What's Happening in Sustainability & ESG (Week Recap 25.06 - 01.07) 🌎

Today’s newsletter is brought to you by Impaakt - stakeholder-powered sustainability.

This week’s read time: 10 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:

• Only 10% of CFOs report that their companies are prepared for detailed reporting mandates 📑

• The US Supreme Court ended a legal precedent that gave federal agencies powers to interpret laws, a decision that could impact climate policies 🇺🇸

• The IFRS Foundation and the IFC formed a partnership to improve sustainability reporting in emerging markets and developing economies 🌎

• Denmark announced the world's first carbon tax on agriculture, starting from 2030 🇩🇰

• Volkswagen announced a $5 billion investment in EV automaker Rivian 🚙

• and other news 🌍

THE WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

📑 Only 10% of CFOs report that their companies are prepared for detailed reporting mandates, according to an Accenture survey of senior finance executives from 730 global companies with at least $1 billion in revenue. However, the report states that these requirements also present an opportunity to leverage a rapidly evolving set of new technologies to help organizations gather better information, make smarter business decisions, and create value from sustainability. Many CFOs are confident they can implement changes that will benefit their bottom line. Among the findings was that even among companies with "moderate" ESG capabilities currently - the majority of those surveyed - 59% of the executives disagreed with the statement that "striking a balance between sustainability and profitable growth is a challenge for my organization." Only 30% agreed that focusing on sustainability negatively affects the interests of shareholders.

🇺🇸 The US Supreme Court ended the "Chevron deference," a legal precedent that gave federal agencies broad powers to interpret laws. This decision significantly weakens the powers of agencies like the Environmental Protection Agency (EPA) to defend their regulations and could have significant implications for climate policy. This could impact tax credits for climate technologies, grid planning and renewable energy capacity, and the EPA's authority to regulate climate change. The decision is seen as a victory for industrial corporate interests and could potentially hinder the use of older environmental laws to address new environmental problems. Meanwhile, the debate between President Biden and Donald Trump lacked emphasis on energy and climate policy. Trump claimed his administration had the best environmental numbers, while Biden criticized Trump's environmental record and claimed to have passed extensive climate change legislation. However, both responses were seen as weak, with Biden missing an opportunity to highlight his role in reindustrializing the US and generating significant investment in industrial facilities.

SPONSORED BY IMPAAKT

Is your company ready for the CSRD?

Is your company ready for the CSRD? Impaakt makes it effortless to manage sustainability data, engage stakeholders, and deliver a CSRD-compliant report through its intuitive platform. Impaakt’s comprehensive solution simplifies the process by providing a central platform to:

• Efficiently collect and manage data for accuracy and transparency.

• Gather stakeholder insights and conduct double materiality assessments.

• Track and benchmark sustainability progress for continuous improvement.

Learn more or get in touch.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🌎 The IFRS Foundation and the International Finance Corporation (IFC) formed a strategic partnership to improve sustainability reporting in emerging markets and developing economies. The partnership will focus on implementing programs to promote the consistent application of the IFRS Sustainability Disclosure Standards across these economies, including the development of toolkits, research publications, and training programs.

🇨🇦 Canada passed new laws to combat greenwashing, or unsupported environmental benefit claims by companies. The laws, part of amendments to the Competition Act, prohibit misleading public representations about a product's or business's environmental benefits without adequate testing or substantiation. Penalties for breaching these provisions can reach up to $15 million or 3% of the company's annual revenues. However, legal experts warn these amendments could introduce significant risks for businesses and potentially slow progress on environmental initiatives.

🇩🇰 Denmark announced the world's first carbon tax on agriculture, targeting emissions from livestock starting in 2030. The tax, set at DKK 120 (USD$17) per ton of CO2e, increasing to DKK 300 (USD$43) in 2035, aims to support the greening of the industry while minimizing the impact on production costs through a basic tax break. The initiative, born from an agreement between the government, farmers, the food industry, and environmental groups, seeks to inspire other countries despite differing needs across the EU.

🇨🇭 The Swiss government is proposing to expand sustainability reporting requirements for companies, aligning its rules with the EU’s CSRD. The proposal would increase the number of companies required to provide sustainability disclosures from 300 to around 3,500. The requirements would cover risks in the areas of environment, human rights, and corruption, and companies can choose to use the EU standard or another equivalent standard for sustainability reporting. The government is also considering how to assist companies in implementing these new rules.

📑 The International Organization for Standardization (ISO) is developing a new international standard on net zero to provide clarity to organizations' net zero targets and strategies and prevent greenwashing. This process, which follows the launch of the ISO Net Zero Guidelines in 2022, is expected to culminate in an independently verifiable international net zero standard by November 2025.

WHAT ARE COMPANIES DOING?

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

🚙 Volkswagen Group and Rivian announced a joint venture to develop next-generation EV architecture and software for use by both companies. Volkswagen will invest $5 billion into Rivian, which includes $3 billion in corporate equity investments and $2 billion into the new joint venture. The collaboration aligns with Volkswagen's plan to shift its fleet towards EVs, aiming for 70% of its unit sales in Europe to be all-electric by 2030.

🛩️ Lufthansa will introduce an 'Environmental Cost Surcharge' of up to €72 to its fares to cover the cost of new EU emission reduction rules. The increase, which will apply to all flights departing from EU countries, Britain, Norway, and Switzerland, will take effect from June 26 for departures starting from January 1, 2025. The surcharge is intended to cover part of the rising costs due to environmental regulations, such as the use of sustainable aviation fuel. Other airlines, including Air France-KLM, have made similar moves.

🟢 KKR and IGNIS are launching a Power-to-X platform to develop green hydrogen and ammonia projects for industrial decarbonization. The platform will develop wind and solar renewables associated with hydrogen and ammonia projects, and produce green hydrogen, ammonia, e-methanol, e-fuels, and SAF production plants. KKR will provide up to €400 million from its global climate strategy for future projects, and both companies will own 50% of the platform upon launch. ExxonMobil and Air Liquide have also partnered to support the production of low-carbon hydrogen and ammonia at ExxonMobil’s Baytown, Texas facility. The agreement will allow the transportation of low-carbon hydrogen through Air Liquide’s existing pipeline network. Air Liquide will also build and operate Large Modular Air separation units to supply oxygen and nitrogen to the facility. ExxonMobil's planned hydrogen production facility will be the world’s largest, producing 1 billion cubic feet of low-carbon hydrogen daily and capturing more than 98% of the associated CO₂ emissions.

🌳 Amazon has developed a new carbon offset verification standard called Abacus, in collaboration with Verra, to address the limited supply of quality-labeled offsets and meet its 2040 net-zero emissions target. This move, despite Amazon's support for the Integrity Council for the Voluntary Carbon Market (ICVCM), has raised concerns about market confusion. Major companies like Alphabet, Meta, Microsoft, and Salesforce plan to purchase Abacus-certified credits. Critics argue that while Abacus aims to ensure high-quality offsets, it may not fully neutralize Amazon's carbon impact, and its permanence requirements need further scrutiny.

📊 IBM launched Maximo Emissions Management, an AI-powered solution designed to help asset-intensive industries track, manage, and report emissions. The solution, which includes an operational dashboard for tracking environmental incidents and their CO₂e impact, is integrated with IBM's ESG data collection platform, IBM Envizi, to support operational emissions reporting and sustainability.

📈 MSCI Inc. and Moody’s Corporation announced a strategic partnership to enhance transparency in ESG and sustainability markets. Moody’s will leverage MSCI’s sustainability data and models, while MSCI will gain access to Moody’s Orbis database to extend its private company ESG coverage. The partnership will not impact Moody’s Ratings, which will continue to provide transparency into the material impacts of ESG factors on its credit ratings.

📊 Sustainability platform CO2 AI launched an AI-powered solution, Product Footprinting, to help companies calculate and reduce their products' carbon emissions. The solution uses generative AI to allocate emissions across the product development cycle and measures emissions with high accuracy. It also allows for the export and sharing of product footprints and visualization of emissions hotspots at various levels.

EVERYTHING FINANCE

Funding rounds, sustainable finance, acquisitions & private equity deals

📑 BNP Paribas Asset Management (BNPP AM) introduced new expectations for portfolio companies, including the integration of climate-related criteria into executive compensation plans. The firm will require companies in energy, utilities, industrials, and materials sectors, as well as high GHG emitters, to incorporate a measurable and relevant climate component in executive remuneration policies.

📈 Invesco launched a new climate-focused exchange-traded fund (ETF), the Invesco MSCI Global Climate 500 ETF, with $1.6 billion in seed funding from Finland's Varma Mutual Pension Insurance Company. The ETF is designed to include companies with GHG emissions reduction targets and aims to deliver competitive returns while considering environmental factors.

📑 Fidelity International has revised its sustainable investing framework in response to new ESG regulations, launching a 3-tiered system categorizing funds by their level of ESG integration. The new framework includes three fund categories: "ESG Unconstrained," "ESG Tilt," and "ESG Target," each with varying degrees of ESG integration and exclusions.

🟢 Neustark, a carbon dioxide removal (CDR) solutions provider, raised $69 million. Neustark's technology uses recycled materials such as concrete from demolished buildings as permanent storage for the CO₂ removed from the atmosphere.

🚢 Prewave raised €63 million in a Series B funding round to expand its AI-driven supply chain risk intelligence platform globally. The platform helps businesses manage supply chain risks and comply with increasing regulatory requirements, serving clients like Lufthansa, Toyota, and Ferrari.

🛩️ Mitsubishi UFJ Financial Group (MUFG) invested in LanzaJet, a company specializing in sustainable aviation fuel (SAF) technology. LanzaJet, launched in 2020, has developed technology for creating SAF and renewable diesel from waste-based and sustainable ethanol sources.

🛩️ Aether Fuels raised $34 million in Series A financing to accelerate the commercialization of its Aether Aurora™ technology for sustainable fuels. The funding will support the scale-up of their proprietary technology, which transforms waste carbon feedstocks into jet fuel and other hydrocarbons.

🛰️ LiveEO raised €25 million in a Series B funding round to enhance its AI-powered satellite data platform, which provides actionable insights for managing climate risks and critical infrastructure. The platform uses advanced satellite technology and AI to monitor environmental risks and compliance with regulations like the EU Deforestation Regulation.

🏚️ Climate risk intelligence company Climate X raised $18 million in a Series A round to accelerate its global expansion. The company provides proprietary financial insights into the potential impact of climate risks on physical asset valuations, including residential and commercial properties, as well as infrastructure such as roads, railways, and power systems.

🟢 Sirona Technologies raised €6 million to scale its Direct Air Capture (DAC) technology, aiming to remove CO₂ from the atmosphere. The funding will help deploy their first pilot plant in Kenya by the end of the year, with a full-scale commercial plant expected by 2026.

PARTNER WITH US

Increase your brand awareness and visibility by reaching the right audience and target market. Showcase your company, solutions, services, products, reports, surveys, events, or other content in front of our highly targeted audience of +3,200 Sustainability & ESG professionals. Contact us at [email protected] if you think we can partner in some way.