Saturday, December 15, 2012

United Nations and Scottish Widows in Edinburgh

The Scottish Widows Investment Partnership (SWIP), based in Edinburgh, is one of Europe's largest asset management companies and part of Lloyds Banking Group.  It manages investments worth £142bn.

The United Nations has an finance initiative under its Environment Programme (UNEP) establishing and encouraging observance of principles of responsible investment (UNPRI).

Both these organisations are brought together in Dr Craig Mackenzie, who is both Head of Sustainability at Scottish Widows Investment Partnership and chair of the UN PRI reporting framework Technical Committee.  Craig was one of the presenters at the first UNPRI event in Edinburgh which I attended last month.  One area on which he focussed was the danger of climate change disaster.

His presentation included an image showing the 2090-99 projection of Palmer Drought Severity Index (PDSI - it is the last of the maps in the four below).  Under the heading 'An even bigger tragedy?', and with extra highlighting of the severe drought colours, I considered his presentation both speculative and melodramatic.  By the time he had finished his presentation he had also conjured with the word 'disaster' and I concluded that he wanted to jolt us investors into more radical action to prevent climate change.

There followed a discussion of the barriers to more effective action to prevent dangerous climate change and the discussion identified decision takers, IE politicians, as being a particular problem.  Being the only politician in the room I was asked point blank what needed to be done to get them (us) to act.

I suggested that decision takers were not likely to be impressed by a speculative projection of what might happen 80-90 years in the future as in the PDSI image. Dr Mackenzie's image referenced a paper in Nature Climate Change which seemed to me to be counter to another peer reviewed paper in Nature.  The latter, more recent, paper seems to suggest that the PDSI may suffer from a rather serious calculation error.

What happened next, however, was more interesting.  At the coffee break I offered to explain myself to Dr Mackenzie.  I could hardly believe my ears when he talked about sceptics in the same breath as flat earthers.

But there was more.  I suggested that there were many impeccably qualified climate scientists, such as Professor Richard Lindzen of MIT, who were sceptical of the position Dr Mackenzie had articulated.  His response was that Lindzen has been proved wrong on every point by peer reviewed papers!   He also presented the old saw that sceptics were regarded as wrong by 97% of climate scientists.  He seemed totally unaware of the weaknesses (or even the claims) of the particular piece of research from which that claim had arisen.

There was much else which separated us and I offered to engage with further evidence.  A brief ensuing correspondence, in which I gave sources and reasons for my position, only served to confirm my suspicion that, beyond headline claims, Dr Mackenzie is not very well informed on climate change issues.  In particular, he is ill informed about the arguments and positions of those he seeks to demonise with the terms 'outlier' and 'flat earthers'.

I know Scottish Widows Investment Partnership has some very competent investment managers.  I am sure the Head of Sustainability is better informed in other areas than he is about climate change - and how to persuade decision takers in relation to climate change.

I trust our investments with SWIP are safe.

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