What's Happening in Sustainability? (Week Recap 02.05 - 08.05) 🌎

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. 🍀

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The week’s most important news:

🇪🇺 The European Council has announced the adoption of its negotiating position on new rules requiring companies to substantiate and verify their environmental claims and labels, including a ban on generic environmental claims, to protect consumers from greenwashing. The Council's position includes several proposals aimed at protecting consumers against unfair practices, such as misleading green claims, and extends the proposed transposition period for member states to adopt the laws once passed to 24 months. The rules will be negotiated with the EU Parliament and are meant to address a need for reliable and verifiable information for consumers, highlighted by a recent study that found that more than half of green claims by companies in the EU were vague or misleading, and 40% were completely unsubstantiated.

⛔️ Florida Governor Ron DeSantis signed into law a series of sweeping anti-ESG measures, prohibiting the consideration of any ESG factors in state and local investment decisions or procurement processes. The laws also include prohibitions on the use of "Social Credit Scores" in banking and lending practices and on banks engaged in "corporate activism" from holding government funds as a Qualified Public Depository. DeSantis has been a vocal anti-ESG advocate, forming an alliance of state governors to coordinate their anti-ESG actions and initiatives.

🇮🇳 India's central bank estimates that the country will spend $1.05 trillion by 2030 to comply with climate change regulations, with green financing requirements at 2.5% of GDP annually. A sector-specific approach to climate risk mitigation is called for due to policy trade-offs, and without action, CO2 emissions may rise to 3.9 gigatonnes by 2030.

🇪🇺 The European Investment Bank (EIB) has approved €6.6 billion of new financing for sustainable transport, clean energy, corporate innovation, and education investment across Europe and globally. This includes €3.8 billion for sustainable transport, €1.2 billion for clean energy, €998 million for corporate innovation, and €625 million for education.

🇦🇺 The Australian government plans to establish a Net Zero Authority to guide the country's transition to net zero emissions, including reskilling workers and coordinating with industry and investors. The Authority will support workers in accessing new skills and employment, help investors and companies engage with net zero transformation opportunities, and support regions in attracting new clean energy industries.

🇨🇳 The World Bank has approved a $345 million loan to support China's green agricultural and rural development program in Hubei and Hunan provinces. The program aims to reduce greenhouse gas emissions, increase carbon sequestration, and improve biodiversity protection and restoration in agricultural ecosystems. The loan will complement a $4.1 billion commitment by the Government of China. The program objectives include building institutional capacity, providing training and agricultural extension services, creating financial incentives, and strengthening rural wastewater and solid waste management services.

💡 More interesting news:

• A report by Aurora Energy Research suggests that efforts to increase hydrogen production, a key fuel for reducing global emissions, are advancing quickly, particularly in the US, and may outpace Europe. Global planned projects for hydrogen electrolyzers have grown by 18% in the last six months, with a total electricity capacity of 1 TW for the first time. Although Europe is still the leading region for new hydrogen projects, it has seen a decline in its share from 63% to 56% in the past six months, and it is projected to lose its majority share by 2025. 🌎

• New York has become the first state to ban the use of gas stoves and heating in new buildings, as part of its efforts to reduce greenhouse gas emissions. The new rules, released with Governor Kathy Hochul’s 2024 Budget, set requirements to advance zero-emission construction in new buildings, with rules phasing out the use of fossil fuels in new buildings up to seven stories by 2026, and all other new buildings by 2029. Meanwhile, the California Air Resources Board (CARB) has approved new rules aimed at decarbonizing the state's transport sector, including ending the sale of medium- and heavy-duty combustion trucks by 2036, and requiring newly built freight trains to be zero emission by 2035. ✅

• TotalEnergies has filed a civil complaint against Greenpeace France and Factor-X over a report claiming the energy company underestimates its greenhouse gas emissions. TotalEnergies seeks to have the report withdrawn and all references removed. Greenpeace responded, claiming the lawsuit is meant to intimidate the climate movement. The report estimated TotalEnergies' 2019 emissions at over 1.6 billion tonnes, while the company reported 455 million tonnes. 👀

• European banks lead globally in overall ESG efforts but need to improve on the Diversity & Inclusion (D&I) agenda, according to the EY Sustainable Finance Index. French banks lead on environmental and social activity, while UK banks lead on governance. European banks scored 7.4 out of 10 on overall ESG performance, with the lowest levels of activity in D&I, board diversity, and quality. The pace of improvement in social activity across European banks is slower than in North America and Asia Pacific, with workplace D&I activity particularly low. 🇪🇺

🧐 What are companies doing?

• Shell and Volkswagen have launched an innovative Flexpole charging station in Goettingen, Germany, which has a unique battery storage system that enables connection to a low-voltage grid and, depending on the vehicle type, charges a range of up to 160 kilometers within 10 minutes. Shell and Volkswagen plan to install the Flexpole charging station at other locations in Germany and Europe. The charging infrastructure is a prerequisite for the ramp-up of e-mobility and the German government has set a goal of having at least one million charging points available to drivers of electric cars by 2030. Shell aims to install over 500,000 charging points worldwide by 2025 and 2.5 million by 2030. 🚙

• United Airlines plans to use 10 million gallons of sustainable aviation fuel (SAF) in 2023, three times more than in 2022 and 10 times more than in 2019. The airline will use SAF blends on departing flights from San Francisco International Airport and is planning to use a SAF blend later this year at London Heathrow Airport. United has invested in the future production of over five billion gallons of SAF, more than any airline, and has welcomed new corporate participants to its Eco-Skies Alliance program to contribute to the purchase of SAF. 🛩️

• Workiva has integrated the CDP environmental disclosure system into its ESG reporting solution to help companies streamline and simplify responses to CDP questionnaires. The integration aims to leverage Workiva's ESG data and program management hub, ESG Program, and ESG Explorer, its tool designed to enable users to browse reporting frameworks and identify relevant disclosures. More than 18,700 companies disclosed environmental data through CDP in 2022, up more than 40% over the prior year. ✅

• Dun & Bradstreet has expanded its ESG rankings to cover 74 million public and private companies, up from 42 million. The rankings are part of the company's ESG Intelligence solutions, which enable companies to assess and track business partners' sustainability performance and activities. The rankings are organized into 13 ESG themes and 31 topic categories, using data gathered from millions of sources and structured around sustainability frameworks including CDP, SASB, GRI, TCFD, the UN PRI, and UN SGDs. ✅

• Accenture has partnered with climate intelligence platform Cervest to expand its climate-related consulting capabilities and provide solutions to manage climate risk. The partnership will combine Accenture's ESG intelligence with Cervest's AI data modeling and machine learning technology to enable clients to perform scenario-based climate risk assessments and improve climate-related disclosure transparency. 🌎

📈 Sustainable Finance:

• A group of over 180 investors representing $10 trillion in assets under management has signed a joint statement calling on consumer goods and retail companies to reduce their use of plastics and address the financial risks associated with plastic pollution. The statement is targeted at intensive users of plastic packaging, including Coca-Cola, Costco, P&G, Nestlé, Unilever, and Target. The investors set out a series of expectations for the companies, including committing to an absolute reduction of single-use plastic packaging, identifying and eliminating the use of hazardous substances in products and packaging, and supporting policies advocating for reductions in plastic. ✅

• The Asian Development Bank (ADB) has launched the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a program aimed at mobilizing up to $15 billion in financing for climate-focused projects in developing countries. The program will use donor grants for project preparation and guarantees for parts of ADB's loan portfolios to free up capital for climate projects. The ADB expects to create up to $15 billion in new loans for climate projects aimed at reducing greenhouse gas emissions and increasing climate resilience. 🌎

• Schroders Capital has received approval from the UK’s Financial Conduct Authority for the first-ever energy transition-focused Long-Term Asset Fund (LTAF), designed to give investors access to renewable energy and energy transition infrastructure investments. The fund will be managed by Schroders Greencoat and aims to unlock new capital flows for infrastructure projects, allowing Defined Contribution (DC) pension managers to invest in renewable energy projects. The launch of the LTAF platform is part of Schroders' goal to become a global leader in the renewable infrastructure sector. 💡

• The European Investment Fund (EIF) has granted a €200 million guarantee to BBVA to support startups with innovative and sustainable value propositions via its BBVA Spark unit. The agreement was made possible with the support of the InvestEU program and will drive innovation and the green transition in the Spanish technology ecosystem. BBVA Spark will have access to a guarantee line with specific products provided by the InvestEU Fund covering innovation, digitalization, and sustainability. This will offer targeted support to innovative, high-growth technology startups, helping them with their expansion plans. 📈

👀 Where is cash flowing?

🍀 Mitsubishi Corporation has launched the Marunouchi Climate Tech Growth Fund, a new fund aimed at investing in and commercializing developing climate tech-related startups with a primary focus on decarbonization solutions. The fund has raised $400 million of capital commitments from investors at its first close, with plans to reach up to $1 billion by its final closing. The company aims to help investee companies commercialize, scale, and rollout their cutting-edge technologies, and support decarbonization and the transition to a carbon-neutral society.

🏢 Real estate energy solutions provider Redaptive has raised $250 million in its Series E funding round, with proceeds aimed at expanding its offerings and supporting more customers. The funding will help the company support customers with energy generation and efficiency programs such as HVAC, LED lighting, solar, EV, and Data Solutions.

🌎 Cority, an enterprise environmental health and safety software provider, has acquired UK-based Greenstone, a sustainability, supply chain, and ESG software as a service provider. The acquisition aims to deepen Cority's sustainability and ESG expertise and expand its offerings. Cority CEO Mark Wallace said the acquisition will accelerate and expand the company's product development roadmap, bringing a more comprehensive suite of sustainability solutions to customers.

💡 KKR's Global Impact strategy has acquired CoolIT Systems, a provider of energy-efficient liquid cooling systems for data centers. CoolIT supports several UN Sustainable Development Goals and aims to reduce energy demand, carbon emissions, and water consumption in data centers. KKR plans to support CoolIT's growth and expand its equity ownership program. The investment comes amid growing demand for energy-efficient data center cooling solutions as data centers are responsible for a growing share of global carbon emissions.

💡 Energy Impact Partners has raised $111.9 million for Elevate Future Fund I LP, a clean energy venture fund focused on diverse founders and accelerating the clean energy transition. The fund invests in companies driving innovation in areas such as supply decarbonization, electrification, and tech-enabled infrastructure. Portfolio companies include ChargerHelp!, Robust.AI, and Rheaply. LP investors include Amazon, Microsoft's Climate Innovation Fund, and GE.

That’s it for this week. Thanks for making it to the end, your attention span is absolutely impressive 💪.

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