EDITORIAL: Climate change is a reality that will touch all of our lives
Activist Greta Thunberg is right in standing up to denialists such as Donald Trump, because the science is no longer disputed
Climate change is said to be the biggest crisis facing humankind.
How odd then this week’s UN Climate Summit won’t be remembered for leadership from the presidents and prime ministers who attended it in New York.
Instead, the image that will linger for generations to come is the sight of a 16-year-old berating those same leaders for their complacency and empty promises.
“You have stolen my dreams and my childhood with your empty words,” said Greta Thunberg, the Swedish climate activist who burst to global prominence with the school strike for climate movement, which involves pupils taking time off to participate in demonstrations to demand action on global warming.
That the science about climate change is no longer disputed hasn’t stopped some politicians from mocking the concept.
Andrea Leadsom, a UK cabinet minister, attracted mockery of her own earlier in 2019 when she described pupils who took to the streets across Britain to demand that their government declare a climate emergency as being involved in truancy.
This week, France’s education minister was reported as urging Thunberg to stop making everyone miserable.
US President Donald Trump, who probably should be given some credit for at least attending the event despite his well-known climate scepticism, went on to Twitter to direct a jibe at the young activist. A video of her reaction to seeing Trump arriving at the conference that went viral would signal that she doesn’t think much of him either.
All of that should not be allowed to distract from the reality that climate change is here and presents a grave risk to business and society.
It was just a month ago that Santam, SA’s largest short-term insurer, was warning that natural disasters and climate change have become hard to predict, making its profits more volatile. The company reported an increase in payouts due to weather-related claims.
Among global central banks, it could be argued that the governor of the Bank of England, Mark Carney, has taken the lead more than any other. For much of the last four or five years, he’s been almost a lone voice.
This week, he repeated his call for comprehensive climate disclosures. He also told the UN conference that “climate risk management must be transformed, and sustainable investing must go mainstream”.
In a report on its website, Oliver Wyman, the global management consulting firm, calls for banks to change their historical approach of seeing climate change through the lens of corporate and social responsibility. That tends to relegate it to the realm of marketing and underplays financial risks for banks.
As the Santam example shows, the risks for institutions that fund and insure buildings and other physical infrastructure vulnerable to damage from floods, fires and other catastrophic events is obvious.
So if you are an investor who might be sceptical about climate on a personal level, can you afford to ignore the damage that could befall your portfolio?
So far, governments globally have been lax in recognising the need for a transition away from a high-carbon economy. With a view to short-term electoral cycles, their focus has been on imagined trade-offs between doing what’s good in the long term and shielding consumers from the short-term costs, such as higher electricity and fuel prices.
But as voters and investors become more aware of the risks of climate change, there is a risk that regulation could move faster than analysts and investors anticipate nowadays, with unclear consequences for those who hold shares in companies that have been big polluters.
Sasol’s current problems in the US might, for example, prove to be a little inconvenience compared with the potentially existential threats ahead.
And if your pension income is linked to its performance or to coal suppliers to Eskom, whose coal-fired stations in Mpumalanga have been linked to high levels of pollution and respiratory diseases, you should be worried.
It might be hard to get people to be excited about a crisis they don’t expect to manifest in their lifetime and easier to mock activists such as Thunberg.
But that’s a shortsighted approach, for us and the generations to follow.