toolkit has been released to support country efforts to engage the private
sector in the National Adaptation Plan (NAP) processes. The toolkit, released
by the NAP Global Network, is aimed at national governments and other
practitioners who are engaged in developing and implementing NAPs. Featuring
examples of best-practice from around the world, and a wide range of tools
including several developed by Acclimatise, the toolkit acts as a guide to
encourage the appropriate support of the private sector in facilitating
The toolkit also includes links to resources that help governments to integrate climate change into decision-making processes such as the Caribbean Climate Online Risk and Adaptation tooL – CCORAL – an online support system for climate resilient decision making, developed by Acclimatise for the Caribbean Community Climate Change Centre (CCCCC).
The NAP Global Network and the UNFCCC Adaptation Committee are hosting an interactive webinar about the toolkit this Wednesday 24th June 2020. Learn more and sign up below.
which business should be engaged in your climate change adaptation planning
processes: the smallholder farmer or the big banker? Or when should you engage
them: in the planning or implementation stage of the National Adaptation Plan
In this interactive webinar, your decisions will guide the story!
advisors will ask for your input at five important junctures of a case study.
The majority votes made by participants will impact the direction of the
story, as you collectively play the role of a government worker responsible for
the NAP process in a sunny and totally made-up island nation.
worry, we have a just the right guiding document to help with your decisions! This
webinar is all about demonstrating the applicability of our new toolkitdesigned
to help governments develop strategies to effectively engage private sector
actors in their country’s NAP process:
There’s little that the left and the right agree on these days. But surely one thing is beyond question: that national governments must protect citizens from the gravest threats and risks they face. Although our government, wherever we are in the world, may not be able to save everyone from a pandemic or protect people and infrastructure from a devastating cyberattack, surely they have thought through these risks in advance and have well-funded, adequately practiced plans?
Unfortunately, the answer to this question is an emphatic no.
Not all policy areas are subject to this challenge. National defence establishments, for example, often have the frameworks and processes that facilitate policy decisions for extreme risks. But more often than not, and on more issues than not, governments fail to imagine how worst-case scenarios can come about – much less plan for them. Governments have never been able to divert significant attention from the here and happening to the future and uncertain.
A recent report published by Cambridge University’s Centre for the Study of Existential Risk argues that this needs to change. If even only one catastrophic risk manifests – whether through nature, accident or intention – it would harm human security, prosperity and potential on a scale never before seen in human history. There are concrete steps governments can take to address this, but they are currently being neglected.
The risks that we face today are many and varied. They include:
Each of these global catastrophic risks could cause unprecedented harm. A pandemic, for example, could speed around our hyper-connected world, threatening hundreds of millions – potentially billions – of people. In this globalised world of just-in-time delivery and global supply chains, we are more vulnerable to disruption than ever before. And the secondary effects of instability, mass migration and unrest may be comparably destructive. If any of these events occurred, we would pass on a diminished, fearful and wounded world to our descendants.
So how did we come to be so woefully unprepared, and what, if anything, can our governments do to make us safer?
A modern problem
Dealing with catastrophic risks on a global scale is a particularly modern problem. The risks themselves are a result of modern trends in population, information, politics, warfare, technology, climate and environmental damage.
These risks are a problem for governments that are set up around traditional threats. Defence forces were built to protect from external menaces, mostly foreign invading forces. Domestic security agencies became increasingly significant in the 20th century, as threats to sovereignty and security – such as organised crime, domestic terrorism, extreme political ideologies and sophisticated espionage – increasingly came from inside national borders.
Unfortunately, these traditional threats are no longer the greatest concern today. Risks arising from the domains of technology, environment, biology and warfare don’t fall neatly into government’s view of the world. Instead, they are varied, global, complex and catastrophic.
As a result, these risks are currently not a priority for governments. Individually, they are quite unlikely. And such low-probability high-impact events are difficult to mobilise a response to. In addition, their unprecedented nature means we haven’t yet been taught a sharp lesson in the need to prepare for them. Many of the risks could take decades to arise, which conflicts with typical political time scales.
Governments, and the bureaucracies that support them, are not positioned to handle what’s coming. They don’t have the right incentives or skill sets to manage extreme risks, at least beyond natural disasters and military attacks. They are often stuck on old problems, and struggle to be agile to what’s new or emerging. Risk management as a practice is not a government’s strength. And technical expertise, especially on these challenging problem sets, tends to reside outside government.
Perhaps most troubling is the fact that any attempt to tackle these risks is not nationally confined: it would benefit everyone in the world – and indeed future generations. When the benefits are dispersed and the costs immediate, it is tempting to coast and hope others will pick up the slack.
Time to act
Despite these daunting challenges, governments have the capability and responsibility to increase national readiness for extreme events.
The first step is for governments to improve their own understanding of the risks. Developing a better understanding of extreme risks is not as simple as conducting better analysis or more research. It requires a whole-of-government framework with explicit strategies for understanding the types of risks we face, as well as their causes, impacts, probabilities and time scales.
With this plan, governments can chart more secure and prosperous futures for their citizens, even if the most catastrophic possibilities never come to pass.
Governments around the world are already working towards improving their understanding of risk. For example, the United Kingdom is a world leader in applying an all-hazard national risk assessment process. This assessment ensures governments understand all the hazards – natural disasters, pandemics, cyber attacks, space weather, infrastructure collapse – that their country faces. It helps local first responders to prepare for the most damaging scenarios.
Finland’s Committee for the Future, meanwhile, is an example of a parliamentary select committee that injects a dose of much-needed long-term thinking into domestic policy. It acts as a think tank for futures, science and technology policy and provides advice on legislation coming forward that has an impact on Finland’s long-range future.
And Singapore’s Centre for Strategic Futures is leading in “horizon scanning”, a set of methods that helps people think about the future and potential scenarios. This is not prediction. It’s thinking about what might be coming around the corner, and using that knowledge to inform policy.
But these actions are few and far between.
We need all governments to put more energy towards understanding the risks, and acting on that knowledge. Some countries may even need grand changes to their political and economic systems, a level of change that typically only occurs after a catastrophe. We cannot – and do not have to – wait for these structural changes or for a global crisis. Forward-leaning leaders must act now to better understand the risks that their countries face.
Fifteen Pacific island countries are part of the newly launched Pacific Adaptation to Climate Change and Resilience Building (PACRES) project under the Intra-African Caribbean Pacific (ACP) Global Climate Change Alliance Plus (GCCA+) Programme funded by the 11th European Development Fund’s (EDF). The EUR 12 million project aims to strengthen adaptation and mitigation measures at the national and regional level and support partner countries in climate negotiations and in implementing the Paris Agreement on climate change.
Jointly implemented by the Secretariat of the Pacific Regional Environment Programme (SPREP), the Pacific Community, the Pacific Islands Forum Secretariat (PIFS) and the University of the South Pacific, the project will also have a disaster resilience component. Some of the activities of the project, according to SPREP, include knowledge sharing, strengthening of networks, and trainings and research opportunities.
An inception and planning meeting for the project was held from 1-3 April 2019 at the SPREP Campus in Samoa.
The Cook Islands, the Federated States of Micronesia (FSM), Fiji, Kiribati, Niue, Nauru, Palau, Papua New Guinea (PNG), the Marshall Islands, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu and Vanuatu participate in the project.
Senators on the Senate Foreign Relations Committee have introduced a bill designed to increase the U.S governments’ understanding of the relationship between climate change and national Security. Brought forward on the 12th of March, The Climate Security Act of 2019 is wide ranging, examining the economic, environmental, and geopolitical impacts fuelled by climate change.
The Climate Security Act of 2019 was cosponsored by Senators
Ben Cardin (D-Md.); Jeanne Shaheen (D-N.H.); Chris Coons (D-Del.); Tom Udall
(D-N.M.); Chris Murphy (D-Conn.); Tim Kaine (D-Va.); Ed Markey (D-Mass.); Jeff
Merkley (D-Ore.); Cory Booker (D-N.J.); and Brian Schatz (D-Hawaii).
If adopted, the Act would create a new Climate Security
Envoy within the Department of State. The role would address climate security
vulnerabilities and serve as the primary federal contact for climate security
issues. The Climate Security Envoy would:
Work with climate scientists and security professionals to conduct analysis and risk assessments of the socioeconomic, geopolitical, and security risks associated with climate change.
Design climate security policies derived from those findings.
Develop and coordinate the application of climate security strategies that integrate climate policy seamlessly within the Department of State and across U.S. Embassies.
Develop and maintain relationships with other nations to address international climate security issues.
The Climate Security Envoy would also advise the President
of the complexities and dynamics of global security threats exacerbated by
climate. In addition, the bill would re-establish the Special Representative
for the Artic.
The bill comes at a time when the security risks of climate change are gaining national attention. The previous week, more than 50 former senior military and national security officials security officials, including former Secretary of State John Kerry and former Secretary of Defense Chuck Hagel, penned a letter to the President emphasizing the need to include climate change in national security planning.
The report provides a broad overview of the evolving
litigation risk landscape arising from the effects of climate change, identifying
some of the key themes, controversies and legal hurdles.
The authors suggest that the significance of this trend
should not be underestimated, with over 1200 climate change cases having been
filed in more than 30 jurisdictions to date. As both litigation approaches and
scientific evidence evolve, litigation increasingly represents a powerful tool
in the hands of those who seek to attribute blame for contributing to effects
of climate change or failing to take steps to adapt in light of available
In as much as the physical risks of climate change raise
both direct and indirect implications for a diversity of sectors, so too do the
associated legal risks. As Clyde & Co Partner Nigel Brook remarks, “As the
volume of climate change litigation grows and legal precedents build, new
duties of care are emerging and the liability risk landscape is undergoing a
shift which is likely to affect a wide range of commercial sectors”.
The authors classify litigation which has been emerging over
the last two decades into three broad categories:
1. Administrative cases against
governments and public bodies;
2. Tortious claims against
corporations perceived as perpetrators of climate change;
3. Claims brought by investors
against corporations for failing to account for possible risks to
carbon-intensive assets or for failing to account for or disclose risks to
business models and value chains in financial reporting.
The report also addresses novel approaches that claimants
are adopting when bringing climate litigation, as well as the practical and
legal considerations that these give rise to.
Finally, the report looks at global trends in climate
litigation and their implications for businesses in different industries around
the world, highlighting the issues which should be on companies’ radars over
the months and years to come. The authors indicate that climate change
litigation has already been deployed against companies beyond the oil and gas
majors and suggest that this trend is likely to continue.
Litigation has advanced far from being targeted at first line ‘emitters’ to being used as a means of holding companies accountable for how they respond to the physical and financial risks of climate change. Clyde & Co. plans to explore these liability risks in greater depth in future reports.
In August of 2018, members of the Energy Department in Punjab, Pakistan, investigated potential climate-related risks to a number of their projects using the beta version of a new online screening tool, the first of its kind in the country. While screening a project to install solar panels in schools across Punjab, officials realised that water stress and drought, projected to worsen with climate change, pose a serious risk to the successful implementation of the project. For one, they would not be able to properly clean the panels if no water was available. Additionally, as noted by Mr Sadaf Iqbal, Manager (Environmental and Social Safeguard), Energy Department, “poor water quality which could have destroyed the solar panel performance over the long term was not considered. The tool [could help project officers] to incorporate these key considerations in the design at the planning stage.”
While a number of national
and sub-national governments have sought to mainstream
climate change in development planning, Punjab is arguably the first provincial
government taking steps to proactively manage climate risks by screening for water-related
climate risks on a project-by-project basis, using an online tool. The Punjab
Adaptation to Climate Tool (PACT) is designed to help departments identify and
integrate climate considerations into project design, ultimately making their
investments more sustainable and resilient to a changing climate. Hosted by the
Punjab Planning and Development Department (P&DD), it is currently used by
3 departments: agriculture, irrigation and energy.
A PACT for what?
A highly flood prone
country, Pakistan has experienced heavy floods every other year
since 1992 (8 incidents in the period between 1992-2015). In 2010, the country
recorded its worst ever impacts from heavy flooding due to extreme monsoon
rains, incurring losses of 10 billion rupees
(PKR) (US $71
million), with at least 1900 deaths and around 160,000 square km of land inundated. The
short and long-term impacts of the 2010 floods made the government sit up and
take notice of a growing problem.
Like many countries,
Pakistan has climate policies and plans; the 2012 National Climate
Change Policy was followed by a Framework for Implementation in 2013. But a lack
of on-ground implementation led to the 2015 Lahore High Court judgement, in
which Judge Syed Mansoor
Ali Shah stated: “For Pakistan, climate change is no longer a distant threat – we
are already feeling and experiencing its impacts across the country and the
region. The country experienced devastating floods during the last three years.
These changes come with far reaching consequences and real economic costs.”
In a legal precedent
by national and international standards, the judgement directed all of the main
federal ministries and provincial level authorities to plan for managing
climate change impacts (internationally termed climate change
paving the way for PACT.
Climate change no longer a distant threat in Punjab
Climate change is already a reality in Punjab (see box). The High Court’s judgement provided political momentum for government officials to respond to climate change – yet they don’t always know how to respond. PACT is a step toward meeting this need, a first-of-its kind tool which systematically considers water-related climate risks in the project development process, enabling departments to proactively plan for the future.
Climate impacts in Punjab
Floods are not the only climate-related threat in Punjab and Pakistan. In spite of being drained by 5 rivers, Pakistan has the lowest per capita water availability in South Asia. The country is the 4th largest abstractor of groundwater globally; groundwater depletion and drought are its top-ranking climate-related risks. These are only set to worsen with projected temperature rise, altered precipitation patterns and river flows, coupledwith increasing demand for water to grow crops. Agriculture, which uses 88% of the country’s total water supply, will be especially hard-hit. In 2007-08, heavy rains, rising temperatures and water shortages reduced Pakistan’s agricultural sector growth rate from 4% to 1.5%. Extreme heat is another top climate concern. During the heatwave of 2015, around 1300 people lost their lives. On 30th April 2018, for the first time ever, Pakistan recorded a temperature of 50°C, the highest recorded in the month of April. Within Pakistan, Punjab is particularly vulnerable to the vagaries of a changing climate, facing long periods of drought, interspersed with flash floods, riverine floods and urban flooding. Punjab is Pakistan’s most densely populated province and the second largest in terms of area. Its land is predominantly floodplain, which has helped the province become an agricultural hub, accounting for 77% of Pakistan’s total area under agricultural production. On the other hand, this has greatly increased its vulnerability to flooding, particularly in the summer monsoon period when the volume of water in all five rivers rises. Floods lead to loss of human life and destruction of crops and land, with knock-on economic impacts.
How does PACT help manage climate risks?
PACT is a web-based
climate and water risk screening tool, developed specifically for, and in
consultation with the P&DD and the departments of agriculture, irrigation
and energy under the Action on Climate
Today (ACT) programme, in partnership with climate adaptation advisors Acclimatise and international and national experts.
The tool has been designed to fit within departments’ existing processes; Mr.
Nusrat Tufail Gill, Chief Environment & Climate Change, P&DD highlights
that PACT helps “to mainstream climate change in projects and include
adaptation during project development and planning stage.” Considering climate
risk becomes just another step in the project development cycle.
risk-based approach to climate adaptation, as recommended by the Intergovernmental Panel on Climate Change
(IPCC)’s Fifth Assessment Report (AR5), PACT is underpinned by the best available science on
climate change in the region and local stakeholder inputs. It includes 15
climate-related indicators, with a focus on water. Through an intuitive
interface, the tool asks project officers to answer a series of questions on the project’s characteristics
based on their experience and perception, without requiring climate change
expertise. The final result is a risk rating that indicates to what
extent achievement of the project’s objectives is at risk due to climate change.
The process of answering
PACT’s questions can yield insights into climate vulnerabilities that users may
not have previously considered. For
example, officers from the energy department, when testing the same project for
solar panels in schools, noted that cloud cover, linked to precipitation, decreases
the effectiveness of solar panels. As future climate change may mean more
frequent and/or heavy rain in certain areas of Punjab, this needs to be
factored into the project design.
PACT can help “identify climate resilient interventions and their
sustainability for development of climate smart irrigated agriculture projects
in the Punjab,” noted Dr Maqsood Ahmed, Deputy Project Director (Watercourses),
Punjab Irrigated-Agriculture Productivity Project (PIPIP), Agriculture
PACT also helps
departments make the best use of financial resources; as Dr Muhammad Javed,
Director Strategic Planning and Reforms Unit of the Irrigation Department
Lahore, noted, “by mainstreaming climate change, the cost of a project could
rise initially but in the long run, sustainability of the project would help
conserve financial resources.”
screening process, PACT points the user toward resources with more detailed
information on climate impacts and adaptation solutions. The aim is that over
time, departments will develop their own knowledge and capacity on climate
change adaptation, in part by using PACT.
On the road to climate resilience in Punjab
Political and legal
statements on climate change, like the Lahore High Court judgment, do not
always translate into action. There are several factors that have helped PACT
become a reality in Punjab. The P&DD took early interest and leadership in adopting
a screening tool, providing support throughout the development process. Nominated
individuals from the three pilot departments were also actively involved in the
process, through testing and providing inputs at each step. Selected officials
were trained in the tool’s use from an early stage, which meant they could mentor
their own colleagues.
finalisation of PACT, P&DD will host it on their website, and has advised
all departments to use the tool within their project development cycles. Over
time, the aim is that the number of projects which consider climate change from
the design phase will increase, ensuring the sustainability and resilience of
projects and the communities they serve. While the tool has been designed with
the agriculture, irrigation and energy departments, it has the potential to be used
by other departments, as well as by non-government and private entities. The
tool can also be regularly updated as climate data improves in the region and
PACT functions as an
aid to decision-makers, enabling increased sustainability and resilience in project
planning, design and outcomes – a big step forward in terms of proactively and
systematically responding to climate change. The Government of Punjab has
established itself as a pioneer in the region by investing in building climate
change capacity in sectoral departments, setting an example for other national
and sub-national governments in South Asia and around the world.
For more information about PACT, please contact Arif Pervaiz (email@example.com)
Cover photo from Asianet-Pakistan / Shutterstock.com
With the Arctic heating up twice as fast as the rest
of the world, the borders its sea ice once protected are being left exposed. That
so-called unpaid sentry is disappearing fast, giving way to not just new shipping
routes but also security challenges countries in the region are reacting to.
Sea ice in the Arctic is being lost at a staggering rate of over 10,000 tonnes per second, by 2035 the region could be ice-free during summer. Speaking to The Guardian, Klaus Dodds, professor of geopolitics at Royal Holloway, University of London, explained “The unique Arctic security architecture has shape and form that come from natural extremities. If the Arctic becomes just another ocean, this breaks down. It’s elemental.”
This is also the reason why military activity in the
Arctic is increasing: the prospect of a completely open water body is cause for
concern among countries that until recently relied on sea ice for securing
their northern borders. However, it should be emphasised that an increase in
military activity does not imply imminent conflict. Comparing the situation to
that in the South China Sea – where nations compete not through combat but by
demonstrating presence – former Norwegian defence minister Espen Barth Eide
said “It’s not because there is an immediate threat, it’s that, as an area
becomes more important, it’s natural to have a heightened military presence.”
With national security concerns also comes an
increased sense of competition for the growing business interest in the region.
The Northern Sea Route from Asia to Europe can save ships up to 20 days travel
time as opposed to the Southern Sea Route (Suez Canal passage). Parts of the northern
passage historically have only been ice-free for two months each year. However,
as mentioned above, that is rapidly changing. Remote places like Tromsø in Norway
are becoming bustling tourism and business hubs. “Now we have a historically
strange situation with political and economic activity in the Arctic. So many
people are knocking on our door, including business and state representatives
from China, Pakistan, Singapore and Morocco,” said Tromsø mayor Kristin Røymo.
The receding ice is a massive game changer, especially for Russia. Not only does the country have the largest border in the Arctic region but must of the Northern Sea Route currently extends across Russia’s exclusive economic zone. As long as the ice doesn’t recede beyond that zone, Russia will get paid by anyone who uses that shipping route. But as sea ice recedes further, ships will be able to travel in international waters. China, an observing member of the Arctic Council since 2013, is one of the countries exploring this possibility and the potential for infrastructure investments in a “Polar Silk Road”, threatening the exclusive position Russia has been in historically.
In addition to the growing interest in the Arctic for its shorter shipping routes, oil & gas companies are sniffing their chance at exploring new oil and gas fields. Norway came under fire earlier this year for having approved over 80 new exploration licenses. At the Arctic Frontiers conference in January, environmentalists highlighted the dual role of oil as both a driver of climate change, which is heavily impacting the Arctic, and as a driver of increasing resource extraction in one of the most fragile and pristine environments on this planet. These tensions and the growing competition are also putting into question peaceful cross-border cooperation efforts that held up even during the cold war and regulated fishing, scientific research and even reindeer herding.
A new study by the Institute for Public Policy Research (IPPR) finds that human-induced environmental change is occurring at an unprecedented scale and pace. At the same time, the window of opportunity to avoid catastrophic outcomes and manage the resulting risks is closing fast. According to the researchers, politics and policies are failing to recognise this urgency, eroding the foundations that enable socioeconomic stability and threatening systemic collapse of 2008-proportions if not worse.
The climate is one of six main global systems that are being altered by human activity. The increase of greenhouse gases in the atmosphere is causing ocean acidification, melting ice sheets and sea ice, rising sea levels, and large-scale ecosystem changes. The ‘safe’ CO2-concentration boundary of 350 parts per million (ppm) has long been breached with levels currently fluctuating between roughly 405-410 ppm – the highest since the Pliocene 3-5 million years ago when average temperatures were about 2°-3° C higher and sea levels about 10-20 metres higher. And change is clearly already happening: the 20 warmest years on record since 1850 happened in the last 22 years. Last year’s devastating IPCC report highlighted this even more, emphasising large-scale change needs to happen now by reducing greenhouse gas emissions by 45% by 2030 from 2010 levels in order to avoid catastrophic warming.
The other systems being altered include ocean
acidification, biodiversity, land-use, the nitrogen cycle, and different forms
of pollution. Together with climate change, the human impact on these systems
has created an explosive new domain of risk. In the report, researchers write “this
new risk domain affects virtually all areas of policy and politics, and it is
doubtful that societies around the world are adequately prepared to manage this
The deterioration of natural systems significantly
amplifies and interacts with existing socioeconomic issues. The study compares
the potential risk of systemic collapse to the subprime mortgage crisis that led
to the 2008 financial crisis – the deepest recession since the Great Depression
in the 1930s. However, given that in this case we are talking about the very
environment we depend on for living as a species, the ramifications of systemic
collapse would be much more dramatic.
For example, migration from the Middle East and central and northern Africa is likely to increase as a result of longer droughts and extreme heat. In 2015, when migration caused by the Syrian war reached its highest numbers ever, European politicians found themselves completely overwhelmed by an arguably foreseeable situation of manageable proportions (there are roughly 1 million Syrian refugees in Europe, a continent of close to 750 million, with EU citizens making up roughly 70% of that). Climate change could increase refugee numbers tenfold and displace tens of millions of people. Laurie Laybourn-Langton, lead author of the study, said “There would be repercussions in Europe. Right-wing groups use the fear of migration, as we saw during the EU referendum in Britain. What is that going to look like when far more people are forced from homes due to environmental shocks? What does that mean for political cohesion?”
The report states that current policy efforts to grapple with these problems are not adequately focussed on all the different elements of environmental breakdown and completely miss the mark to provide transformational change to key socioeconomic systems. Societies are not robust enough to deal with the increasingly dire consequences of a breakdown.
The IPPR study is just the beginning of a larger project that, using the UK as a case study, will assess what progress has been made toward responding to environmental breakdown and develop policies that can help create a sustainable, just and prepared world by seeking to understand how political and policy communities can develop the sense of agency needed to overcome environmental breakdown.
Structural and cultural discrimination of women make
them more vulnerable to the impacts of climate change, however, they also lack
systematic representation as decision makers. Gender equality is essential for
transformational climate action, thus the involvement of women in it is key.
Women are disproportionately affected by climate change impacts in a number of ways. For example, a study from 2007 showed that the socially constructed gender-specific vulnerability of women that is built into everyday socio-economic patterns led to higher mortality during and after disasters compared to men. Surviving extreme weather events can leave women with a lack of resources to rebuild their lives, this can range from a lack of legal assets to not having rights to property. The less extreme day-to-day struggles of having to collect water or food also come with their own set of gendered challenges as women often get threatened and abused.
Framing climate change as a human rights imperative, a global security threat, and a pervasive economic strain, a Georgetown University study from 2015 looked specifically at the gendered dimensions of climate impacts and how women systematically suffer more severe health, economic, social, and physical consequences. The report also recognised women as critical agents of change who provide both creative and localised solutions for climate mitigation and adaptation, but who are, at the same time, systematically excluded from decision-making processes.
The UNFCCC is trying to counteract this systematic exclusion through a number of measures like, for example, the Gender Action Plan (GAP). Established at COP23, the GAP recognises that “there is a need for women to be represented in all aspects of the Convention process and a need for gender mainstreaming through all relevant targets and goals in activities under the Convention as an important contribution to increasing their effectiveness.” The Paris Agreement also mentions the importance of gender equality and women’s empowerment several times calling, for example, for gender-responsive adaptation and capacity building. Increasing women’s participation at the political level results in greater responsiveness to citizen’s needs, increasing cooperation across party and ethnic lines, and delivering more sustainable peace.
Finally, it is important to keep in mind how intersectionality adds fuel to the fire of gender inequality. Intersectionality, a term coined by Kimberlé Crenshaw, describes the way in which institutions of oppression (sexism, racism, ableism, classism, xenophobia, homophobia, transphobia, etc.) are interconnected and cannot be examined separately from each other creating very unique experiences for different people. For example, a wealthy white woman and a wealthy black woman can both experience sexism, but the black woman will in all likelihood experience racism on top of that, or even gendered racism; similarly, a disabled woman encounters completely different challenges than a non-disabled woman. But also, the examples outlined further above do not apply to all women, illustrating why the representation of women in decision-making processes needs to reflect their diverse experiences making sure we are creating solutions for all, not just the few.
European legislative institutions are making important progress toward facilitating a European financial system that supports the EU’s climate and sustainable development agenda. This is the second of a two-part series that reviews the legislative proposals, actions, and reports made by the European Commission, Council and Parliament in their efforts to facilitate a sustainable finance system. This article narrows focus to the progress made by the European Parliament (EP) and Council whereas the first part of the series covered the European Commission’s activities.
The EP has sent a clear signal to the finance sector and other stakeholders that it supports the Commission’s efforts in developing legislation on sustainable finance.In May 2018, following the release of the Commission’s Action Plan on Sustainable Investment, the EP passed a resolution on sustainable finance. The resolution emphasises the vital role of financial markets in the transition to a sustainable economy and the need for a policy framework to encourage investments into sustainable assets. The resolution passed easily with 455 votes to 87, (with 92 abstentions), indicating that Members of the European Parliament strongly back plans to align EU capital markets to long-term sustainable goals.
As discussed in Part 1 of this series, one of the main activities the Commission is focusing on is the establishment of a standardised sustainability taxonomy. The EP is currently also actively considering this legislative proposal. As it stands, the EP’s Committee on Economic and Monetary Affairs (ECON) and the Committee on the Environment, Public Health and Food Safety (ENVI) have issued a draft report on the sustainability taxonomy in November 2018. Amendments have been tabled and the wider EP will now consider the proposed regulation during its plenary session to be held from 25 to 28 March. Review in the European Council is happening in parallel and is ongoing, though very little information has thus far reached the public eye. This taxonomy will help in the governance of financial markets by building familiarity and consistency around climate-related investments.
Regulation on disclosures
The EP’s ECON committee is also reviewing regulation on sustainable investment and sustainability risk disclosures, which could have implications for financial institutions involved in pension investing as it could require additional disclosures. The legislative proposal centres around amending Directive (EU) 2016/2341 on the activities and supervision of institutions for occupational retirement provision, also known as IORP II. While the current Directive requires investment firms and insurance intermediaries providing advice to act in the best interest of their clients, there is no requirement for these entities to explicitly consider environmental, social, or governance (ESG) risks in their advice nor to disclose those considerations.
proposed regulation introduces additional requirements to existing elements of Directive
A dedicated and coherent disclosure framework on
the integration of ESG risks;
Such framework should be used by financial
intermediaries both in investment decision-making or advisory processes;
End-investors should receive coherent and
comparable disclosures on financial product and services relating to
sustainable investments and sustainability risks.
In autumn 2018, a draft report was released, and amendments were tabled within the ECON Committee. The ENVI Committee have provided its opinion and the ECON committee voted to enter into interinstitutional negotiations (trilogue) in November 2018. Trilogues between the European Commission, Council, and Parliament are ongoing. The wider EP will consider the proposed regulation during its plenary session, to be held from 15 to 18 April. In the Council, in December 2018, EU ambassadors agreed the Council’s negotiating mandate on the Commission’s proposal.
Tracking the progress and next steps
The wider EP will now begin the review of proposed regulations and amendments relating to both the sustainability taxonomy and disclosure of sustainability risks in spring 2019. The EP’s consideration of regulations relating to the sustainability taxonomy have been assigned procedure number 2018/0178(COD), and regulations relating to sustainability disclosures is procedure number 2018/0179(COD). The full status of both procedures can be checked on the EP’s Legislative Observatory system.
At the time of writing, only the regulations
relating to disclosure have entered trilogue. While European regulations are
still unfolding, the manner and speed with which lawmakers are considering
climate and sustainability disclosures provide a strong signal to financial
institutions. Those who are aware of and actively preparing for future
legislation in this space may be well placed when regulations drop. Getting to
grips with the voluntary TCFD recommendations could be a useful place to start
internal discussions and capacity building ahead of more formal regulations.
Acclimatise will be keeping a close eye on how this regulation progresses at the EU level and we will continue to reflect on its implications for financial institutions in Europe. Members of our team are actively engaged in providing technical expertise to the European Commission’s Technical Expert Group, which is developing a framework for the sustainability taxonomy.
Cover photo by Diliff/Wikimedia Commons (CC BY-SA 3.0): The Hemicycle of the European Parliament in Strasbourg during a plenary session in 2014.