2022 Oslo International Environmental Law Conference
Oslo and Online
6 October 2022 – h 11:30 am CET
INFO: https://www.iucnwcel2022.com
With the latest IPCC report by Working Group III describing climate change as a systemic financial risk, policymakers are strongly pushing for effective policy design that will harness global capital toward climate-resilient investing. This paper inquires how international climate law and comparative finance law can help financial entities align with the Paris Agreement, focusing on pension funds. Not directly comprised by the international climate regime, pension funds are currently mispricing climate risk, thus feeding on systemic financial risk and contravening their intergenerational role. Although ESG criteria could direct investments towards lessened climate risk, criticism has multiplied on the lack of comparable ESG frameworks and the rise of net-zero greenwashing by financial entities. First, this paper reveals why the field of climate risk in pension funds requires regulatory—instead of voluntary—instruments. Second, it analyses divestment as a tool for enforcing nondiscretionary fiduciary duties and decarbonizing pension funds. In this context, Artificial Intelligence holds potential for regulation to support data-driven investing that is both Paris-aligned and greenwashing-proof. By blueprinting a regulatory roadmap for decarbonising pension funds, the paper argues how risk assessment and risk management can deflect exponential exposure to climate risk, including litigation risk, in pension funds. Conclusively, this article considers the legal implication of divestment from an historical perspective, as based on the divestment case made from apartheid-compromised assets in South Africa, tobacco assets, and Russian assets. On this last note, the article examines divestment in the light of the windfalls that oil and gas firms are currently reaping due to the 2022 Russian invasion of Ukraine, cutting short the economic case for the decarbonisation of pension funds in the short term. This paper reveals that recent events, however, reinforce the case for cutting dependence on fossil fuels.
Chair: Prof. Catherine Kessedjian
● Aude Epstein, “Unleashing the transformative power of business law” (online)
● Esmeralda Colombo, “Riders on the Storm: Decarbonising Fiduciary Duties in Climate Matters” (online)
● Yvan Razafindratandra, “How corporate sustainability should contribute to make the Paris Agreement fully operational” (online)
● Pantos Stavros, “It’s not that easy bein’ green”: evaluating the prudential supervision of climate change risks for financial services in the UK” (online)
● Petros Patronos, “Evaluating compliance of business and finance with climate and biodiversity self-commitments: a necessary step forward?” (online)
● Jasmina Bukovac, “Sustainable» Agreements – a critical analysis of Swiss and European competition law”