What's Happening in Sustainability & ESG (Week Recap 20.08 - 26.08) 🌎

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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. 🍀

In this edition, we’ll cover:

• Food systems are increasingly at risk from climate change, facing both physical and transition challenges 🌾

• US presidential candidate Donald Trump is considering ending the EV tax credit if elected and also eliminating some EPA rules 🇺🇸

• The Australian Senate passed a bill mandating climate reporting for large and medium-sized companies 🇦🇺

• BlackRock reduced its support for ESG resolutions to 4.1% during the 2024 AGM season, down from 6.7% in 2023 and 47% in 2020-21 📈

• Ford is revising its EV strategy due to softer-than-expected demand and rising costs 🚙

• and other news 🌍

THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🌾 (A Reuters insight) The food system is becoming increasingly vulnerable to climate change, facing both physical risks, such as extreme weather and changing growing conditions, and transition risks, like stricter regulation, higher fuel prices, changing consumer tastes, and higher competition for scarce resources such as water. A recent FAIRR analysis suggests that half of the largest livestock companies could be operating at a loss by 2030 due to these climate-related costs. Many agricultural facilities are at risk of becoming stranded, with investment assets turning into liabilities. Despite these risks, there is a significant gap in understanding climate impacts among farmers and the investment community, often leading to a lack of preparedness.

To address these challenges, companies like Mars have launched a blended finance framework to support regenerative agriculture, aiming to provide financial incentives for sustainable practices. However, broader and more systemic changes are needed to ensure the food sector can effectively adapt to and mitigate the impacts of climate change. “Climate change will disrupt all markets, and buyers may find that either there are no crops available to buy or governments will refuse to export them,” says Peter Elwin from Planet Tracker. “When the whole system is becoming more volatile, you can’t diversify away from those risks easily, and you need a more holistic approach.”

🇺🇸 US presidential candidate Donald Trump is considering ending the $7,500 EV tax credit if elected, citing inefficiency. Trump plans to impose new tariffs on cars made in Mexico by US automakers and is open to allowing Chinese automakers to build factories in the US. He also promised to eliminate Environmental Protection Agency (EPA) rules limiting power plant pollution and increase the use of nuclear reactors. His economic policy emphasizes reducing reliance on foreign manufacturing and boosting domestic production, including potential tariffs and increased nuclear energy infrastructure. This approach is clearly outlined in Project 2025, a comprehensive 900-page policy plan crafted for Donald Trump by the conservative Heritage Foundation. Project 2025 advocates for dismantling EPA and its climate regulations, reopening the Arctic National Wildlife Refuge for drilling, defunding the transition to renewable energy across the country, and eliminating environmental justice initiatives. Furthermore, it suggests removing all references to climate change from government discourse.

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MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🇦🇺 The Australian Senate passed a bill mandating climate reporting for large and medium-sized companies, marking a significant step towards a new climate risk disclosure framework. The legislation aligns with international standards and requires companies to disclose climate-related risks, opportunities, and GHG emissions. This initiative is part of the Albanese government’s Sustainable Finance Roadmap, which aims to transition to a net-zero economy and enhance Australia’s appeal to international investors. Reporting will begin in 2025 for large companies, with phased implementation for medium and smaller companies. The Australian Accounting Standards Board and Australian Auditing and Assurance Board are developing the necessary standards and assurance requirements.

🇺🇸 The US Department of Energy’s Office of Fossil Energy and Carbon Management announced up to $127.5 million in federal funding to develop CO₂ capture, removal, and conversion test centers at cement manufacturing facilities and power plants. The funding will establish test centers for cost-effective research and evaluation of carbon capture technologies, with a focus on post-combustion flue gas testing, enhancements at existing facilities, and testing at cement manufacturing sites. These investments are designed to reduce costs, minimize environmental risks, and scale up carbon management processes, contributing to economical and sustainable carbon management practices. The application deadline for this funding is October 31, 2024.

🇨🇳 China significantly reduced the number of permits for new coal-fired power plants by nearly 80% in the first half of 2024, marking a potential shift in its energy strategy, according to a Greenpeace East Asia report. For the first time, China’s combined wind and solar capacity (11.8 TW) surpassed coal capacity (11.7 TW), accounting for 84.2% of all new grid-connected capacity. Despite this, China commissioned 14 new coal plants with 10.3 GW of capacity, a 79.3% decrease from the same period in 2023. The reduction in coal approvals may indicate a slowing reliance on coal as renewable energy expands, but it remains unclear if this trend will continue. Analysts suggest that China’s carbon emissions may have peaked in 2023, with a 1% drop in the second quarter of 2024.

WHAT ARE COMPANIES DOING?

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

🚙 Ford Motor Co. is revising its EV strategy due to softer-than-expected demand and rising costs. The company has canceled plans for a fully electric three-row SUV and is delaying the launch of a new electric pickup truck to 2027. Instead, Ford will focus on producing hybrid versions of its larger SUVs and developing two new, lower-cost electric pickup trucks and a commercial van. This shift will reduce Ford’s capital spending on EVs from 40% to 30% of its budget. The company expects to take a $1.9 billion charge related to these changes, aiming to make its EV business profitable by focusing on more cost-effective models and leveraging incentives like those from the Inflation Reduction Act. Despite losses in its current EV lineup, Ford sees potential growth in the commercial segment and plans to build more affordable EVs to compete globally.

🟢 Linde announced a plan to invest over $2 billion in building a clean hydrogen facility in Alberta, Canada, to supply Dow’s Path2Zero production complex and other customers. Set for completion in 2028, this facility will be the largest clean hydrogen production site in Canada. Linde, which previously invested $1.8 billion in a similar plant in the US, also plans to capture over 2 million metric tons of CO₂ annually for sequestration. The Dow facility includes a new ethylene cracker under construction, aimed at increasing polyethylene capacity by 2 million tonnes per year.

🛩️ LanzaTech (a company that recycles industrial carbon emissions into sustainable fuels) and LanzaJet (which converts ethanol into SAF) partnered with Wagner Sustainable Fuels to develop Australia’s first SAF production facility using their CirculAir platform. The platform, which converts waste carbon into SAF, aims to decarbonize aviation by utilizing locally sourced waste-based feedstocks. The CirculAir technology combines LanzaTech’s carbon recycling process with LanzaJet’s Alcohol-to-Jet technology, transforming waste streams into SAF, and is expected to play a significant role in meeting the aviation industry’s net zero emissions goal by 2050.

📦 Google achieved its goal of plastic-free hardware packaging a year ahead of its 2025 target. By collaborating with suppliers and developing innovative fiber-based materials, Google said that it has eliminated the final 6% of plastic from the packaging of Pixel, Fitbit, and Nest devices. The new packaging, which includes stronger and lighter paper and a recyclable molded fiber pulp, enhances durability, reduces carbon footprint, and improves recyclability.

🚢 Finland-based engine manufacturer Wartsila signed a contract with Norwegian shipowner Eidesvik to convert the Viking Energy platform supply vessel (PSV) to run on ammonia fuel, making it the world’s first ammonia-fueled in-service PSV. The conversion, financed by Norway’s Equinor, is scheduled for early 2026, with operations expected to begin by mid-2026. Ammonia, a potential alternative fuel, can reduce GHG emissions by over 70% compared to diesel. Wartsila plans to deliver its first ammonia-fueled engine for a new vessel in early 2025, anticipating broader adoption in the 2030s.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

📈 BlackRock reduced its support for environmental and social shareholder resolutions to 4.1% during the 2024 AGM season, down from 6.7% in 2023 and significantly lower than the 47% support in 2020-21. Despite an increase in the number of such proposals, BlackRock cited reasons like proposals being over-reaching, lacking economic merit, or being redundant, as companies already addressed the risks internally. In contrast, BlackRock increased its overall support for shareholder resolutions to 11%, up from 9%, primarily by backing governance-related resolutions. BlackRock also refrained from supporting anti-ESG resolutions aimed at reversing sustainability efforts. This trend reflects a cautious approach amidst legal pressures and political scrutiny over ESG practices.

⚡️ Norway’s sovereign wealth fund, managed by Norges Bank Investment Management (NBIM), committed €900 million ($1.01 billion) to Copenhagen Infrastructure Partners’ (CIP) latest renewable energy fund, CI V. This fund invests in wind and solar farms, grid and distribution, and storage. NBIM, which manages $1.7 trillion in assets, aims to expand its investment in renewable energy and gain exposure to new markets and technologies. CIP’s CI V fund is expected to surpass its €12 billion target, with investments distributed across North America, Western Europe, and developed Asia Pacific countries.

🟢 Sunswap, a London-based cleantech startup, raised £17.3 million ($22.8 million) in a new funding round. The funds will be used to advance the development and production of Sunswap’s zero-emission transport refrigeration units (TRUs). Founded in 2020, Sunswap aims to decarbonize cold chain logistics with its electric TRU, Endurance, which operates without diesel and is powered by batteries and solar panels.

🟢 Tallinn-based startup UP Catalyst raised an additional €2.36 million in a seed extension round, bringing its total seed funding to €6.36 million. The funding will accelerate the construction of an industrial production unit to convert CO₂ emissions into sustainable carbon nanomaterials and graphite. UP Catalyst’s innovative electrolysis process significantly reduces the carbon footprint compared to traditional methods, producing advanced materials for batteries and other technologies.

❄️ Swiss deep tech company Apheros secured $1.9 million in funding to advance its innovative metal foam technology for data center cooling. This technology reportedly enhances cooling efficiency by 90%, addressing the growing energy consumption in data centers. Apheros aims to mitigate the environmental impact of data centers by providing a more sustainable thermal management solution.

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