Welcome back to the Climate Nexus finance newsletter – a regular update that looks at the big stories and players at the intersection of climate change, finance, regulation, and energy, with tips for the week ahead.
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Fed climate scenarios – it’s not narrow or nothing
The Fed’s pilot climate scenario analysis faced criticism last week as experts pored over the details of how the central bank plans to assess climate risks. Former Fed Governor Sarah Bloom Raskin described the pilot as “extremely narrow” with its focus on a small number of physical risks to the economy, as opposed to wider knock-on effects that can be expected from the transition towards clean energy. Ceres published a detailed description of what a holistic and useful approach could look like, including transition risks, broadening how physical risks are assessed beyond credit, and looking at the interaction of different types of risk – in essence, making the pilot look a little more like the real world and the real economy.
Will Carlyle’s new CEO be honest about emissions?
The Carlyle Group, a private equity firm plagued by succession drama, just unveiled Harvey Schwartz as its new CEO. The former Goldman Sachs exec comes back after a five-year hiatus from Wall Street spent “practicing guitar, karate, biking and meditating on the West Coast.” Normal, working people activity. In last week’s earnings call, Carlyle co-founder William Conway sought to reassure shareholders that the new hire should help with fundraising, an area where Carlyle has fallen behind.
And here’s something interesting: The earnings call affirmed Carlyle’s ongoing interest in energy investments, including a new oil & gas fund (Natural Resources XIII) being raised by subsidiary NGP that has Carlyle “excited about the opportunities.” No surprise that Carlyle earned a failing grade on the PE Climate Risks Scorecard due to its extensive and continuing fossil fuel investments.
Ramaswamy 2024
The right’s favorite anti-ESG culture warrior surprised no one by making appearances in Iowa and New Hampshire to explore a presidential run. Ramaswamy, who has quickly become relevant through mainstream outlets’ coverage and embraced by GOP ranks after working with a well-funded right-wing effort, is currently assembling a team of Republican operatives and former campaign advisers.
IRA means we need Scope 3
Public Citizen, Americans for Financial Reform Education Fund, and Sierra Club filed a new comment with the SEC, arguing the Inflation Reduction Act strengthens the case for including Scope 3 emissions – for example, the emissions caused by burning gas to run a car would be attributed to an oil company – in the agency’s proposed climate disclosure rule. The comment warns that Scope 3 emissions are an indicator of a company’s resilience and that an investor without access to holistic emissions data is at a major disadvantage. Thousands of companies are already reporting on Scope 3, and international auditors are building the capacity to certify them – with the International Sustainability Standards Board (ISSB) requiring them in its new climate disclosure standard expected to be adopted in jurisdictions worldwide.
Feb 15: Senate Budget Committee, hearing to examine the economy-wide impacts of climate change featuring Mark Carney and Bob Litterman.
Feb 23: As You Sow and Corporate Knights releases the 10th update of the Carbon Clean 200 report. Register here for the webinar.
Mar 22-24: Join Ceres Global and industry leaders from high-emitting sectors to examine the greater corporate ambition and accountability that is needed to drive sectoral action and transition to a more stable, just, and climate-resilient economy. Register here.
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