Less than a week has passed after the UN acknowledged that the Paris Agreement would come into effect on 04 November 2016, a worldwide network of more than 250 institutional investors (representing assets worth over $24 Trn) has released a guide on climate risk in the automative sector.
The guide sets out the threats facing the automotive sector and investor expectations for how these companies must shift gear to adapt their business strategies to address climate related risk and build a sustainable low carbon transport system for the future.
Launching Investor Expectations of Automotive Companies – Shifting gears to accelerate the transition to low carbon vehicles Stephanie Pfeifer, CEO for European investor network IIGCC said, “This guide signals a new area of concerted engagement between big investors and one of the most significant sectors when it comes to tackling the climate challenge. As a consequence of the Paris Agreement, investors expect regulatory frameworks affecting the automotive sector to become far more stringent, not least those governing vehicle fuel performance standards in the EU and elsewhere. Several automotive companies have already recognised they must increase capital expenditure in sustainable driving technology and product pipelines if they are to develop a climate resilient business model. Likewise, that they must engage with policy makers to ensure sustainability is placed at the heart of the industry’s future.”
Commenting on the guide, Dr Hans-Christoph Hirt, Co-Head of Hermes EOS, the stewardship team of Hermes Investment Management which led the drafting of the guide said, “Long-term investors want to ensure that automotive companies are prepared for the challenges stemming from climate change, new technologies, changing policies and shifts in demand caused by global trends. Investors expect the industry to embark upon a smoother route to future prosperity by developing and implementing long-term business strategies which are resilient to climate change and resulting regulatory shifts. Investors expect that such a strategy will feature board-level responsibility for climate change and sustainability, and emission reduction targets with challenging goals. Automotive companies should work together with policy makers to manage the shift to lower emissions vehicles and develop the new infrastructure required to deliver a sustainable low-carbon transport system.”
Chris Davis, senior program director of the Ceres Investor Network on Climate Risk said, “Strong fuel efficiency regulations are in the economic interest of the auto industry; acting as an insurance policy for automakers in the event of future fuel price spikes, and providing significant benefits to suppliers of fuel saving technologies.
A growing number of institutional investors recognise that climate change will impact their holdings, portfolios, and asset values in the short and long-term.
“To achieve sustainable returns for clients and beneficiaries, investors in the automotive sector must engage to ensure companies are prepared to thrive in a carbon constrained environment and support robust policy action sufficient to drive the transition to clean vehicles.”
Emma Herd, CEO at Investor Group on Climate Change and representing the Asia Investor Group on Climate Change said, “Established automotive companies are highly exposed to competition from new entrants responding to growing consumer demand for cleaner vehicles and smart transport services. Consumer demand, combined with targeted government support, is already driving a shift to lower emission fleets in Japan, India, China and South Korea. Auto makers in all regions have significant challenges beyond simply producing cleaner cars, trucks or buses. To show they can act in the long-term interest of investors and beneficiaries they must drive wholesale change across their manufacturing base and through every part of their global supply chains to shrink the carbon footprint of the entire industry.”
About the guide
Investor Expectations of Automotive Companies – Shifting gears to accelerate the transition to low carbon vehicles was developed by the Institutional Investors Group on Climate Change (IIGCC) with support from other investor networks in North America (Ceres’ INCR), Asia (AIGCC) and Australasia (IGCC) in the Global Investor Coalition ( http://globalinvestorcoalition.org/ ). It is intended to be used in tandem with Institutional Investors’ Expectations of Corporate Climate Risk Management (http://www.iigcc.org/publications/publication/institutional-investors-expectations-of-corporate-climate-risk-management ) and is the latest in a series of sector focused guides produced to support investor engagement with key sectors to curb carbon asset and climate risk. It joins existing guides addressing engagement with oil& gas, mining, and utilities companies.
This guide is intended to enable investors to engage with the boards of automotive (and component supply) companies about their efforts to re-think their business models and contribute directly to the development of more sustainable driving technologies in order to mitigate long term climate change related risks. The expectations in the guide go further than suggesting automotive companies should support compliance with 2°C regulatory regime. They call on auto companies to:
· actively engage with suppliers, governments and industry peers to innovate for zero emissions vehicles and supporting infrastructure
· close the gap between real world and emissions testing
· pro-actively adjust their business models to incorporate a long-term strategy that includes decarbonisation and the shift to providing mobility services and maintaining competitive advantage over peers
· invest substantially in sustainable driving technologies and product pipelines
· set meaningful targets and metrics to reduce greenhouse gas emissions in operations, fleet and supply chain.
· engage publicly with policy makers, investors and the rest of the sector to place sustainability at the heart of the industry’s future.
A Good Look At How Homes Will Become More Energy Efficient Soon
Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.
There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.
1. The Rise Of Smart Windows
When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.
If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.
2. A Better Way To Cool Roofs
If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.
Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.
3. Low-E Windows Taking Over
It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.
They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.
4. Magnets Will Cool Fridges
Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.
The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.
5. Improving Our Current LEDs
Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.
That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.
Maybe Homes Will Look Different Too
Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.
ShutterStock – Stock photo ID: 613912244
IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”
IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.
Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.
Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.
Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:
“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.
We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.
There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.
We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”