The latest insights from the We Mean Business coalition

September 16, 2022

Net-zero transition – latest signals of change (16.09.22)

We Mean Business Coalition

Here are just some of the signals of change from the past week, demonstrating the transition to a resilient and inclusive net-zero economy.

Net-Zero Economy

Patagonia billionaire owner Yvon Chouinard is giving his entire company to a uniquely structured trust and non-profit. Going forward, all the company’s profits will be pumped into fighting the climate crisis, protecting nature and biodiversity, and supporting communities on the frontlines of climate change. In an article for Fortune Magazine, Patagonia board chair Charles Conn wrote, “Instead of exploiting natural resources to make shareholder returns, we are turning shareholder capitalism on its head by making the Earth our only shareholder.”

Next to the European Central Bank (ECB), which is firmly focused on climate risk, amidst rising financial pressures due to the ongoing energy crisis and sky-high inflation rates. In conversation with the Financial Times, board member Frank Elderson said the issue of climate risk remains center stage for the institution, which this July announced that it would begin decarbonizing its €386 billion corporate bond portfolio.

Meanwhile, buried on page 667 of the U.S. Inflation Reduction Act are details of the Greenhouse Gas Reduction Fund worth $27bn. The vast majority of this will be used to create America’s first national green bank, which will fund communities to expand their use of clean energy. Green banks already exist at state level and function well, with 99.62% of loans paid back in full.

Staying with banks, JPMorgan, the biggest U.S. bank, has teamed up with software firm Datamaran to develop a data-analysis tool for clients to gauge not just the environmental, social and governance risks facing portfolio companies, but also the ESG risks that such assets pose to the world around them. This concept – known as double materiality – is already built into the EU ESG reporting standards, but has yet to make inroads in the US.

On investor pressure, a group of the world’s largest investors worth $39 trillion is calling on governments to raise their climate ambition by adopting science-based transition plans to phase out fossil fuels. Ahead of COP27, the group is also urging world governments to act on scaling up low-carbon energy systems, implementing carbon pricing mechanisms that rise over time and establishing new or more ambitious plans to end deforestation.

Lastly, on Monday the United Arab Emirates announced details of its updated Nationally Determined Contribution under the Paris Agreement. The country has raised its ambition to achieve a reduction in greenhouse gas emissions of 31% by 2030, up from 23.5%.

Energy

According to the International Energy Agency’s (IEA) first World Energy Employment Report, clean energy workers represent more than half of all energy employees worldwide. Almost two thirds of the world’s 65 million energy workers now have some involvement with clean energy projects. Of the total energy workforce, 45% are considered in “high-skilled occupations” – far higher than the global average of 25%. The IEA foresees further high growth in energy jobs – which already make up 2% of the global workforce – in the coming year.

An Oxford University study published in the journal Joule has suggested that the switch to renewable energy from fossil fuels could save $12 trillion worldwide by 2050. The authors looked at historical price data for different energy sources and modelled the likely future changes. “Our latest research shows scaling-up key green technologies will continue to drive their costs down, and the faster we go, the more we will save,” said Dr Rupert Way, the report’s lead author.

Another new UK study, this time from consultancy Delta Energy & Environment, has calculated that deploying solar panels on just a third of all commercial roof space could double the UK’s solar photovoltaic capacity and deliver the entirety of its 2030 target for solar capacity. Commissioned by the UK Warehousing Association, the findings are being used to urge its members to roll out solar installations, and to call on the government to remove barriers to grid access. Elsewhere, the country’s onshore wind pipeline has increased to 37 GW, with 6.8 GW currently under construction. RenewableUK is calling for a target of 30 GW by 2030, which added to the 50 GW target for offshore wind, would alleviate long-term energy costs for millions of people.

There’s further promising solar news from China, which has begun the construction in its Northwestern Ningxia Region of what will be the country’s largest desert solar photovoltaic base. The 15.2 billion yuan project will have a capacity of 3 GW and an output equivalent to saving 1.92 million tons of standard coal per year. 77% of total newly installed power generation in China in 2022 so far comes from renewable energy sources.

Lastly to Africa, where Kenya’s new President William Ruto used his first address to reaffirm the nation’s commitment to transition to 100% renewable energy by 2030 and invited other African states to join them in the transition. Kenya is already a leader in geothermal electricity generation – among the top ten worldwide – but currently has little infrastructure for technologies such as solar. Its solar hopes are receiving a boost, however, as Unilever brand Sunlight announced a partnership with solar startup Bbox to bring clean energy access to 1 million Kenyans over the next three years.

Transport 

First to Europe, where electric versions of three Volvo heavy-duty truck models began rolling off the production line this week, as the automotive giant looks to expand its range in response to increasing market demand for zero emissions electric heavy goods vehicles (HGVs).

No garage, no problem! New game-changing battery technology from Harvard University spin-off Adden Energy has successfully demonstrated a coin-cell battery prototype with charge rates of three minutes that can run for over 10,000 cycles in its lifetime, equivalent to 20 years of use. The startup has received funding worth $5.15 million to further advance and commercialize the technology. Adden Energy CEO William Fitzhugh wants to appeal to the 37% of Americans who do not have garages at home, and therefore no access to at-home overnight charging for electric vehicles.

Promised back in 2012, Nissan has approved the first bidirectional charging system for use with its all-electric Leaf vehicle in the U.S. The FE-15 charger by Fermata Energy, which can power buildings using the EV’s battery, charge it, and send stored energy back to the grid.

Meanwhile, low-cost airline Ryanair has signed an MOU with Austrian multinational OMV, giving the carrier unique access to purchase up to 160,000 tonnes (53m gallons) of sustainable aviation fuel (SAF) over the next eight years. Ryanair estimates the SAF deal will save over 400,000 tonnes in CO2 emissions – equivalent to c.25,000 Ryanair flights from Dublin to Vienna.

Finally, as part of its target to become net-zero by 2040, British online supermarket Ocado has this week opened its third Zoom by Ocado store in Leyton, East London. The new site will create 130 jobs, and will have a fleet of 100% electric last-mile green delivery vehicles such as electric cars, mopeds and e-cargo bikes. Shopping will be delivered in recyclable bags.

Land and Nature

First to agrivoltaics and to a blueberry farm in Maine, USA, which has teamed up with the University of Maine to grow its crops partially shaded by solar panels. The pilot will see the panels installed across 11 acres of farmland. The beauty of agrivoltaic projects like this one is that the land can be used to produce renewable energy without removing farmland from production.

Meanwhile, Indigenous representatives from all nine Amazon Basin countries gathered in the Peruvian capital Lima this week and pressed world leaders to adopt a global pact to protect 80% of the Amazon Forest by 2025. The pact will be presented to governments at November’s UN COP27 climate conference in Egypt and the UN biodiversity summit in Montreal in December.

Next, to Indonesia, where environment minister Siti Nurbaya Bakar and her Norwegian counterpart Espen Barth Eide on Monday signed an MOU on a new partnership to reduce carbon emissions from deforestation in the Southeast Asian country. The REDD+ scheme will see Norway paying Indonesia to keep its forests standing, and replaces a similar pact between the two countries which Jakarta ended last year citing lack of payments.

Staying with efforts to halt deforestation, on Tuesday the European Parliament voted in favour of a regulation requiring companies to ensure products sold in the EU do not come from deforested or degraded land, in a move hailed as a “ray of hope” by green campaigners. Products included are cattle, cocoa, coffee, palm oil, soya and wood as well as pig meat, sheep and goats, poultry, maize and rubber, charcoal and printed paper products.

Backed by investors managing $68 trillion USD, a new “first-of-its-kind” framework from the Farm Animal Investment Risk and Return (FAIRR) and U.S. non-profit the Good Food Institute, will enable alternative protein companies to report on their environmental, social and governance (ESG) impact. The framework will allow reporting on carbon emissions, land, water and biodiversity and is expected to lead to further investment in alternative protein firms by climate savvy investors based on their low ESG-impact.

Last but not least, it’s been a great week for beavers in the US. On Monday, the New York Times ran an article highlighting the rodents’ position as “highly skilled environmental engineers” capable of mitigating threats like wildfires and drought. The same day, the San Francisco Chronicle dubbed beavers “one of California’s best chances to fight climate change.” And on Tuesday the Los Angeles Times reported that the Golden State is seeking applications for its brand-new beaver restoration unit to protect this “untapped, creative climate solving hero.”

Built Environment and Heavy Industry 

A new report from Systemiq and the University of Toyko’s Centre for Global Commons lays out a technology and investment pathway for the chemicals industry which could create 29 million green jobs worldwide. Though acknowledging multiple challenges to decarbonizing the sector at scale, the Systemiq’s managing partner describes the changes needed to align with the objectives of the Paris Agreement as ‘eminently feasible’.

Next, to green cement, where French firm Hoffmann Green Cement Technologies is entering the UK and Irish markets for the first time, signing a partnership agreement with Cemblend, a supplier of customized cement powder mixes. Hoffmann Green Cement manufactures and distributes low-CO2 cement without clinker – the production of which typically accounts for more than half the CO2 emissions associated with making cement.

Meanwhile on green buildings, the International Code Council has announced plans to set up a uniform standard for measuring building emissions that will bring consistency to how climate impacts are calculated. The standard will cover the calculation methodology to quantify zero net carbon status, the calculation of GHG and carbon emissions associated with on-site and off-site material, energy and carbon flows and the embodied GHG and carbon emissions of building materials and systems.

Lastly to mark World Green Buildings Week, Emma Hoskyn, Head of Sustainability at JLL UK, outlines how a focus on retrofitting and energy efficiency can help deliver the UK’s climate goals. In order to achieve net zero, JLL UK’s modelling shows the need to reduce energy consumption in offices by 60%, and by 73% in London. Given that 40% of all carbon emissions come from buildings, Hoskyn signals the need for a retrofitting revolution to improve buildings’ energy efficiency and calls for greater collaboration between occupiers, landlords, investors and government to make it happen.

Commitments

7 companies joined the SBTi through the science-based target pathway:  

British Steel Limited – UK-based steel manufacturer

CANON INC. – Japanese camera manufacturer

Cytel Inc. – American software company

Jules – French clothing company

Mycronic – Swedish electronics company

Schwäbische Werkzeugmaschinen GmbH – German engineering company

The LYCRA Company – American textiles company

23 companies joined SBTi through the Net Zero Standard pathway: 

Anchor Glass Container Corporation – American glass manufacturer

APL Apollo Tubes Limited – Indian steel manufacturer