Reducing the Cost of Capital (Part I)

‘Ahead of the Curve’ in collaboration with SYSTEMIQ – Episode 4

“It’s not just what you say, it’s what you do. It’s very hard to get at that in the financial sector,” Anne Simpson, Managing Investment Director, Board Governance and Sustainability at CalPERS, the largest public pension fund in the United States tells us on the latest episode of ‘Ahead of the Curve’.

She might have been talking about the promise of wealthier countries to make $100bn of climate finance a year available to poorer countries, something that was promised at COP16 in 2009. A report at this year’s COP said that target would now be met by 2023.

“We need to see the $100bn as a floor, not a ceiling, and we’re already scraping to get there,” commented Katherine Stodulka (Partner, Sustainable Finance for SYSTEMIQ and Director, Blended Finance Taskforce), Simpson’s fellow guest on the podcast, who also explains how that $100bn will unlock greater sums of capital investment.

Simpson might also have been talking about around 100 of the 10,000 companies the CalPERS pension fund invests in, who were responsible for 85% of the emissions of their investees, despite “fine words” about the Paris Agreement. So what’s the problem? Why aren’t financial institutions being consistent in what they say and what they do?

Information is key; CalPERs were only able to identify the biggest carbon offenders in their portfolio with the help of think tank Carbon Tracker. Finance employees need to be incentivised to find ways for companies to tackle climate change, thinks Simpson – their performance bonuses should be linked to it. And there needs to be “climate competent” board members focused not only on profit, but on people and planet too.

Tune in for more ideas and for one example of how investors got board members at a well-known oil company changed to give them a shot at transitioning to a more climate-friendly future.

This episode is hosted by James Cameron, a Friend of COP26 and Senior Adviser to SYSTEMIQ. James is also a Senior Adviser to Pollination, Tulchan, and various other companies. He is also a Non-Executive Director to the Octopus Renewables Infrastructure Trust (ORIT) and Crown Agents and served as Chairman of the Overseas Development Institute (ODI). He is also an entrepreneur, barrister, and mentor.

Latest Episodes

Hydrogen and Carbon Capture Technology (Ep #3)

As the buzz around green hydrogen gathers steam, Andreas Gunst, Partner at DLA Piper, joins Lee Beck (Clean Air Task Force) to discuss its potential as a clean and renewable energy source, the latest developments in carbon capture, utilisation and storage technology, and the ways in which government and business must collaborate to accelerate the transition to a decarbonised energy sector.

Climate Litigation (Ep #2)

Increasingly the climate lobby is moving from the streets to the courtroom - but how can climate litigation accelerate government policies for a zero emissions future? In this episode, Paul van Zyl is joined by Alice Garton, Director of Global Legal Strategy at the Foundation for International Law for the Environment, to explore litigation and human rights law as a tool for climate action.

Just Transition & Human Rights (Ep #1)

What do we really mean by a just transition, what role does the law have to play, and how can we place indigenous knowledge at the forefront of climate decision making? In this episode, Paul van Zyl is joined by Yasmine Ahmed, UK Director of Human Rights Watch, and Tishiko King, a Torres Strait Islander and campaigner, to delve into these vital questions. They discuss what governments should be doing to protect the rights of at-risk populations, the Torres Strait islands ground-breaking court case against the Australian government, and why having a clean, healthy and sustainable environment is a human right