What's Happening in Sustainability & ESG (Week Recap 13.08 - 19.08) 🌎

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This week’s read time: 8 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. 🍀

As we reach the height of summer, the pace of news and events may slow down, but there’s still plenty worth sharing. This week, we’re sending a special edition with some standout findings in our Top Section. We hope you find them as inspiring as we did. 🟢

THIS WEEK’S TOP FINDINGS

‘Moving Beyond ESG’

Moving Beyond ESG - an article by Robert G. Eccles, a leading authority on ESG and Sustainability, and co-founder of the Sustainability Accounting Standards Board (SASB). In this article, Eccles recommends a pragmatic approach for corporate leaders: clearly define corporate purpose, improve transparency in ESG reporting, and engage stakeholders constructively.

“In essence, being a responsible business requires having a clear purpose—and that requires a clear understanding of what the company can and cannot do to address societal and environmental challenges while providing long-term returns for its shareholders.”

“Financial reporting standards require companies to report both good and bad financial performance. Sustainability reporting standards will do the same. They will enable companies to be more candid and precise in reporting on both ESG and impact performance. If companies are making the world a better place while making money for shareholders, they will be able to explain how. If they are making the world a worse place while making money for shareholders, it will be clear. If they are making the world a better place at the expense of shareholders (and probably some stakeholders), that will be clear as well. Candid reporting using standards is a way to avoid greenwashing and not hide through greenhushing.”

“Corporate leaders and their boards should hear what critics have to say. They should then explain which sustainability issues aren’t important to value creation, acknowledging that some issues may become relevant in the future only if the law changes. Companies should explain what they can and cannot do about their negative externalities and identify areas where regulation is needed. Some of those expecting a company to “do more” will listen; some won’t. Some will listen and agree in private but maintain a different public posture as part of their overall strategy to exert pressure on the private and public sectors.”

‘The sustainability recession will end soon - and not by choice’

The ‘sustainability recession’ will end soon—and not by choice - an article by Andrew Winston, a globally recognized expert on megatrends and sustainable business and the author of multiple books on strategy.

Corporate sustainability is in decline, described as a “sustainability recession” by John Elkington. Despite gaining momentum during the pandemic, companies are now quieter about sustainability efforts, a trend called “greenhushing”. Many firms are stepping back from commitments, missing targets, and laying off sustainability staff. Key reasons for this slowdown include increased regulation and reporting requirements, which consume resources and slow action, and the emergence of AI, which has drawn focus away from sustainability. Additionally, sustainability has become a contentious political issue, especially in the US, with backlash against ESG investments and actions supporting diversity and inclusion.

Despite the current pullback, sustainability will return stronger due to real threats like climate change, which poses significant economic risks. Clean technology is also becoming cheaper, making climate action more profitable. Diversity and inclusion remain crucial as the world becomes more diverse, and companies must adapt to attract talent and serve new markets. Regulations and investor expectations ensure sustainability remains a priority. As Accenture reports, 90% of CFOs expect ESG issues to be major in the coming years. Companies will return to sustainability as regulations demand it and because it benefits both businesses and the planet. The sustainability agenda offers short and long-term paybacks, critical for future business success. Sustainability will definitely resurge, offering wise companies the chance to prepare for the next wave of commitment and action.

‘The Birth, Life, Death, and Afterlife of ESG Ratings’

The Birth, Life, Death, and Afterlife of ESG Ratings - a TED talk by Pavan Sukhdev, a sustainability thought leader and the founder & CEO of GIST Impact, a leading impact data and analytics provider.

“Pavan Sukhdev walks us through the evolution, challenges, and criticisms of ESG ratings. It also envisions an 'afterlife' for ESG and explains how it can become a catalyst for creating a more sustainable and equitable world for all.”

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MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📑 A survey by EcoOnline reveals that 68% of large US companies have dedicated budgets for sustainability reporting, with nearly all planning to increase spending on sustainability and compliance efforts. The survey, which included 95 executives from companies with over $500 million in annual revenue, highlights that companies are preparing for new laws requiring GHG emissions reporting. Companies are investing in technology and staff to meet these requirements, with 76% exploring dedicated software for sustainability applications. Despite regulatory pressures, companies view sustainability as a value driver, with 74% expecting revenue growth and 95% anticipating enhanced brand value from their initiatives.

🇺🇸 A federal judge in Missouri invalidated a state rule that restricted financial professionals from considering ESG factors in investment advice. US District Judge Stephen Bough ruled that the 2023 rule conflicted with federal law, violated free speech rights, and was too vague to enforce. The rule, issued by Missouri Secretary of State Jay Ashcroft, required investment advisers to disclose and obtain consent for ESG considerations. The Securities Industry and Financial Markets Association argued the rule was unnecessary and disrupted uniform federal regulation.

🇺🇸 The US Department of Energy's Office of Fossil Energy and Carbon Management announced $54.4 million in funding to advance carbon management technologies, focusing on CO2 capture, transport, conversion, and storage. The funding will target reactive carbon capture, engineering-scale testing for natural gas power plants, portable systems for industrial plants, and preliminary engineering design studies for carbon capture at various facilities. Projects must also address societal impacts, emphasizing diversity, equity, inclusion, and accessibility.

🌡️ In 2024, a record 15 national heat records and 130 monthly temperature records were broken, indicating an unprecedented frequency of extreme heat events. Climate historian Maximiliano Herrera attributes this to a combination of man-made global heating and the fading El Niño phenomenon. The tropics have been particularly affected, setting daily records for 15 consecutive months. Major institutions like the UN and the Copernicus Climate Change Service continue to warn of accelerating climate change impacts, including more intense heatwaves, extreme weather events, and rising sea levels.

WHAT ARE COMPANIES DOING?

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

🛰️ SpaceX will launch Tanager-1, a methane-detecting satellite developed by Planet Labs PBC with NASA’s Jet Propulsion Laboratory, to track methane emissions from major sources like oil and gas wells. Tanager-1 can detect emissions within 50 meters of their source, providing data to drive regulatory actions and market mechanisms for reducing emissions.

🌀 NVIDIA introduced StormCast, a generative AI model designed to enhance weather prediction and climate simulation at mesoscale levels, crucial for disaster planning. This advancement could improve safety and cost-efficiency by enabling more precise predictions of hazards like flash floods and tornadoes. StormCast's innovations include high-resolution, hourly forecasts and realistic 3D storm dynamics, marking a significant advancement in AI-driven weather prediction.

🔋 Natron Energy, a global leader in sodium-ion battery technology, plans to build a $1.4 billion sodium-ion battery manufacturing facility in Edgecombe County, North Carolina, producing 24GW annually. Supported by a Job Development Investment Grant, the project is expected to create over 1,000 jobs and boost the state's economy by $3.4 billion over 12 years. Natron's sodium-ion batteries, which outperform lithium-ion batteries in power density and recharging speed, will serve various industrial power markets.

🚢 Danish shipping group Maersk joined a study with Lloyd's Register and Core Power to explore the feasibility of nuclear-powered container shipping in Europe. The study will assess regulatory frameworks and safety requirements for using fourth-generation nuclear reactors on ships. While nuclear power presents challenges such as safety and waste management, advancements in reactor designs could make it a viable decarbonization option for the shipping industry within 10 to 15 years. The maritime industry, responsible for nearly 3% of global CO2 emissions, is under pressure to find cleaner fuel solutions.

🟢 Heimdal Inc. (backed by Sam Altman) inaugurated the largest direct air capture (DAC) plant in the US, located in Oklahoma, capable of capturing over 5,000 tons of CO2 annually. The plant uses a cost-effective process leveraging natural minerals and existing industrial technologies. Unlike its competitors, Heimdal utilizes the captured CO₂ for enhanced oil recovery. The company plans to open a larger facility by 2026, aiming to capture one megaton of CO₂ per year.

🏬 Honeywell launched INNCOM Direct, a tool designed to help mid-market hotels reduce energy consumption and carbon emissions by automatically adjusting heating and cooling in vacant rooms. The tool uses a detection system to manage room temperatures without affecting guest comfort and includes features like quick setup, portfolio analytics, and mobile accessibility.

🔴 Texas added UK bank NatWest to a list of financial companies that may face divestment by the state’s pension funds for allegedly "boycotting" oil and gas companies. This move is part of a broader anti-ESG initiative in Republican states, with Texas being a major energy supplier. The list, initially published in 2022, now includes 16 companies. NatWest was added due to its policy changes limiting financing for oil and gas exploration.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🌳 The World Bank issued a $225 million bond with returns linked to carbon removal units (CRUs) from Amazon reforestation projects by Mombak. Founded in 2021, Mombak is focused on large-scale carbon removal projects, starting with native, biodiverse reforestation of the Amazon rainforest. This marks the first bond tied to carbon removal rather than avoided emissions and is the World Bank’s largest outcome bond. Investors will receive a fixed and variable coupon based on CRUs. Proceeds will support global sustainable development, with $36 million allocated to Mombak’s reforestation projects.

🟢 Canada’s government-backed Canada Growth Fund (CGF) will also invest up to $100 million in Svante, a carbon capture technology provider, to support emissions reduction projects in hard-to-abate industries in Canada and the US. CGF, which began operations in 2023 with $15 billion, aims to develop a clean economy and attract private investment in low-carbon projects. This investment will help Svante focus on first-of-a-kind deployment opportunities and prioritize Canadian projects. Svante, founded in 2007, is constructing a facility in Burnaby to produce filters capable of capturing 10 million tonnes of CO2 annually.

📈 Standard Chartered introduced an ESG-linked cash account for corporate clients, rewarding them for achieving significant ESG-related targets through favorable interest rates or fee pricing. This initiative is part of the bank's broader sustainability-focused Transaction Banking Cash solutions, which include accounts and financing options supporting sustainable development. The ESG goals will be based on relevant and ambitious KPIs. The new account will initially launch in Hong Kong and Singapore, with plans for a broader rollout.

📊 EQT Group will acquire a majority stake in AMCS, a provider of cloud-based and AI-enabled software for resource-intensive industries. AMCS, founded in 2003, focuses on enhancing sustainability and profitability in sectors like waste management and recycling. The acquisition aligns with EQT's strategy to invest in companies driving sustainability and circular economy practices.

🛩️ Alaska Airlines invested in JetZero, a developer of sustainable aircraft, marking its first options for future aircraft orders. JetZero, founded in 2021, is creating a commercial blended-wing body (BWB) aircraft that promises up to 50% less fuel burn and lower emissions, aiming for a 2030 launch with 100% sustainable aviation fuel compatibility.

⚡️ Guidewheel, an AI-powered factory optimization platform, raised $31 million in a Series B funding round led by BlackRock and Temasek’s Decarbonization Partners. Guidewheel's "FactoryOps" solution helps factories improve efficiency, reduce downtime, and manage energy and carbon emissions. The new funding will scale the platform and introduce features like Scout, an AI-powered predictive maintenance tool.

⚡️ Aalo Atomics, a developer of small nuclear fission reactors, raised $27 million in Series A funding to advance its mission of producing small reactors in gigafactories. The funding will help reduce costs and construction times for clean energy solutions. Aalo has made significant progress, including completing the conceptual design of its Aalo-1 microreactor, signing a siting MOU with the US Department of Energy, and submitting a regulatory engagement plan to the NRC.

👕 Ambercycle secured a $10 million investment to establish its first commercial plant for producing premium materials from end-of-life textiles, set to open in 2026. Ambercycle, founded in 2015, specializes in converting end-of-life fabrics into purified, regenerated polyester called cycora. This investment will help Ambercycle scale its operations to meet increasing demand for sustainable textiles.

🟢 Finnish startup Collo raised €5 million to expand its liquid analysis technology globally, helping industrial plants reduce costs, emissions, and waste. Founded in 2017, Collo's real-time measurement solutions optimize liquid processes, providing significant savings in resources like raw milk, CO₂ emissions, and clean water. Their analyzers use electromagnetic fields and IoT to detect chemical compositions and physical changes in liquids, offering actionable insights for process optimization.

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