ESG International Weekly News 9/11-9/17
Resource: ESG TODAY,The Guardian
1. Amazon’s 1st Big Investment in CDR Credits
Amazon, the retail behemoth, is venturing into carbon removal credits as a strategy to neutralize emissions from its expansive fleet. Situated in Seattle, the company aims for net zero emissions by 2040, largely by transitioning to electric vehicles and tapping into renewable energy sources, especially solar. Apart from these, Amazon has funded nature-centered initiatives, like reforestation, across the globe. Although the company witnessed a slight 0.4% dip in its carbon footprint in 2022, it was coupled with a 9% surge in net sales.
Amazon’s Climate Pledge Fund is also endorsing CarbonCapture Technologies, a firm specializing in developing Direct Air Capture (DAC) materials for cement manufacturing. The contract with Oxy, spanning 10 years, is Amazon’s inaugural large-scale venture into a technological solution like DAC. Under this agreement, Amazon will receive CDR credits from 1PointFive’s DAC plant named STRATOS, which boasts the capacity to capture up to 500,000 metric tons of carbon annually. This would rank it as the globe’s largest DAC facility.
The carbon captured for Amazon will be stored in saline aquifers, areas devoid of any extraction activities by Oxy. Additionally, 1PointFive is exploring the injection of CO2 into existing oil wells to generate emissions-free crude oil.
Amazon’s commitment to DAC, as noted by 1PointFive’s President Michael Avery, underlines the pivotal role DAC plays in business decarbonization. Following closely on the heels of this announcement, Microsoft publicized a $200 million carbon removal deal with another DAC startup, Heirloom. Microsoft is currently leading in the purchase of carbon removal credits. Data suggests a significant 437% hike in CDR credit purchases in the first half of 2023 compared to the entirety of 2022.
However, despite the financial thrust, the carbon removal industry still manages to extract only a few thousand tons of CO2 from the atmosphere each year. As per climate experts, billions of tons of CO2 need to be removed annually by 2050 to align with the 1.5°C target of the Paris Agreement. Encouragingly, projections indicate that by the end of 2023, CDR purchases might escalate to 6 million tonnes—a tenfold rise from the preceding year.
In conclusion, Amazon’s significant investment in 1PointFive’s DAC technology underscores the escalating emphasis on carbon removal solutions in the battle against climate change. This sentiment is echoed by other corporate giants, highlighting the collective push towards adopting and advancing these crucial technologies.
2.US introduces new carbon trading scheme to boost investment in developing countries
The US government, in collaboration with the Rockefeller Foundation and the Bezos Earth Fund, has launched a voluntary carbon trading scheme termed the “energy transition accelerator.” This initiative seeks to amplify private investments in clean energy ventures in developing nations. John Kerry, the US climate envoy, stated that the scheme, which is anticipated to commence next year, aims to generate the trillions needed to support less affluent countries in adopting renewable energy and mitigating adverse climate impacts. Countries such as Nigeria and Chile have expressed interest.
However, the International Energy Agency suggests that yearly investments in green energy need to surge to over $4tn by 2030 to counter hazardous global warming. John Kerry expressed frustration over the slow pace of change and emphasized the need for innovative strategies to raise funds.
While carbon markets have faced criticism for minimal emission reductions and for enhancing companies’ green reputations without substantive action, Kerry assures that only high-quality credits will be sanctioned in this new program. However, many environmentalists remain skeptical. Rachel Cleetus of the Union of Concerned Scientists and Rachel Rose Jackson from Corporate Accountability highlighted concerns about the efficacy of such programs in genuinely addressing climate change.
Historical carbon offsetting schemes, particularly in countries like Brazil, India, and Kenya, have faced criticism for being more of a “bookkeeping scam” and being linked to issues like land grabs and inflation of food prices.The US’s commitment to carbon markets was previously integrated into the core of the Paris agreement. Critics believe this weakened the pact. Many advocates for climate change emphasize the necessity for real emissions reductions, robust guidelines, and a comprehensive finance system rather than relying on the private sector. Furthermore, concerns about neocolonialism have been raised in relation to initiatives like the Africa carbon markets scheme.
美國政府與洛克菲勒基金會和Bezos Earth Fund合作，啟動了一項名為“能源轉型加速器”的自願性碳交易計劃。此項目旨在增加私人對發展中國家清潔能源項目的投資。美國氣候特使約翰·克里表示，該計劃預計於明年開始，旨在為較不富裕的國家生成數萬億美元，以支持其採用可再生能源並減少氣候不良影響。如尼日利亞和智利等國家已表示有興趣參與。
雖然碳市場因減少排放量最少以及增強公司的綠色聲譽而未採取實質行動而受到批評，但克里保證新計劃中只會批准高質量的信用。然而，許多環保人士仍持懷疑態度。擔心的科學家聯盟的Rachel Cleetus和企業問責的Rachel Rose Jackson都強調了這些計劃在真正解決氣候變化問題方面的有效性。
3.EU Commission Considers Requiring Sustainability-Related Disclosures for All Financial Products
The EU Commission has begun consultations regarding its Sustainable Finance Disclosure Regulation (SFDR). This regulation determines how financial participants, such as asset managers, communicate sustainability information to investors. It categorizes investment funds based on sustainability, with each category having specific disclosure requirements. The current review examines if all financial products, even those not claiming sustainability, should adhere to a common disclosure standard. This can aid in preventing greenwashing and ensuring all investors have comprehensive knowledge of a product's sustainability attributes. Additionally, the consultation delves into potential requirements for all financial products, encompassing taxonomy, engagement strategies, and exclusion details. The Commission seeks feedback to refine and possibly expand the existing classification system for sustainable financial products.
4.California Lawmakers Pass Bill Requiring Companies to Disclose Full Value Chain Emissions
A proposed California law has been passed by the state's Assembly, aiming to mandate most large U.S. companies to disclose their complete greenhouse gas (GHG) emissions. This bill is set to move to the Senate, where it had previously been approved in May, and finally to Governor Newsom's desk for finalization. This legislation will necessitate firms with over $1 billion in revenue operating in California to annually report their full-spectrum emissions, encompassing direct, indirect, and all other emissions associated with their entire business activities. Reporting will kick off in 2026 for direct emissions and electricity use, and 2027 for other indirect emissions. Moreover, it will align with the Greenhouse Gas Protocol standards and necessitate third-party assurance. This California legislation is more extensive than the initial proposal by the SEC and could compel broad emissions disclosure, especially for companies operating within California or Europe, given the EU’s Corporate Sustainability Reporting Directive (CSRD).
5.Climate Tech Startup UBQ Raises $70 Million to Convert Waste into Fossil-Plastic Substitute
UBQ Materials, a climate tech startup based in Tel Aviv, announced a fundraising of $70 million to amplify the global expansion of its innovative materials derived from waste. Established in 2012, UBQ Materials has developed a sustainable alternative to fossil-based plastics named UBQ, which is made from household waste, including hard-to-recycle items. This material can be recycled extensively and aids in reducing waste and CO2 emissions. The new funds will be channeled towards scaling up commercial operations, sales, and marketing, including opening new facilities in Europe and North America. The company is also investing in research for new product lines across different sectors. This investment round saw participation from various firms, including Eden Global Partners, TPG Rise Climate, and Battery Ventures.
以色列特拉維夫的氣候技術新創公司UBQ Materials宣布已籌集7千萬美元，用於擴大其從廢料製造的先進材料的全球拓展。UBQ Materials於2012年成立，將家用廢料（包括有機物和難以回收的材料）轉換為UBQ，這是一種可替代化石塑料的可持續材料。新資金將用於擴大商業運營、銷售和營銷，包括在歐洲和北美開設新設施。該公司還正在投資於研究，開發新產品線，服務於各個不同的部門。此次投資輪包括來自Eden Global Partners、TPG Rise Climate和Battery Ventures等公司的參與。