Forbes.com, 15 June 2019
On June 12-14, about 70 executives from the energy industry and investors met at the Vatican in Rome to deliberate on the theme “The Energy Transition and Care for Our Common Home”. Organized by the Vatican and the University of Notre Dame, this quite amazing dialogue, the second of its kind, was both frank and fruitful, despite some differences along the transatlantic divide.
Agreement was reached on two joint statements, a statement on carbon pricing and a statement on the importance of transparency and climate risk disclosures, the latter in alignment with the recommendations of the Task Force on Financial Disclosure of Climate Risks (TCFD). These two statements will certainly help to improve investor-business dialogue and inspire more political accountability and actions.
Notably titled “Existential Risks Versus Disruptive Transformations”, the dialogue was framed within the latest climate science. A sense of urgency and nervousness prevailed among the participants as the Potsdam Institute for Climate Impact Research presented evidence of global warming and changes in the earth system that supports human life.
The hearts and minds of all participants were touched by Pope Francis’ address and his subsequent wide-ranging interactions with the participants. The Holy Father reiterated his view, previously expressed in his encyclical letter Laudatio Si, that “we have failed to listen to science” and that “any discussion on climate change and energy transition must be rooted in the results of the best scientific research available today, letting them touch us deeply”. Pope Francis stressed the need for a radical energy transition to save our common home. He also appealed to the participants to ensure a justtransition, as the poor of the world suffer the most from the impact of climate change. Referring to the inter-generational aspect of climate change, he said that “our children and grandchildren should not have to pay the cost of our generation’s irresponsibility”.
It became clear throughout the dialogue that climate change needs systemic change involving all actors, everywhere. Policy makers, business, investors and citizens need to collaborate across all sectors to decarbonize and to build low-carbon economies. The call for more political accountability was especially stressed, as was the need for energy consumers to know that their choices matter.
Investors recognized ways to better support companies that embark on the transition, for example through the Climate Action 100+ initiative, and through the advancement of ESG investing. They agreed that current price signals do not yet adequately favor a relocation of capital and that new valuations are required to better capture the risks and opportunities brought on by climate change. Several European energy companies showed their progress and actions in the transition process and explained the need for new forms of cross-industry cooperation.
All participants worked hard to find common ground in a spirit of respect and mutual understanding. This truly inspiring dialogue showed that the voice of reason informed by science can prevail in today’s fragmenting world of divisions and fake news. Pope Francis’ moral leadership has to be applauded and one would hope that political leaders and other decision makers will follow his lead.
Georg Kell, Chairman, Arabesque, Founder And Former Executive Director, UN Global Compact