What's Happening in Sustainability & ESG (Week Recap 05.11 - 11.11) 🌎

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. 🍀

In this edition, we’ll cover:

• COP29 has begun, with countries endorsing a framework for a global carbon market 🌎

• Donald Trump’s re-election impact on sustainability and clean energy 🇺🇸

• The US SEC fines Invesco $17.5 million over misleading ESG investing claims 📈

• The new California climate law survived an initial legal challenge ⚖️

• and other news 🌍

THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🌎 COP29 has begun in Baku, Azerbaijan, under a cloud of uncertainty following Donald Trump’s recent election, which raises doubts about the US‘s climate commitments and highlights growing skepticism toward multilateral action. The summit aims to secure an ambitious $1 trillion in annual climate finance from wealthy nations to support developing countries, a target that starkly contrasts with Trump’s “America-first” stance. Key leaders, including Biden, Xi Jinping, and Modi, are notably absent, which has left fossil fuel interests, like ExxonMobil, to fill the void and has sparked concerns about the event’s credibility, particularly as Azerbaijan promotes gas as a transitional energy source. China has pushed for discussions on trade, including tariffs, positioning itself to strengthen its role in clean energy while resisting increased financial obligations.

An early deal was reached on the first day of the summit, with countries approving carbon credit quality standards, paving the way for a UN-backed global carbon market intended to fund CO₂-reducing projects in poorer nations. This deal brings the long-awaited carbon market closer to launch, potentially as early as next year. The market will allow countries and companies to offset their emissions by funding projects like mangrove cultivation or clean stove distribution. Although the standards aim to improve market credibility, campaigners argue they fall short of protecting human rights, and some nations criticized the lack of inclusivity in the decision-making process. The International Emissions Trading Association projects that by 2030, this market could cut 5 billion tonnes of emissions annually and generate $250 billion per year.

The 29th COP in Baku continues decades of climate action milestones. Key moments include:
• 1800s-1958: Scientists discover GHG’s warming effect, with Charles David Keeling establishing the “Keeling Curve” showing rising CO2 levels.
• 1990s: The UN Framework Convention on Climate Change (UNFCCC) is signed in 1992, establishing “common but differentiated responsibilities.” COP1 in 1995 and the 1997 Kyoto Protocol set the first emissions targets.
• 2000s: The Kyoto Protocol takes effect in 2005 despite US rejection; COP15 in 2009 ends without new targets but inspires the Green Climate Fund at COP16.
• 2015: The Paris Agreement at COP21 calls for universal, ambitious emissions pledges, aiming to limit warming to 1.5°C.
• 2017: US President Donald Trump pledges to remove the US from the Paris treaty, which happens in 2020.
• 2020s: The US reenters the Paris Agreement under Biden in 2021, COP26 sets a coal reduction goal, COP27 establishes a Loss and Damage Fund, and COP28 in 2023 calls for a transition away from fossil fuels.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🇺🇸 Donald Trump’s re-election could impact ESG policies both domestically and globally. For the environment, he plans to boost fossil fuel production, pull the US from the Paris Agreement, and roll back Biden’s climate policies, though all subsidies for clean energy are unlikely to be repealed. Socially, Trump has pledged to eliminate diversity programs in education and restrict civil rights protections, raising concerns among minority communities. For governance, Trump is expected to dial back Biden’s antitrust actions, especially against Big Tech, potentially influencing major cases involving companies like Google. He also plans to reimpose tariffs and limit international climate commitments, having called climate policies “one of the greatest scams of all time.” His transition team is already preparing executive actions to withdraw from the Paris Climate Agreement, reduce the size of certain national monuments to enable more drilling and mining, lift the pause on new liquefied natural gas (LNG) export permits to Asia and Europe, and revoke a waiver allowing states like California to enforce stricter pollution standards.

⚡️ Donald Trump’s election has also raised concerns about slowing the clean energy transition, but these fears may be overstated, according to experts. Clean energy’s growth has shifted from policy dependence to being driven by market dynamics, cost competitiveness, and consumer demand. The sector’s economic foundation is robust, with major corporations, institutional investors, and state governments committed to renewables due to cost declines in solar, wind, and battery storage. While Trump may reduce federal clean energy incentives, market forces, technological advancements, and strong state policies might ensure that clean energy investments continue.

🇨🇦 Canada proposed a draft regulation to cap GHG emissions in its oil and gas sector, aiming to reduce emissions by over a third while allowing production to grow by 16% by 2030-2032. The regulation introduces a phased cap-and-trade system, where companies receive annually decreasing emissions allowances and may purchase additional allowances, use offsets, or contribute to decarbonization efforts. This sector, Canada’s largest emissions source, supports 400,000 jobs and is central to national climate targets, including a 40-45% reduction in emissions by 2030 and net-zero by 2050.

🇺🇸 The new California law requiring large US companies to disclose value chain emissions and climate-related financial risks survived an initial legal challenge by the US Chamber of Commerce. US District Judge Otis Wright II declined to block the law, citing insufficient evidence on constitutional grounds. The law, under SB 253 and SB 261, mandates that companies with over $1 billion in revenue report Scope 1, 2, and 3 emissions, while companies with $500 million must report climate risks and mitigation strategies, with reporting beginning in 2026. The Chamber argued the law violates the First Amendment by compelling disclosure on subjective issues, but the court suggested it may instead regulate commercial speech related to green claims, indicating the case could be revisited with additional evidence.

WHAT ARE COMPANIES DOING?

Corporate sustainability, new tools and services & companies in the news

🛢️ Shell won an appeal overturning a 2021 Dutch court ruling that required it to cut absolute carbon emissions by 45% by 2030, marking a setback for climate activists. The Hague appeals court acknowledged Shell’s duty to reduce emissions but dismissed the prior mandate, citing potential adverse global effects, like customers switching to more polluting energy sources. Friends of the Earth Netherlands, which brought the case, vowed to continue fighting polluters. Shell, whose emissions from its own production dropped 30% from 2016, plans $10-15 billion in investments in low-carbon energy through 2025 but has scaled back broader renewable targets.

🛩️ Archer Aviation, an electric vertical take-off and landing (eVTOL) aircraft developer, signed a deal to supply up to 100 electric aircraft to Soracle Corp., a joint venture between Japan Airlines and Sumitomo Corp., for air taxi services in major Japanese cities. Valued at up to $500 million, the agreement includes pre-delivery payments and plans for routes in cities like Tokyo, Osaka, and Okinawa. Archer’s Midnight eVTOL aircraft, designed for short flights up to 50 miles, will be showcased at the 2025 World Expo in Osaka. Final approval from Japan’s Civil Aviation Bureau is pending for this advanced air mobility initiative.

🇬🇧 The UK’s Competition and Markets Authority (CMA) closed its investigation into Unilever’s environmental claims after the company made changes to some product claims. The CMA’s probe was part of a broader investigation into potential greenwashing in the fast-moving consumer goods sector, where it initially found practices that could mislead consumers regarding product sustainability. The CMA had raised concerns about Unilever’s use of broad or vague language that could exaggerate environmental benefits, unclear claims about product recyclability, and the use of colors and imagery that might imply a stronger environmental impact than was accurate. Unilever’s recent adjustments to its claims and broader industry improvements contributed to the CMA’s decision to close the investigation.

🥤 Los Angeles County filed a lawsuit against PepsiCo and Coca-Cola, accusing the companies of contributing significantly to plastic pollution, misleading the public on the recyclability of plastic containers, and concealing environmental and health impacts associated with plastic use. The county alleges that most plastic bottles end up in landfills or as litter, with limited recycling benefits. The lawsuit contends the companies engaged in deceptive practices, such as promoting a “circular economy” for plastics while failing to reduce virgin plastic use as promised. The county seeks injunctive relief, restitution, and civil penalties to address these alleged unfair practices and reduce local plastic pollution.

🟢 BASF and Exterra Carbon Solutions signed an MoU to pursue a commercial-scale carbon capture and storage (CCS) project in Quebec, Canada, combining BASF’s OASE® gas treatment with Exterra’s Reactive Oxide to Carbonate (ROC) technology. This partnership aims to reduce emissions from hard-to-abate industries, such as cement, steel, gas-to-power, and waste-to-energy, which contribute significantly to global CO2 emissions. The collaboration will create North America’s first integrated system for capturing and mineralizing CO2 for permanent surface storage and validated carbon credits.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🇺🇸 The US Securities and Exchange Commission (SEC) charged Invesco, a global asset manager, with making misleading claims about its ESG-related investments, alleging that Invesco overstated the percentage of assets integrating ESG considerations. From 2020 to 2022, Invesco’s marketing materials claimed that 70%–94% of its assets were ESG-integrated, yet many of these assets were held in passive ETFs without ESG factors. Invesco agreed to settle for $17.5 million without admitting or denying the charges.

⚡️ Energy Infrastructure Partners (EIP) increased its stake in Eni’s renewables, retail, and EV charging company, Plenitude, with an additional €209 million investment, raising EIP’s total investment in Plenitude to nearly €800 million. EIP now holds a 10% stake in Plenitude, supporting its growth in renewable energy, retail energy, and e-mobility. Plenitude, created by Eni in 2021, has over 3 GW of renewable capacity, aiming for 8 GW by 2027, serves 10 million energy customers across six countries, and operates 21,000 EV charging points, with plans to expand to 40,000 by 2027.

🛩️ Vermont-based electric aerospace company BETA Technologies raised $318 million in Series C funding to advance the production, certification, and commercialization of its electric aircraft and charging infrastructure. The funding supports BETA’s ALIA Electric Vertical Take-Off and Landing (eVTOL) and Conventional Take-Off and Landing (CTOL) aircraft, which offer substantial emissions and cost reductions. Seeking FAA certification for both cargo and passenger variants, BETA aims to serve commercial and military markets.

⚡️ Paris-based ZE Energy raised €54 million to expand its hybrid photovoltaic power plants and energy storage solutions across Europe. Founded in 2019, the company aims to reach 900 MW of solar capacity and 600 MWh of storage by 2026, providing stable, fixed-price renewable energy. The funding will help ZE Energy scale its model, which combines solar production with storage to mitigate price volatility amid Europe’s fluctuating solar market.

🌮 Danish SaaS company Kanpla raised €8 million in Series A funding to drive international expansion across Europe and the US. Kanpla’s platform digitalizes contract catering operations, helping caterers streamline processes, reduce food waste, and enhance customer experience. Currently active in 10 European countries with over 3,000 canteen clients, Kanpla’s platform allows 250,000 users to view menus, track CO₂ emissions and nutrition, make purchases, and give feedback.

🟢 Dutch startup SeaO₂ raised over €2 million in funding to scale its Direct Ocean Capture (DOC) technology, which removes CO₂ from seawater to enhance oceanic CO₂ absorption. This funding will support SeaO₂’s transition from prototype to a pilot plant, expected to launch in 2025 with a 250-ton annual CO₂ capacity, and aims to achieve one megaton of CO₂ removal by 2030 and one gigaton by 2045.

🟢 Irish startup Ulysses Ecosystem Engineering raised $2 million in pre-seed funding to scale its autonomous marine drones for seagrass restoration. These drones reduce restoration costs by 10x and enable projects that are 100 times larger and faster, helping address the decline of seagrass meadows, which absorb 35 times more carbon than rainforests and support marine biodiversity. Unlike traditional methods reliant on divers, Ulysses’ drones automate seed collection and replanting, operating in conditions that typically limit human divers.

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