What's Happening in Sustainability? (Week Recap 06.06 - 12.06) 🌎
Global greenhouse gas emissions are at an all-time high, EU plans to invest in carbon capture and storage infrastructure, and other news ...
This week’s read time: 7 minutes
Welcome to this edition of Green Digest, where you will get updated about everything happening in the sustainability & ESG space in less than 10 minutes 🌎
We go through tons of articles and data from the most reliable sources, filter & simplify them and serve them to you in bite-sized chunks every week. 🍀
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The week’s most important news:
⛔️ Greenhouse gas emissions have reached an all-time high, threatening to push the world into "unprecedented" levels of global heating, according to a study published in the journal Earth System Science Data. The world is rapidly running out of "carbon budget", with only about 250bn tonnes of carbon dioxide that can now be emitted to avoid the accumulation of CO2 in the atmosphere that would raise temperatures by 1.5C. Governments are meeting in Bonn to prepare for a major UN summit on the climate, Cop28, this November in the United Arab Emirates.
🇪🇺 The European Commission is developing plans to accelerate investment in carbon capture and storage (CCS) infrastructure to help the bloc reach its net zero emissions goal by 2050. The Commission's plans could include setting targets for CO2 storage infrastructure, EU-wide standards on CO2 quality, and access to carbon capture infrastructure. The EU already has targets in place for expanding natural ecosystems that can absorb and store CO2, but the bloc may need to store up to 550 million tonnes of CO2 per year by 2050 to achieve its goal. The EU countries will also attempt to pass a deal on new renewable energy targets after a group of countries, including France, lodged last-minute opposition, citing concerns that the law sidelines nuclear energy. The law is designed to drive a rapid expansion of renewable energy sources like wind and solar, while other pro-nuclear EU members including Bulgaria, Poland, Hungary, and the Czech Republic had also signaled they would not support the renewable law. 🇪🇺
🇩🇪 Germany has launched a €50 billion, 15-year subsidy program called Carbon Contracts for Difference (CCfD) to help energy-intensive industries invest in low-carbon production processes and technologies. The program will provide “climate protection agreements” to shield companies from the price risk of operating low-carbon facilities compared to competitors using fossil-based operations. The program is based on an auction system, with companies submitting a bid based on the amount of government support needed to avoid a ton of CO2 emissions based on the price gap. Eligible bidders include companies with emissions greater than 10 kilotonnes per year in emissions-intensive industries such as steel, chemicals, and cement.
🇺🇸 The Biden administration has requested that a federal judge dismiss a lawsuit by Republican-led states seeking to overturn a rule allowing socially-conscious investing by employee retirement plans. The rule replaces limitations placed by the Trump administration on considering environmental, social, and corporate governance factors in making investment decisions. The new rule recognizes that issues such as climate change and social justice can impact companies' long-term financial health. The lawsuit was filed by a coalition of 25 states led by Utah and Texas, claiming that the rule would imperil the retirement savings of millions of Americans by allowing investments to be made based on political agendas rather than financial considerations.
🇨🇳 China has exceeded its 2025 target for non-fossil fuel energy sources, which now account for over 50% of the country's total installed electricity generation capacity. Coal still accounts for the majority of China's energy consumption, but the country has made significant investments in renewable energy capacity in recent years.
💡 More interesting news:
A report by Net Zero Tracker shows that while 75 of the world's largest 112 fossil fuel companies have committed to reaching net-zero emissions, most fail to address key concerns such as Scope 3 emissions and short-term reduction plans, making their targets "largely meaningless." The report also found that none of the companies were making the necessary commitments to move away from fossil fuel extraction or production. The study highlights the need for credible plans and meaningful execution to achieve net-zero targets. ⛔️
Shareholder support for proxy resolutions on climate change and workforce diversity has dropped significantly this year in the US, with average support for environmental resolutions at 25% and social resolutions at 20%, according to shareholder engagement firm Georgeson. Analysts attribute the decline to growing political pressure on fund firms' voting and resolutions asking for steps investors deemed too burdensome. However, new resolutions that got low backing stand to gain in coming years, such as a call on Exxon to account for divested assets in emissions reporting, which won 18% support. 👀
Gender inequality has remained stagnant for a decade, with almost 90% of men and women holding fundamental biases against women, according to a report by the United Nations Development Programme. Despite the rise of women's rights groups and social movements, cultural biases and the COVID-19 pandemic have hindered progress towards gender parity by 2030. The report also noted a broken link between education and income for women, with the average income gap at 39% even in countries where adult women are more educated than men. ⛔️
The U.S. has banned imports from China-based printer maker Ninestar Corp and a Chinese chemical company over alleged human rights abuses against China's Uyghurs and other persecuted groups. The companies were added to the U.S. Uyghur Forced Labor Protection Act Entity List for working with the government of Xinjiang to recruit, transport, transfer, harbor or receive forced labor of Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups, out of Xinjiang. The ban is part of the U.S. effort to combat forced labor and human rights abuses in China. China's commerce ministry has opposed the move, stating that it lacks factual basis and transparency, and that China will take necessary measures to safeguard the rights and interests of Chinese enterprises. 🇺🇸🇨🇳
The UK Advertising Standards Authority (ASA) has banned several ads from Shell, Petronas, and Repsol that were found to be misleading consumers on the companies' overall environmental impact. The ads breached codes regarding misleading advertising and environmental claims. The ASA has increased its focus on environmental claims made in ads, releasing guidance for advertisers making environmental sustainability claims to consumers. The rulings come as the regulator has increased its focus lately on environmental claims made in ads. ⛔️
Funds that market themselves as opposing ESG investment considerations have seen a slowdown in new investor deposits, according to Morningstar. After taking in more than $300m in the month after launching last August, Strive U.S. Energy ETF and other such firms have seen a significant slowdown in flows, with total assets among the 26 anti-ESG funds Morningstar tracked standing around $2bn as of March 31. The report suggests that most asset managers still see ESG risks, such as climate change, as worth considering. 🟢
On the other hand, over 75% of private markets investors plan to stop investing in non-ESG products, with a majority intending to increase allocations to ESG investments, according to a report by PwC. The report surveyed 300 GPs and 300 LPs across the US, EU, UK, and Asia Pacific and found that ESG AUM in private markets is expected to surge from $1.1tn in 2021 to $2.7tn by 2026. The report also highlighted key ESG regulatory-related challenges facing private markets investors, including conflicts between regional and national regulations and burdensome compliance requirements. 👀
🧐 What are companies doing?
Orsted, the world's top offshore wind power group, plans to invest $68 billion to install 50 GW of power capacity by 2030. The company has also issued its first-ever blue bonds (the first energy company to do so), raising €100 million to finance ocean biodiversity and sustainable shipping initiatives. The company plans to use the proceeds to scale up its efforts on marine biodiversity and support the transition to sustainable shipping. Ørsted aims to grow its renewable energy capacity to 50 GW by 2030, with roughly 30 GW coming from offshore wind. The company has committed to ensuring all new projects commissioned by 2030 have a net-positive biodiversity impact and is piloting techniques such as artificial habitat restoration. 🟢
Glencore, Stellantis, and Volkswagen's PowerCo will back a $1 billion deal by ACG Acquisition Company to purchase two mines in Brazil from private equity funds advised by Appian Capital. The nickel concentrate will be refined at Glencore's facilities and used in electric vehicle batteries by Stellantis, PowerCo, and other manufacturers. ACG will become ACG Electric Metals and issue new shares, making Glencore, Stellantis, and La Mancha owners of 51% and leaving 49% for free float. The deal is part of a mining M&A trend driven by rising demand for metals needed for the global green energy transition. 🌎
Mercedes-Benz has signed agreements with H2 Green Steel to supply low-carbon steel for use in vehicles in Europe and establish a green steel supply chain in North America. H2 Green Steel is building the world's first large-scale fossil-free steel plant in Sweden, with plans to produce 5 million tonnes of nearly fossil-free steel by 2030. Mercedes-Benz has purchased an equity stake in H2 Green Steel and aims to achieve a green steel supply chain from 2039 at the latest, with an 80% reduction in CO2 emissions from production by 2030. 🚙
General Motors has announced a collaboration with Tesla to adopt the North American Charging Standard (NACS) into its EVs starting in 2025 and to provide current GM EV drivers access to Tesla's supercharging network using an adapter early next year. This collaboration will help expand access to fast chargers for customers and could help move the industry towards a single North American charging standard. Ford also recently announced an agreement with Tesla to equip future EVs with NACS charge ports beginning in 2025 and to provide Ford drivers with access to Superchargers using an adapter next year. 🚘
Uber has pledged to eliminate emissions from all Uber Eats deliveries by 2040, with an earlier target of 2030 for European cities. The company also aims to end all unnecessary plastic waste from deliveries by 2030 and transition to more sustainable packaging by offering discounts, incentives, and advocacy. Uber is working with organizations such as the World Wildlife Fund and RMI to scale programs helping couriers switch to greener transport modes and expand micro-mobility partnerships to support couriers' transitions to e-bikes, EVs, and other emission-free modes. 🟢
Nestle is piloting a scheme to give cash incentives to coffee farmers who grow beans sustainably as part of its plan to halve greenhouse gas emissions in its coffee business by 2030. The scheme offers conditional cash incentives to 3,000 coffee farmers in developing countries to encourage them to transition to regenerative agricultural practices, including using organic fertilizers, planting shade trees, and intercropping. The move comes as major consumer goods companies face increased reputational and legal pressure to clean up their supply chains globally. 🍀
Permutable AI, a UK-based provider of sustainability intelligence using AI tools, has launched a project aimed at revolutionizing the prediction of carbon emissions within global supply chains. The project addresses the need for reliable carbon emissions reporting in the supply chain sector by leveraging natural language processing and data science to predict and estimate emissions across scopes 1, 2, and 3, offering a holistic view of companies' carbon footprints. Permutable AI's machine learning models demonstrated accuracy improvements, ranging from 68% to 99%, compared to using country averages. The results have already showcased the advantage of machine learning models over traditional statistical methods in predicting emissions, with potential benefits including higher accuracy in determining supply chain carbon evaluations, enhancing sustainability reporting, supply chain optimization, ESG performance analysis, and compliance with carbon regulations. ✅
👀 Where is cash flowing?
🌎 Just Climate has raised $1.5 billion for its Climate Assets Fund I, which invests in industrial decarbonization solutions in sectors including energy, transport, industry, and buildings. The fund's objective is to address climate change through asset-heavy growth-stage companies in industries with high emissions and limited options for reducing them. The first three investments include ABB E-mobility, H2 Green Steel, and Meva Energy.
🍀 San Francisco-based Charm Industrial has raised $100M in Series B financing. The company plans to use the funds to expand engineering and bio-oil R&D efforts, scale operations with tens of thousands of pyrolyzers, and improve transportation capacity. Charm uses plants to capture CO₂ from the atmosphere and converts biomass into a stable, carbon-rich liquid which is then pumped deep underground, permanently removing CO₂ from the atmosphere. The company has increased tonnes of carbon removal delivered per week by 5x since the beginning of the year and has new deals with Frontier and JPMorgan Chase to permanently remove an additional 140,000 tons of atmospheric carbon dioxide via bio-oil sequestration.
🔋 Denver-based Forge Nano has raised over $50M in funding, led by Hanwha Corporate Venture Capital, to accelerate the growth of its nanotechnology opportunities for battery material and develop a battery production line. The company's proprietary Atomic Armor technology allows manufacturers to engineer materials at the atomic level, optimizing battery characteristics like range, safety, and cycle life. Plans are underway to launch the construction of a pilot battery production line in Q2 2023 to support applications including aerospace, consumer electronics, and defense.
🛩️ Climate tech company OXCCU has raised $22.7 million to commercialize its sustainable aviation fuel (SAF) produced from captured carbon dioxide. The company combines CO2 with hydrogen from water to produce fuels, chemicals, and biodegradable plastics. The funding will be used to support technological capabilities, expand facilities, and grow the team in the UK.
🟢 Sustaincert, a climate impact verification company based in Luxembourg, has raised $37M in Series B funding. The funds will be used to accelerate the commercial, organizational, and technology scale-up of its value chain decarbonization impact solution for Scope 3 emissions and its soon-to-be-launched digital verification solution for carbon markets. Sustaincert combines independent climate expertise with digital verification solutions to provide impact validation and verification services for carbon markets and value chains and is also the co-founder of the Value Change Initiative.
🌎 Carbon removal marketplace Nori has raised $6.25 million and appointed Matt Trudeau as its new CEO as it prepares to scale its marketplace to support its largest-ever sale of carbon removal credits through its collaboration with Bayer. The company aims to develop market-driven solutions to remove 1.5 trillion tonnes of legacy carbon dioxide from the atmosphere and address climate change through the creation of a large-scale carbon market.
That’s it for this week. Thanks for making it to the end, your attention span is absolutely impressive 💪.
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