Climate-led Impact Leading
“A code red for humanity.” That’s what the UN Secretary General called the latest UN Climate Report.1 Finally, climate change has captured the world’s attention. And for good reason. Forest fires have been raging and weather events and flooding have increased in intensity. During NYC’s recent Climate Week, world leaders, companies, environmental advocates, and investors gathered to urge for ambitious climate action.
At Domini, we’re on a mission to seek to harness the power of finance to create a greater and greener world. And while being recognized for our efforts is not the goal, we’re proud when it happens from time to time. Our Bond Fund, which makes investments directly into communities to advance meaningful environmental change, recently received the 2020 Environmental Finance Award (fixed income fund).
Acknowledgement or not, we continue to uphold our commitment to addressing climate change by seeking companies that are developing innovative models, engaging to encourage change where we feel we can make a positive impact or our voice is needed, and strengthening our commitment to advancing the UN Sustainable Development Goals. After all, climate change has systemic relevance across portfolios, and in this moment, its intersection with health, well-being, human rights, livelihoods, global stability, and equity is clear. When we invest with an awareness that environmental, social, and financial systems are linked, we can create positive outcomes for portfolios—and for people and planet too.
Strong, effective public policy and investment from government at the international, national, and state level are essential to address climate change’s urgency. So we’re glad to see that governments are evaluating and accelerating their commitments. U.S. lawmakers have recognized the need for climate action in their next budget. Their most recent discussions have recommended 80 percent clean energy by 2030, on the path to 100 percent clean by 2035– with incentives for utilities, clean energy tax credits, EV charging stations and truck electrification, and fees on oil and gas.2 These initiatives will ensure U.S. policy meets its commitments in the Paris Agreement, in anticipation of November’s 26th United Nations Climate Change Conference of the Parties (COP26) in Glasgow.3
Investors are collectively sending signals that we believe ambitious COP and biodiversity commitments as well as strong emissions standards for trucks in the U.S. are in the best interests of society and our long-term financial success. We had spearheaded a letter to California Governor Gavin Newsom, encouraging him to sign the CA Deforestation Free Procurement Act into law. While disappointed this did not move forward, we will continue to press for state actions that will incentivize deforestation-free procurement.
We also joined 587 investors in the Global Investor Statement to Governments on the Climate Crisis, calling for increased ambition in climate targets to ensure a transition to net-zero emissions by 2050 or sooner, as governments prepare to gather for the climate talks in November. Noting the complementary objective to support biodiversity in advance of COP 15 on the Convention on Biodiversity4, we signed an investor statement calling for ambitious and transformational frameworks to meet this biodiversity goal.
As Amy Domini says in her forthcoming essay book, Thoughts on People, Planet, & Profit, “Together, we can each do something. And this, in the end, is everything.” True to our beloved founder’s words, we’re doing and continuing to do everything we can to allocate our capital and use our voice, as leaders and in collaboration with other investors, to create the greener and greater world we want to see. While the work is relentless, we know that when we collectively act with intention, we can do more together than we ever could alone.
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