By David Callaway, Callaway Climate Insights

With climate change impact bearing down hard around the world this month and G20 leaders failing to agree to reduce coal consumption over the weekend, or anything for that matter, expectations for a global deal at the COP26 summit in Glasgow in less than 100 days have dimmed dramatically. But there is some good news.

The prospect of even holding the November summit in Scotland shifted in a positive direction this past week as a two-month surge in new Covid cases in Britain plateaued and began to fall. It’s early days, of course, and the impact of the UK’s Freedom Day last week won’t be felt for a few more weeks, but if the present trend continues, it is good news for hopes the conference will occur in person.

We expect many large players, including China, the U.S. and India, will try to deliver climate bombshells ahead of the summit to help stir momentum. Increased spending and faster timelines will be the primary drivers, as well as an October coal surprise. And as the Intergovernmental Panel on Climate Change (IPCC) meets in Geneva this week to finalize what will be the most frightening scientific report to date on the global warming threat for release next month, governments will frantically try to shift blame and/or grab the lead.

From an investor standpoint, this has all the markings of a low-expectation event that will surprise to the upside, likely led by the international financial community. At Callaway Climate Insights, we’ll be doing our part with a special “Countdown to COP26” event in late September or early October to hear what the top executives, ESG investors and climate politicians will be looking for.

Anyone who’s lived in the UK knows, you shouldn’t expect much from Glasgow in November, but the odds on this one are starting to look more attractive.

More insights below. . . .

Hulbert: Want to boost your ESG rating; simply dump more data

. . . . Forget greenwashing. A new trick to earning climate credibility might be “green-dumping” with data, writes Mark Hulbert. A new study by PanAgora Asset Management and Google finds that the more environmental data companies disclose, the better their ratings tend to be. Perhaps it’s a chicken and egg thing but if true, it calls into question the entire process of requiring more disclosure from companies because investors and ratings agencies are simply putting quantity above quality. As Hulbert surmises, it’s an age-old sales strategy that would make the great Irish poet Oscar Wilde smile. . . .

Read the full column

Tuesday’s subscriber insights: Fidelity joins the BlackRock battle

. . . . Fidelity International threatened late last week to target as many as 1,000 companies in shareholder votes on climate change and boardroom diversity, joining BlackRock and tilting the playing field among the world’s largest asset managers closer toward ESG priorities. Read more here. . . .

. . . . Is China’s relentless international fossil-fuel investing easing? According to the Beijing-based International Institute of Green Finance (IIGF), the People’s Republic did not green-light a single coal project in the first half of 2021, the first time since the BRI started in 2013, and somewhat shocking given that over 70% of coal plants built today rely on Chinese funding, according to the IIGF. Read more here. . .

. . . . Lucid Motors (LCID) shares rose 11% on their first day of trading, after hitting an early high above $28. The largest EV SPAC deal to date, Lucid caught a wave of EV trading ahead of Tesla’s earnings, which were highlighted by a 60% rise in revenue in its energy business, and a profit for the first time. . . .

. . . . Sustainable mutual funds inflows in the U.S. dipped in the second quarter, though not as much as equity funds in general, reports Morningstar. Sustainable inflows were $17.5 billion, lower than the record $21.5 billion in the first quarter, though active funds reached an all-time high. Among the standouts were two spanking new carbon transition ETFs from BlackRock (BLK), tickers LCTU and LCTD, which just launched in April. . . .

. . . . Toyota Motors (TM), producer of the popular hybrid Prius and early green automaker, is suddenly finding itself on the wrong side of the electric vehicle market, having bet on the expensive hydrogen fuel cell batteries. Now it’s trying to slow down EV consumption, of all things. Read more here. . . .

. . . . Renewable energy may be cheap, but it’s not small, as wind and solar makers are starting to see from local opposition from farmers, fishermen, and property owners. The latest sally comes from clam diggers in New Jersey, who threaten the state’s burgeoning offshore wind business before it’s even begun. Read more here. . . .

. . . . Great piece by WSJ energy reporter Russell Gold on battery startup Form Energy, which has been the poster child for a long-term climate solutions company in Silicon Valley for four years now. CEO Mateo Jaramillo disclosed the somewhat secret sauce behind the company’s battery research, iron and air. A recent investment by iron ore and steelmaker ArcelorMittal might have been an early clue, but the disclosure in the article got tongues wagging about the company’s prospects after raising hundreds of millions of dollars in recent years. Look forward to seeing more. . . .

. . . . A real non-stop road trip might soon be possible, or at least, one that doesn’t require refueling. The Indiana Department of Transportation, Purdue University and a German company called Magment are teaming up to test a new road component that would provide high-speed charging in the pavement at standard road building costs. Read more here. . . .

. . . . And finally, the most read story on the Financial Times website Monday, ahead of Tesla (TSLA) earnings, the rest of Big Tech, and a Federal Reserve meeting, was this piece on farmers being able to now grow avocados in Sicily because of climate change. Just sayin’. . . .

Editor’s picks: Chinese solar supplier’s labor issues; PG&E to bury power lines

Thank you to my friend @AlokSharma_RDG and our global colleagues for convening a ministerial to continue to drive progress towards @COP26 in Glasgow. Onwards! pic.twitter.com/hO8E3guJnK

— Special Presidential Envoy John Kerry (@ClimateEnvoy) July 26, 2021

Chinese solar supplier’s labor issues imperil renewable efforts

China’s LONGi Green Energy Technology Co., the U.S.’s top solar-panel supplier, illustrates the difficulties faced in the effort to eliminate labor abuses from China’s supply chains without smothering an industry that is vital to the Biden administration’s efforts to limit climate change, Michael Copley writes for S&P Global Market Intelligence. Copley notes that LONGi buys polysilicon, a key ingredient in most solar panels, from at least three producers that source their raw material from Hoshine Silicon Industry Co. Ltd. Hoshine in turn faces U.S. import restrictions after U.S. Customs and Border Protection, or CBP, said it found evidence that the company used forced labor at factories in China’s autonomous Xinjiang region, where Beijing is accused of suppressing Uyghurs and other Muslim minorities. LONGi has denied the allegations and the Chinese government previously has denied that it is committing human rights abuses in Xinjiang. Analysts say an aggressive crackdown by the U.S. government could cause major disruptions in the country’s solar market. Congress also is pursuing trade restrictions on Xinjiang. The report notes that earlier this month, the U.S. Senate passed a bill that would ban all goods from the region, which produces about half of the world’s polysilicon, unless importers can prove they were not made with forced labor.

Pacific Gas & Electric to bury power lines

Pacific Gas & Electric (PCG) plans to bury 10,000 miles of its power lines in an effort to prevent its dilapidated power grid from sparking more wildfires in California. The project, announced by the company last week, would bury about 10% of PG&E’s distribution and transmission lines. The cost is estimated at $15 billion to $30 billion — and will be paid for mostly by the utility’s shareholders, who, the Associated Press notes, already pay among the highest gas and electric bills in the U.S. The decision comes just a day after PG&E told state regulators it believes its equipment sparked the huge Dixie Fire in Northern California’s Butte County, which has already burned nearly 200,000 acres and was reported to be 22% contained today. The Dixie fire is right next to the burn scar of the 2018 Camp Fire — also caused by PG&E equipment — that killed 85 people, destroyed thousands of homes and the entire town of Paradise. That fire was the deadliest and most destructive wildfire in California’s history, and the most expensive natural disaster in the world in 2018 in terms of insured losses.

Today in wildfires

. . . . As of July 27, the Fire Information for Resource Management System reported three new large incidents in the U.S., four large fires contained, and 63 large fires uncontained. Active areas continued to be in the Western states. In the Northwest, there were 15 large uncontained fires. In the Rocky Mountain Area, 34 new fires were reported, including one new large incident, and there are five uncontained large fires. Across the nation, the National Interagency Coordination Center reports that as of Tuesday morning, more than 21,466 firefighters are battling 96 blazes that have burned 1.5 million acres in the past day. . . .

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