At this year’s NYC Climate Week, I felt both energized by the scale of participation and burdened by the nagging sense of inertia that has plagued climate action for decades. The excitement in the air is tangible, but there’s also the risk of getting swept up in the frenzy or bogged down with FOMO.
The Energy and the Frustration
At the NEST Climate Campus, I attended panel discussions and engaged in 1-on-1 conversations. These dialogues brimmed with optimism, yet a familiar twinge of concern arose when protestors stormed the stage, aiming their ire at New York State Comptroller Tom DiNapoli. Their protest highlighted a fundamental issue in climate finance — the ability of investors to influence change in current investment strategies.
Even after countless calls to action over the past two decades, tangible, real-world impact remains elusive. Carbon emissions, which saw a brief decline during COVID lockdowns, have since rebounded. The sense of urgency hasn’t translated into the reductions required, and a market increasingly shifting to passive investing due to fee pressures makes it harder to put pressure on companies to effect change.
Voluntary Initiatives: A Growing, Yet Fragile Ecosystem
Climate action has become inundated with voluntary initiatives like Climate100+ and the Net-Zero Asset Owner Alliance (NZAOA), mushrooming only to fade as members leave, partly due to growing disillusionment with the effectiveness of engagement and, for companies exposed to the US market, the unwelcome political scrutiny that comes with the current ESG backlash. Perhaps most importantly is the realization that achieving Net Zero is impossible without system-wide change.
Signs of Hope: Regulation and Incentives
Despite these challenges, there was a unifying belief at Climate Week that regulation is essential. If the global economy is to transition to clean energy, it needs certainty. Governments, particularly in the EU, are stepping up. Investment-related mandates around sustainability-related disclosures, greater transparency in ratings, and clearer labels on sustainability funds are beginning to take shape. Real economy carrots, such as the IRA in the US, are game changers.
These regulatory and legislative actions are significant steps forward. If we can stay the course, we can begin to move beyond the “Wild West” of Sustainability Inc., where promises of impact often fail to materialize in the real economy. But with increased oversight comes an even greater responsibility — net-zero mandates must translate into meaningful real-world impacts for investors and society alike.
The Future of Climate Action: Tying Effort to Impact
As the spotlight shifts toward getting the real economy to deploy climate solutions, it becomes increasingly clear that more robust connections between climate action and tangible impacts must be made.
While Climate Week NYC may leave some attendees feeling as though decades of effort have led to little more than frustration, the path forward is clearer than it has been in years. There is no shortage of work ahead, but with more strategic legal and regulatory frameworks, stronger market incentives, and a deeper understanding of the systems at play, we may yet see the breakthrough the world so desperately needs.