War in Ukraine: a new world order in environmental agreements?

Newsletter #23

The Giant Plastic Tap installation at UNEA, Nairobi where governments agreed a resolution on a global plastic pollution treaty. Photo by IISD/ENB Photographer Kiara Worth.

Today’s newsletter looks at some of the big milestones in the 2022 environmental calendar as in-person meetings return, and what the war in Ukraine means for ESG.

In a clear sign that multilateralism is alive and well, the UNEA Assembly in Nairobi adopted a resolution on March 2 to end plastic pollution.

Did the war in Ukraine galvanize political will to rise above the concerns of competing sovereign states? Delegates called this moment our Paris. But, unlike the Paris Agreement, this treaty will be legally binding - despite efforts by some to get a voluntary agreement. Next steps? Two years of talks on a treaty which is expected to address the full lifecycle of plastics as well as the design of reusable and recyclable products and materials, signifying a shift from linear to circular economic models.

UNEA also delivered another big win - overshadowed by plastics but equally important - a new IPCC-style science-policy panel on chemicals and waste. This will allow scientific input in all 3 areas of the planetary crisis: climate, biodiversity and chemicals.

Amid the joy, a poignant reminder of the new world order unleashed by the war in Ukraine.

The representative for Ukraine expressed readiness to fight for the environment, “like we also fight for our future.” He condemned Russia’s invasion of Ukraine, noting that “when these international terrorists leave, we will rebuild our country,” and called on the international community to stand with Ukraine.

Photo by IISD/ENB Photographer Kiara Worth

The Russian Federation, for its part, said that for the past eight years, “war has raged in Eastern Ukraine with 12,000 people killed by Ukrainian soldiers and neo-Nazi units.” He emphasized that through the years, the Russian Federation sought a peaceful, diplomatic solution, while the international community stood silent, noting his country is trying to stop a war.

Photo by IISD/ENB Photographer Kiara Worth

Highlights from Green and Sustainable Finance

The IPCC dropped a new mega-report on February 28, the second installment in the current Sixth Assessment (AR6) cycle on impacts, adaptation and vulnerability.

Watch out for an upcoming podcast where we’ll explore what was new, controversial and also encouraging in this 3,500-page report, the result of years of work by 270 scientists from 67 countries, along with other experts, governments, and reviewers from around the world.

The final approval session for the Summary for Policymakers (SPM) - an arduous line-by-line negotiation of the text by the world’s governments, was also marked by war-related interventions. But, unlike in Nairobi, the representative for the Russian Federation surprised everyone.

Let me present an apology on behalf of all Russians who were not able to prevent this conflict (…) those who know what is happening fail to find any justification for the attack.

These are closed-door meetings, but media reports quoted participants widely on his intervention, which was clearly a heart-stopping moment.

👉 Svitlana Krakovska, the representative for Ukraine, made the explicit link between war, climate change and fossil dependency, according to participants quoted in media coverage.

Human induced climate change and the war on Ukraine have the same roots, fossil fuels, and our dependence on them.

Helen Thompson, Professor of Political Economy at Cambridge University, wrote a piece in Nature last week warning that the energy transition will not put an end the geopolitics of fossil fuels. She writes:

There is a discernible fear in Washington DC that an age of green energy will be the age of China. Renewables infrastructure depends heavily on rare-earth minerals, whose production China almost entirely dominates. Deng Xiaoping, a former leader of the Chinese Communist Party, once quipped: “The Middle East has oil and China has rare earths. (…) For the United States, playing catch-up on creating a domestic industry around the extraction of ‘tech metals’ has become a national imperative.

Thompson has just released a new book which is more than timely, looking at the history of energy, Bretton Woods and the 1970s, and today’s crisis of democracy. Disorder: Hard Times in the 21st Century

What’s ahead in 2022: Biodiversity, drylands and wetlands

There are 3 big COP (Conference of the Parties) meetings this year on the environment. In a way, they should be negotiated, administered and communicated together. Yet some get more air time than others - climate more than biodiversity, biodiversity more than drylands and wetlands.

If there’s one takeaway from the IPCC’s latest report, it’s a strong message about making the effort to work harder on these inter-connections.

For example, a signature concept of the report was “climate-resilient development”, the idea that you can focus on both development and resilience to climate at the same time.

Scientist Lisa Schipper, who led the chapter on this topic.

The development of the concept of “climate-resilient development” is the most exciting part of the report. While climate resilience was discussed in AR5, it was never framed as an explicit critical goal. (…)

The urgency of climate-resilient development was made even clearer by WG1’s conclusion in August last year that we are quickly nearing 1.5C. (…) while we have made great gains in adaptation, they are not sufficient and we are hitting both hard and soft limits in natural and human systems, and have evidence of maladaptation, it’s clear that we cannot adapt our way out of climate change.

As a result, we need to think strategically about combining adaptation and mitigation with sustainable development, and this is what we call climate-resilient development.

The oft-delayed meetings to prepare the final COP15 conference (Kunming, China, later this year) of the Convention on Biological Diversity (CBD) that will produce a new global framework on biodiversity are now in progress in Geneva this week.

The UN Convention to Combat Desertification (UNCCD) will convene its COP15 meeting in Abidjan, Ivory Coast in May.

👉 So what? This convention, established in 1994, is the sole legally binding international agreement linking environment and development to sustainable land management. It addresses the so-called “dry-lands”, home to some of the most vulnerable ecosystems and peoples, many of whom will be hard hit by food inflation resulting from the war in Ukraine.

The Ramsar Convention on Wetlands has its COP 14 meeting in November, and China is also the host - this time in Wuhan.

👉 This convention aims to halt the worldwide loss of wetlands (this includes peatlands, the largest natural terrestrial carbon sink) and to conserve those that remain. As such it requires a lot of transboundary wrangling, and international cooperation.

ESG and the war

Since February 24, many companies have pulled out of Russia or announced they will sell their stakes in Russian oil and gas companies, or are divesting from Russian shares, bonds and other assets.

Nearly 400 companies have quit so far, according to the Yale School of Management’s constantly updated list.

Professor Jeffrey Sonnenfeld, who created the list, says that it generated a lot of shaming power that pushed many companies to follow the early movers.

Many companies pulled out in response to employee outrage over the exposure of the firms to Russia, leaving billions of assets and revenue on the table, Sonnenfeld said.

More than 50 asset owners (pension funds, sovereign wealth funds, insurers) have divested from Russian assets, according to a list from Responsible Investor.

Many divestments are being driven by sanctions; you can track the increasing list of sanctions via a public tracker from shipping company Skuld.

Sanctions + moral outrage are sometimes insufficient to overpower the profit motive. For example, Swedish bank SEB AB decided to adjust their sustainability policy to match Europe’s new geopolitical reality by reversing a ban on investing in weapons.

From and beyond the podcast

As I mentioned earlier, our next podcast will be about the IPCC’s latest report on adaptation, impacts and vulnerability, talking with Lead Authors Joern Birkmann and Edwin Castellanos.

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