Monday Debate: Are renewables a ‘Get Out of Jail Free’ card?
Energy investors should not pretend that decarbonisation will be achieved only by a shift to renewables
Ultimately there is no other option than a mass reduction in energy consumption, so further focus needs to be placed on reducing energy usage, according to a leading sustainability investment expert.
In fact, energy investors should not pretend that decarbonisation will be achieved only by a shift to renewables, Duncan Higgins said.
The chief executive of Sustainable Trading stated that, on the perspective of the energy sector: “Renewable energy should not be just seen as a ‘Get Out of Jail Free’ card. We have to be more efficient with our use of energy.
“There's an EU goal of significant reduction in energy intensity by 2030. To create that efficiency the population needs to be using less energy for the same activities. We've got to electrify our transport network, we've got to electrify our homes instead of heating with gas. Not only do we have to transform the current grid to renewable energy, we've got to be really conscious about our use of that energy.”
The remarks were made at the EMEA Trading Conference, an event featuring those in the trading community looking to discuss the most pressing issues facing the institutional sector.
Also moderating at the panel discussion on ‘Sustainability: From Talking To Taking Action’ was Rebecca Healey, managing partner at fintech firm Redlap Consulting, who observed that measuring Scope 3 emissions was a “nightmare”, and that understanding and reporting emissions from the supply chain was “incredibly complex.”
Anthony Belcher, head of sustainable finance at ICE Group, said: “Understanding the impact of your investment portfolio or your bank can be very hard because the disclosures are not there in the same way as they are around Scope 1 and 2. You need to be reliant upon more modelling than direct disclosure in in Scope 3.”
No more wolves on Wall Street?
During the panel, Healey also considered the possibility that a renewed focus on ESG had “killed the Wolf of Wall Street”, though also acknowledged this responsible investment surge could be a greenwashing façade or even lead to “ESG fatigue” escalated by record oil and gas company profits.
Higgins said: “ESG is just good business. Investors are demanding the products. The employees are demanding that their companies change. Companies that don't meet the needs, either their clients or their employees, are not going to do well over the longer term.”
Across the world, Andrew Bowley, managing director and sustainability governance officer at Nomura, also spoke of how ESG is continuing to have a significant effect on attitudes towards responsible investing:
“I was in front of a CEO of big UK fund manager a couple of weeks ago, who was asking about the diversity data of Nomura in Japan, in terms of gender and the trajectory of societal change in Japan, and that's not a conversation I would have had any time in my career until now”, he said.