Finance Has Moved On From Fossil Fuels – Fashion, Not Quite

While the coronavirus still creates uncertainty in the near term, climate change is the unrivaled long-term threat that’s got everybody talking.

It became such a precedent for President Joe Biden that it even marked the entry of a brand-new role of “special presidential envoy for climate,” housed within the National Security Council.

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Describing a new landscape for sustainability, John Kerry, the first U.S. special presidential envoy for climate, said frankly: “You couldn’t build a coal-fired power plant in the United States today if you wanted to because no bank will fund it,” in the opening conversation for The Economist’s weeklong sustainability event that kicked off Tuesday.

Kerry was previously a senator and secretary of state under former President Barack Obama.

“Now, the major banks in America, together with some of our asset companies, have all articulated with clarity, with pledges, the amount of money they will be investing in climate-related activity in the next 10 years,” he continued. “I don’t think any politician can change what the world is going to move toward over the course of these next months. The challenge for all of us is not will we get where we need to go — it is will we get there fast enough?”

This change in tune from the financial sector that Kerry mentioned — where major financiers are divesting from fossil fuels — is a warning sign that landed on the desks of fashion executives pressed by investors to reframe financials under the lens of “ESG” or environmental, social and corporate governance factors.

The call to action has only accelerated in the past year. While the fashion industry has been named a heavy emitter time and time again and relies predominately on polyester — Kerry did not call out the industry explicitly for lack of progress.

“We still have some tough hurdles to get over. We’re not yet there sufficiently with curbing the emissions from heavy industries — cement, concrete, steel and so forth,” Kerry said, reemphasizing the Biden administration’s view on collaboration to accelerate and scale reductions across broader economies. “There’s a great deal of space for us to be working together to accelerate.”

Kerry discussed the international “race” in renewed climate ambition — of which the Biden administration is looking to take in full stride — as well as topics like carbon pricing, promising technologies, expectations for the 26th Conference of the Parties, or COP26, and curbing emissions on heavy-emitting industries.

“Real leaders in most countries are looking at this and saying to themselves: ‘You know what, this is jobs, this is economic development, international leadership, this is health and safety for my citizens. This is the security of my nation,’ and that’s for all the nations that are looking at this now,” Kerry said. “That’s why I think there is a race toward some of these new technologies, and it’s only the countries that are getting into that race that are going to be providing the great jobs that come with this new energy future.”

One aspect of Biden’s infrastructure plan is to make electricity carbon-free by 2035.

“Can [Biden] achieve that? Yes. Why — because utilities themselves are embracing that notion and they’re moving in that direction. Moreover, Congress has already passed some critical elements [on refrigerants, methane, tax credits for solar and wind],” Kerry said. “So, yes — things are already passing, and I’m convinced they will continue to embrace sensible legislation.”

As new carbon pricing markets pop up (just last month in the U.K.), carbon pricing — while a hot-button discussion — “is not on the table at this moment” under Biden, according to Kerry.

In the meantime, fashion has taken up carbon labeling on its own terms.

For More, See:

What Rejoining the Paris Agreement Signals to Fashion

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