What's Happening in Sustainability & ESG (Week Recap 19.12 - 25.12) 🌎

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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. 🍀

⭐️ The week’s top news:

🇪🇺 The EU Council has agreed on a proposal to regulate ESG ratings providers in order to boost investor confidence in sustainable products. The new rules aim to improve the transparency and integrity of ESG ratings providers, strengthen reliability and comparability, and prevent conflicts of interest. ESG rating providers will need to be authorized and supervised by ESMA, comply with transparency requirements, and manage conflicts of interest. The Council also introduced a temporary registration regime for small providers and clarified the scope and requirements for operating in the EU. Interinstitutional negotiations are expected to start in January 2024.

🚗 The UK and EU have agreed to delay the implementation of tougher rules on electric vehicles (EVs) and batteries until the end of 2026. The agreement aims to save manufacturers and consumers billions in costs and provide more time to scale up European battery production. The rules of origin for EVs, which were set to be implemented in 2024 and 2027, have been pushed back due to supply chain disruptions caused by the COVID pandemic and the Russia-Ukraine war. While the agreement provides temporary relief, the EU acknowledges the need to boost battery capacity and has announced a €3 billion funding mechanism to support sustainable battery production.

🇪🇺 The European Commission has also announced investments of €2.2 billion in clean energy projects in lower-income member states, funded by revenues from the EU Emissions Trading System. The allocations were made through the EU's Modernisation Fund, supporting energy system modernization and efficiency improvements in ten countries. With these new allocations, the Modernisation Fund's disbursements to date reach €9.7 billion, supporting 50 projects. Romania and Czechia were the largest beneficiaries in 2023, receiving €2.2 billion and €1.8 billion, respectively.

• The UK government has unveiled its strategy to establish the country as a global leader in carbon capture, usage, and storage (CCUS). The plan includes ramping up CCUS to at least 20 million metric tons of CO2 by 2030 and creating a self-sustaining CCUS market by 2035. CCUS is seen as a key solution for emissions reductions in industries like steel and cement. The plan also highlights the opportunity for the UK to offer storage services to other countries, potentially boosting the economy by £5 billion annually by 2050. 🇬🇧

• The US state of Tennessee is suing BlackRock, accusing the investment giant of deceiving consumers about its commitment to ESG investing. The lawsuit alleges that BlackRock made conflicting statements about the extent to which it incorporates ESG considerations in its investment strategies. BlackRock denies the accusations and states that it fully discloses its investment practices. The lawsuit comes amid a broader anti-ESG movement by Republican politicians in the US targeting BlackRock and accusing the firm of following a social agenda. Despite the political pressure, BlackRock has stated that its engagements with companies will continue to include sustainability-focused topics. 🔴

• Indonesia plans to fine palm oil companies operating in forest areas a total of $310.1 million. So far, fines worth $30.7 million have been issued, with details of the companies fined not provided. Indonesia aims to convert 200,000 hectares of oil palm plantations back into forests. The country implemented rules in 2020 to address the legality of plantations in forest areas, requiring companies to submit paperwork and pay fines by November 2, 2023. Only owners of plantations totaling 1.67 million hectares have been identified out of the 3.3 million hectares found in forests. 🌳

🧐 What are companies doing?

• Amsterdam-based global bank ING has announced plans to phase out financing for oil and gas exploration and production by 2040, while tripling financing for renewable power generation by 2025. The move is in line with the international agreement to transition away from fossil fuels and reach net zero emissions by 2050. ING also aims to reduce loans to upstream oil and gas activities by 35% by 2030, resulting in a 50% reduction in emissions financed. The bank's new renewables target would bring its financing of renewable power generation to €7.5 billion annually by 2025. 🏦

• Microsoft has signed a 15-year offtake agreement with nature-based carbon removal startup Chestnut Carbon, potentially receiving over 3 million metric tons of nature-based credits. The deal includes the removal of 362,000 tons of carbon in the first phase and up to 2.7 million tons in subsequent phases, making it one of the largest-ever nature-based carbon removal agreements. Chestnut develops afforestation projects in the US, using proprietary technology to identify optimal land and monitor carbon sequestration. 🟢

• Daimler Truck is building a customer-trial fleet of Mercedes-Benz GenH2 Trucks powered by hydrogen fuel cells, with Amazon, Holcim, and other companies participating in the trials. The use of fuel cell trucks is suitable for long-haul applications where battery charging infrastructure may be limited. Daimler aims to introduce the series version of the truck in the second half of the decade. The vehicles will be refueled at designated public liquid hydrogen filling stations, but a greater international refueling infrastructure is needed for a transition to hydrogen fuel cells in commercial trucking. 🚚

• Iberdrola, a global energy provider, has signed a €5.3 billion credit line tied to its climate and social goals. The credit line's rates will be adjusted based on Iberdrola's performance in emissions reduction and increasing the percentage of women in leadership positions. This financing aligns with Iberdrola's commitment to carbon neutrality and sustainability. The company aims to have two-thirds of its debt in green and sustainable products by 2025. Iberdrola's investment plan focuses on renewable energy and electricity networks, with a goal to boost renewable capacity by 2025. ⚡️

💸 Recent funding rounds, sustainable finance, acquisitions, and private equity:

🟢 The Government of Canada has invested $200 million in carbon capture startup Entropy through the Canada Growth Fund (CGF). This investment aims to de-risk Entropy's projects and help decarbonize emissions-intensive industries. Entropy develops modular carbon capture and storage facilities and has already operated a commercial natural-gas-fired carbon capture and sequestration project. The investment will accelerate private CCS development and includes a long-term fixed-price carbon credit purchase agreement. CGF has committed to purchasing up to 9 million metric tons of carbon credits from Entropy projects over 15 years.

⚡️ France-based Sweetch Energy, a renewable energy company specializing in osmotic energy, has raised €25 million in a Series A financing round. The funding will be used to accelerate the development of osmotic energy, including finalizing a demonstrator, expanding R&D activities, and supporting global expansion. Sweetch Energy aims to produce clean, 24/7, competitive electricity using its proprietary INOD® technology. The company has already secured a total of nearly €40 million in private and public funding for the deployment of its technology and the creation of an osmotic energy industry.

🛻 EVUM Motors, a leader in electric utility vehicles, has secured €20 million in funding led by Jolt Capital. The investment will support the expansion of the company's footprint, scale-up phase, and development of robust electric vehicles with smart energy solutions. EVUM Motors aims to become a European leader in electric mobility and energy efficiency, offering total energy solutions for transportation and work.

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 🍀