ESG International Weekly News 1/22-1/28

January 30,2024
Green and White Minimalist Earth Day Instagram Post-40
Resource:ESG TODAY

1.EU Lawmakers Approve 2 Year Delay of Sustainability Reporting Standards for Specific Sectors and non-EU Companies

The European Parliament's Legal Affairs Committee has voted 21-2 to delay key elements of the Corporate Sustainable Reporting Directive (CSRD) by two years. This includes the adoption of sector-specific sustainability disclosure standards and reporting requirements for non-EU companies operating in the EU. The delay, proposed by the EU Commission as part of its 2024 Work Programme, aims to reduce reporting burdens and give companies time to implement the initial ESRS rules adopted in July 2023. These rules set general sustainability reporting requirements, with sector-specific standards originally due by June 2024. The proposal also allows more time for the European Financial Reporting Advisory Group (EFRAG) to develop new standards. MEPs agreed to the postponement but requested the early publication of standards before the new deadline and annual progress consultations with the Commission. The proposal now moves to the Parliament plenary for approval and negotiation with the EU Council.


2.ECB: A “Staggering 90%” of Banks’ Portfolios Misaligned with Climate Transition
歐洲中央銀行(ECB)的研究: 90%的歐洲銀行的貸款組合與全球氣候目標和歐盟2050年氣候中立目標不符


A European Central Bank (ECB) study reveals that 90% of European banks have loan portfolios not aligned with global climate goals and the EU's 2050 climate neutrality target. Covering 75% of euro area loans from 95 banks, the study used an 'alignment assessment' to evaluate risks in key carbon-intensive sectors like Power, Automotive, Oil & Gas, Steel, Coal, and Cement. Only 8 banks were found to align with a 2050 net zero pathway, primarily due to slow phase-out of high-carbon production and lagging renewable energy development. The report highlights substantial reputational and litigation risks, with most banks committed to net zero yet failing to align their strategies. Credit risks are less pronounced, though some banks have large misalignment exposures. The study also found significant risks from financing carbon-intensive technologies and insufficient renewable energy funding. ECB's Frank Elderson emphasizes the importance of stable banks in the green transition, urging them to identify and measure decarbonization risks.

歐洲中央銀行(ECB)的研究顯示,90%的歐洲銀行的貸款組合與全球氣候目標和歐盟2050年氣候中立目標不符。該研究涵蓋了來自95家銀行的75%的歐元區貸款,使用了一種“對齊評估”方法來評估像電力、汽車、石油和天然氣、鋼鐵、煤炭和水泥等關鍵碳密集行業的風險。僅有8家銀行被認為與2050年零排放路徑一致,主要原因是高碳生產的緩慢淘汰和可再生能源發展的滯後。報告強調了重大的聲譽和訴訟風險,大多數銀行承諾實現淨零排放,但未能使其戰略與之一致。信用風險較不顯著,儘管一些銀行的錯位風險曝光較大。研究還發現,資助碳密集技術和對可再生能源資金不足導致了顯著風險。歐洲中央銀行的Frank Elderson強調,在綠色轉型過程中穩定的銀行尤為重要,敦促它們識別和衡量脫碳經濟轉型的風險。

3.U.S. Invests Over $100 Million in Projects to Decarbonize Federal Buildings

The U.S. Department of Energy announced a $104 million investment in energy conservation and clean energy projects at 31 Federal facilities, as part of a net zero focus. This funding is the first of three from a $250 million program initiated by the Biden administration to support federal agencies in achieving net zero building projects through the AFFECT program. It follows President Biden's executive order aiming for net zero emissions by 2050, with a specific goal for a net zero government building portfolio by 2045. The projects include building electrification, on-site solar, and heat pump installations. These initiatives are expected to significantly reduce energy and water costs, greenhouse gas emissions, and energy usage, aligning with the government's aim to lead by example in energy efficiency and climate resilience.


4.HSBC Launches Net Zero Transition Plan

HSBC has launched its first Net Zero Transition Plan, detailing strategies to finance and support the transition to net zero and meet its climate goals. The plan follows HSBC's 2050 net zero target, set in 2020, aiming to align financing activities with the Paris Agreement and reduce financed emissions to net zero by 2050. HSBC plans to prioritize financing and investment for low carbon transition, with a $750 billion to $1 trillion finance and investment target by 2030 for customer transition support. The new plan addresses challenges due to HSBC's heavy financed emissions footprint, particularly in high-emission sectors. It includes interim targets, policies to end financing for new oil and gas projects, and plans for sector-specific transitions. HSBC's strategy involves supporting nascent technologies in hard-to-abate sectors, customer engagement, and embedding net zero in business practices, including risk management and executive compensation. The plan also emphasizes collaboration with governments, regulators, and the finance industry to shape supportive standards and policies.


5.H2 Green Steel Raises Over $5 Billion in Financing for New Decarbonized Steel Plant

H2 Green Steel, a decarbonized steel startup, announced new funding arrangements totaling €4.75 billion (USD$5.2 billion) for constructing the world's first large-scale green steel plant in Boden, Sweden. This plant aims to produce steel with 95% lower emissions using blast furnace technology. The funding includes €4.2 billion in project debt financing, €300 million in equity, and a €250 million grant from the EU Innovation Fund. Founded in 2020, H2 Green Steel will use hydrogen and 100% renewable electricity to significantly reduce CO2 emissions. Production is expected to start in 2025, targeting 5 million tons of nearly fossil-free steel by 2030. The company has already secured half of its initial yearly steel volumes through customer agreements with several major automotive firms. The funding includes €3.5 billion in senior debt, up to €600 million in junior debt, and new shareholders like Microsoft Climate Innovation Fund. The total funding secured is now €6.5 billion, signaling strong support for the project and its potential to inspire decarbonization in other industries.