Maitland/AMO Sustain Monitor – 14 February 2020

14th February 2020

Welcome to the first newsletter of Maitland/AMO Sustain, our new integrated sustainability practice.

 Each week we cover the latest sustainability news from around the world in business and politics.

In Business

  • CARBON NEUTRAL BP: BP’s chief executive, who has been in the role for a week, has set out his ambition for the company to achieve carbon neutrality by 2050. Although Bernard Looney admitted he could not say how BP would achieve its aim he vowed: “We are heading for net zero. There is no turning back.” The pledge is the boldest of any of the oil majors on the environment so far and heralds a new era for BP which has been seen as slow to act on climate change.
  • COTTON RANKING 2020: Adidas has become a global leader in sourcing sustainable cotton, according to a ranking of companies buying the material. The Cotton Ranking 2020 report published by three organisations, Pesticide Action Network UK, Solidaridad and WWF, is based on independent research looking at 77 major cotton-using companies.
  • ENERGIZED EDF: French utilities giant EDF Energy smashed analyst expectations today as it enjoyed a strong performance from its renewable energy business. The firm’s profit for 2019 was €5.2bn (£4.3bn), almost five times larger than the €1.1bn it posted in 2018. Analysts had predicted a profit of €3bn. Revenue rose four per cent to €71.3bn, ahead of forecasts of €70.9bn.

In Politics

  • HS2 PLANS: Boris Johnson announced on Tuesday the go-ahead for all proposed sections of the HS2 high speed rail scheme, despite increasing costs and local environmental concerns over the controversial project. Environment groups have condemned the decision to build HS2 as the company behind the scheme, HS2 Ltd, admitted it would never be carbon neutral over its 120-year projected lifetime.
  • CABINET RESHUFFLE: Yesterday’s Cabinet reshuffle saw Environment Secretary Theresa Villiers sacked and replaced by George Eustice while Business Secretary Andrea Leadsom was replaced by International Development Secretary Alok Sharma, who has also been named as COP26 President.
  • ENERGY EFFICIENCY: The Government has rejected calls to beef up its target of getting all homes to the Energy Performance Certificate (EPC) Band C standard by 2035. Liberal Democrat peer Lord Foster introduced legislation designed to give legislative force to the government’s 2035 target, however the Government has said that even though it was in line with its own aspiration, it would oppose the bill because it provided less flexibility for achieving the 2035 target.

In Investment

  • BARCLAYS’ DIVESTMENT PUSH: Barclays is considering introducing stronger climate change policies that would further limit its investments in fossil fuels, following growing pressure from the bank’s shareholders after a report published last year by NGO ShareAction highlighted it had invested more than $85bn in coal, gas, and oil projects.
  • ESG OUTLOOK: Following a round-up of its 2020 outlooks for a number of sectors, Moody’s Investors Services claims ESG concerns will increasingly influence credit quality assessments and investment decisions. “One major trend is that climate change and the transition to a low-carbon economy are growing in relevance for global credit markets,” said Ram Sri-Saravanapavaan, ESG Analyst at Moody’s. “Investors are seeking more disclosure from companies about how they are addressing these risks as the financial implications are becoming clearer.”
  • SDG FUNDING: NN Investment Partners has unveiled three thematic impact equity funds designed to contribute to 14 of the UN Sustainable Development Goals. The sub-funds of the Luxembourg-based NN fund series have a combined €405m in assets under management at launch and will target investments in areas such as affordable healthcare, food sufficiency and resilient infrastructure.
  • ECOSYSTEM INVESTMENT: Ecosystem Investment Partners reached $454.5m at the final close of its fourth fund. The private equity firm said the oversubscribed fundraise will enable it to invest in “large-scale” wetland, stream and habitat mitigation and restoration projects in the US. The fund, Ecosystem Investment Partners IV, exceeded its target in less than 10 months, an EIP statement
  • RBS LOANS: Royal Bank of Scotland will stop lending to energy companies that fail to align with the Paris Agreement’s goals by 2021 as part of a corporate overhaul. As part of its fresh strategy unveiled by the new chief executive, Alison Rose, the bank will stop lending and offering underwriting services to major oil and gas firms that don’t have credible transition plans to help limit global heating to below 2C.

In Research

  • NEW ENERGY OUTLOOK 2019: BloombergNEF published its New Energy Outlook 2019, which claims that by 2050, wind and solar will make up almost 50% of the world’s electricity – “50 by 50”. The report also notes that Europe has been leading the way on decarbonising the furthest and the fastest while China and the US are trying to keep up.
  • WWF GLOBAL FUTURES: The WWF’s Global Futures report has concluded that continuing rates of environmental degradation will cost the global economy £8tr by 2050. It notes that the UK will suffer heavily, at a minimum cost of £16bn by 2050.
  • HIGHER AND HIGHER: Temperatures logged by Brazilian scientists have shown that the Antarctic has registered a temperature of 20.75C, marking the first time in history it has measured above 20C.