Climate Week Preview September 2015

Pope Francis Suggests Sustainability is the Only Hope for Capitalism

If you drive around the New York City area, you are seeing flashing signs warning you to take mass transit next week.  The irony of this message isn't lost on me, anyway, as Climate Week descends on New York once again and calls ring out for more action on the environmental challenges we face.  

Last year, 310,000 people marched in Manhattan seeking action on climate change.  

Other highlights from last year included China seeking to peak their greenhouse gas emissions, Obama speaking on the subject to the UN General Assembly, California taking the lead on climate policy and much, much more as per the link above.

This year, much of the focus is on the arrival of Pope Francis for five days of activities, including a talk to a Joint Session of Congress on Thursday, an address to the UN General Assembly and other talks in Philadelphia.

Francis is expected to bring attention to both climate change and the needs of the poor both of which are the focus of his recent Encylical entitled 'Laudato Si' and we discussed the potential impact of this document on investing in a previous piece here.

There are a variety of other events scheduled next week in New York such as those listed here, but the week isn't expected to be as high profile as last year.  

This is perhaps a bit surprising given the build up to the COP 21 Climate Negotiations occurring late this year in Paris.  But the reality is with elections coming up next year in the US in 2016, whatever Obama commits to in Paris won't be binding until congress approves (not likely given its Republican present tilt) or until the next President takes office in January 2017, so who that will be will help dictate not only US but also global policy on climate change.

This makes the next election critically important for those concerned about climate change, and it is frankly disturbing to hear some candidates act as deniers of the science, which is fully accepted by scientists and all of the world's 195 nations as per this report and presentation from the world's climate scientists.

There is no debate - climate change is fully accepted as influenced by human behavior, though there is a different question in so far as how to change the annual emissions we create and which enter the atmosphere, trapping increasingly more heat and likely to cause a variety of problems for future generations such as sea level rise, disease, lack of fresh water and much more.

So will Pope Francis' arrival and speeches add urgency to this subject will be a very important question for investors to understand as many sectors could be either negatively or positively affected.  Innovating companies such as Tesla have already wildly outperformed their peers such as GM, up over 1000% the last few years versus GM being down 10%.  The utility and chemicals industries are undergoing great transformations.  Few sectors are not likely to be affected in some material way.

Social needs are also likely to be a focus. We live in a time where wealth and income inequality disparities are increasing, and we have record levels of displaced refugees and indentured slavery.  

Expect Francis to talk about this as well.  

Societies are arguably only as strong as the lowest common denominator.  Hunger, depression, lack of purpose leads to unrest and turmoil, while economic vitality leads to strength and happiness.


Economic vitality in future may well only be possible if we heed the words of Francis and avoid the outcomes of climate change that seem inevitable and if we continue to ignore the plight of those worse off than we are.

Francis has spoken to his concerns about capitalism, but perhaps he is its greatest defender.   

Without solving these dire and imminent problems, a healthy, vibrant economy will likely be impossible.

Expect Francis to take this all head on next week, and to even suggest a full embrace of sustainability solutions is the only best hope for Capitalism.  

Sustainable Investing may well turn out to be the best thing for society and your financial returns as well.