What's Happening in Sustainability & ESG (Week Recap 26.09 - 02.10) 🌎

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This week’s read time: 8 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:

🇪🇺 The EU launched the first phase of the world's first carbon border tariff on Sunday, October 1. The Carbon Border Adjustment Mechanism (CBAM) will enter into application in its transitional phase, aiming to fight carbon leakage and equalize the price of carbon between domestic products and imports. The CBAM requires importers to report GHG emissions and purchase certificates to cover CO2 emissions starting from 2026. During this transitional phase, CBAM will only apply to specific goods (cement, iron, steel, aluminum, fertilizers, electricity, and hydrogen), and importers will report on the volume of imports and GHG emissions without financial adjustment. The phase will serve as a learning period, allowing the European Commission to refine the methodology for the definitive period starting in 2026. The border levy is in line with WTO rules and aims to encourage greener production worldwide, prevent European manufacturers from relocating to countries with lower environmental standards, and protect them from losing out to foreign competitors.

🇺🇸 The US Securities and Exchange Commission's (SEC) Chair Gary Gensler has revealed that many companies have expressed concerns about including Scope 3 emissions in the US SEC’s upcoming climate disclosure rule. The issues raised include the early stage of development and current unreliability of Scope 3 reporting. The SEC will take these concerns into consideration when finalizing the rules, and Gensler also mentioned concerns about the impact on smaller businesses and clarified that the focus is on public companies. While the SEC may ease up on supply chain emissions reporting, other disclosure rules, such as California's climate disclosure legislation and the EU's Corporate Sustainability Reporting Directive (CSRD), may still require Scope 3 reporting. Gensler emphasized the importance of accurate reporting and stated that the SEC will release the finalized rule when ready, regardless of the timeline.

🇬🇧 The UK has approved the development of the country’s largest untapped oil reserve field which is located in the North Sea, Rosebank - angering environmental campaigners who argue it goes against its net zero economy plan. The field has the potential to produce 500 million barrels of oil, emitting as much carbon dioxide as 56 coal-fired power stations. Green campaigners have called for the project to be halted, while legal challenges are being considered. Critics also argue that the tax break given to Equinor, the company involved, will burden struggling households with higher energy bills.

🌎 The International Energy Agency (IEA) states that record growth in clean energy technology makes limiting global warming to 1.5 degrees Celsius possible. However, the transition to cleaner energy will require an annual investment of nearly $4.5 trillion from the next decade, compared to the expected $1.8 trillion in 2023. The IEA emphasizes the need for a tripling of global renewable capacity, a doubling of energy-efficient infrastructure, and reductions in methane emissions. The IEA states that advanced economies should reach net zero sooner than developing economies, and governments must prioritize climate over geopolitics.

• The European Commission also announced the adoption of a series of measures aimed at fighting microplastics pollution, including banning the sale of a broad series of products to which microplastics have been added, including cosmetics, detergents, and toys. This ban targets small, insoluble plastic particles under five millimeters in size that harm the environment and health. Some exemptions exist, and manufacturers must report emissions and provide usage and disposal instructions. The estimated cost of these measures is €19 billion over 20 years, but they are expected to prevent around half a million tonnes of microplastics from entering the environment. 🇪🇺

• The US SEC has fined Deutsche Bank's subsidiary DWS $19 million for misleading statements regarding its ESG investment process, marking the largest-ever greenwashing penalty imposed on an asset manager by the SEC. The charges followed a 2-year investigation initiated after allegations of misrepresentation by DWS' former sustainability chief. The Commission found that DWS made materially misleading statements about its ESG controls and failed to implement policies to ensure accuracy. DWS has stated that there were no misstatements in its financial disclosures and has taken steps to address the weaknesses identified by the SEC. 🔴

• Supply chain delays, design flaws, and higher costs in the offshore wind industry are jeopardizing the timely delivery of projects and countries' ability to meet climate goals, according to Reuters. The race to reduce reliance on fossil fuels, particularly in the EU, is increasing demand for clean energy, but the industry is struggling to keep up. Rising costs and supply chain constraints have led to project delays and cancellations, and offshore wind developers are facing high industry costs. The industry's push for bigger and more efficient turbines has also resulted in quality issues and increased risks. Governments need to address the imbalance between risk and reward in the offshore wind market to prevent a major market failure and ensure climate and economic goals are met.💡 

🧐 What are companies doing?

• La Banque Postale and its subsidiaries, LBP AM and CNP Assurances, have launched a €1 billion impact infrastructure debt fund to finance energy transition projects in Europe. The fund will focus on renewable energy, circular economy, clean transport, energy efficiency, e-mobility, green hydrogen, and energy storage. 💡

• Morgan Stanley and Stanford University have collaborated to develop an open-source ecosystem footprinting tool that allows companies and investors to assess the potential impacts of their projects and activities on natural ecosystems. The tool aims to help companies measure their impacts on natural assets and ecosystem services, in response to increasing interest in nature-related risk management and disclosure. It calculates the impact of human-made structures on ecosystem services and can be used to compare impacts between different locations. 🟢

• Chemical company LyondellBasell has launched its +LC (Low Carbon) solutions, a range of chemicals produced using recycled and renewable feedstock to help manufacturers make their products more sustainable and meet emissions goals. The +LC solutions are sourced from certified recycled and renewable feedstocks and come with mass balance certificates and Product Carbon Footprint data. The company aims to empower customers to reduce their Scope 3 GHG emissions and expand the availability of +LC solutions to Asia by early 2024. ♻️

• EcoVadis has launched the EcoVadis Product Carbon Footprint (PCF) Data Exchange, a new feature in its Carbon Action Module solution. This feature aims to address the challenge of tracking product-level GHG emissions by enabling emissions reporting for products and services purchased across the supply chain. The solution allows organizations to collect product carbon footprint data from suppliers, identify emissions reduction opportunities, and compare data based on global standards. 📄

• Nestlé has launched a pilot program in collaboration with Blue Marble to provide weather insurance to smallholder coffee farmers in its Nescafé supply chain. The program aims to protect farmers from the impact of irregular weather conditions on their crops by using satellite-based climate data to determine payouts. The pilot is being conducted with over 800 farmers in Indonesia, and the results will determine the program's expansion to other sourcing locations. 🟢

💸 Recent funding rounds:

🌾 Paine Schwartz Partners has raised $1.7 billion for its Paine Schwartz Food Chain Fund VI, focused on sustainable investments in the food value chain. The fund is the largest one dedicated to the food and agribusiness sector. Paine Schwartz aims to invest in businesses that enhance agricultural productivity, promote sustainability, and provide access to healthier and safer food.

🟢 InterContinental Energy has raised $115 million in funding to accelerate the development of its green hydrogen projects. The company aims to deploy up to 10 GW of renewable energy capacity by 2030 and produce over 5 million tonnes of green hydrogen per annum. The market for green hydrogen is projected to reach between 450 and 600 million tonnes per annum by 2050.

🔋 EV charging station management company SWISH has raised €47 million in a financing round led by sustainable infrastructure investor RGREEN INVEST. The funding will support SWISH's expansion plans, including the construction of future projects and the deployment of over 80,000 charging points by 2030.

💡 Infrastructure tech startup Neara has raised $24 million in its Series B funding round, with a focus on helping utilities deploy renewable energy and reduce climate risk. Neara uses AI to create 3D models for engineering simulations, allowing utilities to test their assets under various conditions.

♻️ Hamburg-based waste management startup Resourcify has raised €14 million in a Series A funding round. The funding will be used to enhance its SaaS offering and expand across Europe. Resourcify helps companies improve recycling efforts through automated workflows, aiming to achieve zero-waste targets. The company has processed over 500,000 tonnes of waste and plans to increase CO2 savings. Resourcify is already in use in 7 countries, managing over €100 million worth of waste.

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