What's Happening in Sustainability & ESG (Week Recap 14.05 - 20.05) 🌎

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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. 🍀

In this edition, we’ll cover:

• How would a second Trump presidency impact clean energy investments? 🇺🇸

• The GRI and IFRS publish guides to help companies understand and apply directives and standards 📑

• More than 40% of Gen Zs and Millennials would change jobs over climate concerns 🌎

• Norway's $1.6 trillion wealth fund urged Shell to be more transparent and excluded three companies due to ethical concerns 🇳🇴

• Microsoft is requiring key suppliers to use 100% carbon-free electricity, as its emissions go up 30% from 2020 💡

• and other news 🌍

THE WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇺🇸 A Trump victory in the upcoming presidential election could jeopardize $1 trillion in low-carbon energy investments, according to Wood Mackenzie. Their analysis also projects that carbon emissions could be 1 billion tonnes higher by 2050 under Trump's policies compared to the current ones. Trump has hinted at reversing many of Biden's climate policies and possibly pulling the US out of the Paris agreement. He would also likely strive to replace the head of the International Energy Agency (IEA) to shift its focus back to maximizing fossil fuel output instead of fighting climate change. The IEA has broadened its focus beyond oil and gas supply to include clean energy, a shift that has accelerated during President Biden's tenure. Trump's potential pressure on the IEA would align with his pro-fossil fuel policies and could go against the energy policies of the EU and other key IEA members.

📑 The IFRS Foundation has released an updated guide to assist companies in applying both the Integrated Reporting Framework and the IFRS Sustainability Disclosure Standards. The guide offers a phased approach to implementing the framework and understanding how the standards can be incorporated into reporting. The updated guide aims to help companies, whether new or experienced in integrated reporting, improve transparency and comparability in their reports.

📑 The Global Reporting Initiative (GRI) has also launched the 'CSRD Essentials' series, a guide to understanding the EU's Corporate Sustainability Reporting Directive (CSRD). The series, which targets over 42,500 EU companies and numerous global businesses, covers topics such as scope and timing, reporting format, legal interconnections, and SMEs and implementation. The initiative aims to make sustainability reporting more accessible and aligns with EU regulations like the European Climate Law and Corporate Sustainability Due Diligence Directive (CSDDD).

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MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📑 Norway's $1.6 trillion sovereign wealth fund has urged Shell (the fund is the company’s second-largest shareholder) to provide more information about its revised climate targets. However, the fund will not back a resolution by a group of 27 shareholders for the oil company to strengthen those targets. Shell had previously weakened a 2030 carbon reduction target and scrapped a 2035 carbon intensity reduction objective, but reaffirmed a plan to cut emissions to net zero by 2050. The fund has also decided to exclude Adani Ports, L3Harris Technologies, and Weichai Power from its government pension fund due to ethical concerns. Adani Ports is excluded due to the risk of contributing to serious violations of individuals' rights in war or conflict situations. Weichai Power is excluded due to concerns over its contribution to weapon sales in armed conflicts. L3Harris is excluded due to its involvement in the development and production of components for nuclear weapons.

🤔 Climate change and environmental sustainability are increasingly influencing Gen Z and millennials' workplace and consumer behaviors, with over 40% considering job changes due to climate concerns, according to a Deloitte survey. The study also found a high value placed on purpose in the workplace, with 86% of Gen Z and 89% of millennials stating it's crucial for job satisfaction.

🇦🇺 The Australian government plans to invest $5 billion in hydrogen production and technology over the next decade. This is part of a larger initiative to boost the country's clean energy sector, following the establishment of climate goals in 2022. The investment includes a new Hydrogen Production Tax Incentive and the Hydrogen Headstart program. The government also plans to allocate over $2 billion through the Australian Renewable Energy Agency to support the commercialization of technologies for the transition to net zero.

🇬🇧 The UK government's lack of clear policies supporting the transition to a low-carbon economy is driving billions of pounds of investment away, according to a survey of 100 financial services firms. Two-thirds of these firms, representing around £1 trillion in annual turnover, have already moved or plan to move investments to more sustainability-supportive markets. The UK Sustainable Investment and Finance Association (UKSIF) suggests that implementing mandatory corporate transition plans, clarifying the fiduciary duty of pension schemes in relation to climate finance, and embedding biodiversity into the regulatory framework could unlock £100 billion of investment in the national economy.

WHAT ARE COMPANIES DOING?

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

💡 Microsoft is requiring key suppliers to use 100% carbon-free electricity as part of its sustainability goals, which include becoming carbon-negative, water-positive, and zero waste by 2030. Despite progress in several areas, Microsoft is struggling to reduce Scope 3 emissions, which make up over 96% of its total emissions. The company’s carbon footprint has increased 30% compared to 2020 due to indirect emissions from the construction of data centers.

🏡 Deutsche Bank and the European Investment Bank (EIB) Group are launching a new program to offer discounted mortgages for the construction of climate-friendly homes and energy-efficient renovations in Germany. The EIB Group will guarantee a €150 million mezzanine tranche in a consumer loan securitization with Deutsche Bank, enabling the bank to offer discounted mortgages. The program aims to provide over €600 million of low-interest mortgages for climate-friendly housing, with stringent criteria such as a 30% reduction in primary energy demand for eligibility.

🟢 The US Department of Energy has offered a conditional loan guarantee of up to $1.66 billion to Plug Power (a hydrogen fuel cell systems developer), to support the construction of up to six clean hydrogen plants. The hydrogen produced will power fuel cell-electric vehicles used in various industries, contributing to an 84% reduction in GHG emissions compared to conventional hydrogen production.

🎯 The LEGO Group is tying a portion of all salaried employees' bonuses to emissions reduction goals, as part of its strategy to meet climate targets. The company has introduced a new KPI measuring carbon from its operations and business travel emissions, and plans to expand this to cover Scope 3 emissions.

🛩️ Boston Consulting Group (BCG) has announced another purchase agreement for sustainable aviation fuel certificates (SAFc) from Twelve, a cleantech company that transforms carbon. The agreement, which will run from 2026 to 2029, is expected to reduce CO₂ emissions by over 4,000 metric tons. Twelve's technology uses captured CO₂, water, and renewable energy to produce chemicals, materials, and fuels, including a power-to-liquid jet fuel that results in up to 90% lower lifecycle emissions than conventional jet fuel.

EVERYTHING FINANCE

Funding rounds, sustainable finance, acquisitions & private equity deals

📈 Mizuho Financial Group plans to provide $13 billion in financing for the production and supply of hydrogen and related technologies by 2030. The bank will focus on developing business strategies, establishing a group-wide framework, and expanding its pool of specialized personnel to achieve this goal.

📈 Norrsken VC, an early-stage impact venture investor, has raised €320 million ($345 million) for its second fund, surpassing its initial €250 million target and making it the largest early-stage generalist impact fund in Europe. The fund aims to support entrepreneurs addressing global challenges and plans to invest in over 30 impact startups, adhering to criteria linked to UN SDGs.

🔋 German startup Cylib has raised €55 million in a Series A funding round for its lithium-ion battery recycling technology. The funding will allow Cylib to scale its technology, which can recycle every component in a lithium-ion battery, at a facility in Germany. The company's technology uses a water-based process, which it claims is more sustainable and cost-effective than using chemicals.

🛩️ Airport operator Groupe ADP has invested $20 million in LanzaJet, a SAF technology and production company. LanzaJet, launched in 2020, has developed a technology that creates SAF and renewable diesel from waste-based and sustainable ethanol sources. The company aims to reach 1 billion gallons of SAF production by 2030.

⚡️ Industrial energy optimization company Ndustrial has raised $18.5 million in a Series B funding round. Ndustrial's platform uses AI to integrate various data sources from industrial systems, providing real-time understanding of energy intensity and enabling manufacturers to manage energy use in production. The company claims its technology has helped industrial sites avoid over $100 million in direct energy spend.

🟢 Allozymes, an enzyme discovery and engineering company, has secured $15 million in a Series A funding round. Allozymes' proprietary microfluidic platform allows for rapid enzyme screening, offering a higher success rate in developing custom enzymes for specific industrial applications.

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