What's Happening in Sustainability? (Week Recap 07.03 - 13.03) 🌎

This week’s read time: 4 minutes

Welcome to this edition of Green Digest, where you will get updated about everything happening in the sustainability & ESG space in less than 5 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 Biden administration has announced a $6 billion Industrial Demonstrations Program to accelerate decarbonization projects in hard-to-abate sectors as part of its focus on industrial decarbonization. The program will provide up to 50% of the cost of first-of-a-kind or early-stage decarbonization projects, with priority given to those that accelerate industry towards deep decarbonization and enable new markets for cleaner products. The program is part of the administration's comprehensive approach to building a clean industrial sector, which includes allocations of nearly $500 billion to climate-focused investments in areas such as carbon-free energy and clean technologies.

🇬🇧 The UK government has pledged to invest £20 billion ($24 billion) over the next 20 years in projects aimed at capturing and storing carbon dioxide emissions, as part of efforts to reduce emissions to net zero by 2050. The investment will be used to fund projects that aim to store 20-30 million tonnes of CO2 a year by 2030, and will be set out in next Wednesday's budget as part of a "clean energy reset." The Treasury also announced plans to launch a competition for the country's first small modular nuclear reactor, as the UK aims to replace its aging nuclear power stations.

✅ A new survey by PwC and Workiva found that almost all U.S. public companies may begin complying with the SEC's upcoming climate-related disclosure rules regardless of when they become law, yet most companies admit that they face technology, staffing, and budget challenges in meeting the rules' requirements. The report also found that assurance is expected to play a major role in managing risks and meeting requirements for climate-related reporting.

🇨🇦 Canada's Office of the Superintendent of Financial Institutions (OSFI) has released guidelines on climate risk management, requiring banks and insurance companies to manage and disclose climate-related risks. The guidelines include expectations for major institutions to begin climate-related reporting for the fiscal year 2024, followed by smaller institutions the following year. The requirements cover disclosure categories including governance, strategy, risk management, and metrics & targets, and include reporting of Scope 1, 2, and 3 greenhouse gas emissions, targets used to manage climate-related risks and opportunities, and public commitments made as part of a Net Zero alliance.

⛔️ Kansas' proposed anti-ESG legislation, which would prohibit ESG investing in the state's pension funds and block suppliers from integrating sustainability-focused factors, could cost the pension system up to $3.6 billion in returns, according to a report by the Kansas budget division. The proposed legislation forms part of a series of anti-ESG initiatives by Republican politicians at the state and federal levels and may face challenges moving forward given the cost revealed by the report.

🇪🇺 The European Union's financial regulators will conduct a comprehensive system-wide analysis of the financial sector's resilience to climate-related risks and its ability to facilitate financing for Europe's green transition under stress scenarios. The analysis will focus on assessing the financial system's resilience in the transition to the EU's 2030 goal to reduce greenhouse gas emissions by at least 55% by 2030. The regulators will work together to conduct a cross-sector assessment to expose system-wide vulnerabilities, and the analysis is expected to go beyond examining climate-related shocks. The results of the test could be used by policymakers to understand the potential impact of climate-related shocks and to feed into the regulators' and central banks' future supervisory and monitoring programs.

🇦🇺 Australia's competition regulator, the Australian Competition and Consumer Commission (ACCC), has announced that it will investigate companies for potential greenwashing after finding concerning environmental or sustainability-related claims from over half of businesses reviewed in a study. The study involved an internet sweep of 247 companies across various sectors, and the highest proportion of concerning claims was found in the cosmetic, clothing and footwear, and food and drink sectors. The ACCC will conduct education activities with businesses and update guidance to help improve the integrity of environmental claims.

What else is happening? 🧐

• Royal Bank of Canada (RBC) has announced that it will incorporate climate considerations into the medium- and long-term incentive plans for its top executives, including the bank’s CEO and Group Executives, beginning this year. The new assessment will provide incentives for the CEO and Group Executives to accelerate RBC’s progress on key climate priorities through innovation and engagement with governments, businesses, and individuals to facilitate meaningful global progress toward net zero over the short, medium, and long term. 💡

• Deloitte has launched GreenLight Solution, a new decarbonization software tool that uses artificial intelligence to help organizations build emissions reduction strategies and a pathway to net zero emissions. The tool provides insight into the potential financial impacts of different climate initiatives and algorithms to establish a portfolio of opportunities to achieve decarbonization targets balanced against business goals. The software tool is built on the artificial intelligence platform CortexAI and includes advanced data automation and transformation capabilities, incorporating 150,000 emissions factors and 200 emissions abatement projects. 🍀

• Morgan Stanley has committed to strengthening its deforestation policies for clients in agriculture and land-use sectors, according to Green Century Funds, who filed a proposal for the financial services firm's 2023 AGM. The firm will adopt leading "No Deforestation, No Peat, No Exploitation" (NDPE) policies and require best-practice Forest Stewardship Council (FSC) certification or a time-bound plan to achieve it for timber clients in high conservation value forests. Morgan Stanley will also enhance its review of beef clients' no-deforestation policies and practices in high-risk regions. 🌲

Where is cash flowing? 👀

• Clean energy platform Palmetto has raised $150 million from TPG Rise Climate to support its initiatives to spur the adoption of clean energy and access to residential solar in the U.S. Palmetto provides end-to-end solutions helping U.S. homeowners access solar energy, including handling sales, designing, engineering, permitting and fulfillment, and enabling cost reductions using automated workflows, predictive algorithms, and local intelligence data. The financing will help Palmetto expand its software and technology platform, which helps individuals, small businesses, and large corporations access and grow in the clean energy economy. 💡

• Chicago-based cleantech startup ClearFlame Engine Technologies has raised $30 million in a Series B funding round led by Mercuria Energy Group, with participation from Breakthrough Energy Ventures, Rio Tinto, and WIND Ventures. ClearFlame's technology enables heavy-duty diesel engines to run on cleaner-burning renewable liquid fuels, and the company is piloting five trucks with some of the largest fleet operators in North America. The funding will be used to bring ClearFlame's solutions to market and explore partnerships in the mining, agriculture, and power generation sectors. 🍀

• Canadian freight and logistics services provider Purolator has announced plans to invest $1 billion over the next seven years to electrify its network, including purchasing over 3,500 fully electric last-mile delivery vehicles and electrifying more than 60 terminals. The investment is part of Purolator's climate-related targets to reduce emissions and achieve net zero emissions by 2050. The company expects its environmental sustainability investments to reduce greenhouse gas emissions by 80,000 tonnes in 2030. 🚚

More interesting news💡:

• EY and IBM have announced an expanded collaboration to provide ESG solutions to help companies accelerate, manage and report on sustainability-related business transformations and initiatives. The collaboration will leverage EY’s CCaSS practices and IBM’s Envizi and Environmental Intelligence suites to provide offerings such as Scope 3 greenhouse gas emissions accounting and management, ESG Managed Services, and EY’s SEAM tool for carbon capture, analysis, and decision support. ✅

• Delta Air Lines has announced its plans to achieve net zero emissions by 2050 and provide more sustainable air travel. The company's roadmap focuses heavily on the evolution to Sustainable Aviation Fuel (SAF), with goals to achieve 10% SAF usage by the end of 2030, 35% by 2035, and at least 95% by 2050. Delta is also working to increase transparency in its supply chain processes and evaluate suppliers, with the goal of achieving a net zero supply chain by 2050. Other initiatives include minimizing the use of single-use plastics on flights and electrifying ground support equipment. 🛩️

• TD Asset Management has launched its first actively managed ESG-related fixed-income product, the TD North American Sustainability Bond Fund. The fund will invest in North American corporate fixed-income securities that demonstrate strong sustainability characteristics and/or positive contributions to the UN Sustainable Development Goals, as well as green, social, sustainable and/or sustainability-linked bonds. 🌎

• Franklin Templeton has launched the Franklin MSCI Emerging Markets Paris Aligned Climate UCITS ETF, which invests in emerging market securities transitioning to a low-carbon economy. The ETF is the fourth in Franklin Templeton’s Paris Aligned Climate ETF and is classified as Article 8 under the EU’s SFDR regulation. The new ETF will track the MSCI Emerging Markets Climate Paris Aligned Index, which incorporates the TCFD recommendations and exceeds the minimum standards of the EU Paris-Aligned Benchmark. 🍀

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

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