What's Happening in Sustainability & ESG (Week Recap 04.06 - 10.06) 🌎

Today’s newsletter is brought to you by ConsciESG - The Progress Benchmark.

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:

• What does the EU's shift to the right mean for green policies? 🇪🇺

• Global investment in clean energy is set to reach $2 trillion in 2024, almost double the amount invested in fossil fuels ⚡️

• The new EU anti-greenwashing rules could lead to up to $40 billion in stock divestments 📈

• UN Secretary-General urged advertising and PR companies to cease their collaborations with fossil fuel companies 🛢️

• Major economies are seeking to finalize a plan to halt new private-sector funding for coal projects ⚡️

• and other news 🌍

THE WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇪🇺 This weekend’s EU elections marked the end of the bloc’s greenest parliament ever after concerns over everything from climate policies to the rise in the cost of living to migration gave the far-right populists a boost. Green parties lost 18 seats compared to the previous elections, moving from fourth to sixth place. Despite the far-right's advances, the centre, liberal, and Socialist parties are set to retain a majority in the parliament.

What does this mean for green policies and laws?

The rightward shift may make it tougher to pass new legislation that might be needed to respond to security challenges, the impact of climate change, or industrial competition from China and the US. However, a Reuters analysis predicts that most current policies will likely remain and the EU's core climate change targets won't be undone, as mainstream parties that support the current policies still hold a majority. The new EU parliament may also try to weaken certain green measures, and the political focus is predicted to shift to security and industry. The biggest challenge will be securing financing for the green transition amid sluggish economic growth and inflation.

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MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

⚡️ Global investment in clean energy technology and infrastructure is projected to reach $2 trillion in 2024, almost double the amount invested in fossil fuels, according to an International Energy Agency (IEA) report. Total energy investment is expected to exceed $3 trillion for the first time in 2024, with China accounting for the largest share of clean energy investment. The IEA also said that the tools needed to eradicate 35% of the world’s carbon emissions are currently at prototype or demonstration stage. The wish-list includes alternative fuels for ships and planes, green ways of making cement and steel, and batteries for storing renewable energy for long periods.

🌎 UN Secretary-General António Guterres urged advertising and PR companies to cease their collaborations with fossil fuel companies, likening them to the 'godfathers of climate chaos.' He also called for a ban on fossil fuel advertising, similar to the ban on tobacco ads due to health risks. France has already banned fossil fuel ads, with similar bans being considered in Canada and Ireland. Major economies are also seeking to finalize a plan to halt new private-sector funding for coal projects ahead of this year's UN climate summit. The proposal by the OECD would instruct investors, banks, and insurers to stop new financing for existing or planned coal projects and end funding for companies building coal infrastructure. Instead, financial institutions would fund the early retirement of coal plants and finance clean energy to replace lost coal capacity. The proposal has backing from France, the US, the UK, and the EU, but Japan has pushed back.

📈 The new anti-greenwashing rules introduced last month by the European Securities and Markets Authority (ESMA) could lead to up to $40 billion in stock divestments, according to a report by Morningstar. The rules require funds using ESG or sustainability-related terms to meet certain investment thresholds and follow exclusion criteria for Paris Aligned Benchmarks (PABs). Morningstar's analysis found that over 1,600 funds hold at least one company breaching the PAB or Climate Transition Benchmarks (CTB) exclusion rules. If these funds were to sell the stocks in breach to keep their names, divestments could reach up to $40 billion.

🟢 The Integrity Council for the Voluntary Carbon Market (ICVCM) approved the first carbon credits labelled with its Core Carbon Principles, marking an important step towards establishing a standard for transparency in the voluntary carbon markets. The ICVCM's (a multi-stakeholder-led independent governance body) principles aim to set a global benchmark for high-quality carbon credits that create verifiable impacts. The newly approved label has been applied to seven carbon crediting methodologies, covering an estimated 27 million carbon credits.

WHAT ARE COMPANIES DOING?

Corporate sustainability, new tools and services & companies in the news

📑 ESG data science company RepRisk launched Due Diligence Scores, a solution designed to help investors and businesses identify specific ESG risks. The new tool addresses the growing need for detailed and timely data for compliance with sustainability-related regulatory requirements. It provides disaggregated ESG scores, assessing risk factors such as biodiversity and human rights. The scores, which range from 0-100, are informed by RepRisk's ESG risk database and measure compliance risk across a variety of factors.

📊 Wolters Kluwer has launched CCH Tagetik ESG & Sustainability for Carbon Emissions, a solution designed to assist companies in managing and reporting Scope 1, 2, and 3 carbon emissions data. The platform includes features for automatic data feeding into various reports, a pre-configured data model for multiple data sources, pre-loaded emissions factors, dashboard and data visualization capabilities, and AI-powered narrative reporting.

🟢 Climeworks announced its Generation 3 direct air capture (DAC) technology, which offers significant improvements in efficiency and performance. The new technology uses novel structured sorbent materials that increase surface contact with CO₂, reducing capture time and increasing CO₂ release for storage. This doubles CO₂ capture capacity per module, halves energy consumption, and increases material lifetime, reducing costs by 50%. The technology was first implemented at full scale this month and will be deployed in Louisiana as part of a megaton-scale project funded by the US Department of Energy.

🛩️ SkyNRG, a sustainable aviation fuel (SAF) provider, launched Project Runway, a Book & Claim initiative aimed at enabling companies and airlines to reduce their carbon footprints by accessing SAF. Microsoft has joined as the founding corporate member. The book & claim approach allows airlines operating at locations where SAF is not available and companies to purchase and use SAF, even if the physical fuel is consumed somewhere else, as long as it is being used instead of fossil jet fuel.

🟢 TotalEnergies and Air Products signed a 15-year green hydrogen supply agreement to reduce GHG emissions from TotalEnergies' European refineries. The company aims to replace the same amount of hydrogen consumed in its refineries with green hydrogen by 2030, potentially reducing CO₂ emissions by 5 million tonnes annually. Air Products will deliver 70,000 tonnes of green hydrogen per year to TotalEnergies’ Northern European refineries from 2030, helping avoid approximately 700,000 tonnes of CO₂ per year.

🟢 Rio Tinto plans to invest $143 million in a new facility in Western Australia to test a low-carbon ironmaking process, BioIron. The process uses biomass and microwave energy instead of coal to convert iron ore to metallic iron, potentially reducing carbon emissions by up to 95% compared to the current blast furnace method.

EVERYTHING FINANCE

Funding rounds, sustainable finance, acquisitions & private equity deals

⚡️ UK-based clean energy tech company Octopus Energy Group received investments from Galvanize Climate Solutions and Lightrock at a $9 billion valuation. The company, which serves over 7 million customers and 40,000 businesses across 18 countries, plans to use the funding to expand its presence in North America, Europe, and emerging markets.

⚡️ Foresight Group raised €300 million for its energy transition fund, Foresight Energy Infrastructure Partners II (FEIP II), which aims to invest in strategic energy assets to facilitate the energy transition. The fund seeks to deliver capital growth and stable income through a diversified portfolio of energy infrastructure assets.

🟢 Climate-focused investment firm Pollination launched the Climate and Nature Impact Venture Fund, targeting a final close of $150 million to invest in early-stage climate and nature solutions companies, primarily in Australia. The fund will focus on "net-zero disruption" areas like energy management, clean industries, food and agriculture, and carbon management. Investments will range from $4 million to $12 million, targeting Series A and B-stage companies.

💧 Asset management firm Candriam launched the Candriam Sustainable Equity Water Fund, an actively managed fund investing in companies developing solutions to reduce pressures on water resources. The fund targets both companies providing water treatment solutions and those reducing water intensity in high-water use sectors.

🟢 Industrial equipment company John Cockerill raised €250 million for its subsidiary, John Cockerill Hydrogen, to accelerate the deployment of its green hydrogen electrolyzer technology. The funding will support the company's strategy of establishing electrolyzer production and service hubs in the USA, India, and the UAE, with potential expansions in Morocco and Vietnam.

📑 Sustainability advisory firm ERM acquired Australia-based climate risk and energy transition consultancy Energetics. Energetics, which helps large businesses, investors, and governments respond to issues like climate change and decarbonization, will join ERM’s climate change and corporate sustainability practice.

🏡 Cleantech startup Aira secured €200 million in debt commitments from BNP Paribas to facilitate the installation of heat pumps in homes across Germany. The funding will help address the upfront cost barrier for consumers transitioning to heat pumps, which are an energy-efficient and climate-friendly alternative to traditional heating systems.

⚡️ Xcimer Energy, a Denver-based startup, raised $100 million in a Series A financing round. The company's laser technology aims to accelerate the commercial deployment of fusion energy, a process that combines two atoms to form a single atom and release energy. Xcimer's laser architecture is expected to produce up to 10 times higher laser energy at 10 times higher efficiency and over 30 times lower cost per joule than the National Ignition Facility (NIF) laser system.

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