What's Happening in Sustainability & ESG (Week Recap 23.01 - 29.01) 🌎

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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:

• EU lawmakers approved a two-year delay in sector-specific sustainability reporting standards 🇪🇺

• GRI launched a new Biodiversity Reporting Standard 🌳

• IESBA released proposed ethics standards for sustainability reporting and assurance to prevent greenwashing 📄

• Texas bans Barclays from the state's bond market over the bank’s ESG policies 🔴

• HSBC launches its first Net Zero Transition Plan 🏦

• and other news 🌍

⭐️ The week’s top news:

🇪🇺 EU lawmakers have approved a two-year delay of key aspects of the Corporate Sustainable Reporting Directive (CSRD), including the adoption of standards for companies to provide sector-specific sustainability disclosures and for sustainability reporting from companies outside of the EU. The delay aims to ease regulatory burdens on companies and allow them to focus on implementing broader ESG disclosures required in their annual reports. It also reflects a pushback against climate-related rulemaking in the EU and a desire to reduce bureaucracy on companies. The European Financial Reporting Advisory Group (EFRAG) has also released exposure drafts proposing sustainability reporting standards for small and medium enterprises (SMEs) under the EU’s CSRD. The new standards aim to support SMEs in accessing financing and providing standardized sustainability information. The drafts are open for consultation until May 21, 2024.

🌳 The Global Reporting Initiative (GRI) has launched a new Biodiversity Reporting Standard, aimed at enabling companies to disclose their significant biodiversity impacts and management. The standard aligns with global efforts to address nature-related issues and includes reporting on supply chain impacts, location-specific reporting, and disclosures on drivers of biodiversity loss. The standard will go into effect in January 2026, with a pilot phase over the next 2 years.

📄 The International Ethics Standards Board for Accountants (IESBA) has released proposed ethics standards for sustainability reporting and assurance to prevent greenwashing and improve the quality of sustainability information. The standards include frameworks for sustainability assurance practitioners, professional accountants, and the evaluation of external experts.

• Texas has banned Barclays from participating in the state's municipal bond market due to the bank's failure to respond to requests for information about its ESG policies. This move is part of an ongoing anti-ESG movement by Republican politicians in the US. Texas has been actively taking actions against ESG initiatives, including placing asset managers on a divestment list and joining a multi-state alliance to block the use of ESG in investment decisions. Barclays was identified as a potential "fossil fuel boycotter" and informed the Attorney General that it would not be able to respond to the inquiry. 🔴

• Moody's forecasts that the green, social, sustainability, and sustainability-linked (GSSS) bond market will remain resilient in 2024, reaching around $950 billion. Europe is expected to maintain the largest share of GSSS volumes, while North America continues to experience declines. Green bond volumes are projected to increase modestly, while social bond volumes are expected to fall slightly. Sustainability-linked bond issuance may decline slightly as well. The market is supported by factors such as regulatory green bond standards and the reliance of emerging markets on sustainable finance. 📈

• A study by the European Central Bank (ECB) reveals that 90% of European banks have loan portfolios misaligned with global climate goals and the EU's 2050 climate neutrality target. The study highlights the risks faced by these banks, including reputational and litigation risks, and the potential impact on solvency. The report emphasizes the need for banks to identify and measure the risks arising from the transition to a decarbonized economy. 🏦

• Impaakt, a Swiss-based impact data provider, has launched its Certified Impact Advisor Course, led by its CEO, Bertrand Gacon. The course aims to empower finance professionals to become experts in sustainable investing and is designed for client advisors, relationship managers, and those engaged directly with customers. The participants can expect to learn how to identify opportunities to develop new revenue-generating services for clients based on the growing demand for sustainable finance, learn how to generate a portfolio impact report & build an impact portfolio for clients, and understand the various types of clients when it comes to sustainability, among others. Here’s the brochure and the sign-up page. 📈

🧐 What are companies doing?

• HSBC has launched its first Net Zero Transition Plan, outlining its strategy to finance and support the transition to net zero and meet its climate goals. The plan focuses on using financing and investment choices to support decarbonization and sector transitions. HSBC acknowledges the challenges of transitioning due to its heavy financed emissions footprint but has set interim targets and implemented policies to reduce emissions in carbon-intensive sectors. 🏦

• Energy giant bp has announced a partnership with climate tech startup CHOOOSE to enhance decarbonization solutions for the aviation industry. The partnership includes a strategic investment from bp and aims to help airlines meet sustainability obligations. CHOOOSE provides a software platform for companies to track and reduce emissions, and has partnered with aviation, travel, and logistics companies on sustainable aviation fuel and carbon offset programs. 🛩️

• Sumitomo Corporation has announced an investment in CO2 removal startup Inherit Carbon Solutions, aiming to remove millions of tons of CO2 from the atmosphere over the next decade. Inherit captures and stores CO2 released from the production of renewable natural gas (RNG) and transports it for permanent geological storage. 🟢

• Rio Tinto has signed a 25-year power purchase agreement with European Energy to buy all the electricity from Australia's first gigawatt-scale solar project, the Upper Calliope Solar Farm. Once approved and developed, the solar farm has the potential to reduce Rio Tinto's carbon emissions by 1.8 million tonnes per year and could power its three Gladstone production assets. ⚡️

• Financial market infrastructure provider SIX has launched a new climate data offering to support investors in reporting, monitoring, and decision-making related to climate factors. The data sets cover emissions data from over 33,000 companies globally and include regulatory, historical, and forward-looking climate impacts. 📄

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

⚡️ BlackRock has committed $500 million to clean energy developer Recurrent Energy, representing a 20% stake in the company. The investment will support Recurrent Energy's project development pipeline and transition to a developer and long-term owner and operator.

🔋 TotalEnergies has announced its acquisition of Kyon Energy, a leading battery storage developer in Germany, for a consideration of €90 million upfront payment. Kyon Energy has developed 770 MW of projects, with 120 MW already in operation, and has a pipeline of 2 GW of advanced-stage products.

📈 ArcTern Ventures has raised $335 million for its global decarbonization venture fund, ArcTern Fund III. The fund aims to invest in technology companies focused on renewable energy, clean mobility, circular economy, sustainable food, agriculture, and industrial decarbonization.

🔌 EV charging platform Monta has raised $87 million in a Series B funding round. Monta provides an integrated software platform for streamlining the deployment and management of EV charging infrastructure. The company has experienced significant growth, increasing its annual recurring revenue by 600%.

🔋 Sion Power Corporation, a next-generation EV battery technology developer, has raised $75 million in a Series A funding round. The funds will be used to support the commercialization of their proprietary lithium-metal cell technology for electric vehicles. The technology offers enhanced safety, lifetime, and recharging rates, delivering up to twice the energy of conventional lithium-ion batteries.

🍄 Infinite Roots, a German mycelium biotech company, has raised $58 million in a Series B funding round, bringing their total funding to $86.8 million. Infinite Roots specializes in developing mushroom mycelium-based nutrition to address challenges such as climate change and food security.

🟢 Circularity startup CheckSammy has raised $45 million in a strategic investment round to support its waste diversion and sustainability solutions. The funding will also be used to launch its sustainability software platform, Veridiant, which offers diversion analytics, and carbon offset capabilities, and integrates with customers' existing ESG technology stack.

🌊 Ocean-based carbon capture startup Captura has raised an additional $21.5 million in funding to commercialize its Direct Ocean Capture (DOC) technology. The technology extracts CO2 directly from seawater for permanent storage or reuse. The company plans to move into large-scale commercial deployments after successful pilots, capturing tens of thousands of tons of CO2 annually.

🟢 CarbonPool, an insurance start-up founded by former Allianz executives, has closed a seed funding round of CHF10.5 million. The company aims to guarantee companies buying carbon credits receive the permits they've paid for, even if the issuer cannot deliver them.

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