What's Happening in Sustainability? (Week Recap 11.04 - 17.04) 🌎

This week’s read time: 6 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. 🍀

Subscribe to receive the issue every Tuesday and stay updated:

The week’s most important news:

💡 According to a report by independent energy think tank Ember, wind and solar energy generated a record high of 12% of global electricity in 2022, while all renewable energy sources made up 39% of global electricity. The report predicts a phasedown of gas power and a reduction of coal-fired power, with fossil fuel generation declining by 0.3% this year. The European Union lags behind global wind energy expansion, logging 9% growth from wind power, below the global average. The report suggests that the barriers preventing the rapid deployment of onshore wind power must be removed to reach the EU's targets by 2030.

🇪🇺 The European Supervisory Authorities (ESAs) have proposed amendments to the EU’s Sustainable Finance Disclosure Regulation (SFDR) to extend and simplify the regulation. The proposals include adding information about decarbonization targets and a dashboard providing information about products’ sustainable and taxonomy-aligned investment. The ESAs have also proposed consulting stakeholders on changes to the layout, structure, and language of the regulation’s template. The proposals are open for consultation until July 4, 2023, with the final report expected to be released by the end of October 2023.

🇺🇸 As was announced last week, the U.S. Environmental Protection Agency (EPA) has now proposed new federal vehicle emissions standards that would reduce climate and other harmful air pollution, lower maintenance costs, and deliver significant fuel savings for drivers and truck operators. The proposed standards would require a 56% reduction in projected fleet average greenhouse gas emissions target levels compared to the existing model year 2026 standards by 2032 and would also accelerate the transition to electric vehicles. EPA declared that the proposals were informed by robust and inclusive stakeholder engagement with industry, labor, advocates, and community leaders.

🌎 A new survey by Google Cloud of around 1,500 executives across 16 countries found that 72% want to improve their sustainability efforts but don’t know how. Economic uncertainty has made the challenges tougher, with most managers being asked to do the same or more with less. 59% admitted their companies were overstating their sustainability methods, and nearly three-quarters said most organizations in their industry would be guilty of greenwashing if investigated. The survey identified dedicated sustainability leaders, support from senior management, advanced measurement tools, and education for employees and executives as tools to improve sustainability. Technological innovation and operational investment were identified as the top two pathways to sustainable growth.

💡 More interesting news:

• Tesla has cut the price of its Model Y by 24% since January, making it more affordable than the average new vehicle in the US. The Model Y is already one of the top-selling SUVs in the country, and the price reduction is expected to further increase its market share. Tesla's other models have also seen price drops, putting pressure on other automakers in the EV market. Analysts are divided on whether the price cuts indicate weakening demand or a long-term strategy to expand Tesla's market share. 🚙

• For the second consecutive year, the use of coal in the US power market is expected to decrease as utilities are turning to natural gas and cleaner renewable energy sources that are more affordable. According to the Energy Department's latest data, coal will account for around 17% of US electricity production this year, a decrease from 20% last year. This means that coal will now be producing less electricity than gas, renewables, or nuclear plants. The closure of 11 gigawatts of coal plants in the past year represents a 5% reduction in the fuel's capacity. 💡

• France is expected to experience an even worse summer drought than the record drought it suffered in 2022, according to the French geological service BRGM. Groundwater levels are even lower than last year, and the situation is worrying because the whole of France is affected and several dry years have already occurred. Water restrictions are expected to be introduced in many parts of the country, and French President Emmanuel Macron is calling for new water-saving measures. ⛔️

• Germany has begun shutting down its three remaining nuclear power plants as part of a long-planned transition towards renewable energy. The move has proved divisive, with anti-nuclear campaigners welcoming the decision and others raising concerns about fuel scarcity. Germany's decision to stop using both nuclear and fossil fuels has been met with some skepticism, as well as unsuccessful last-minute calls to halt the shutdown. The German government has acknowledged that, in the short term, the country will have to rely more heavily on polluting coal and natural gas to meet its energy needs, even as it takes steps to massively ramp up electricity production from solar and wind. 🇩🇪

🧐 What are companies doing?

• Apple has announced an expansion of its Restore Fund, investing up to an additional $200 million in high-quality, nature-based carbon removal projects. The new portfolio aims to remove 1 million metric tons of carbon dioxide per year while generating a financial return for investors. The Restore Fund is part of Apple's roadmap to become carbon neutral for its entire supply chain and life cycle of every product by 2030. The company has also announced a new target to use 100% recycled cobalt in batteries by 2025, up from around 25% in 2022. Furthermore, it aims to use entirely recycled rare earth elements in magnets and 100% recycled tin soldering and gold plating in all Apple-designed printed circuit boards by 2025. 🍀

• Chipotle Mexican Grill has launched a new all-electric restaurant design that uses 100% renewable energy to reduce emissions from energy use. The design includes features such as rooftop solar panels, all-electric equipment, and energy management systems. The company aims to achieve its climate goal of cutting absolute emissions in half across its entire value chain by 2030. Chipotle has already opened restaurants in Virginia and Florida in the US with the new features, with a third planned in Colorado, and more than 100 new locations in 2024 are expected to utilize all-electric equipment and some additional elements from the new design. ☀️

• Iberdrola, a global energy and electricity provider, has committed to sourcing more than 85% of its purchases from suppliers that comply with ESG criteria, up from its previous goal of 70%. The company's Global Supplier Sustainability Evaluation Model measures suppliers' performance in areas including SDGs, climate change risk management, and human rights due diligence. Rather than excluding companies, Iberdrola aims to encourage its entire supply chain to align with its principles. ✅

• Global alternative investment manager Apollo has set a new goal to achieve $2 billion in diverse spending, with an emphasis on minority- and women-owned suppliers, across its funds’ private equity portfolio by the end of 2025. The company has already surpassed its prior target of $1 billion in diverse spend, set early last year, and has established a Supplier Diversity Program to measure diverse spending, expand partnerships with diverse-owned businesses, and implement supplier diversity strategies and toolkits. 🌎

📈 Sustainable Finance:

• Asset manager DWS' Xtrackers achieved the largest ever ETF launch in the U.S. with the listing of a new climate-focused ETF, the Xtrackers MSCI USA Climate Action Equity ETF, backed by a $2 billion investment by Finland-based pension insurance company Ilmarinen. The fund aims to provide investors with exposure to U.S. large and mid-cap companies leading in their sectors on climate transition action, and tracks the MSCI USA Climate Action Index, which employs a series of ESG screens to its parent index, the MSCI USA Index. 📈

• Morningstar Sustainalytics has launched its Low Carbon Transition Ratings, which assess a company's alignment with a net zero pathway based on an evaluation of its strategy, actions, and scenario analysis. The ratings are expressed as an Implied Temperature Rise, indicating a company's exposure to low carbon transition risks and opportunities. The new ratings are launching with coverage of approximately 4,000 of the largest public companies, with plans to expand to more than 12,500 companies by 2024. ⭐️

• Zurich Insurance Group has launched a new initiative aimed at decarbonizing its supply chain by providing suppliers with tools and resources to help measure and address their own carbon emissions. The initiative includes providing climate training materials and free access to Normative's Business Carbon Calculator. This is the latest in a series of moves by Zurich targeting its Scope 3 value chain emissions, including a goal for suppliers responsible for 75% of its procurement spend to have science-based emissions reduction targets by 2025 and net-zero targets by 2030. 🌎

• Lloyd's has launched the Lloyd's Private Impact Fund, which will be managed by Schroders Capital and invest in private equity, infrastructure, natural capital, and real estate with a focus on climate mitigation, climate adaptation, circular economy, and social inclusion. The fund is the first to be launched on the Lloyd's Investment Platform and reflects Lloyd's commitment to being the insurer of the transition to net zero. The initial investment is £250m and each investment will be aligned to one of seven UN Sustainable Development Goals. ✅

👀 Where is cash flowing?

☀️ SunPower, a leading residential solar technology and energy services provider, has secured over $450 million in financing commitments from HASI and Crédit Agricole CIB for its residential solar and storage loan program. The program will provide customers with attractive loan options for transitioning to a cleaner and lower-cost future, and SunPower also plans to participate in a new Treasury bonus incentive program through lease financing.

🔋 GM Ventures is leading a $50 million Series B financing round in EnergyX, a company that has developed direct lithium extraction technology to optimize North American lithium recovery and make EV production more affordable and sustainable. The collaboration includes a technology development program, an agreement enabling GM to access competitive lithium offtakes for EV production, and additional strategic financing for lithium production projects in North and South America.

🏢 Infogrid, a startup focused on sustainability in smart building technology, has raised $90 million in equity and convertible loan notes to fund global growth initiatives. The company's AI-powered platform helps commercial real estate owners and landlords reach their ESG goals by automating and optimizing facilities and building management. The financing will support expanding the platform's functionality and building out global sales and marketing operations.

🍀 San Francisco-based startup Noya has raised $11 million in a Series A funding round led by Union Square Ventures and Collaborative Fund. The company's Direct Air Capture (DAC) technology uses affordable and readily available materials to remove CO2 from the atmosphere and offers carbon removal credits to companies. The funding will be used to increase hiring, expand testing and manufacturing capabilities, and deploy the first commercial pilot later this year. DAC technology is identified as a key option by IPCC in the transition to a net zero energy system.

✅ Watershed, a climate solutions software provider, has acquired environmental database provider VitalMetrics, which will allow its customers to measure emissions with global coverage and granularity. VitalMetrics' database includes 600,000 emissions factors across 148 countries and 400 activities, updated twice per year, and covering 95% of global emissions. The acquisition follows a $70 million series B capital raise by Watershed last year, valuing the company at $1 billion.

That’s it for this week. Thanks for making it to the end, your attention span is absolutely impressive 💪.

If you enjoyed reading this newsletter, don’t forget to subscribe and share it 🍀