What's Happening in Sustainability & ESG (Week Recap 23.04 - 29.04) 🌎

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:

• G7 reaches deal to exit from coal by 2035 ⚡️

• EU approves the supply chain audit law and the Net Zero Industry Act 🇪🇺

• European sustainable funds registered deposits of $10.9bn, while US funds experienced a record $8.8bn in withdrawals in Q1 2024 📈

• ISSB is exploring the development of new disclosure standards for biodiversity and human capital 📑

• Britain's FCA confirmed a new rule to combat greenwashing will take effect from May 31 🇬🇧

• and other news 🌍

THE WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

⚡️ The G7 energy ministers have agreed to shut down their coal-fired power plants in the first half of the 2030s, marking a significant step towards transitioning away from fossil fuels. The final political deal will be sealed today (April 30), with a communique detailing the G7's commitments to decarbonization. The ministers are also considering potential restrictions on Russian imports of liquefied natural gas to Europe. Nuclear energy and biofuels will be mentioned in the final communique as options for decarbonizing power generation and transport.

🇪🇺 Following the EU Council’s approval in March, the European Parliament granted the final approval of the Corporate Sustainability Due Diligence Directive (CSDDD) in the past week, requiring larger companies to audit their supply chains for forced labor and environmental damage. 

The rules will apply gradually to EU companies:

• From 2027 to companies with over 5,000 employees and worldwide turnover higher than €1.5 billion;

• From 2028 to firms with over 3,000 employees and a €900 million worldwide turnover;

• From 2029 to all the remaining companies within the scope of the directive (including those over 1,000 employees and worldwide turnover higher than €450 million).

🇪🇺 The EU Parliament also:

• approved the Net Zero Industry Act, which aims to ensure that 40% of the EU's renewable energy and green technology needs are produced domestically;

• approved a law banning certain single-use plastic packaging, including mini shampoo bottles and thin grocery bags, from 2030;

• adopted stricter, legally-binding air pollution limits to be met by 2030, which aim to reduce the 300,000 premature deaths caused by air pollution in Europe each year by 70% over the next decade.

• approved a plan for the EU to exit the Energy Charter Treaty, due to concerns it hampers climate change efforts. The treaty has been used by energy companies to sue governments over policies affecting their investments, including measures to shut down fossil fuel plants.

ANNOUNCEMENT

Introducing our newest weekly publication 🎉

💡 We're excited to announce a significant expansion of our content in response to the increasing importance of corporate transparency, highlighted by new standards such as the EU's CSRD. Starting this Thursday, we will launch a second weekly edition in partnership with Impaakt, a Swiss-based impact data provider.

Each week, our new feature will provide an in-depth analysis of a company’s environmental and social impact, with our inaugural issue focusing on a company we all know – Amazon. So, stay tuned to uncover Amazon's comprehensive impact score, exploring its most significant positive and negative impacts, and delving into annual metrics such as GHG emissions, energy and water usage, the percentage and inclusion of women in the workforce, the company’s gender pay gap, and more.

We promise to keep it concise and insightful, aiming for a quick read of under 6 minutes. 🚀

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📈 In Q1 2024, European sustainable funds registered a net deposit of $10.9 billion, while US counterparts experienced a record $8.8 billion in net withdrawals. Factors such as high-interest rates, mediocre returns in 2023, greenwashing concerns, and the politicization of ESG investing contributed to the US outflows. Despite the influx, European fund inflows were relatively weak compared to previous periods, partly due to inflation and recession concerns.

📑 The International Sustainability Standards Board (ISSB) plans to launch new projects to research corporate disclosure on risks and opportunities in biodiversity, ecosystems, ecosystem services, and human capital. This initiative aims to inform future sustainability reporting standard setting and follows market feedback indicating a growing need among investors for improved disclosures regarding nature and human capital.

🇬🇧 Britain's Financial Conduct Authority (FCA) confirmed a new rule to combat greenwashing will take effect from May 31. The rule aims to prevent investment firms from overstating the environmental credentials of their products. It requires any reference to environmental, social, and governance sustainability in a product or service to be fair, clear, and not misleading. The FCA is also considering extending sustainability disclosure requirements to portfolio management firms.

🌎 The Net Zero Insurance Alliance (NZIA), a global coalition aimed at reducing the insurance sector's GHG emissions, is being disbanded and replaced by the Forum for Insurance Transition to Net Zero (FIT) following allegations of collusion and member departures. Unlike NZIA, FIT members will not be required to set and report emission reduction targets annually. Instead, they will adopt four 'Principles for Sustainable Insurance' focusing on creating emission measurement frameworks, developing energy transition plans, engaging with companies across sectors, and addressing barriers to climate solutions.

WHAT ARE COMPANIES DOING?

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

📊 Microsoft has added new features to its Sustainability Manager, part of the Cloud for Sustainability platform. These include an AI-powered "what-if analysis" tool for predicting the emissions impact of business decisions, a feature for extracting data from ESG documents, and expanded capabilities for assessing water and waste management scenarios.

♻️ TotalEnergies and Vanguard Renewables, a BlackRock portfolio company, have announced a joint venture to develop projects converting food biowaste into renewable natural gas (RNG) in the US. Vanguard Renewables, which operates 17 organics-to-energy facilities, plans to commission over 100 RNG projects by 2028. TotalEnergies has set a goal to produce 10 TWh of biomethane by 2030.

⚡️ French energy company Engie plans to invest up to €4 billion in Belgium by 2030, focusing on renewable power generation, particularly wind power. The company aims to install wind power capacities of 2 GW, divided between onshore and offshore projects.

EVERYTHING FINANCE

Funding rounds, sustainable finance, acquisitions & private equity deals

⚡️ Exowatt, a renewable energy company, announced a $20 million seed round and launched a first-of-its-kind modular energy platform for data centers. The Exowatt P3, a 3-in-1 system, stores solar energy in a thermal battery, providing dispatchable power and heat throughout the day. Exowatt aims to offer electricity for as low as $0.01 per kWh, making it more cost-effective than fossil fuels and other renewable energy alternatives.

📈 BlackRock and Temasek's decarbonization-focused fund, Decarbonization Partners, has raised $1.4 billion to invest in companies providing technologies and solutions that accelerate the transition to a net-zero economy by 2050. The fund has already invested in seven companies across various decarbonization technologies and received commitments from over 30 institutional investors across 18 countries.

🛩️ Microsoft's Climate Innovation Fund has invested in sustainable aviation fuel (SAF) technology and production company LanzaJet. The investment will enable LanzaJet to expand its sustainable fuels process technology globally and will provide Microsoft with access to sustainable fuels and SAF certificates.

🔋 Chemix, an EV battery developer, has raised $20 million in Series A funding. Chemix is pioneering the use of GenAI in battery development, with its proprietary transformer-based deep neural network autonomously generating better materials and cell designs daily.

🏡 Infogrid, a building intelligence and analytics company, has secured $13 million in funding to advance its mission of reducing real estate's environmental impact. Infogrid's AI-powered platform helps real estate owners reduce energy and emissions, meet sustainability reporting mandates, and demonstrate commitment to ESG goals.

🟢 Treefera, a UK-based AI-enabled data management platform provider, has raised $12M in Series A funding. Treefera provides businesses with insights and technology for carbon removal, bioenergy, fuel, and supply chain markets.

🔋 Berlin-based Terra One has secured $7.5 million in seed funding. The company operates a network of decentralized battery storage projects to support the transition to renewable energy. Terra One's largest approved battery projects can power a city of 100,000 people for up to six hours.

🟢 goodcarbon has raised €5.25 million for its long-term carbon credit portfolios, aiming to become a key part of corporations' carbon offsetting plans. The Berlin-based startup provides a digital investment and trading platform for carbon credits, driving companies to fund high-impact, nature-based solution projects.

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