What's Happening in Sustainability? (Week Recap 27.06 - 03.07) 🌎

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 most important news:

***🇮🇳 The World Bank has approved $1.5 billion in financing to accelerate India's low-carbon energy sector, promoting low-carbon energy by scaling up renewable energy, developing green hydrogen, and stimulating climate finance for low-carbon energy investments. The program aims to help India reach its committed 500 GW of renewable energy capacity by 2030 and support the implementation of the National Green Hydrogen Mission, which aims to stimulate $100 billion in private sector investment by 2030.

🇬🇧 Zac Goldsmith, a Conservative peer and former MP, has resigned as a minister, accusing the UK PM Rishi Sunak of being "simply uninterested" in the environment. Goldsmith criticized the prime minister for causing "paralysis" on the environment within Whitehall and choosing to attend the party of a media baron rather than an international environmental forum. The opposition parties are expected to emphasize the government's failure to do enough on the climate emergency, animal welfare, and sewage discharges.

🇪🇺 The proposed Nature Restoration Law, aimed at restoring and protecting natural habitats and ecosystems, has hit a major stumbling block in the European Parliament's Environment committee, with a deadlocked vote. The law contains targets for improving and re-establishing biodiverse habitats, reversing the decline of pollinating insect populations, and restoring marine habitats, among others. The European People's Party has led a campaign against the law, claiming it would threaten food security and agriculture and work against Europe's clean energy and climate goals.

🇺🇸 The Biden administration plans to invest $2 billion from last year's Inflation Reduction Act to accelerate domestic manufacturing of electric vehicles and resuscitate struggling plants. The Domestic Manufacturing Conversion Grants for EVs program will provide cost-shared grants for making efficient hybrid, plug-in electric hybrid, fully electric, and fuel cell vehicles. The Environmental Protection Agency (EPA) has proposed rules that could result in as much as two-thirds of the new vehicle market shifting to EVs by 2032, which has been criticized by the Alliance for Automotive Innovation and the United Auto Workers (UAW).

🇦🇺 Australia plans to introduce mandatory climate-related financial disclosure requirements for companies and financial institutions starting in 2024. Large businesses will be required to report first, with smaller entities phased in over the following three years. The proposed reporting rules include disclosures on governance, strategy, risk management, targets, and metrics, including greenhouse gases. The rules also require companies to report Scope 1 and 2 and material Scope 3 emissions, in addition to industry-specific metrics.

• BlackRock CEO Larry Fink says he has stopped using the term ESG, which has become too politicized, but the company's stance on environmental, social, and corporate governance issues remains unchanged. ESG has become a politically polarizing issue in the Western world, leading to some Wall Street firms backing down on commitments. BlackRock has been the target of investigations and an investment boycott. Despite dropping references to ESG, BlackRock will continue to talk to companies it has stakes in about decarbonization, corporate governance, and social issues. 🟢

• The recent U.S. Supreme Court ruling against race-conscious policies in college admissions may have implications for corporate diversity initiatives, as the court warned about the legal limits of workforce diversity efforts. The ruling may fuel challenges to corporate policies that create preferences based on race or sex, and companies should review their diversity policies to ensure they are not violating the law. The court's decision could lead to an increase in bias lawsuits by white and male workers and challenges to the requirement that federal contractors adopt policies ensuring equal employment opportunities. 🇺🇸

• The UK Advertising Standards Authority (ASA) has updated its guidance on environment-related advertising issues, with a focus on barring green claims by companies that don’t include context into their broader environmental impact. The new principles added to the guidance state that environmental claims relating to specific products should make it clear that they are not representative of the entire business and that ads by companies responsible for significant environmental harm that reference beneficial environmental initiatives are more likely to mislead if they do not include balancing information on the companies’ broader impact. 🇬🇧

• The International Energy Agency has urged oil and gas companies to spend $75 billion, or 2% of their combined annual earnings, on reducing methane emissions to cut the energy sector’s direct greenhouse-gas emissions by 15% by 2030. Methane is a big contributor to global warming, and the energy sector accounts for 40% of all human-caused methane emissions. The investment would enable oil and gas companies to reduce methane emissions by identifying and quickly repairing methane leaks as well as upgrading older infrastructure that is prone to leaking. 🌎

• According to a global CEO survey by IBM, 50% of CEOs now have their compensation tied to sustainability goals, up from 15% one year ago. Environmental sustainability was identified as the most frequently cited top challenge over the next three years but has declined on the list of top organizational priorities. Progress on sustainability-related initiatives remains slow, with inadequate data cited as the greatest obstacle. CEOs often use operational and financial data, but only 34% often use ESG data to make strategic decisions. A lack of consistent standards is delaying at least one major investment for 56% of CEOs. 🟢

• Despite world leaders' pledge to halt and reverse deforestation by 2030, an area the size of Switzerland was cleared from the world's most pristine rainforests in 2022. The tropics lost 4.1 million hectares of primary rainforest, an increase of around 10% from 2021, with Brazil, the Democratic Republic of the Congo, and Bolivia heading the table for tropical primary forest loss. The report's authors warn that humans are destroying one of the most effective tools for mitigating global heating and halting biodiversity loss. ⛔️

🧐 What are companies doing?

• Shell's head of renewable generation, Thomas Brostrom, is leaving the company after CEO Wael Sawan scaled back its energy transition plans. Brostrom joined Shell in August 2021 to head offshore wind but quickly became head of renewables in February 2022. Shell's new CEO announced a shift back to oil and gas production and pared back investments in renewables. Brostrom will be succeeded by Greg Joiner as head of Shell Energy Europe and Emerging Markets Power. 💡

• AstraZeneca has announced a $400 million expansion of its reforestation and biodiversity-focused program, AZ Forest, committing to planting 200 million trees by 2030. The program has already planted over 10.5 million trees in countries including Australia, Indonesia, Ghana, the UK, the US and France, and will now expand to Brazil, India, Vietnam, Ghana and Rwanda, with the program spanning over 100,000 hectares worldwide, impacting an estimated 80,000 livelihoods, and removing approximately 30 million tonnes of CO2 from the atmosphere. 🌲

• Scania has made its first order of green steel from Swedish startup H2 Green Steel, as part of its commitment to decarbonize its supply chain by 2030. Scania aims to use 100% green batteries, steel, aluminum, and cast iron in its production by 2030, and this new agreement supports its commitment to purchasing substantial amounts of green steel as part of the First Movers Coalition. H2 Green Steel is building the world's first large-scale fossil-free steel plant in Sweden, with plans to produce 5 million tonnes of nearly fossil-free steel by 2030. 🚛

• Maersk has ordered six mid-sized container vessels capable of operating on green methanol, with delivery expected in 2026 and 2027. The new ships will replace the existing capacity in Maersk's fleet and are estimated to reduce net greenhouse gas emissions by 450,000 tonnes of CO2e per year. This marks the latest in a series of green fuel-capable vessels by Maersk, which has committed to achieving net zero gas emissions in 2040 across its entire businesses and all scopes. 🚢

• AXA has set new decarbonization targets for its investment and insurance activities, including reducing emissions of its largest commercial insurance clients by 30% and cutting the carbon footprint of its general account investment assets by 50% by 2030. The company also aims to increase its business in renewable energies and low-carbon business models. The targets were announced in the company's 2023 Climate & Biodiversity Report, which also revealed a decrease in the implied temperature rise of its general account portfolio's bond and equities holdings. AXA recently exited the Net Zero Insurance Alliance but remains a member of the Net-Zero Asset Owner Alliance. 📈

🌎 Swiss impact investor ResponsAbility has raised $106 million for its climate-smart food systems investment solution, which provides long-term expansion financing to innovative businesses across the food value chain in Asia Pacific, Latin America and Africa. The solution aims to support the transformation of global food systems in alignment with the world's climate targets, including mitigating climate change, reducing food loss, and fostering climate change resilience of smallholder farmers. New investors in the strategy include Global Affairs Canada, FMO, IFU, Visa Foundation, Calvert Impact Capital, Bank of America, and Ceniarth.

♻️ Chemical recycling startup DePoly has raised $13.8 million in seed funding to scale its solution for recycling plastics used in textiles and consumer packaging. The company offers a chemical recycling process that converts post-consumer and post-industrial plastic waste streams into their main raw components, which can be sold to make new virgin-quality plastic items.

🐟 Bluu Seafood, a German startup creating cultivated fish products, has raised $17.5 million in a Series A funding round led by Sparkfood and LBBW VC. Bluu Seafood uses stem-cell technology to grow entire cell lines of fish species inside a lab, and has unveiled its first products, including fish sticks and fish balls. The company aims to attain regulatory approval in various markets, starting with Singapore in 2024, and has also kickstarted the approval process with the FDA. Bluu Seafood is one of many biotech startups addressing seafood production problems, including overfishing and contamination, and joins countless companies reproducing everything from bacon to burgers and chicken using lab-grown meat technology.

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 🍀