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Scientist have often warned that human activities have transformed not only climate and environmental quality, but the nature’s equilibrium too. Disclosing of corporate effects on nature and climate change is increasingly becoming used: e.g. the US Securities and Exchange Commission has made such disclosures mandatory for public companies, following the initiatives from the European Union. Half of the world’s gross domestic product is dependent on nature, according to World Economic Forum.
Background
Hundreds of companies have already committed to start reporting their nature-related risks in their financial disclosures, and they will start rolling them out in the next few months. “We’ve got to change the mindset around nature being something we can take for granted. It’s a risk we have to actively manage; and the resilience of nature underpins the resilience of business”, said Tony Goldner, the executive director of the Taskforce on Nature-Related Financial Disclosures, which produced the framework the companies are using.
Disclosing more corporate impact on nature is at at its early stage: but experts say more transparency can stop companies from green-washing their environmental claims. Every single company depends on nature and its resources, either directly or indirectly. EU-wide legislation created obstacles for companies buying palm oil and other products from deforested areas, which has significantly affected companies based in tropical nations.
Source: https://www.nytimes.com/2024/03/14/climate/what-about-nature-risk.html
Norwegian example
Norway’s trillion-dollar sovereign fund published recently a report about nature-related risks; the fund, largely created by profits from the country’s fossil fuel exports, is the largest in the world. Mr. Snorre Gjerde, who’ connected to the bank’s investment strategy, noted that the Norwegian bank’s experience showed that understanding nature-related risks could be a lot more complex than accounting for climate alone. When the bank wants to figure out how a company contributes to climate change, it’s relatively straightforward to measure greenhouse gas emissions: i.e. one ton of emissions anywhere in the world have the same impact globally, so-to-say.
However, impact on nature is far more complex: first, there does not exist a “global unit” to measure nature, second, a company’s impact on ecosystems will vary according to the location of a factory or a farm. Drawing water from a healthy river is not the same as depending on a nearly dry aquifer, and deforesting a bio-diverse system doesn’t have the same impact as razing trees in an area that doesn’t host as many species. And, actually, there are no presently feasible and proven answers to all these and other challenges and problems.
Norwegian fund owns about 1.5 percent of the entire global stock market, which is “a small slice of the global economy”; the bank’s mandate is to manage the fund for the benefit of the current, but also future, generations. In the very long run, then, the bank’s financial returns will be dependent on sustainable development in economic terms, but also on social and environmental issues.
References to: New York Times, Climate Forward Newsletter, 14.03.2024. In:
Electric utilities in the US: another example
The demand for electricity, which was largely flat for two decades, has begun to surge in the US: e.g. last year, electric utilities have nearly doubled their forecasts of how much additional power they will need by 2028. Peak demand is projected to grow by 38,000 megawatts nationwide in the next five years, equivalent to adding another California to the grid.
Utilities are confronting an unexpected explosion in the number of data centers, an abrupt resurgence in manufacturing, and millions of plug-in electric vehicles. Experts from the North American Electric Reliability Corporation, which monitors the nation’s electric grids are saying that if more power is not brought online relatively soon, large portions of the country could risk blackouts. But what is more worrying: “the swelling appetite” for more electricity could also jeopardize the country’s plans to combat climate changes.
To meet spiking demand, utilities in several US states, e.g. Georgia, North and South Carolina, Tennessee and Virginia are proposing to build dozens of natural gas-burning power plants over the next 15 years. In Kansas, one utility has postponed the retirement of a coal plant to help power a giant electric-car battery factory.
Burning more gas and coal runs counter to President Biden’s pledge to halve the nation’s planet-warming greenhouse gases by 2035. “I can’t recall the last time I was so alarmed about the country’s energy trajectory,” said Tyler H. Norris, a former solar developer and expert in power systems. If a wave of new gas-fired plants gets approved by state regulators, he said, it is game over for the Biden administration’s 2035 decarbonization goal.
For much of the 20th century, the use of electricity in the US has been increasing steadily; numerous utilities companies built plenty of coal, gas and nuclear plants in response. However, starting in the mid-2000s, the demand flattened.
The economy and population kept expanding, but factories, light-bulbs and even refrigerators became much more energy efficient.
Now demand is rising again, for several reasons: the growth of remote work, video streaming and online shopping has led to a frenzied expansion of data centers across the nation.
Besides, the rise of artificial intelligence is poised to accelerate that trend: by 2030, electricity demand at the US data centers could triple, using as much power as 40 million homes, according to Boston Consulting Group.
In Northern Virginia, one of the nation’s largest data center hubs, at least 75 facilities have opened since 2019 and Dominion Energy, the local utility, says data center capacity could double in just five years. A big question, said Brian Janous, a former vice president of energy at Microsoft who now focuses on ways to clean up the grid, said it was “a big question of how much outside pressure utilities and state regulators would face to do things differently.”
References and citations’ source: https://www.nytimes.com/interactive/2024/03/13/climate/electric-power-climate-change.html