Nov 13, 2020

Axios Generate

Good morning. Today's Smart Brevity count: 1,204 words, 4.5 minutes.

🎵And with a hat tip to drrock.com, this weekend marks 35 years since the U.S. release of Sade's "Promise," which provides today's silky intro tune...

1 big thing: Biden urged to follow the money on climate

Illustration: Lazaro Gamio/Axios

Joe Biden's presidency could bring new efforts to use regulation on Wall Street and action from the Fed and the Treasury to press big companies to take climate change more seriously.

Why it matters: There's a lot of pent-up interest in employing financial regulation to promote better disclosure of climate-related risks and to pressure companies to cut emissions.

  • It's hardly a new thing for the climate movement, but advocates see a chance to have an ally in the White House now, and it's on the minds of influential figures including Sen. Elizabeth Warren.
  • Democrats' slim odds of Senate control are only adding to pressure for a government-wide strategy that goes beyond agencies that directly oversee energy and environment.

Driving the news: The Climate 21 Project posted a new agency-by-agency set of recommendations from advocates that count a number of senior Obama-era people in their ranks. The transition memo with goals for Treasury include...

  • Immediately appoint a special counselor for economic growth and climate.
  • Work with financial regulators to develop climate-focused priorities and "regulatory initiatives."
  • Elevate the topic's prominence within the Treasury-led Financial Stability Oversight Council.

Where it stands: They're not alone.

  • Evergreen Action, a new(ish) group that includes former campaign aides to Warren and Jay Inslee, a few weeks ago offered a bunch of ideas, ranging from Fed "climate stress tests" of large banks to pressuring them to create decarbonization strategies. They also want appointees to a range of agencies — like FDIC, the Comptroller of the Currency — committed to addressing climate risks.
  • The umbrella Stop the Money Pipeline coalition, which includes lots of groups on the left flank of the green movement, is calling for a "true climate hawk" to be Treasury secretary.

What we're watching: Personnel and the transition. For instance, Fed governor Lael Brainard is reportedly a leading Treasury candidate and she gave a widely covered speech in late 2019 noting that climate-related risks are "projected to have profound effects on the U.S. economy and financial system."

  • Plus, the "agency review teams" unveiled this week by the Biden transition office already include people with a climate background.
  • The Treasury team includes Andy Green, a former SEC lawyer currently with the liberal Center for American Progress. He co-authored a memo this year arguing that financial regulators must take "swift and aggressive steps to measure and mitigate climate-related risks and impacts."
  • Several other members of the teams also have a history of working on climate. E&E News points out that the team handling the Fed, banking and securities includes Amanda Fischer, "a vocal advocate of the Fed accounting for climate risk and a former chief of staff to progressive Rep. Katie Porter (D-Calif.)."
  • The Fed has already been stepping up its work on climate-related risks to the financial system lately.

Go deeper: Biden SEC likely to push more climate and diversity disclosures (Bloomberg Law)

2. Workers want their bosses to do better on climate
Data: KPMG; Table: Axios Visuals

A survey from KPMG and the law firm Eversheds Sutherlands of directors and top executives from hundreds of companies provides some interesting data points on how the corporate world is and isn't addressing climate change.

  • Check out the chart above, which shows that corporate climate performance plays a role in how workers think about their employers, not to mention talent recruitment and loss.

By the numbers: The survey of executives from more 500 international companies in August 2020 also found...

  • 35% said they understand climate-related risks their companies face "extremely" well, while another 52% said their understanding needs to be better.
  • 25% reported their companies' directors have remuneration incentives for directors to achieve carbon-cutting targets.
  • 45% answered that their companies report publicly on climate-related risks they face.
  • 74% said decarbonizing will require "significant changes" to their business model.
3. The cost of a gas bridge to nowhere

Source: Giphy

Axios' Amy Harder reports: If the world aggressively tackles climate change — a big if — investments in natural gas could be reduced by 65% over the next 20 years, according to a new Wood Mackenzie report.

Why it matters: Natural gas has been considered a bridge fuel to zero-emitting energy sources, but it’s also one of the most controversial energy sources when it comes to combating climate change.

  • This analysis puts hard numbers on the business impact of a swift move off the fuel.

By the numbers: That 65% figure is based on a trajectory of reducing emissions to a level that would keep Earth’s aggregate temperature from rising 2°C over the next century, compared to preindustrial temperatures.

  • Wood Mackenzie estimates that over the next 20 years, almost $2 trillion in capital would be needed to deliver gas resources in a world not aggressively reducing emissions, compared to $700 billion in a world that was.

The bottom line: Wood Mackenzie Asia Pacific VP Gavin Thompson says...

“The industry is at a critical juncture. Investors are demanding project returns stay attractive at lower oil and gas prices just as companies are looking to address multiple challenges on carbon. The global gas industry needs to respond, and soon.”

Go deeper

4. Ford stakes its claim to the electric fleet market

The Ford E-Transit van. Courtesy of Ford

The latest step in Ford's foray into electric vehicles is a cargo van arriving late next year with a starting price under $45,000.

Why it matters: Ford wants to defend its hold on the commercial vehicle market where there's growing demand for electric delivery and utility vans by companies looking to make good on carbon-cutting pledges or comply with new rules.

Driving the news: Thursday's rollout of the E-Transit makes this point in all kinds of ways.

  • The range isn't huge — 126 miles — but neither is the cost, and it makes sense for vehicles that operate in urban delivery routes with access to centralized charging.
  • Ted Cannis, a top exec in Ford's commercial business, called it "ideal for commercial customers who know their drive routes and often work in urban environments."
  • They're also touting an optional feature called the Pro Power Onboard, which provides enough mobile power to run "everything from belt sanders to circular saws."

Of note: Part of the van's rollout is making the case that the transition for existing customers would be seamless.

  • Ford emphasized that its new electric van has the same interior cargo dimensions and mounting points for racks, bins and so forth as the internal combustion version Transit model.
5. Sign of the times: Oilfield services diversify

Via the Houston Chronicle,"Baker Hughes has partnered with the world’s largest fastener company to manufacture parts for industries outside of oil and gas as the oil-field services company buttresses itself against the pandemic fallout."

Driving the news: The announcement this week of the oilfield services giant's partnership with Würth Industry North America says their offerings have applications in not only oil-and-gas but also "renewables, power generation, maritime, automotive, and aerospace industrial sectors."

Why it matters: It's just the latest sign that big oilfield services companies are looking to diversify their business lines amid the industry downturn and, longer-term, as a peak in oil demand appears on the horizon and other forms of energy grow.

  • For instance, the Oil Daily reports: "Early this year, Schlumberger launched a New Energy division focused on energy efficiency and energy storage, targeting 'adjacent markets' and 'breakthrough technologies in energy verticals beyond oil and gas.'"
6. Sign of the times, part 2: The SPAC wave

Via Greentech Media, "Nuvve, the San Diego-based company that’s spent the past decade pioneering electric-vehicle-to-grid (V2G) projects around the world, plans to go public via a special purpose acquisition company (SPAC)."

Why it matters: It's the latest in a wave of EV-related companies going public via so-called reverse mergers. Others include Canoo, ChargePoint, Lordstown Motors, and Fisker.

Go deeper: Wall Street is searching for electric vehicle gold