Advisory Partners

The FT Moral Money Forum is supported by its advisory partners, High Meadows Institute, Planet First Partners and White & Case. They help to fund the reports.

The partners share their business perspective on the forum advisory board. They discuss topics that the forum should cover but the final decision rests with the editorial director. The reports are written by a Financial Times journalist and are editorially independent.

Our partners feature in the following pages. Each profiles their business and offers a view on navigating the road to net zero.

Partners’ views stand alone: they are separate from each other, the FT and the FT Moral Money Forum.

Getting to net zero: time to get serious about carbon capture
Chris Pinney, president and CEO, High Meadows Institute

As experts note in the article above, the chance of achieving net zero by 2050 with the current approach is poor. In terms of governments, the reality is that when COP26 convenes, only one country, the Gambia, will have met its Paris commitments according to the Climate Action Tracker. Many of the world’s most important players fall woefully short. While many large, publicly traded corporations have set ambitious net-zero goals, few have said how they will achieve them. Similarly, not many have backed up their commitment with targets within their executive compensation structure which could ensure meaningful headway.

Progress is further complicated by the fact that, in the absence of a coherent transition strategy, even the current levels of commitment to net zero could result in a social backlash, especially over rising energy prices. In 2018, rising fuel prices caused by a green tax led to the “yellow vest” protests in France. China and Germany, in particular, face energy shortages and price increases because the supply of renewable energy has failed to meet demand.

The reality of the net-zero challenge is that we have to accept that a carbon-based energy sector and related petrochemical industries will remain a key part of the industrial scene for at least the next 30 years. This is especially true for those in emerging markets that can least afford the cost of transitioning and are still trying to catch up with living standards in the developed world.

As forests burn from the US to Brazil to Russia, we must recognise that forest sequestration, a mainstay of carbon offset strategies, is not viable. We need to dramatically scale up investment in carbon capture and sequestration technology and reliable energy alternatives such as nuclear power. Without this, we cannot realistically meet our climate goals while at the same time ensuring social progress and stability.

Whether sending man to the moon or coming up with a Covid vaccine in record time, investment in innovation has proven to be vital.

Our task now is to create the same urgency and desire to invest in carbon capture. There are promising initiatives but we need more funding to refine ideas and carry out the tests to ensure that these can work at scale. We also need to continue to explore new technologies.

As Bill Gates said when he launched his non-profit Catalyst Breakthrough Energy, which involves a personal investment of $2 billion: “Half the technology needed to get to zero emissions either doesn’t exist yet or is too expensive for much of the world to afford.”

While private-sector players, from Amazon to Microsoft to Unilever, have pledged billions of dollars to help address climate change, a PwC study of the $16.3 billion of venture capital invested in climate tech in 2019 found that less than 5 per cent went to carbon capture technologies. Public sector investment probably has a similar proportion.

Now is the time to step up both public and private-sector investment in carbon capture technologies.

* High Meadows Institute’ views are separate from other advisory partners, the FT and the FT Moral Money Forum

The chain that links us all
Frédéric de Mévius, co-founder, Planet First Partners

A chain is as strong as its weakest link. In business this applies to the carbon chain, from supply to consumption.

Companies must now examine that chain to trace, calculate, report and reduce emissions if they are to live up to their ambitious net-zero targets by 2050 and guarantee the successful implementation of the Paris agreement.

Some links are easy to identify:
• precise measurement of emissions from cradle to grave of a product
• transparent emissions reporting to investors and regulators honest disclosure to
• action plans to reduce emissions to net zero and periodical report cards on progress.

Each step in carbon accounting raises complex challenges, not dissimilar to those faced by accounting nearly 70 years ago. In a similar track, but only recently, the world has agreed upon standardised criteria and protocols for carbon, enabling a concerted effort to measure, report and verify sustainability data.

Accounting for carbon-footprint and sustainability will require a new generation of professionals. It will not be enough to introduce a module into CFA Institute courses. New norms will need new approaches to train sustainability accounting professionals.

Their jobs will be hard. Unlike cash accounting, they will have to manage the nuance of local contexts and honest mistakes. Everyone, from supplier to consumer, will play their part in what will be a human chain of accountability and action.

Even calculating the scale of the problems will be tough. Take the example of a carmaker where the bulk of the GHG footprint is associated with materials that go into manufacturing (e.g., steel) and with the use of the car (e.g., fuel burnt in the engine).

Once we have clarity around the state of play we can act most efficiently, but it is clear that pressure from outside, from government and from private, strategic investment partners, has a huge role.

Ultimately, with genuine commitment enforced by active investors, companies can deliver on the transparency and completeness of data needed to tackle emissions.

As for regulators, the EU has taken strong steps forward with a new taxonomy and norms for disclosing sustainability data. There is also promise in the Fit for 55 package, a set of proposals to revise and update European legislation and deliver on Paris commitments by 2045.

The presence of active investors and forward-looking regulations explain partly why we see Europe as setting the pace for sustainable finance. This month Planet First Partners, which aims to put growth capital into companies that are better for the people and better for the planet, announced its largest investment to date, in Sunfire, a producer of ground-breaking green-hydrogen electrolysis technology. The Dresden-based company will become an important player in the decarbonisation of key industries, including steel and ammonium production, as well as high intensity transportation.

We adopt neither the doom and gloom position of “nothing can be done” to avert the climate collapse, nor the tech-miracle that envisages some illusory ‘business as usual’. As investors we have a clear mandate to test and strengthen the links of the decarbonisation chain wherever we invest.

* Planet First Partners’ views are separate from other advisory partners, the FT and the FT Moral Money Forum

Road to Net Zero
White & Case ESG Group

As COP26 approaches, companies are racing to enact climate policies. The message from investors and governments is clear: companies must mean what they say with regard to climate commitments.

Turning pledges into actionable targets makes economic sense but it is also essential for companies to be aware of the requirements of laws, regulations and rules that are designed to protect consumers from greenwashing.

The UK Competition & Markets Authority’s Green Claims Code is one example. Published in September, it commits to undertaking a full review of misleading sustainability and environmental claims from 2022 onwards. Similar initiatives have been put forward in the European Green Deal and 2020 Circular Economy Action Plan, with mandatory human rights and environmental due diligence also under consideration.

Preparing to reach net zero will require major corporate shifts – and companies will benefit most if they plan with diligence. In the UK, many businesses already know about human rights legislation, such as the Modern Slavery Act 2015. With its requirement for companies to say how they mitigate modern slavery and trafficking in their supply chains, the changes implemented could provide a template for climate-related issues in supply chains too.

Covid-19 has shown us that major corporate shifts can happen. As the pandemic transformed business relationships with employees, consumers, suppliers and the public, those companies that were willing to change came out on top. Now they must show flexibility to adapt to climate change, the next great challenge.

Reporting requirements will be the driver that ensures CO2 emissions go down. One of the main points of COP26 will be a discussion of the rules to implement the Paris Agreement, in particular those that will govern Article 6 on the use of credits or offsets to support a reduction in emissions.

Alongside initiatives such as the Taskforce on Scaling Voluntary Carbon Markets, the green financial systems promoted by Article 6, which focuses on oversight standards and core carbon principles, will help to reduce and remove emissions and accelerate the transition to net zero.

Establishing legal liability gives teeth to these mechanisms. Companies will be compelled to shift up a gear. In the landmark decision of Milieudefensie et al v Shell, a Dutch court ordered Shell to reduce CO2 emissions by 45 per cent by 2030 relative to 2019 levels. The decision against Shell could be the most far-reaching climate change litigation against a company so far. It will embolden other claimants to hold companies to account.

Alongside these external factors, change must occur within companies themselves, with shareholders encouraging long-term carbon reduction policies that will result in significant progress on the road to net zero

* White & Case’s views are separate from other advisory partners, the FT and the FT Moral Money Forum