Maitland Green – Our Weekly Update: 7 June 2018
World Ocean Day
World Ocean Day takes place tomorrow and this year’s theme is centred on discarded plastics contaminating the world’s oceans. On Saturday 9 June there will be a March for the Ocean through Westminster in London.
This week the Cabinet approved a plan to expand Heathrow with a new runway. Green Party MP Caroline Lucas responded to the plans calling them a “bad joke”, commenting: “Can’t quite believe Chris Grayling’s statement on #Heathrow didn’t mention climate change even once.” Greenpeace’s UK executive director, John Sauven, went further, commenting, “Green-lighting a new runway at Heathrow on World Environment Day is like handing out free cigarettes on World Health Day…This airstrip alone will load the atmosphere with as much extra carbon as some entire countries pump out. And it would make Londoners’ air more dangerous to breathe, contributing to an air pollution crisis that’s already cutting short thousands of lives.”
The Evil Mr Plastic
This week Oxford University Press named ‘plastic’ its word of the year following an analysis of children’s stories. In an annual study of thousands of short stories, submitted to the 2018 BBC Radio 2 competition, Oxford University Press found that “plastic” had doubled in a year as children wrote about the threat to the planet of discarded bottles, bags and containers. Story titles included The Plastic Shore, The Mermaid’s Plastic Mission and The Evil Mr Plastic.
Energy, Emissions & Clean Tech
- A Cambridge study has concluded that the global economy could be headed for a sharp downturn, triggered by the bursting of the “carbon bubble” as cheap renewable energy causes a collapse in demand for fossil fuel. The study predicted that oil companies’ vast reserves of fuel would become “stranded assets” before 2035, having been sharply devalued by the rapid shift to electric cars and wind and solar power.
- Research by the Universities of Oxford and Bath have estimated that using a car in London creates up to £7,714 in healthcare costs for the NHS from air pollution.
- The Society of Motor Manufacturers and Traders (SMMT) found sales of hybrids and plug-in hybrids were the main driver of growth in the UK car market. The sales of petrol-electric hybrids rose by almost a quarter in May 2018 compared to a year earlier, sales of plug-in hybrids rose to 72 per cent.
- A study by Lund University, Malmö University, and the Swedish Environmental Protection Agency, has suggested that cities with relatively clean levels of air pollution can still gain ‘significant’ health benefits from policies to reduce emissions from road transport.
- The Vatican is to host executives of the world’s top oil companies for the ‘Energy Transition and Care for Our Common Home’ conference. The conference is expected to be attended by the senior executives of companies including Exxon Mobil, Eni, BP, Royal Dutch Shell and Pemex.
In Westminster and the EU
- The UK Government has announced it will invest £5bn in a new nuclear power station in Wales. This is a reversal of a longstanding government policy that rules out direct investment in nuclear projects. Ministers insisted that negotiations with Hitachi to back the Wylfa plant were just beginning.
- The Government has suggested that it is considering proposals to force new petrol stations, supermarkets and car parks to install charging points for electric vehicles
- A cross-party coalition of politicians have urged Theresa May to set greenhouse gas emissions targets to ‘net zero’ in law.
- The Government invited companies to bid for £30 million of funding to support the development of self-driving vehicles on UK roads. The Government hopes to have fully self-driving vehicles on UK roads by 2021.
- Maitland Green client, Pernod Ricard, was praised by Secretary of State for the Environment and Rural Affairs, Michael Gove. Pernod Ricard UK pledged to ban all single use plastics. Earlier this year the company launched a campaign to ban plastic straws in drinks.
- Analysis in the magazine Science concludes adopting a vegan diet is the single biggest way to reduce your environmental impact. The research shows that the vast majority of farmland is used to provide meat and dairy and produces 60% of the worlds greenhouse gas emissions.
In Westminster and the EU
- Secretary of State for Environment, Food and Rural Affairs, Michael Gove, has insisted that farming in Britain will be profitable following Brexit.
- The Environmental Audit Committee (EAC) has called for climate risk reporting to be made mandatory for large companies and asset owners by 2022.
- The EAC also took evidence from Ministers on the UK’s resilience to heatwaves.
- The EFRA Committee has called on the Government to ring-fence funding for farming post Brexit. MPs are currently concerned that the Government’s current plans “lack detail”.
Waste & Resources
- Research by REN21, a renewables policy organisation, has shown renewable power generation capacity had its largest annual increase yet in 2017. However, the study also found energy demand and energy-related carbon dioxide emissions rose for the first time in four years last year. Global energy demand was estimated to be 2.1% higher due to economic growth in emerging economies and population rises.
- The Renewable 2018 Global Status Report found that despite 2017 renewable energy capacity progress, more still needs to be done to reduce carbon dioxide emissions in line with the goals of the Paris Agreement.
- Network Rail has pledged to ban plastic cups and introduce a coffee cup recycling scheme. The new targets were broadly welcomed by Network Rails tenants including Greggs and Waitrose.
- Pret A Manger has announced it will launch reusable bottles at 370 shops across the UK this week. Pret A Manger will also introduce filtered water stations in its stores.
- Having confirmed that their packaging is sent to landfill, Quorn, the meat-free food manufacturer, has pledged to phase out plastic packaging. CEO Kevin Brennan said the move would cost the company a “six figure sum” to implement, but was “right thing to do”.
In Westminster and the EU
- A UN report highlights 50 countries who have pledged to reduce their plastic waste. The report also features 35 potential bio-substitutes for plastic.
Green Finance & Responsible Investing
- Bloomberg reports just 86 of the 1200 ESG themed investment funds Bloomberg tracks own Tesla shares. Of those only seven counted Tesla as a top-10 holding. It is thought Tesla’s recent performance on social and governance issues have damaged its standing amongst ESG investors. The company also refuses to publish a sustainability report.
- Several large investment firms, boasting $26 trillion, have urged G-7 leaders to increase their actions fighting climate change. The 288 investors, including Germany’s Allianz Global Investors, urged leaders from the Group of Seven nations to do more to cut down greenhouse gas emissions by phasing out coal power entirely.
- An AIMA survey suggests smaller hedge-fund managers are deterred from ESG adoption due to lack of interest from financial intermediaries, excessive costs and concern about how much returns might be eroded by the practice. Hedge funds with more than $1 billion of assets blamed paucity of data, lack of relevant corporate disclosure and inadequate methodologies for assessing sustainability risks.
- ING’s global head of sustainable finance, Leonie Schreve, has said he believes global green loan growth could outpace the green bond market over the next few years as loans are accessible to a wider range of borrowers and can carry some clear financial incentives. She added that “more parties and clients are actively reaching out to us (for green loans). They are attractive and simple for the market”.
- A rapid reduction in demand for fossil fuels could lead to trillions of dollars being lost in the global economy. Reports suggest that the US and Canada would be the biggest losers.
- Despite the risks climate change poses to insurance companies, insurers are still not investing in the low-carbon economy.
- London has become the leading centre for the issuance of rupee-denominated bonds – Masala bonds. There are currently 26 Masala bonds listed. The City of London’s Green Finance Initiative are helping with the launch of “Green Masalas“.
In Westminster and the EU
- The European Bank for Reconstruction and Development has signed up to an international initiative to disclose climate-related financial information. This is in line with the recommendations of the Task Force on Climate-Related Financial Disclosures.
Viral Campaign of the Week
Environmental charity, Hubbub, has launched #whatsinmywash. It aims to raise awareness of the threat microfibres can pose to marine habitats and human health. The campaign claims over 1/3 of primary ocean microplastics come from washing textiles. Polling by the charity revelled 44% of people questioned do not realise synthetic fabrics such as nylon, polyester or acrylic are plastics, or that plastic microfibres are released from clothing when they are washed.
Comment of the Week
FAIRR Initiative director, Maria Lettini, comments on the findings of the first index to analyse the sustainability risks of big meat, fish and dairy producers. The nine sustainability risk factors analysed by the index include water stewardship, greenhouse gas inventories and antibiotics. She comments: “On the issue of antibiotics alone, three in four companies display inadequate polices or have no measures in place to reduce their excessive use of antibiotics, despite emerging regulation and public and investor pressure for them to do so… the Coller FAIRR Index, and it aims to be a useful starting point to further dialogues between investors and these important food suppliers to help both harness the upside of disruption and to manage the challenges ahead.”
Analysis of the Week
Following the recent devastation in Guatemala and Hawaii, scientists have identified a list of volcanoes they deem are most likely to erupt next. Current trends in climate change indicate that Oraefajokull, Iceland’s largest active volcano, may be heading for an eruption. In addition, this month the Volcanic Ash Advisory Center Washington (VAAC) issued a warning that a major “emission” from Mexico’s Popocatepetl volcano appeared imminent. Up to 25 million people are estimated to live within 60 miles of Popocatepetl. The volcano is also topped with a glacier, which means mudslides would be likely to occur.