cyclical El Niño phenomenon, the warming could cause significant damage to ecosystems and cause major storms. The Atlantic hurricane season has the potential to devastate due to this sustained heat, even as El Niño system weakens to give way to the opposing La Niña weather cycle. 

The Atlantic Ocean absorbs 90% of the excess heat and energy released by GHG emissions. Concerns have been raised about the slowing of the Atlantic Meridional Overturning Circulation, the conveyor belt of circulation in the oceans, and its unknown consequences for habitable conditions on Earth.

Leave a Reply

Your email address will not be published. Required fields are marked *