Net-Zero Transition – June signals of changeWe Mean Business Coalition
Here are just some of the signals of change from the past month across transport, energy, industry, land use and the whole economy, demonstrating the transition to a resilient and inclusive net-zero future is accelerating.
The G7 summit ended with rich nations reaffirming their goal to limit global heating to 1.5C, and agreeing to protect and restore 30% of the natural world by the end of this decade. The European Parliament has approved a law to make the EU’s GHG emissions targets legally binding, while the European Banking Authority has set out recommendations for banks to have a 10-year plan spelling out how they will deal with ESG risks to their bottom line. UK banks will be forced to reveal their exposure to climate change as part of the Bank of England’s “climate stress tests” this year. France has published a new set of binding targets that require investors to declare how green their assets are and set greenhouse emissions goals every five years. The number of companies committed to the Business Ambition for 1.5°C campaign has surpassed 600. 168 asset managers and financial institutions from 28 countries have signed up to support CDP’s campaign demanding that 1,320 companies make their disclosures about environmental risks clearer. NATO has agreed on a climate action plan to help mitigate climate change and incorporate climate change considerations into its full spectrum of work. And UN secretary general Antonio Guterres has said that the success of COP26 will depend on a breakthrough in financial contributions from rich countries and that the pledge to provide $100bn per year to help poorer countries was a “vital commitment”.
RE100 companies, committed to going 100% renewable, now have a greater collective electricity demand than either the UK or Italy. A new IRENA report shows almost two-thirds of wind and solar projects built globally last year will be able to generate cheaper electricity than coal, suggesting replacing the world’s 800GW of coal-fired power plants with renewables could save up to $32.3bn and contribute to roughly 20% of the emission reductions needed to limit global warming to 1.5°C. The EU has approved the $21.3bn “Just Transition Fund”, which aims to support the communities most affected by the shutdown of coal, peat and oil shale. Shareholders at HSBC have voted overwhelmingly to end coal financing. NTPC, India’s largest power generator, has nearly doubled its RE target to 60 GW by 2032, accelerating a shift away from coal. South Korea’s three major non-life insurers have said they will no longer cover new coal power projects, including their construction and operation. Canada will not approve new thermal coal mining projects or plans to expand existing mines. The world has more than enough renewable energy potential to comfortably transition away from fossil fuels and achieve the 1.5°C global warming target, while expanding energy access for all. And Ikea has launched a new supplier program that will allow its 1,600 suppliers to consume 100% renewable electricity in their production.
Volvo is teaming up with steelmaker SSAB as it plans to build cars using steel made without fossil fuels by 2026. Audi plans to only launch new all-electric car models starting in 2026 and stop manufacturing ICE vehicles by 2033, while General Motors will spend $35 billion in the years leading up to 2025 on developing electric and driverless cars. Renault will combine three of its plants in northern France to form an electric car hub with the aim of producing 400,000 vehicles a year by 2025. French-owned delivery company DPD is to become one of the UK’s biggest operators of electric vehicles after an order that will double its battery-run fleet to 1,500, while the UK postal group Royal Mail has announced a 10-fold increase in its EV fleet. India will revise its scheme to incentivize uptake of EVs in the country. Electrifying heavy trucks used for short-haul deliveries in the US could be achieved without upgrades to electrical substations. Aircraft and ship engine manufacturer Rolls-Royce has outlined plans to reach net-zero emissions by 2050 through decarbonizing technologies investments and sustainable aviation fuel use. And switching to more sustainable airline fuel could reduce the amount of soot pollution by 50-70% and lower the number of ice particles contained in the contrails, which could lead to decreased warming.
Net-Zero Built Environment & Heavy Industry
Construction companies Galliford Try Holdings Plc, Kier Group plc and JBA Group Limited; real estate company CLS Holdings Ltd; pharmaceutical companies Takeda Pharmaceutical Company Limited, AbbVie, Boehringer Ingelheim Limited and Pfizer; and chemicals company Corteva Agriscience have joined the Business Ambition for 1.5°C campaign. Cement and building materials companies Siam Cement Public Company Limited (SCG) and CEMEX, S.A.B de C.V.; construction companies Aecon Group Inc and Nishimatsu Construction Co., Ltd.; and real estate companies Tokyo Tatemono Co. and Ltd. And Majid Al Futtaim Properties have committed to set a science-based target. US aluminum producer Alcoa has detailed plans to cut 70% of carbon emissions from the material production by tapping renewable energy. HeidelbergCement is to create a carbon-neutral plant in Sweden, planning to meet its net-zero target by 2030 by eliminating the plant’s CO2 emissions using carbon capture or sequestration and storage in the seabed and through the increased use of biofuels. The EU is said to be planning to impose a carbon border tax on imports of steel, aluminum and cement. And Gates-Backed climate fund has invested $22m in a company that helps improve energy efficiency in homes and offices.
AXA’s investment management arm will stop investing in companies that contribute to deforestation or the loss of biodiversity. Dove will restore and protect 20,000 hectares of woodland in Northern Sumatra, Indonesia. Target has launched Target Forward, a new sustainability strategy focused on restoring and regrowing natural systems, while BNP Paribas Asset Management has launched the BNP Paribas Ecosystem Restoration fund, which will have 40-60 holdings selected from 1,000 global companies focused on aquatic, terrestrial and urban ecosystem restoration. WWF has launched “Forests Forward,” a new program that engages with companies and other stakeholders to deliver effective nature-based strategies for forests. The US, UK, Chile, Costa Rica and France have launched the International Partnership on Marine Protected Areas, Biodiversity and Climate Change, which aims to boost the use of protected ocean areas as a climate solution. The European Commission is planning to adopt a combination of mandatory and voluntary due diligence rules later this year to prevent global deforestation in its supply chains. And new research shows GHG emissions from food systems – which represent one third of the human-produced total – have long been systematically underestimated and points to major opportunities to cut them.