Maitland/AMO Sustain Monitor – 18 September 2020

18th September 2020

European Commission President Ursula von der Leyen has formerly unveiled her ramped-up climate ambitions for the supranational bloc, announcing a minimum 55% emissions reduction target for 2030.

 

Her first State of the Union speech to the European Parliament saw her announce a climate plan that was “ambitious” but also “achievable”. Ambitious should be the operative word as the Commission is proposing reductions far beyond the original 40% target first agreed six years ago.

 

The financial sector has thrown its weight behind the new target, with the Institutional Investors Group on Climate Change – which has over €33 trillion in assets under management – calling on the Commission and EU member states to commit to at least the 55% reduction. CEOs from over 150 business and investor networks, including Deutsche Bank, Google, IKEA and Unilever, have made similar demands

 

Despite significant support, the route forward will be bumpy, with Eastern EU countries calling for more “realistic” climate goals, which is in stark contrast to NGO pressure groups demanding a 65% cut to increase the chances of limiting global warming to 1.5C.

 

Assuming the 2030 target receives the necessary backing from member states and the European Parliament, Brussels will have to significantly beef up its policies to encourage the deployment of new technologies such as hydrogen, as well as dramatically scale-up existing low carbon solutions. This represents a significant investment opportunity for the companies and institutions that are prepared to move quickly and position themselves as the solution providers that can help the EU achieve its new ambitions, whilst also helping to reboot a green economy post-Covid.

 

Maitland/AMO Sustain Team 


A round-up of this week’s sustainability news…

In Business

  • PEAK OIL: BP’s 2020 Energy Outlook has predicted the world may have already passed peak oil. The oil major has concluded that oil and gas will be “increasingly challenged” and that renewables will be the “fastest-growing source of energy” in the coming decades.
  • GOOGLE MILESTONE: Google has officially announced that it has “eliminated” its entire carbon legacy through offsetting all its operational emissions generated before 2007 when it achieved carbon neutrality.
  • PWC 2030 TARGET: PwC has made a science based commitment to reach net zero greenhouse gas emissions by 2030 through reducing and offsetting emissions from operations, travel and its supply chain.
  • NET ZERO AVIATION: 13 major airlines have signed a new joint commitment to reach net-zero emissions by 2050. The move, which has been orchestrated by alliance oneworld, will see the airlines invest in more fuel-efficient aircraft, sustainable aviation fuels and carbon offsetting.
  • CARBON NEUTRAL WINE: The company behind popular wine brands Kumala, Hardys, and Echo Falls has announced that its core range has now been certified carbon neutral.
  • BT ON 1.5C: BT has joined more than 50 organisations in supporting the 1.5C Business Playbook, calling for renewed efforts from corporates and policymakers to halve emissions by 2030 as part of a “race to zero”.
  • ICELAND DISCLOSURE: Food retailer Iceland has called for fellow corporates to better disclose their plastics consumption. Iceland has also published its own plastic footprint, which totals 32,000 tonnes across its UK and international operations. The company will update these figures on an annual basis.
  • TV TARGET: ITV has confirmed that it will attempt to reach net zero emissions by 2030 across its Scope 1 and 2 emissions, business travel and produced and commissioned programmes.
  • A FIRST FOR TRUCKS: Scania has launched its first ever electric truck, boasting a range of up to 250 kilometres on a single charge.
  • LEGO PLEDGE: Toymaker Lego has pledged up to $400m in investment to build a “sustainable future”, with the firm stepping up efforts to develop and deploy sustainable materials, while promoting environmental themed “actions”.
  • ENGINEERING AMBITION: Arup has unveiled a new net-zero carbon target by 2030. The target covers its operations, including energy used in offices and the goods and services it purchases.
  • A NEW BLEND FOR NESPRESSO: Coffee giant Nespresso has announced plans to reduce supply chain emissions with the intention of reaching carbon neutrality by 2022. In order to meet the new target, Nespresso has pledged to switch to 100% renewable energy in all its stores, as well as use carbon offsetting.

In Politics

  • £40 MILLION FUND: The UK government has announced a £40m green recovery fund aimed at nature focused initiatives. Environmental charities can apply for grants worth between £50k to £50m.
  • CBI’S NEW ROADMAP: The CBI has launched a Green Recovery Roadmap, which calls on the UK government to take ambitious steps nationally and use the rest of the year to reignite global efforts to achieve net-zero by 2050. The Roadmap also urges the government to publish the long-awaited Energy White Paper.
  • CARNEY ON CLIMATE CHANGE: Speaking at a parliamentary event, UN Climate Change Envoy Mark Carney warned there is “no greater systemic risk than climate change” to the world economy. He also used the event, which took place online, to map out some of the opportunities presented by economies shifting towards net zero targets, arguing that sustainable infrastructure promised to provide more jobs and boost GDP.

In Investment

  • NET-ZERO BENCHMARK: Investor group Climate Action 100+, which represents $47trn in assets, has asked 161 of the world’s largest corporate emitters to commit to net-zero targets to prove they are changing their business models and processes.
  • A FIRST FOR MEXICO: Mexico has launched the world’s first sovereign SDG bond, which will focus on financing five of the Sustainable Development Goals. The 7-year deal will target funding towards projects that will assist the most vulnerable populations in Mexico.
  • SPACS AND SDGS: Private equity firm AEA Investors and UK impact investment manager Bridges Fund Management have launched a sustainable Spac, which is looking to raise $400m. It will look to invest in businesses that align with the SDGs. Spacs raise money on stock exchanges to acquire businesses in the future.
  • CLIMATE PLEDGE FOR AMAZON: Amazon has announced the first investments from its $2bn Climate Pledge Fund. Five companies have won investment, including Canadian company CarbonCure Technologies, which has developed a carbon-sequestering technology for concrete.
  • NEW DATA COVERAGE: ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc has bolstered its data coverage to include racial and ethnic characteristics of senior leaders at more than 6,000 U.S. corporations.
  • SBT OFFERS GUIDANCE ON NEW STANDARDS: The Science Based Targets initiative has issued guidance on what will lead to the development of a new global standard to ensure that corporate net-zero carbon targets are aligned with climate science.
  • RSPB LAUNCHES BIODIVERSITY CAMPAIGN: Conservation charity RSPB has published analysis that shows the UK has failed to meet the overwhelming majority of its international biodiversity targets. The charity has launched a campaign to ‘Revive Our World’, pushing for legally binding targets to restore nature by 2030.
  • 5% FOR NET ZERO: A report from the Energy Transitions Commission has found that just 0.5% of global GDP is needed to reach net-zero by 2050. It urges policymakers to enact changes within the next decade that will help create zero-carbon energy systems with no permanent reliance on offsetting or carbon removal.
  • THE PRICE OF FASHION: Research from CDP has found that only 1 in 10 large fashion brands are aware of water pollution risks. Over the last 20 years, clothing production has almost doubled, and the industry now uses around 32 million Olympic swimming pools of water each year.