Mark Campanale (MC): COVID changed a lot. What it’s done is forced a huge contraction in the global economy. And that contraction has worked its way into energy demand. If we think of climate change as perhaps the big existential problem of our age, and certainly for the coming century, [Covid has] meant that people are looking at where energy is generated and the burning of fossil fuels which contribute to climate change. People have realized we can switch to clean energy: it’s cheaper, it’s more efficient, it’s cleaner. All those fossil fuel companies that used to dominate the S&P 500 like Exxon, their valuation has collapsed. Investors are fleeing the sector. And of course, the darling of the past year has been Tesla, the miracle of new technology. People are thinking: Well, actually, this changes everything; how we communicate, how we transport, what energy we generate, how offices function, etc. [The pandemic] has brought forward the peak in demand for fossil fuels. It has really tipped us over into the end days of the fossil fuel economy, giving us the freedom and hope to deal with climate change. Driving Change (DC): That’s a big claim. You really feel this is an inflection point. Would you say it’s brought forward the peak for energy demand? MC: I think energy demand is growing, particularly in the developing world. That will remain the case. But in the developed world, I think demand, particularly for fossil fuels, has peaked. The internal combustion engine car has almost certainly peaked. It looks like demand for oil has peaked. Demand for coal, globally, has almost certainly peaked, particularly in the western economies. DC: What about these reports that coal plants have been reopening, and new ones built in places like China? MC: Yeah, that’s true. But you need to look at their efficiency and how much of the time they spend on stream. A lot of these new coal fired power stations are only operating at 30-40% capacity. Part of the demise story is that they’re not achieving the revenues that a lot of the modelers forecast they would. Even in China, you’ve got dispatchable power from renewables getting onto the grid before fossil fuels. In many parts of the world, what counts is who’s getting onto the grid first, and renewables are getting on first. Some economists ask me: “Well, Mark, we’ve seen this before, we’ve seen something similar in 2008, when the economy contracted after the financial crisis only for energy demand, particularly fossil energy demand, to bounce back. So what’s different today? It’s very simple. What’s different is, renewables are cheaper. It’s cheaper across most parts of the world, if not all of the world, to generate power from wind, solar and battery storage compared to new build coal or new build gas. But soon, it is going to be cheaper to build new renewables than to continue to operate old coal plants. That switch I think will be the death knell for the traditional energy system.Soon, it is going to be cheaper to build new renewables than to continue to operate old coal plants. That switch I think will be the death knell for the traditional energy system.DC: So you really see this as an inflection point? MC: Demand for energy will grow back, particularly in the developing economies, but that demand is not going to be met from fossil fuels, it is going to be met with renewables. We’ve got far more renewable energy capacity being built today than traditional fossil fuels. The very simple reason for that is that the cost of production for renewables has dropped below that of fossil fuels. It’s a technology switch. Across the world, it’s cheaper to build wind and solar plus battery storage than it is to build new coal-fired power, and typically, often new gas power as well. And even in economies like China’s, when it comes to dispatchable power, renewable energy is getting onto the grid first. Renewable suppliers increasingly have first right to get their power onto the grid, ahead of fossil fuels. That’s making traditional fossil fuel capacity expensive to build, expensive to run. It’s just accelerating the demise of the old technologies. DC: You mentioned policymaking. Are you seeing in some of these stimulus packages that this time around policymakers are leaning towards the new technologies over the old technologies? Or is there still a default mentality of pouring money into whatever creates jobs and keeps the economy growing? MC: Good question. I’m going to give you an answer that’s broken into two halves, a good and a bad. The good news is there are many green stimulus packages, including at the European Union level. The French and the Germans have been driving it. Even the UK, which is preparing to Brexit, has a Green stimulus. If you look at the Biden election program, it does include a Green stimulus, and envisages a Green recovery. There are simply more jobs to be created in retrofitting clean energy and energy conservation than there are from fossil fuels. The bad news is in the purchase agreements used by central banks to stimulate the economy. They’ve been buying fossil fuel company bonds and high carbon company bonds at the same rate, or faster, than Green energy bonds. That throws a whole lot of cheap capital to fossil fuel incumbents. What that has done, including in the UK and the US, is turn the stimulus into a bailout of an industry that was teetering on the edge. I’m disappointed by central bankers, who had a lot of choices. They should have known better, but didn’t really think it through. As a consequence, we’ve got businesses that were on their last legs being bailed out by the taxpayer. No thank you. DC: So as you look forward, firstly to the next year and then beyond, what are you hoping that policymakers who care about fighting climate change will do? MC: We need everything from certainty around carbon pricing to certainty around green power and power purchase agreements. One bet that I’m thinking about is slightly technical, but needs to be talked about it. At Carbon Tracker, our analysis shows there’s around $30 trillion of fixed assets in the fossil fuel economy: pipelines, oil rigs, coal fired power stations, and coal mines. These are going to have to be written down, written off, aggressively depreciated over the next ten, fifteen years. Oil wells and the rest of the fossil fuel economy is going to become redundant. Currently companies are not putting aside the capital to deal with this. I want policymakers to make sure that the accounting profession actually does the write-downs, and does the stress tests. It’s a bit like going into the 07-08 financial crisis with those triple A mortgage-backed securities and insisting that they are still triple A. It is the same problem with fossil fuel assets; regulators and governments need to do something about it.We also need to see more clearly the endgame for fossil fuels. The world is continuing to invest in fossil fuels when we should be winding down the industry. The International Energy Agency reckons around $1 trillion is invested in fossil fuels annually. That has to stop. To do that we need to focus not so much on energy demand reduction – turning off the lights, switching to electric cars and so on (all good, of course), but on constraining the supply of fossil fuels. That’s why I and others have called for a Fossil Fuel Nonproliferation Treaty (fossilfueltreaty.org). Governments, policymakers, civil society and companies need to prevent all those projects that stand to take us above one and a half degrees [increase in average temperatures]. We’re gonna have to constrain supply, we’re gonna have to cancel licenses, cancel production. You may have seen the announcement from British Petroleum, one of the world’s biggest fossil fuel companies, that they are going to cut production by 40%. It was the first time I’d ever heard a CEO talk about this when Bernard Looney referred to the declining carbon budget limiting how much fossil fuels we can burn. The company wrote off $17 billion of fossil fuel reserves. But it needs to be more than BP; everybody should be doing it. That’s what I want to see policymakers focus on in the year ahead. DC: That is a big, big idea, the Fossil Fuel Non-proliferation Treaty. Is it something that could be announced and signed next year? Is it something that governments get? Also, is it still down to the government to lead, or can the private sector now be in the vanguard of this shift?It goes to the heart of this question: what’s the point of a retirement plan if there’s no planet worth retiring into?MC: The treaty idea has been driven by scientists, academics and civil society. You may ask, how good is that? Well, actually, the nuclear treaties of the 1970s were driven by civil society. NGOs and civil society were the first to go off and start counting missiles and then sat around the table and had them draw up the agreement to cut those huge missile reserves that the Americans, Chinese and Russians had. We have to do the same with fossil fuel. I do think it’s possible that it can happen. I spoke to somebody in the UK Government just last week, and they said, well, look, all policy has been focused on emissions reduction from the demand-side. Nobody’s thinking about supply, because the politics are really tough. But they added that this may not be such a bad thing, as there is space for fresh thinking and for governments to embrace new ideas. So I’m hopeful that this will get onto the agenda. As to private sector leadership, over the last two years individual private investors and investment institutions have mobilized regardless of government. There’s Climate Action 100, a coalition of the world’s largest investors, taking on the world’s top 200 polluters. It has a combined $46 trillion under management. It’s the biggest coalition that has ever been created of investors who are sitting down with management and challenging them to change. Now, the government didn’t tell them to do that. It was driven from the bottom-up, driven by individual policyholders of pension schemes, driven by trustees, driven by fiduciaries. It goes to the heart of this question: what’s the point of a retirement plan if there’s no planet worth retiring into? DC: How serious is this shift? Is it largely rhetorical, or is there something fundamental going on here? After the Paris Agreement, there were lots of business leaders and investors saying, yes, we’ve got to do this. But they also said that we mustn’t scare the fossil fuel industry, and that there needed to be a “just transition” with compensation to fossil fuel companies that lose from the shift to renewable fuels. MC: I think the level of ambition and expectation is now there. What people have told me about Paris is that in previous years of climate negotiations, you had power blocks – the business power block, lobbying, government not doing anything that’s damaging for jobs. Then you had the scientists and the NGOs saying, please do something. What changed in Paris was investors turning up en masse, saying to the governments that a strong climate agreement is in the interest of investors. They were coming as a counterforce to the narrative from the business community. People often make the mistake thinking that finance and business are the same thing. In fact the business community is often in conflict with the interests of the shareholders. Investors are starting to find their voice. There have been many shareholder resolutions on climate, and investor groups that were previously slow to act, like BlackRock, are fundamentally changing. BlackRock now is in favor of a progressive climate deal. That’s really the switch that we’ve seen. Finance saying, “Now, we’re going to stand for our own position and our own status as interlocutors in the climate negotiations by setting out the kind of climate agreement we want.” Finance is now increasingly on the side of the angels. Is it going to be enough? Fast enough? Well, one of the things we’ve worked on at Carbon Tracker, along with the UN Principles for Responsible Investment and others, is a concept we’re calling the “inevitable policy response”. People often think that governments are slow to act, and nothing is going to change. What we are saying to investors – and investors are agreeing – is that actually, there’s growing evidence of climate chaos: ice caps increasingly show signs of melting, forests are burning, 100 degree temperatures in the Arctic, London is a hundred degrees for three, four days in a row – unheard of. We’re saying it’s inevitable that governments will act, they won’t sit aside, because the public will call on them to act. We should expect governments to act and it’s that inevitable policy response that companies have to fear and investors have to ask for. People are not going to sit around and do nothing. That’s for certain. DC: So if policy response is inevitable, what is the policy that you would advise a policymaker to make their top priority over the next 12 months? MC: Switch the narrative from trying to constrain demand, – which I feel is a bit like boiling the ocean, telling a billion people to turn their lights off – to constraining supply. We know where the supply is coming from, who’s producing the fossil fuels. We know who it is. We know which projects are going to take us to above one and a half degrees. We know who‘s developing them and who owns them. Policymakers should be focused on getting an agreement that reflects the science. A Fossil Fuel Non-proliferation Treaty is the policy I really want people to think about today.
38: Mark Campanale - Sustainability, Planetary Boundaries, and Changing Capitalism
Impact Leaders - Sustainable & Impact Investment and Performance with Purpose
Mark Campanale is an award winning Sustainable Investment expert, the Founder & Executive Director of the Carbon Tracker Initiative and conceived the ‘unburnable carbon’ capital markets thesis. He has twenty-five years experience in sustainable financial markets working for major institutional asset management companies. Please listen to the episode to be inspired beyond any boundaries and read the “More about Mark Campanale” section at the end of these notes to learn more about his outstanding career and contribution to the financial markets and our society at large. Highlights: How can we change financial Markets for good? “There is an old saying: How do you change capitalism? You need to take control of the capital.” Mark’s (career) evolution and path to founding Carbon Tracker: Going to The University of York Crossing the Sahara Desert Becoming an analyst assessing projects for Live Aid Working on the first fairtrade coffee in Tanzania in1988 Pioneering green finance alongside Tessa Tennant founder of Merlin Ecology Fund Being one of the first “green analyst” in the City of London Investing in the first renewable energy business Knowing what you don’t like: Stop the city protest Inspiring women leaders in the industry How global warming motivated Mark to find solutions through the world of finance. Xtrata’s IPO and the lack of sustainable impact information on their documentation. The long list of supporters, advocates and funders of this movement “In the same way that Bill McKibben with the divestment movement managed to change everything, Mark Carney carried this message into the world of financial markets regulation has changed everything.” Re-thinking the purpose of finance: The future of the planet, the security of the financial system and pension schemes. Paris Climate agreement: Investors are absolutely aligned with a safe outcome. The analysis of ecological boundaries and its financial impact “Four or five hedge funds are now shorting the fossil fuel industry and going long on the clean economy. I think we are going to see a lot more of that in the future.” “Everyone that has sold out of the fossil fuels sector or shorted it in from 10 years ago has done extremely well, both on a relative and absolute basis … but we need a forceful intervention”. Using Satellites and AI to help cut carbon emissions: Transparency is a crucial element of accountability. Trying to alert the world of an urgent challenge Time Stamp:[01:14] Who is Mark Campanale - An introduction to his Bio[05:25] What is sustainable and impact investing? Intention and boundaries?[08:03] What ignited Mark’s passion in sustainable finance?[17:50] Background 10 years story of how Carbon Tracker started and materialised - including funding[24:00] Wasted Capital and Stranded Assets: coining the phrase together with Unburnable Carbon [26:00] Ideas are a cursed and the purpose of markets[28:00] Working with investors and educating the market, including Pension Trustees[31:00] Bill McKibben, Mark Carney, and their impact [34:00] The role of the private sector: investors, shareholder, fiduciary duties and pension funds[36:00] The network of initiatives linking into Planet Tracker and measuring the impact on Ecological boundaries[40:00] Supply chain: Fish stock as natural capital, deforestation, agriculture and meat production[42:00] Climate Action 100 and its $46trn coalition and the change on valuations[45:00] The need for a forceful intervention to close the Fossil Fuels sector[46:00] The role of firms such as Share Action and Litigation Funds [48:00] Using AI to create transparency and accountability on Carbon Emissions reporting [49:20] What impresses Mark about Impact Leaders[52:00] Call to actionUseful links:Mark Campanale - https://www.linkedin.com/in/mark-campanale-1886203/Carbon Tracker - https://carbontracker.org/Unburnable Carbon - https://carbontracker.org/resources/terms-list/Planet Tracker - https://planet-tracker.org/Robin Millington - https://www.linkedin.com/in/robin-millington-60036817Robin Millington - https://planet-tracker.org/about-us/the-team/Tear Fund - https://www.tearfund.org/University of York - https://www.york.ac.uk/Tessa Mary Tennant OBE - https://en.wikipedia.org/wiki/Tessa_Tennant Jupiter Ecology Fund - https://www.jupiteram.com/UK/en/Individual-Investors/Funds-and-Prices/Jupiter-Ecology-FundStop The City protests - https://en.wikipedia.org/wiki/Stop_the_CityAnne Simpson - https://www.linkedin.com/in/anne-simpson-a3024328CalPERS - https://www.calpers.ca.gov/page/investments/about-investment-office/investment-office-senior-team/anne-simpsonClimate Action 100 - http://www.climateaction100.org/Waste Recycling Group (Now FCC Environment) - https://en.wikipedia.org/wiki/FCC_EnvironmentAsia Energy - https://en.wikipedia.org/wiki/GCM_ResourcesXtrata - https://en.wikipedia.org/wiki/XstrataGlencore - https://www.glencore.com/Jeremy Leggett - https://jeremyleggett.net/Rockefeller Brothers Fund - https://www.rbf.org/Joseph Rowntree Foundation - https://www.jrf.org.uk/Green Peace - https://www.greenpeace.org.uk/Friends of the Earth - https://friendsoftheearth.uk/Christian Aid https://www.christianaid.org.uk/James Arbib https://uk.linkedin.com/in/james-arbib-6883973aNic Hurd - https://en.wikipedia.org/wiki/Nick_HurdZac Goldsmith - https://en.wikipedia.org/wiki/Zac_GoldsmithLord Stern - https://en.wikipedia.org/wiki/Nicholas_Stern,_Baron_Stern_of_BrentfordFinancial Times article: “A profound contradiction at the heart of climate change policy” https://www.ft.com/content/52f2709c-20f0-11e1-8a43-00144feabdc0 Bill McKibben - https://en.wikipedia.org/wiki/Bill_McKibbenRolling Stone magazine article: “Global Warmings Terrifying New Math” - https://www.rollingstone.com/politics/politics-news/global-warmings-terrifying-new-math-188550/Mark Carney - https://en.wikipedia.org/wiki/Mark_CarneyMark Carney’s Tragedy of the Horizon Speech - https://www.youtube.com/watch?v=V5c-eqNxeSQTask Force on Climate-Related Financial Disclosures - https://www.fsb-tcfd.org/Ellen Dorsey, Wallace Global Fund - http://wgf.org/ellen-dorsey/Natasha Landell-Mills, Sarasin & Partners - https://sarasinandpartners.com/stewardship/Saker Nusseibeh CBE - https://www.hermes-investment.com/ukw/team-members/saker-nusseibeh/https://www.icgn.org/speakers/saker-nusseibeh-chief-executive-officer-hermes-investment-managementOak Foundation - https://oakfnd.org/Frederick Mulder Foundation - http://www.frederickmulderfoundation.org.uk/Steve Waygood, Aviva Investors - https://www.avivainvestors.com/en-gb/about/our-people/s/steve-waygood/Tzeporah Berman, Fossil Fuel Non-proliferation Treaty https://en.wikipedia.org/wiki/Tzeporah_BermanAristata Capital - Litigation Fund - https://www.aristata.co.uk/Watt Time - https://www.watttime.org/Gavin McCormick - https://www.linkedin.com/in/gavinmccormickKey Articles:Financial Times article: “A profound contradiction at the heart of climate change policy” https://www.ft.com/content/52f2709c-20f0-11e1-8a43-00144feabdc0 Rolling Stone magazine article: “Global Warmings Terrifying New Math” - https://www.rollingstone.com/politics/politics-news/global-warmings-terrifying-new-math-188550/Bloomberg article: Stranded Assets’ Risk Rising With Climate Action and $40 Oil. https://www.bloomberg.com/news/articles/2020-08-11/why-climate-action-40-oil-create-stranded-assets-quicktakeHow AI and satellites can help cut emissions | The Leonardo DiCaprio Foundation - https://www.leonardodicaprio.org/how-ai-and-satellites-can-help-cut-emissions/Al Gore and Gavin McCormick - CEO of WattTime - announced the launch of a New coalition called “CLIMATE TRACE” — which stands for “Tracking Real-time Atmospheric Carbon Emissions” - https://medium.com/@algore/we-can-solve-the-climate-crisis-by-tracing-pollution-back-to-its-sources-4f535f91a8ddMore about Mark Campanale:Mark was a co-founder of some of the first responsible investment funds, firstly at Jupiter Asset Management in 1989 with the Ecology Funds, NPI with Global Care, the AMP Capital Sustainable Future Funds, and Henderson Global Investor’s Industries of the Future Funds.Mark served on the World Business Council for Sustainable Development working group on capital markets ... leading up to the 1992 Earth Summit; was a Member of the Steering Committee of UNEP Financial Sector Initiative (1999-2003) and continues to advise a number of financial institutions including Tribe Impact Capital and Consilium Capital. Mark is a Founder Director of the UK Sustainable and Responsible Investment Forum (UKSIF), 1990-2006, is a member of the Advisory Council of ImpactBase.org; a member of the Advisory Board of the Gordon and Betty Moore Foundation’s ‘Conservation and Markets Initiatives’; a member of UNCTAD’s Sustainable Stock Exchange’s Green Finance Advisory Group; and is the Hon Treasurer of The Rainforest Foundation UK. Mark was also Founder of the Social Stock Exchange, funded by the Rockefeller Foundation and more recently Big Society Capital.--------Connect with JP Dallmann on Linkedin, Twitter, or Instagram.Contact us to help you transition into Sustainable & Impact Investing - ILA & Partners How to incorporate SDGs into your business model - Fast Forward 2030 Impact Leaders is produced by Podcast Publishing--------Important:The content shared on this podcast does not constitute a request, offer, recommendation or solicitation of any kind to buy, subscribe, sell or redeem any investment instruments or to perform other such transactions of any kind.
IB Green Minds #26: In conversation with Mark Campanale
Imperial Business Podcast
This week, Chloé chats with Mark Campanale, Founder of the Carbon Tracker Initiative. They discuss the carbon bubble theory, the financial risks posed by stranded assets, and the way forward for oil and gas companies.
72 Mark Campanale Matt McLuckie, the hidden risks in the food and ag system any investor should know
Investing in Regenerative Agriculture and Food
An episode with Mark Campanale and Matt McLuckie of Planet Tracker, a non-profit financial think tank focused on planetary limits and financial markets e.g. fisheries, water and textiles.----------------------------------------------------------Welcome to Investing in Regenerative Agriculture and Food.Join our Gumroad community, discover the tiers and benefits here: www.gumroad.com/investinginregenag. Other ways to support our work:- Share the podcast - Give a 5-star rating- Or buy us a coffee… or a meal! www.Ko-fi.com/regenerativeagriculture. ----------------------------------------------------------- Planet Tracker’s focus is on global industry sectors defined by significant investment flows and revenues in the context of the planetary boundaries that are most threatened. This includes regional and global industry sectors such as agri-business, plastics and textiles. As natural capital declines, Planet Tracker is working with capital markets to measure the extent to which macroeconomic health, also referred to as sovereign health, depends on the sustainable management of natural capital. Through the lens of agriculture, Planet Tracker is assessing how declines in natural capital create increased credit risks for sovereign investors. In agriculture-based economies, declines in natural capital can decrease production, impacting industry revenue, tax contributions, employment and soft commodity exports, resulting in falling treasury receipts including of foreign currency. Find all notes and show notes here:www.investinginregenerativeagriculture.com/2020/02/05/mark-campanale-matt-mcluckie. ----------------------------------------------------------- For feedback, ideas, suggestions please contact us through Twitter @KoenvanSeijen, or get in touch through the website www.investinginregenerativeagriculture.com. Join our newsletter on www.eepurl.com/cxU33P. The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.How to raise $10M to finance radical transitions for farmers?April 20th 17:00 CEST Register here Support the show (https://www.gumroad.com/investinginregenag)
CEO of Carbon Tracker Mark Campanale joins Daniel Murray for Five Degrees of Change, the energy and environment podcast from the Business Post
Five Degrees of Change
Mark Campanale is CEO of Carbon Tracker, the financial think tank that interprets the financial realities of the energy transition. Carbon Tracker is a hugely influential body. It has led the charge on convincing investors around the world to divest of their fossil fuel assets. It was Carbon Tracker that coined the term ‘carbon bubble’ when it produced a paper in 2011 concluding that there were more fossil fuel reserves in there world than could be safely burned according to the best climate science. That reported gained a cult like status after Bill McKibben used it as the basis for an article in Rolling Stone magazine. Carbon Tracker and Campanale then went on to coin the phrase ‘stranded asset’ which conceived that fossil fuel assets could become worthless in the coming years if the clean energy transition began to gather pace. The term is now a regular part of financial market jargon and the concept has led to investors around the world reconsidering the long term value of their fossil fuel assets.
Episode 77: Interview with Mark Campanale, Founder of Carbon Tracker Initiative
The Sustainability Agenda
In this interview with Mark Campanale, we discuss divestment from coal, oil and gas and the carbon bubble. Mark asks the important question, if we can’t even burn all the reserves of fossil fuel companies, why are we still investing in their expansion, which could end the world as we know it? Stock prices are not properly valuing the climate risk. He goes on to describe the substantial momentum that has begun to take hold, with many taking a step up to voice their concerns and divest by moving their investments to clean energy technology or simply away from coal, oil, and gas. Over 8 trillion dollars of investments have announced divestment.Momentum around climate risk still varies a lot by geography, and some still think that only the government can solve the issue. Fortunately more and more are saying we can’t wait for the government and we must act now. What we need companies to act responsibly, and incorporate climate risks into their goals and bottom line. We need a steady change to a low carbon future to avoid the bubble bursting.Mark Campanale is the founder of the Carbon Tracker Initiative, a non-profit think tank launched to pinpoint with clarity how global capital markets have failed to deal with climate risk. Mark developed the unburnable carbon capital markets thesis, the idea that there are substantial fossil fuel energy sources that cannot be burnt, if the world is to adhere to the necessary carbon budgets to limit global warming. Mark commissioned and was editor of the “Unburnable Carbon – Are the World’s Financial Markets Carrying a Carbon Bubble?” report that launched launched in 2011. The post Episode 77: Interview with Mark Campanale, Founder of Carbon Tracker Initiative appeared first on The Sustainability Agenda.
Paul's guest this week is Mark Campanale, founder of the Carbon Tracker Initiative. They delve into Mark's childhood in the Italian countryside, the importance of aligning capital markets with the realities of climate change, and how his recent trip to the Vatican will affect the future of the energy industry.
Mark Campanale - The author of Fat Business Man: A Cautionary Tale and the soon to be released book Fit Dad Cooking, Mark Campanale shares his powerful story of triumph over his weight issues and the challenges he's encountered as a direct result of his personal pursuit of health.