What's Happening in Sustainability & ESG (Week Recap 28.11 - 04.12) 🌎

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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:

🌍 In the first four days of COP28, over $57 billion have been mobilized across the climate agenda, with pledges and declarations in finance, health, food, nature, and energy.Highlights include:

• An agreement to operationalize a new Loss & Damage Fund to assist poor nations in dealing with climate disasters, with several countries, including the US, Japan, and the UAE, announcing contributions ($725 million in pledges secured so far).

• 118 countries pledged to triple the world's renewable energy capacity by 2030, aiming to cut the share of fossil fuels in global energy production. However, China and India did not back the overall pledge.

• The UAE launched ALTÉRRA, a $30 billion investment platform aimed at driving private capital towards climate investments and improving access to climate finance in emerging markets. The platform, with launch partners including BlackRock, Brookfield, and TPG, aims to mobilize $250 billion globally by 2030.

• The US pledged an additional $3 billion to the Green Climate Fund, bringing their total contribution to $5 billion. The fund, with over $20 billion in pledges, supports climate action in developing countries.

For a full breakdown of financial pledges and contributions so far, visit this link.

🇪🇺 The European Financial Reporting Advisory Group (EFRAG) and the Global Reporting Initiative (GRI) have announced a new cooperation agreement to deepen collaboration on sustainability reporting. This includes working on reporting standards development, training, and the release of a GRI-ESRS Interoperability Index. The collaboration aims to align the European Sustainability Reporting Standards (ESRS) with the GRI standards, preventing the need for double reporting. The collaboration will also focus on standards and guidance development, proportionate reporting for SMEs, and education and training for ESRS preparers and users.

• The UK’s Financial Conduct Authority (FCA) has released new Sustainability Disclosure Requirements (SDR) and investment label rules to help investors assess the sustainability attributes of investment products and avoid greenwashing risk. The rules include an anti-greenwashing rule, four labels to differentiate between sustainability objectives, and naming and marketing rules. Implementation timelines range from May 2024 to December 2025. The new policies aim to build trust and confidence in the UK's sustainable investing market. 📄

• Major financial institutions have launched the Impact Disclosure Taskforce, an initiative aimed at measuring and reporting efforts to advance the UN Sustainable Development Goals (SDGs) and facilitate capital flows for global sustainability. The Taskforce provides voluntary guidance for entities to set targets and monitor progress toward addressing development challenges, intending to attract sustainable financiers. Participating companies include JPMorgan, Natixis, Bank of America, Deutsche Bank, and Standard Chartered. 🟢

• However, several major banks, including HSBC, Standard Chartered, Societe Generale, and ABN AMRO, have chosen to exit the Science Based Targets initiative (SBTi) validation process for their climate targets. This decision comes ahead of the anticipated launch of a new standard by SBTi to assess financial institutions' net zero goals, which includes strict limitations on fossil fuel financing. The banks cited concerns about hindering their ability to finance fossil fuels and the SBTi requirements interfering with their engagement and service to clients in less developed markets. However, the banks remain committed to the Net Zero Banking Alliance and have alternative third-party assurance for their targets. 🔴

• The Monetary Authority of Singapore (MAS) has launched the Singapore-Asia Taxonomy for Sustainable Finance, which defines green and transition economic activities across key sectors. The taxonomy aims to enable the identification and allocation of capital to sustainable projects, reduce "green or transition washing" risk, and introduce a "transition" category. 🇸🇬

• A new study by S&P Global Ratings warns that over 4% of global GDP could be lost annually by 2050 due to the physical impact of climate change, with developing nations being more exposed and less prepared. The report highlights the potential economic losses caused by climate hazards such as extreme heat, flooding, wildfires, and storms. It also emphasizes the need for climate adaptation measures and the challenges in funding such measures. Developing regions, particularly South Asia, Sub-Saharan Africa, and the Middle East and North Africa, are projected to be heavily impacted. 🔴

🧐 What are companies doing?

• Deloitte has partnered with academic institutions including MIT, NYU, and ASU to expand its sustainability upskilling program for its professionals. The program aims to enhance their ability to help clients with sustainability, climate, and equity issues. The collaborations offer various learning opportunities, including virtual speaker series, sustainability accelerator programs, and modular courses. 📄

• EY and AspenTech have allied to help industrial and energy markets clients meet sustainability targets. The alliance will leverage EY's technology and services capabilities with AspenTech's solutions for optimizing supply chains, improving asset lifecycles, managing emissions reduction, and supporting utility grid orchestration. The collaboration aims to drive improved production performance, energy efficiency, and emissions management while navigating the energy transition and embracing renewable energy. 🟢

• Nasdaq has launched Nasdaq Sustainable Lens, an AI-powered platform that allows users to access and summarize ESG data from thousands of companies. The platform offers features such as chat-based answers, trend monitoring, natural language search, benchmarking, and regulatory compliance assessment. Research conducted using the platform revealed that only 44% of companies provide climate-related disclosures aligned with reporting standards, while 75% provide human capital disclosures. 📄

• Stripe has launched Climate Orders, a platform that allows businesses to pre-order carbon removal tons through the advance market commitment coalition Frontier. This platform aims to integrate carbon removal into sustainability programs and address the need for scalable CO2 removal methods. Businesses can pre-order carbon removal tons from Frontier's portfolio of growth-stage companies, with a certificate provided upon delivery. 🟢

• American Airlines has signed an agreement with carbon removal startup Graphyte to purchase 10,000 tons of permanent carbon removal using Graphyte's Carbon Casting approach. The process involves compressing biomass into dense carbon blocks and storing them underground. 🛩️

• Volvo Cars has announced a new commitment to reduce CO2 emissions per car by 75% by 2030 compared to a 2018 baseline. They have joined the First Movers Coalition to support the shift to near-zero emission aluminum. Volvo also aims to sell only fully electric cars by 2030 and has already reduced CO2 emissions per car by 19%. 🚗

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

📈 Copenhagen Infrastructure Partners (CIP) has launched the Growth Markets Fund II (GMF II), a $3 billion fund focused on developing clean energy projects in high-growth middle-income markets across Asia, Latin America, and EMEA. The fund aims to enable over 10 GW of new renewable energy capacity and reduce GHG emissions by more than 10 million tons annually.

🟢 Mizuho, a Tokyo-based banking and financial services company, has announced an investment in carbon marketplace Climate Impact X (CIX) and a partnership aimed at expanding the carbon credit market in Asia. CIX, launched in 2021, leverages satellite monitoring, machine learning, and blockchain technology to enhance the transparency and quality of carbon credits.

📈 Impact Investor responsAbility Investments, together with KfW and FMO, has launched a $500 million climate investment strategy focused on reducing CO2 emissions in Asia. The strategy targets investments in low-emission technologies such as renewable energy, energy storage, electric mobility, energy efficiency, and circular economy, and aims to achieve direct CO2 savings of 10 million tons.

🛩️ ZeroAvia, a hydrogen-electric aviation startup, has raised $116 million to advance its efforts in enabling zero-emission commercial aviation. The company aims to offer engines for 9-19 seat aircraft with a 300-mile range by 2025 and 40-80 seat aircraft with a 700-mile range by 2027.

🟢 Finland-based startup Carbo Culture has raised $18 million to advance its biochar carbon removal technology. The company transforms waste biomass into biochar, a solid form that permanently stores carbon. Carbo Culture's technology also produces syngas, which can be used for various purposes.

🟢 California-based startup Yard Stick has raised $12 million in Series A funding to accelerate its mission of enhancing the accountability and effectiveness of soil carbon sequestration projects. Yard Stick's soil carbon measurement technology provides third-party validation for companies seeking to decarbonize their agricultural supply chain or offset emissions.

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 🍀