What's Happening in Sustainability & ESG? (Week Recap 12.09 - 18.09) 🌎

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This week’s read time: 9 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. 🍀

⭐️ The week’s top news:

🌎 World leaders, business titans, scientists, and activists are meeting in New York City for Climate Week (September 17-24) to discuss combating climate change. On the first day, tens of thousands of people marched across the US to demand President Biden and other world leaders end fossil fuels. The event kicked off Climate Week NYC, with speakers criticizing the Biden administration for approving new oil and gas drilling permits. The summit aims to showcase "first movers and doers" committed to net zero pledges and emissions reduction targets. The outcome will be a chair's summary, highlighting discussions and areas of agreement or disagreement. Notable absences include oil and gas CEOs, and it is unclear which heads of state will be speaking. Climate Week occurs amidst a year of climate extremes, with 2023 on track to be the warmest year on record. The event also presents an opportunity for world powers to signal increased aid to developing countries for climate adaptation.

🇪🇺 The European Parliament has voted to increase the share of renewable energy in the EU's energy consumption to 42.5% by 2030, nearly doubling the current level. The legislation also sets more ambitious clean energy targets for high-emitting sectors and aims to accelerate the approval of renewable energy projects. The law now awaits formal approval by the EU Council and includes measures to speed up the permitting process for renewable energy power plants. Sector-specific targets and requirements are also outlined in the legislation.

🇺🇸 The State of California has filed a lawsuit against Exxon Mobil, Shell, BP, ConocoPhillips, Chevron, and the American Petroleum Institute (the US oil industry’s biggest lobby), alleging that they misled the public for decades about the dangers of fossil fuels. In the past year, California has dealt with record heat, wildfires, unusual bouts of severe rain and snow, and rising sea levels that have threatened the state’s shorelines—extreme weather events that studies show were made more likely or more intense due to climate change. The suit seeks funding for recovery efforts related to California’s weather-related disasters. California Governor Gavin Newsom also plans to sign two landmark climate-related disclosure bills into law. The bills will require large companies in the US to disclose their full value chain emissions and report on climate-related financial risks and adaptation measures. The laws would introduce the first major mandatory climate-related reporting obligations for many US companies and go beyond the proposed SEC rules. 

🇪🇺 The EU Commission is also considering requiring sustainability-related disclosures for all financial products offered in the EU, even if they have not made any sustainability claims. The consultation focuses on the Sustainable Finance Disclosure Regulation (SFDR) and seeks feedback on introducing uniform disclosure requirements for all products. This includes reporting on Principal Adverse Impact (PAI) and considering sustainability factors such as climate, environment, social issues, human rights, and anti-corruption. The consultation also explores developing a more precise categorization system for sustainable financial products. The Commission aims to ensure that the rules meet stakeholders' needs and expectations.

• Norway's $1.4 trillion wealth fund, managed by Norges Bank Investment Management (NBIM), has released a new set of climate-related expectations for portfolio companies, including requirements to disclose value chain emissions, report on climate risks, and implement transition plans. The fund also expects companies not to count carbon credits towards their interim emissions reduction targets. NBIM aims to reach net zero emissions for all companies in the fund by 2050 and sets climate-related expectations for its portfolio companies. The expectations will guide engagement activities, investment analysis, and risk management. NBIM also calls for improved transparency on companies' use of carbon credits. 🇳🇴

• A paper prepared for EU leaders and seen by Reuters warns that the EU could become as dependent on China for lithium-ion batteries and fuel cells by 2030 as it was on Russia for energy before the war in Ukraine. The paper emphasizes the need for strong measures to reduce dependency on China and diversify towards Africa and Latin America. The EU's goal of reaching net-zero CO2 emissions by 2050 will significantly increase the demand for lithium-ion batteries and fuel cells. Without strong measures, the EU risks a similar severity of dependency on China as it had on Russia before the invasion of Ukraine. The paper also highlights vulnerabilities in the digital-tech space and warns that foreign dependency could hinder productivity gains and impede climate change mitigation efforts. 🇪🇺

• Deutsche Bank and the European Investment Bank (EIB) have launched a €400 million sustainable finance initiative to support medium-sized companies in their transition to more sustainable business models. Deutsche Bank will provide long-term loans, with the EIB providing guarantees covering up to 50% of the loan sum. The financing will be available for investments in renewable energy, energy efficiency, and other sustainable projects, with at least half of the funding earmarked for renewable energy production. The collaboration aims to accelerate the shift away from fossil energy in Germany and is part of Deutsche Bank's broader sustainable finance goals. 📈

• The UK government has granted licenses to oil companies, including Shell and ENI, to store up to 10% of the country's annual carbon emissions in depleted oil and gas fields beneath the North Sea. The plan aims to develop a carbon capture and storage (CCS) industry to reduce emissions from heavy industry. The North Sea Transition Authority estimates that the companies could store up to 30 million tonnes of CO2 per year by 2030. While some green groups question the focus on CCS, the Committee on Climate Change suggests it is necessary for the government to achieve its emissions reduction goals. 🇬🇧

• The Science Based Targets initiative (SBTi), one of the key organizations focused on aligning corporate environmental sustainability action with the global goals of limiting climate change, announced the launch of a major transformation aimed at improving governance, boosting integrity, and increasing capacity, including revealing that it is separating its standard-setting and validation activities into distinct entities. SBTi was formed in 2015 as a collaboration between CDP, WRI, WWF, and UNGC to establish science-based environmental target setting as a standard corporate practice. Their functions include defining emissions reductions and net-zero targets, providing technical assistance, and validating emissions reduction targets. 🟢

🧐 What are companies doing?

• Amazon has announced a 10-year agreement to purchase 250,000 tonnes of CO2 removal credits from Occidental's carbon capture platform, 1PointFive. This marks Amazon's first investment in Direct Air Capture (DAC) technology and one of the largest-ever orders for a DAC facility. The credits will be enabled by 1PointFive's DAC plant, STRATOS, which is expected to be the world's largest of its kind. Amazon's Climate Pledge Fund has also invested in DAC technology company CarbonCapture and aims to make carbon removal credits available to businesses within the company as well as to suppliers, selling partners, and customers. 🟢

• Apple has launched its new Apple Watch lineup, which is the company's first carbon-neutral product. The new Apple Watch incorporates sustainability features such as using clean electricity for manufacturing, incorporating recycled materials, and reducing shipping emissions. According to the company, innovations in design and clean energy have driven reductions in product emissions of over 75% for each carbon-neutral Apple Watch. Apple also aims to use only recycled or renewable materials in its products and has made progress in increasing the use of renewable energy in its manufacturing supply chain. ⌚️

• Mercedes-Benz has signed a deal with Steel Dynamics to purchase over 50,000 tonnes of CO2-reduced steel annually for its plant in Alabama, US. The steel, produced using electric arc furnace technology and renewable energy sources, will significantly reduce carbon emissions compared to traditional steelmaking methods. This agreement is part of Mercedes-Benz's goal to achieve a green steel supply chain by 2039 and reduce CO2 emissions from production by 80% by 2030. Volvo Group has also signed an agreement with H2 Green Steel to purchase low-carbon steel for its commercial vehicles, starting in 2026. 🚘

• Nestlé has launched a pilot project in the UK to produce low-carbon fertilizer using cocoa shells as a way to address agricultural greenhouse gas emissions. The two-year trial will assess the fertilizer's impact on crop production, soil health, and GHG emissions, potentially producing up to 7,000 tonnes of low-carbon fertilizer for Nestlé's UK wheat supply chain. Nestlé has committed to achieving net zero GHG emissions by 2050 and also advancing regenerative agriculture practices. 🌾

• United Airlines has signed an agreement with Cemvita for up to 3.7 billion liters (1bn gallons) of sustainable aviation fuel (SAF) made from CO2. The deal will provide United with up to 189 million liters (50mn gallons) of CO2-based SAF annually over 20 years. Cemvita designs synthetic microbes that have the potential to convert CO2 into sustainable aviation fuel (SAF), thus offering a potential solution to the limited supply of feedstocks. 🛩️

💸 Recent funding rounds:

📈 Galvanize Climate Solutions has raised over $1 billion for its Innovation + Expansion Fund, one of the largest climate venture funds to date. The fund invests in early- to growth-stage climate transition-aligned companies and provides capital and resources to help them scale. Galvanize aims to accelerate critical climate solutions and believes in the immense value of technologies driving decarbonization in the next decade.

🔋California-based startup Lyten has raised $200 million in funding to scale the production of its 3D graphene supermaterials. The company aims to provide decarbonization solutions for greenhouse gas-emitting sectors. The financing will support the development of next-gen lithium-sulfur batteries, lightweight composites, and advanced sensor arrays. Lyten is collaborating with Fortune 500 companies and the U.S. Government, with plans to deliver its first commercial application this year.

♻️ Climate tech startup UBQ Materials has raised $70 million to expand its waste-to-plastic technology. The Israeli company converts household waste into a sustainable substitute for fossil-based plastics, diverting waste from landfills and reducing CO2 emissions. The funding will support commercial scale-up, new facilities in Europe and North America, and R&D for new product lines.

📈 Impaakt, a Switzerland-based startup that measures the impact that businesses have on the planet and society, has secured close to $8 million in its latest fundraising round. With a focus on collaborative impact measurement, Impaakt aims to empower business decision-makers with robust impact data and insights. The funds will be used to drive growth, expand market reach, and develop new services for individual investors. Impaakt's unique approach assesses the true environmental and social impacts of businesses, while also addressing the need for individual investors to align their sustainability convictions with their investment choices.

🟢 Optera, a sustainability management solutions provider, has raised $12 million in funding. The company plans to expand its carbon accounting solutions and services to more mid-market and enterprise companies. Optera's platform enables companies to measure and manage emissions, collaborate with partners, and provides actionable insights. The funding will be used to accelerate product innovation and global growth.

📄 Sustainability software provider Pulsora has raised $20 million in a Series A financing round to support its global expansion and enhance its platform for measuring, reporting, and improving sustainability and ESG initiatives. The funding will be used to add functionalities like carbon accounting, ensure compliance with evolving sustainability regulations, and expand its presence across North America, Europe, the Middle East, Australia, and Asia.

That’s it for this week, thanks for making it to the end! If you enjoyed reading this newsletter, don’t forget to subscribe and share it 🍀