As the war in Ukraine rattles global energy markets, sustainable investors worry that the calls to address global climate concerns are getting drowned out by the cacophony of short-term energy needs.

A recent Wall Street Journal article illustrates the challenges many countries face to maintain their climate ambitions. Germany announced that they may prolong the use of coal-fired power plants, and France is considering extending the use of several nuclear energy facilities. Meanwhile, U.S. exports of fossil fuels have increased more than ever to fill in gaps left by embargoes of Russian oil.

What does this mean for sustainable investing? Even as companies and countries adjust to new market realities, sustainable investors remain steadfast in their calls for corporate accountability. The war has only strengthened the long-term case for renewable energy. Beyond the obvious climate advantages, renewables lessen the dependency on and weaken economic ties to the colorful suite of unpredictable dictators in fossil fuel-rich countries.

The economic and political pressures to seek short-term solutions mean that CEOs and government leaders are likely to continue focusing on quick fixes and miss the opportunity to take meaningful steps toward a net-zero future aligned with the Paris Accord, which limits temperature rise to 1.5 degrees (Celsius) by 2050.

UCF, as an active member of Climate Action 100+ (CA100), the largest investor engagement initiative holding companies accountable for their climate impact, co-leads an engagement with International Paper. International Paper is considered a critical company because of its emissions through pulp harvesting and the manufacture and distribution of cardboard packaging. This is one of 166 engagements with the world’s largest carbon emitters, representing 80% of the world’s industrial emissions, being led by CA100 members.

Recently, UCF’s Director of Responsible Investing, Matthew Illian, was part of a panel in a CA100 webinar highlighting updated scorecards for all 166 companies. While the overall message was that companies are making progress, the current assessment is that the pace of change is woefully inadequate. More companies than ever are making commitments to cutting greenhouse gas emissions, and yet only a handful of companies are making the necessary upgrades to property, plants and equipment to achieve these emission reduction targets.

The CA100 assessment also introduces the concept of a Just Transition. This indicator measures a company’s attention to the net-zero transition’s social impact on workers and communities most impacted by the pending energy transition. The underlying premise is that it is unjust to cut ties with workers and communities as business needs change. Both companies and governments should be doing what they can to retrain workers and invest in those communities that are losing fossil fuel industries.

Ultimately, sustainable investing depends on everyone working together. At UCF, we are encouraged by the leadership of UCC ministers and members in combatting climate change. We see our work with investors as complementing efforts like the Jazz Narrative that Pastor Otis Moss describes in the recent America Climate Leadership Summit. All of us have a part to play in this Earth Day ensemble, and if we are ready, the music just might inspire a more just world for all.

Learn more about our values-aligned investing here.

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