Kate Mackenzie Profile picture
Writer/researcher/consultant on finance & climate change. Fellow @centrepolicydev columnist @climate and alum @FT
17 Oct
Ghana’s finance minister, Ken Ofori-Atta, wrote about oped in the FT a couple of weeks ago, saying that Africa deserves more Int’l support for the damage wreaked by COVID.
on.ft.com/33MRTPA
He points out that the amount of support from IMF, WB, G20 debt servicing suspension etc is welcome but not enough. What’s needed is still only a tiny fraction of what OECD nations have spent on their Covid responses. But with the US blocking new SDR issuance; China..
..negotiating on a country by country basis which slows things down, and private creditors nowhere to be seen, the environment is pretty tough.
Read 8 tweets
16 Oct
Thread on what looks to be some very important new research (as with most things Fran does!).
co author @Capi_Planeta has a blog post: “Economists are well aware that human wellbeing is highly dependent on natural systems, however, it often remains unnamed in the guts of the computational models used to calculate the costs of climate change.”

…inabilitycommunity.springernature.com/posts/beyond-t…
Great to see all that effort by accountants to develop intricate “natural capital” is finding a use beyond voluntary sustainability reports.
Read 4 tweets
16 Oct
By me: the IMF’s featured chapter on economics of climate mitigation suggests we might have crossed a tipping point - macro policy types are seeing beyond the reductive models that have plagued thinking about climate action for decades. bloomberg.com/news/articles/…
The IMF’s latest World Economic Outlook dedicates one of its three main chapters on the merits of a global climate mitigation plan. It’s actually pretty interesting in itself. imf.org/en/Publication…
The report sets the stage by pointing out that our knowledge about the damages of climate change is still pretty limited. Even though models & methodologies are improving, some impacts (sea level rise) aren’t captured; neither are some mitigation benefits (eg less air pollution).
Read 17 tweets
2 Oct
My latest for @climate looks at what *might* go wrong when "climate-related financial risk" concepts are applied to sovereign bonds. What does this mean for developing countries that are highly vulnerable to climate impacts? bloomberg.com/news/articles/…
Feels sometimes like I am repeating myself but:
1) financial actors protecting themselves from climate risk does NOT necessarily create positive externalities.
2) this is apparent when you consider real world effects of managing for “transition risk” vs “physical risk”.
3) this would all be fine and hunky dory if the same actors being pro active about “climate risk” were just being all about the financial risks. They’re not, for the most part. They’re also talking about SDGs and “doing well by doing good” etc.
Read 7 tweets
1 Oct
Climate Change: World’s Biggest Polluters Are Hiding in Plain Sight
... for all the activity about “sustainability” etc, scope 3 emissions are still woefully underreported. bloomberg.com/graphics/2020-…
“The 182-page, 15-category guidance for Scope 3 disclosures offers so much scope for discretion and ambiguity that companies can more or less mark their emissions to model — or even refuse to disclose them at all.“
Sound familiar?
As anyone who’s spent time wrangling scope 3 numbers out of the CDP database knows, even after years, TCFD, shareholder resolutions, glossy reports etc... the standard of disclosure is poor and many of companies are not even pretending to try (hello, Exxon).
Read 4 tweets
15 Sep
"Because green labels apply to standalone projects rather than to the firm’s overall activities, projects promising carbon reductions could be offset by carbon increases of the same firm elsewhere." Suggests firm-level green ratings instead. (Taxonomy?) bloomberg.com/news/articles/…
Duh, I forgot the EU is already on it: Image
That's from the BIS paper bis.org/publ/qtrpdf/r_…
Read 5 tweets
13 Sep
Wow. Read this and the replies. Facebook is an utterly malign force in society today:
Prof Hayhoe is a well known & highly respected scientist for those who don’t know:
Events for climate scientists deemed “political”:
Read 4 tweets
7 Sep
This story is from last week now but it has some solid reporting heft behind it & makes several interesting points:
ft.com/content/38d0da…
First, it says lots of banks' "fossil fuel exclusion" policies are weak & greenwashy, either due to low % thresholds, or narrowly defined types of finance, or limited scope of FF activity covered. Hard to argue with, although there are a few good ones out there.
Second it kind of toys with whether stronger policies would be ineffective anyway eg a defensive quote from Soc Gen that not financing FF won't actually help transition. I'm not at all persuaded.
Read 7 tweets
12 Aug
It's not a huge amount of money & these are banks are signatories of things like Equator Principles, UNEP FI and PRB... uk.reuters.com/article/us-cli…
The different responses of the banks highlighted is striking: ImageImage
Throwing shade on the methodology seems particularly not-great: Image
Read 4 tweets
10 Aug
My latest @climate column is about how the use of "scenario analysis" to understand climate-financial risk is kind of a double-edged sword:
bloomberg.com/news/articles/…
Scenario analysis has become a very popular method for companies and regulators to try to assess the effects of future climate change, in terms of both impacts ("physical risk"), or efforts to decarbonise ("transition risk").
It goes without saying that historical data won't give enough information about either of these risks. So scenario analysis was recommended by the @FSB_TCFD as a basis for forward-looking disclosures in 2017, which is when it took off. But...
Read 15 tweets
5 Aug
Interesting story contrasts the euro with US oil majors, a starkly different approach to climate & energy transition.
Lots of important points in these pars about the financial implications & risks for the Europeans: Image
But *not* taking that path is its own considerable risk too, again even in a narrow near-term financial lens: Image
Read 4 tweets
16 Jul
It’s a problem of incumbency. Introducing something new or different in a sudden & bewildering crisis looks opportunistic (even if it’s clearly best and it’s not THAT new or different).
I’ve been involved in lots of these conversations, and it’s true there was an element of self-restraint that was maybe overdone. But I’ve also heard from others that talking about green recovery felt genuinely wrong in the early stage of a health crisis.
Bottom line is that incumbent and powerful industries & interests have a structural advantage in any situation, including a crisis. Look at the “market neutrality” concept being debated in ECB and other central banks re asset purchasing.
Read 4 tweets
9 Jul
Can confirm from US energy secretary that #ieasummit that they are really into the idea of diversity... in energy sources.
"That's why our country is abandoning none of our fuels."
😔
Bottom-up competition-based approach to energy. Uh huh.
Isn't it lucky there's "innovation", a word that can mean anything.
Follow up question from Fatih on the R&D expenditure being static for past 10 years. Brouilette replies that US is going to spend an enormous amount of money on nuclear. And a bit on storage, I think?
Read 4 tweets
3 Jul
Yeah! Happy to see Energy Source, which I feel is kinda one of my journalism babies, is back in its 3rd iteration & carrying on the tradition of an integrated perspective on energy (politics, markets, companies and most definitely climate across all 3).. 1/3
Definitely @Ed_Crooks and Carola Hoyos co-parented this too and Ed created & ran the 2nd iteration as a really nice & popular weekly email.
It's funny to think that it was still a little unusual, back in 2009, to take such an interdisciplinary, inter-desk approach to energy news
I was hugely inspired and encouraged by @KFJ_FP 's excellent WSJ Energy & Environment blog - couldn't have asked for a better direct competitor. Also the independent media writers like @bradplumer and @kate_sheppard. It was such an interesting period in energy & climate.
Read 4 tweets
30 Jun
.@leslieatlarge has honed in on some of the most important questions raised by the proliferation of location-specific climate risk data:
Who gains & who loses from this information being available? bloomberg.com/news/articles/…
This is quite a complex area. As I wrote last week, the proliferation of commercial climate risk analysis can exacerbate inequality: bloomberg.com/news/articles/…
This is because it can have an effect akin to "redlining" of mortgages by banks, or "bluelining" as @Jesse_M_Keenan dubs it in Leslie's story. But Rachel Cleetus at @UCSUSA (who's been researching this for years) points out that making data public also has repercussions Image
Read 8 tweets
26 Jun
My latest @climate column is on a topic I've been thinking about for a long time: what does the new fad for commercialised, precision predictions of climate change impacts mean for society?
bloomberg.com/news/articles/…
If you haven't heard of these services, they combine geolocation data + information about physical assets, (and sometimes transit/logistics, supply chains etc) + info from climate models. The final product is analysis or advice on financial risks from climate impacts.
These services are often developed, provided and purchased by people who work in "climate risk" "sustainability" or "resilience".
AFAIK it's usually done with noble intentions: the more we know about climate change, the more resilient we can be. But...
Read 20 tweets
26 Jun
This sounds like like quite an... aggressive move:
bloomberg.com/opinion/articl…
I haven't been following closely the battles being waged on what US industry pension funds can invest in, and there are long-running debates over what's acceptable under "fiduciary duty" (which is not a narrow and neat concept as some like to think) but this goes a bit further...
"They can consider ESG factors “only if they present economic risks or opportunities that qualified investment professionals would treat as material economic considerations under generally accepted investment theories”;"
Read 7 tweets
22 Jun
Remember that huge write down by BP a couple of weeks ago, in recognition of lower than expected oil prices? Investors believe there is more to come. Next in their sights - not just fossil fuel companies, but Rio and CRH:
uk.reuters.com/article/uk-cli…
Sarasin, which is coordinating the campaign, has now published copies of the letters already sent to BP’s audit committee in November, asking if assumptions on oil prices were tested against Paris goals, the results of sensitivity or scenario analysis, and much more: Image
More: Image
Read 4 tweets
22 Jun
ICYMI this is another excellent report from @cflav. Not only are US lenders requiring bigger deposits for coastal & flood-prone properties, they're also shifting them off their books to Fannie Mae & Freddie Mac: nytimes.com/2020/06/19/cli…
Couple of really interesting things about this:
1) research led by @Jesse_M_Keenan found that smaller lenders tended to be more likely to raise the bar for lending against houses in more exposed coastal areas. Possibly because they have local knowledge.
2) In this story, an official from the lenders industry group responded with the old "insurance" response. Property insurance term is for 12 months; it does not help an emerging risk to the collateral for a 30-year loan!
Read 5 tweets
22 Jun
"Estimates by The Economist suggest that publicly listed firms, excluding state-controlled ones, account for 14-32% of the world’s total emissions, depending on the measure you use." economist.com/leaders/2020/0…
"corporate disclosure is so bad that [objective comparison] is impossible, at least for now. Instead, fund managers resort to using dubious ESG ratings, created by external advisers, that make subprime credit scores look like the gospel truth."
The thing is, EVERYONE knows that "ESG" doesn't have a concrete definition. Yet it's still referred to by countless institutions & experts as if it does. And worse, it's portrayed as a substantive way that finance can tackle climate change, racism, human rights abuses and more.
Read 4 tweets
18 Jun
The financial sector is very excited about using mapping data + climate models to assess financial risks from climate change. My latest column for @climate is about the challenges & pitfalls of using these methods:
bloomberg.com/news/articles/…
One of the challenges is simply bringing together very disparate fields of finance & climate science; ensuring that the models do what the users think they're doing. Understanding the uses & limitations of climate models is still a pretty niche skillset.
There is a lot more I didn't go into about physical assets, geolocation, and vulnerability and exposure - but these skills and fields are at least somewhat understood in finance already, eg via the insurance industry.
Read 8 tweets