You know the old quote about London buses? You wait ages for one and then three come along at once. Well, it’s been the equivalent in terms of climate announcements recently, they’ve been queuing up since the end of May. At this mid-point of the year, as the world begins to look beyond the Covid-19 pandemic, momentum in terms of climate-related change really does appear to be building. 
Kicking off this series of announcements was the landmark ruling on the 25th of May from the Netherlands; its district court in The Hague stated that Royal Dutch Shell must cut its global carbon emissions by 45% compared to 2019 levels by 2030. The judgement maintains that Shell owed an “unwritten standard of care” under the Dutch civil code to Dutch residents, requiring it to limit global warming to the 1.5˚C cap set out in the Paris climate change agreement. Moreover, the court said that this standard of care also incorporated Shell’s obligations under human rights law. In addition, they found that Shell’s published policy intentions and ambitions on climate change mitigation “largely amount to rather intangible, undefined and non-binding plans for the long-term” which are “not unconditional but … dependent on the pace at which global society moves towards the climate goals of the Paris agreement”. 
A highly significant factor is that the Shell group is responsible not only for its own CO₂ emissions but also those of its suppliers. It’s the first time a company has been legally obliged to align its policies with the Paris climate accord. This is not only substantial for the Oil & Gas supermajors, but has major ramifications for all companies – operators, non-operators, and investors – active in the sector. 
Hot on the heels of the Dutch courts, the G7 met in London in early June to discuss the world’s most pressing global issues. Climate change is always high on the agenda now, and they expressed support for numerous initiatives to tackle it, including the movement towards mandatory climate disclosures. Discussing the need to mobilize trillions of dollars of private sector finance, and to “green” the financial system on the road to meeting the nations’ net zero commitments, the G7 communique said: 
“We support moving towards mandatory climate-related financial disclosures that provide consistent and decision-useful information for market participants and that are based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, in line with domestic regulatory frameworks. Investors need high quality, comparable and reliable information on climate risks.” 
Hence climate disclosure is no longer going to be an optional extra. The TCFD framework is already well established as a credible tool for business; mandating its use sends an unequivocal message to all companies, big or small. Understanding the strategic implications of climate change and global warming, and reporting on the financial risks – and opportunities – will impose a requirement that forms a vital part of any business’s license to operate. 
The implications of these major announcements bring us to the third vehicle in the queue of climate pantechnicons. ESG is the phrase on everybody’s lips when it comes to corporate credentials, and when one of the world’s biggest advisory firms plans to increase its workforce by over 100,000 personnel in response to the anticipated demand for environmental, social and governance advice, it sends a very strong signal to the markets. PWC, one of the Big Four Accounting and Advisory firms, plans to spend $12 billion on expanding its global staffing numbers by a third, including 4,000 jobs in Britain, where at present it employs about 22,000 people. The firm’s global strategy, which it has called The New Equation, is a response to what it sees as the urgency with which companies need to respond to a variety of global stresses, specifically naming “technological disruption, the risks of climate change, fractured geopolitics, social tension and the continuing effects of Covid-19”. 
The world has become a very different place due to Covid but what hasn’t changed is the ever increasing need to address climate change. Mid-way through 2021 as we start to see a way out of the pandemic, we could be witnessing the start of real movement towards a more sustainable future. 
In the middle of difficulty lies opportunity” Albert Einstein 
At JS Global we work with organisations on all aspects of sustainability strategy, risk management, climate-related disclosure and ESG 
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