What's Happening in Sustainability & ESG (Week Recap 16.04 - 22.04) 🌎

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:

• US is set to release guidelines for carbon offsets to build market confidence & EU considers incorporating them into its carbon market 🇺🇸🇪🇺

• Global leaders will discuss a first-ever treaty to control plastic pollution 🌎

• Despite concerns, the IEA predicts strong growth in EV sales this year 🚗

• Climate change could cost an estimated $38 trillion per year by 2050 🔴

• and other news 🌍

THE WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇺🇸 The US is set to release guidelines for carbon offsets to build market confidence and ensure credits reflect real emissions cuts, according to the top US climate diplomat John Podesta. Podesta previewed some of what the guidelines will require, including assurance that carbon credits "represent real, additional, permanent emissions reductions," and that emissions accounting happens at the sectoral level. On the demand side, he said companies’ use of carbon credits "should not substitute or delay" efforts to invest directly in reducing their emissions.

FT also reported that advisers to former US climate envoy John Kerry lobbied the Science-Based Targets initiative (SBTi) to allow companies to use carbon credits to offset their pollution. The move was part of the US clean-energy scheme, known as the Energy Transition Accelerator (ETA), to channel funds to developing countries. ETA is defined as an “innovative carbon finance platform aimed at catalyzing finance to speed the just energy transition in emerging and developing economies”, created by the US Department of State, Bezos Earth Fund, and The Rockefeller Foundation.
🇪🇺 Meanwhile, the EU is also considering incorporating emissions removal credits into its carbon market, after banning carbon offsets from its emissions market in 2020, owing to concerns about cheap international credits with low environmental standards.

🌎 In other news, global leaders will discuss a first-ever treaty to control plastic pollution in Ottawa this week, which could be the most significant environmental deal since the 2015 Paris Agreement. The treaty aims to address the lifecycle of plastics, from production to disposal. However, countries are divided on the treaty's ambition, with some opposing production limits. The plastic industry’s emissions, which account for 5% of global carbon emissions, could grow to 20% by 2050 if current trends continue.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🚗 Despite concerns from carmakers, the International Energy Agency (IEA) predicts strong growth in electric vehicle (EV) sales this year, with battery and hybrid models potentially accounting for one in five cars sold globally. The IEA expects EV sales to rise more than 20% to reach 17 million this year and to constitute two-thirds of global sales by 2035. The report also highlights that almost one in three cars in China and one in five in the US and EU will be electric by 2030, impacting both the auto industry and the energy sector.

🇺🇸 The US announced a $7 billion Solar for All grant program on Earth Day message to provide residential solar projects to over 900,000 low-income households across the US. The program is expected to save these households $350 million annually, create around 200,000 jobs, and reduce 30 million metric tons of CO2 equivalent emissions over five years.

🔴 Climate change could cost an estimated $38 trillion per year by 2050, equating to a 17% reduction in global GDP, according to a study by the Potsdam Institute for Climate Impact Research. The cost of measures to limit global warming to within 2°C by 2050 would be less than a sixth of the estimated damage. The study found that almost all countries would suffer economically from climate change, with poor, developing nations hit the hardest. If emissions continue at today's rate, the estimated economic toll after 2050 could lead to a 60% income loss by 2100.

☀️ BONUS: we’re loving this LinkedIn post …

WHAT ARE COMPANIES DOING?

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

🟢 Climeworks, one of the first and most prominent direct air capture companies, has launched a new service, Climeworks Solutions, to provide companies with carbon removal portfolios. As part of the solution, the company will also offer to construct and carry out carbon removal portfolios. The service may consist of both engineered and nature-based approaches to carbon removal, including afforestation, reforestation, biochar, bioenergy with carbon capture and storage, and enhanced weathering.

⚡️ Apple has announced that 95% of its supply chain, representing over 320 suppliers, have committed to using 100% renewable energy for Apple production by 2030. The company is also working towards matching the electricity used by customers to charge their devices with clean electricity by 2030 and aims to replenish 100% of the fresh water used in corporate operations in high-stress locations.

🟢 Microsoft, Aker Carbon Capture, and CO280 are collaborating to scale up the carbon removal market, focusing on project development and digital tracking. The partnership aims to address the need for large-scale carbon removal, as highlighted in the 2022 IPCC climate change mitigation study. The collaboration will explore carbon capture projects in the US and Canada, standardize lifecycle assessment and reporting systems, and develop a digital tool for project comparison.

🛢️ Shell has urged shareholders to reject a resolution from a group of 27 investors, including activist shareholder Follow This, that calls for tighter climate targets. The resolution, which will be voted on at Shell's annual general meeting on May 21, is the largest of its kind and asks Shell to align its carbon reduction targets with the Paris Climate Agreement. Shell argues that the resolution is against good governance and shareholders' interests and would have a negative financial impact on the company.

📑 Nestlé shareholders rejected a proposal to reduce the company's reliance on less healthy foods high in salt, sugar, and fats. The proposal, filed by a coalition of shareholders through NGO ShareAction, called for the company to set targets to increase sales from healthier products. However, 88% of shareholders voted against it. Nestlé argued it was already making progress with its health and nutrition goals and that the proposal would create opportunities for competitors without necessarily promising any public health benefits.

EVERYTHING FINANCE

Funding rounds, sustainable finance, acquisitions & private equity deals

⚡️ Chevron's venture capital arm has launched its third fund, the Future Energy Fund III, with a $500 million commitment to invest in renewable energy technologies. The fund will focus on industrial decarbonization, emerging mobility, energy decentralization, and the circular carbon economy.

📈 Wellington Management has raised $385 million for its inaugural Climate Innovation Fund, which invests in private companies developing solutions to mitigate and adapt to climate change. The fund targets late-venture and early-growth companies in areas such as software, sensors, AI, data and analytics, and focuses on themes like energy transition, sustainable buildings, transportation, and food and agriculture innovation.

📈 The Bezos Earth Fund plans to grant up to $100 million to advance AI-based solutions for climate change and nature loss through its AI for Climate and Nature Grand Challenge. Priority areas will be sustainable proteins, biodiversity conservation, and power grid optimization.

🟢 Tree Energy Solutions (TES), a Brussels-based green energy company, has raised €140 million. TES specializes in producing e-NG, a hydrogen-based green molecule identical to natural gas, and is developing a green energy hub in Wilhelmshaven, Germany.

📈 Acre Impact Capital has raised nearly $100 million for a fund aimed at financing climate-aligned infrastructure projects in Africa. The fund plans to support projects in renewable energy, health, food, and water and aims to mobilize $5.60 of private-sector capital for each dollar invested.

💡 Smart energy company GridBeyond has raised $55 million in a Series C financing round. The company provides an AI-powered platform that bridges the gap between distributed energy resources and electricity markets, helping to balance the grid.

📈 UK fintech startup Unwritten has raised $3.5 million in seed funding to advance its solutions that allow investors and companies to integrate climate change into their financial decisions. Unwritten's analytics translate complex climate-related information into financial data for over 40,000 firms.

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