What's Happening in Sustainability & ESG (Week Recap 16.01 - 22.01) 🌎

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This week’s read time: 7 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. 🍀

🌍 In this edition, we’ll cover:

• The European Parliament approved a new law banning misleading product sustainability claims 🟢

• GRI and the IFRS published an analysis and mapping resource on interoperability considerations for GHG emissions 📄

• The European Banking Authority released proposed guidelines for banks to manage ESG and climate transition risks 🏦

• 320 companies and financial institutions committed to reporting on their impact on the natural world 🌎

• H2 Green Steel raised €4.75 billion to build the world's first large-scale green steel project 🟢

• and other news 🌍

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⭐️ The week’s top news:

🇪🇺 A couple of things happened in the EU the past week:

• The European Parliament has approved a new law banning misleading product sustainability claims, including generic environmental claims without proof and claims based on emissions offsetting schemes. The law also focuses on product durability, requiring clearer labels, mandating extended guarantee information, and banning unfounded durability claims.

• The European Banking Authority (EBA) has released proposed guidelines for banks to manage ESG and climate transition risks. The guidelines include requirements for banks to assess ESG risks, integrate them into risk management frameworks, and develop transition plans. The EBA aims to address shortcomings in managing ESG risks and promote the safety and soundness of institutions as the EU transitions to a more sustainable economy. The guidelines focus on risk assessment and embedding ESG risks in strategies and policies, rather than specific sustainability goals or transition pathways.

• EU lawmakers also agreed on new rules to reduce emissions from trucks, including a 90% emissions reduction for heavy trucks by 2040. The scope of the regulation has been expanded to cover smaller trucks, buses, coaches, and trailers, with exemptions for certain vehicles. The agreement also introduces a 2035 target for 100% zero emissions urban buses.

📄 The Global Reporting Initiative (GRI) and the IFRS Foundation have collaborated to publish an analysis and mapping resource on interoperability considerations for GHG emissions. The resource highlights the alignment between GRI 305: Emissions and IFRS S2 Climate-related Disclosures, making it easier for companies to report GHG emissions information. The collaboration aims to support more efficient reporting for companies using both the ISSB Standards and the GRI Standards. The GRI Academy has also launched a new course called "Unlock the ESRS for GRI reporters" to help sustainability reporting practitioners integrate the European Sustainability Reporting Standards (ESRS) into their existing reporting practices. The course provides an overview of the Corporate Sustainability Directive (CSRD) and ESRS, explores their alignment with the GRI Standards and offers guidance on reporting using both sets of standards.

• 320 companies and financial institutions have committed to reporting on their impact on the natural world, aiming to address the global collapse of biodiversity. The disclosures, developed by the G20-backed Taskforce on Nature-related Financial Disclosures (TNFD), will provide more information on the risks and opportunities associated with their interaction with nature. This initiative aims to encourage boards to make decisions that positively impact nature and align with the global agreement on biodiversity. 🟢

• Businesses are failing to address the shortage of green skills among workers, which poses a risk to the transition to a lower carbon economy, according to a report by Economist Impact and Iberdrola. The report highlights that while a majority of business leaders recognize the importance of green skills, only 55% have implemented or planned programs to develop these skills. This lack of training could hinder progress in the green transition, with 62% of respondents expecting delays. Governments are urged to provide support through grants, tax relief, and funding for educational courses. 🌍

• Exxon Mobil has filed a lawsuit in a Texas court to prevent a climate proposal by activist investors (Arjuna Capital and Follow This) from going to a vote during the company's shareholder meeting in May. The investors are urging Exxon and other oil majors to adopt tighter climate targets, including setting Scope 3 emissions reduction targets. Exxon argues that the investors are "driven by an extreme agenda" and that their repeated proposals do not serve investors’ interests or promote long-term shareholder value. 🛢️

• Climate advocacy organization Friends of the Earth Netherlands is initiating a climate lawsuit against ING, demanding the bank reduce emissions by 50% by 2030 and cease financing fossil fuel customers without strong phase-out plans. The group argues that ING has a legal obligation to not contribute to dangerous climate change. The organization utilized a similar argument in its landmark lawsuit against energy giant Shell, in which the group succeeded in winning an order from the Dutch court requiring Shell to slash its emissions by 45% by 2030, and holding the company responsible for Scope 3 emissions from its value chain. 🏦

🧐 What are companies doing?

• Amazon has invested in over 100 new solar and wind energy projects in 2023, making it the largest corporate purchaser of renewable energy for the fourth consecutive year. The company aims to have 100% of its electricity sourced from renewable energy by 2025, ahead of its original 2030 target. It now has more than 500 wind and solar projects globally, and once operational, they are expected to generate more than 77,000 GWh of clean energy each year, or enough to power 7.2 million US homes. ⚡️

• Bloomberg has signed a 15-year renewable energy power purchase agreement (PPA) with Ørsted, under which Ørsted will provide 80MW of energy from its Mockingbird Solar Center project in Texas. This agreement allows Bloomberg to cover 100% of its US electricity usage and 80% of its global electricity usage with renewable energy. The Mockingbird project is Ørsted's largest solar project in the US and incorporates conservation efforts through a preservation agreement with The Nature Conservancy. 💡

• Global automotive supplier KIRCHHOFF Automotive has signed a €130 million agreement with H2 Green Steel for the supply of near-zero emissions steel, aiming to decarbonize its supply chain and achieve sustainability goals. The deal will help KIRCHHOFF meet the increasing demand for safe and sustainable body-in-white parts while reducing its carbon footprint. 🟢

• Novata has launched a new solution, Novata Carbon Navigator, to help organizations track, measure, and report carbon data. The solution aims to address the increasing transparency and sustainability demands by providing a simplified and easy-to-use platform for calculating emissions, tracking activities, and meeting regulatory requirements. 📄

• Barclays has launched a new Sustainable Banking Group, combining its Sustainable Capital Markets and ESG Advisory teams to address the sustainability needs of clients. The new business will offer tailored coverage, advice, and execution across various capabilities. This move is part of Barclays' efforts to expand its sustainable finance capabilities and achieve its goal of facilitating $1 trillion of sustainable and transition financing by 2030. 🏦

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

🟢 H2 Green Steel, a Sweden-based startup, has raised €4.75 billion in new funding for its green steel project in Boden, Sweden. The new plant will be the world's first large-scale green steel project. The funding includes debt financing, equity from investors, and a grant from the EU Innovation Fund. The Boden plant will use hydrogen produced from renewable electricity - rather than coal - to deliver steel in a process emitting as much as 95% less CO2 than steel produced with traditional blast furnace technology, the company has said.

📈 Blue Earth Capital has raised $378 million for its private equity climate impact strategy, BlueEarth Climate Strategy. The funds will be used to invest in companies working towards the net zero transition, climate resilience, and circular economy. The strategy focuses on energy transition, buildings, and mobility, climate intelligence, production and consumption, and food and agriculture.

🔌 Electra, a fast-charging EV network provider, has raised $330 million in equity funding. The company plans to install 2,200 stations with 15,000 charging points in Europe by 2030. Electra's app analyzes vehicle and charging station data to recommend the best charging options.

🏡 Clean energy tech startup Aira has raised €145 million in its Series B financing round to accelerate residential heating electrification in Europe. The funding will be used for market expansion, the introduction of an affordable payment model, portfolio expansion, and R&D. Aira aims to reduce household heating costs by up to 40% and CO2 emissions by 75% through the use of its clean energy solutions, such as high-efficiency heat pumps.

🟢 Clean fuels startup INERATEC has raised $129 million in its Series B funding round to scale the production of sustainable e-fuels. The company's modular chemical plants use renewable electricity and CO2 to produce drop-in e-fuels, which can replace fossil fuels in sectors like aviation, shipping, and chemicals. The funding will be used to start mass production of Power-to-X plants globally, with an expected 1,500x increase in production and recycling of over 12 million metric tons of CO2 annually. INERATEC aims to transform 1GW of renewable energy into 125 million gallons of sustainable e-fuel by 2030.

🟢 Biotech startup ZymoChem has raised $21 million in a Series A funding round, along with funding from the US Department of Energy. The California-based company uses microbes to convert renewable feedstocks into high-value, biodegradable polymers with a low CO2 emissions footprint. The funding will be used to launch its first high-performance material and advance its first partnered product to a commercial scale.

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 🍀