What's Happening in Sustainability? (Week Recap 13.06 - 19.06) 🌎

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 International Public Sector Accounting Standards Board (IPSASB) will develop a climate-related disclosure standard for governments and other public sector entities, marking the first sustainability reporting standard for the public sector. The IPSASB hopes to initiate additional sustainability reporting projects in the coming months and will consider addressing other ESG topics as well. The standard will include disclosure requirements for public sector entities, encompassing their climate-related impacts on the economy, environment, and people, and their exposure to climate-related risks including physical and transition risks, as well as climate-related opportunities. Approval of the project's exposure draft is expected in mid-2024, with final standard approval anticipated for the second half of 2025.

🇪🇺 EU countries' ambassadors reached a deal on a new renewable energy law, which increases the EU's renewable energy targets to 42.5% by 2030. The Commission agreed to exempt certain ammonia plants from renewable fuel targets, replacing an option to add a loophole to the law. The law was held up for weeks due to France and other states seeking carve-outs for non-renewable fuels such as nuclear. It is unclear whether parliament will approve the latest tweak to the deal. The European Commission has also proposed new measures to regulate ESG ratings providers and expand the EU Taxonomy to include criteria for sustainable economic activities. The sustainable finance framework aims to facilitate private funding for the EU’s sustainability goals, with the Green Deal requiring around €700 billion per year in investments. ESG ratings providers will be supervised by ESMA to ensure quality and reliability and will be required to use rigorous, systematic, and objective methodologies.

🇨🇭 Swiss voters have approved a global minimum tax on businesses and a climate law aimed at cutting fossil fuel use and reaching zero emissions by 2050. The business tax will increase to the 15% global minimum rate from the current average minimum of 11%, and the climate law has gained 59% support. The proposal is estimated to bring 2.5 billion Swiss francs ($2.80 billion) per year in additional revenue and has been backed by business groups, most political parties, and the general public. The climate law has stirred up more debate, with those campaigning against it gaining traction in recent weeks.

💡 More interesting news:

• French President Emmanuel Macron has committed to investing €300 million per year through 2030 in technologies and low-carbon fuels aimed at decarbonizing the aviation sector. The funding will support research into low-carbon emitting aircraft and engines, as well as the development of sustainable aviation fuel. France also plans to invest €200 million in electric and hydrogen-powered aircraft and €200 million to accelerate the development of capacity for sustainable aviation fuel. The investments come as demand for sustainable aviation fuel is anticipated to rise sharply in Europe, with lawmakers finalizing rules mandating minimum SAF blends for flights, reaching as high as 70% by 2050. 🇫🇷

• The Japanese government and several large banks, including Mitsubishi UFJ Financial Group, are launching a "green transformation" program to attract 150 trillion yen ($1.06 trillion) in investment over the next decade. The project will focus on Sapporo, which will be designated a special zone to attract renewable energy investment in 2024 and will involve the Industry and Environment Ministry. Japan aims to reduce emissions by 46% from 2013 levels by 2030. 🇯🇵

• The European Parliament has also approved the EU AI Act, which aims to protect consumers from dangerous applications of AI. The legislation takes a "risk-based approach," introducing restrictions based on how dangerous lawmakers predict an AI application could be. The bill takes aim at the recent boom in generative AI, creating new obligations for applications such as ChatGPT that make text or images. The legislation requires firms to publish summaries of what copyrighted data is used to train their tools. The EU's progress contrasts starkly with the picture in the US Congress, where lawmakers are newly grappling with the technology's potential risks. 🇪🇺

• Ukraine is seeking up to $40 billion to fund the first part of a "Green Marshall Plan" to rebuild its economy, including developing a coal-free steel industry. The plan is expected to be funded by a blend of finance from export credit agencies, concessional funding, equity of operating companies, EU transition funding, and private sector loans. The reconstruction is estimated to cost over $400 billion, and the initial focus will be on the iron and steel industry, with a vision to build a 50 million tonnes green steel industry in Ukraine. 🇺🇦

• A new report by Deloitte estimates that over $9 trillion in investment will be needed through 2050 to scale green hydrogen production to levels required to support global decarbonization and climate goals. The report envisions the clean hydrogen market growing to 172 million tonnes in 2030 and then scaling further to nearly 600 million tonnes in 2050, with initial demand focused on sectors such as fertilizer production and long-term demand driven by heavy industry and transportation. The report also points to significant opportunities from the development of clean hydrogen for developing countries, which could account for nearly 70% of the $1.4 trillion market by 2050 and support up to 1.5 million jobs per year. 📈

💭 Insight:

🧐 What are companies doing?

• Ford has opened its first-ever carbon-neutral assembly plant in Cologne, Germany, following a $2 billion investment to transform the facility to build the company’s next generation of electric vehicles. The plant will operate on 100% certified renewable electricity and biomethane, with an external power plant and waste incineration plant generating carbon-neutral heat through a dedicated steam network. This is part of Ford's 2035 commitments to reduce emissions and reach carbon neutrality by 2050. ✅

• Mercedes-Benz aims to source over 200,000 tonnes of CO2-reduced steel from European suppliers annually by 2030, with existing partnerships with Salzgitter and Arvedi. The low carbon steel supply agreements are part of the company's "Ambition 2039" strategy, which includes goals to halve lifecycle CO2 emissions per passenger car in its new vehicle fleet by 2030 and to offer a carbon-neutral new car fleet before the end of the next decade. 🟢

• Ilmarinen, a pension insurance company based in Helsinki, has invested over €2.7 billion in two new climate-focused ETFs launched by BlackRock's iShares. The ETFs track MSCI Climate Action indexes, which consist of companies taking measurable steps to reduce emissions and provide exposure to all economic sectors. BlackRock has also launched a new fund, the BlackRock Global Funds Brown to Green Materials Fund, aimed at investing in materials sector-related opportunities arising from the transition to a low-carbon economy. The fund will invest in companies that supply materials key to the transition or carbon-intensive companies with credible transition plans. 📈

• Microsoft has updated its sustainability platform, Microsoft Cloud for Sustainability, to include features such as ESG reporting and regulations, Scope 3 emissions calculation, and data collection and management across ESG categories and sources. The update also includes the launch of Project ESG Lake, a data platform for standardizing ESG data from various sources. The platform now covers all 15 categories of Scope 3 emissions and includes prebuilt reporting templates for ESG regulations and standards. ✅

• Lombard Odier Investment Managers has appointed Dr. Marc Palahi to the newly created role of Chief Nature Officer, responsible for developing holistiQ’s nature strategy and integrating nature across its research activities. The appointment follows the launch of holistiQ Investment Partners, a sustainable investing platform aimed at capturing sustainable transition investment opportunities. Palahi will also support the creation of new tools and investment solutions focused on the phase-out of carbon-intensive economic activity in favor of nature-based models. 🍀

👀 Where is cash flowing?

💡 Brookfield Renewable has acquired Duke Energy Renewables, the Commercial Renewables business of Duke Energy, for $2.8 billion. The acquisition will help Brookfield Renewable become one of the largest renewable energy businesses in the U.S. with over 90,000 MW of operating and development assets. Duke Energy plans to focus on its regulated businesses and invest in grid reliability and renewable energy growth.

💡 Iberdrola has signed a €1 billion financing agreement with the European Investment Bank to fund 22 renewable energy projects across Spain, Portugal, and Germany, including 19 solar plants and 3 onshore wind farms. The projects are expected to have a total installed capacity of 2.2 GW, with total investment expected to reach €1.7 billion. The agreement is part of the EIB's financing package to support the EU's REPowerEU strategy, which aims to reduce European reliance on Russian fossil fuels through the deployment of renewable and clean energy capacity.

💡U.S.-based solar manufacturer CubicPV has raised $103 million in equity financing to support its U.S. factory plans and product roadmap. The company's Direct Wafer technology enables low-cost production of tandem modules, which offer over 30% greater efficiency than conventional models. CubicPV plans to establish 10 GW of conventional mono-wafer capacity in the U.S. and has narrowed its site selection to two possible locations.

🥩 Uncommon, a British startup that develops cell-based meat products, has raised $30m in a Series A round led by investors including Sam Altman, CEO of OpenAI. The company is using RNA technology to guide cells in the process of forming muscle, fat, or skin tissue, and plans to apply for regulatory approval. Uncommon's round is one of the largest in the sector in Europe, and the company aims to become "the largest protein company in the world.”

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

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