Net-zero transition – latest signals of change (23.09.22)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.
Australian mining giant Fortescue, part of the First Movers Coalition, announced a $6.2 billion net-zero push to be spent by 2030. The firm, considered one of the most vocal on the decarbonization of heavy industry, has already set up a separate unit — Fortescue Future Industries — to invest in renewable and hydrogen technologies.
Climate Week also saw the U.S. launch of the SME Climate Hub. Hosted by We Mean Business Coalition and launched in partnership with America is All in, the Hub empowers small and medium-sized businesses to take climate action and helps larger corporations to engage smaller suppliers to reduce their Scope 3 emissions.
Staying with supply chains, Jaguar Land Rover has invited its Tier 1 supplier network – comprising products, services and logistics – to align with the company’s science-based target of net-zero supply chain emissions by 2039. This requirement has been shared with the carmaker’s supply network of more than 5,000 companies around the world, who are asked to disclose their carbon reporting and collaborate with their own supply chain to deliver the reductions.
Carbon Tracker and Global Energy Monitor announced the first ever global registry of oil and gas reserves, covering 75% of worldwide production. The aim is to help investors understand which assets could be at risk of being uneconomic, or ‘stranded’, in the low-energy transition. The news comes in the same week that the Net Zero Asset Owner Alliance revealed that almost 2/3 of its investors have set 49% emissions reduction targets by 2030, commitments which cover $3.3 trillion in assets.
Norway’s $1.2 trillion wealth fund will push its portfolio to commit to net zero by 2050. 70% of the fund’s emissions come from 174 companies, and these biggest emitters will be the priority target. Meanwhile, HSBC Asset Management has launched a circular economy investment fund aimed at supporting around 60 firms involved in recycling, regenerating natural ecosystems and designing out waste and pollution. This is the fourth ESG-focused fund released by HSBC AM this year.
The US Senate has belatedly ratified the 2016 Kigali Amendment on limiting the production of hydrofluorocarbons (HFCs), joining 130 other nations including China, India and Russia in a collaboration that could avoid 0.5°C of warming.
Lastly, there are further positive signals from the EU, where a draft of the 27-country bloc’s negotiating mandate for COP27 said it intends to further update its NDC. Last year, the EU agreed a 55% emissions reduction by 2030 from 1990 levels and officials are hopeful to increase that target by a few percentage points.
First to the UK, where over 100 UK business leaders have signed an open letter to new Prime Minister Liz Truss organized by CLG Europe, urging her government to tackle the energy crisis by accelerating the clean energy transition. Amazon, Coca-Cola, IKEA, Siemens, Sky, Aviva, and Nestlé are among the 116 leading firms to have signed the letter, which calls for increasing energy efficiency in UK homes and restoring nature through a comprehensive environmental improvement plan.
In Germany, Mercedes-Benz has announced a new windfarm to be built in Lower Saxony, that will be able to produce 100 MW of electricity upon completion in 2025. An assessment is also being made on the possibility of using the remaining land for solar panels, which could further increase the farm’s output.
Next to Australia, where the state of South Australia has announced its intention to become the first grid of its size to run on 100% renewables. The grid regularly produces enough wind and solar power to meet more than 100% of state demand, averaging 64% over the past year. Increasing confidence in battery inverter technology means that the state could also remove its last fossil fuel-run back-up generator by 2026.
Meanwhile in India, Mahindra Group have agreed a partnership with Ontario Teachers’ Pension Plan, which sees the latter purchase a 30% equity stake in Mahindra Susten, the Group’s solar installation arm. Partnerships like this one and Tata’s deal with Blackrock earlier this year, have helped renewables power 60% of India’s energy capacity additions in the past six years.
And circling back round to Climate Week, Amazon has shared plans to further accelerate its renewables push, backing 71 new projects around the world that take the total generation from its renewable energy portfolio to 50,000 GWh of clean energy. The projects include solar farms in Brazil, India and Poland.
Climate Group launched EV100+ at Climate Week on Tuesday. Founding members IKEA, Unilever, JSW Steel, A.P. Moller – Maersk and GeoPost/DPDgroup have collectively committed to transition their medium and heavy-duty vehicles (MHDVs) to zero emissions in OECD markets, India and China by 2040. MHDVs – those weighing over 7.5 tonnes – account for over 40% of all road transport emissions.
Rental fleets too are making steps towards the EV transition. Hertz plans to order 175,000 EVs from General Motors by 2027, in a multi-billion deal that could be the first in a string of similar partnerships for GM. The auto manufacturer aims to produce one million EVs in North America by 2025, while Hertz plans to have ¼ of its fleet comprised of EVs by 2024. Meanwhile in Spain, Iberdrola hit a milestone of 2,500 public EV charging points, as it targets 150,000 public, home and business-based charging points by 2025.
India and the World Bank are also close to agreeing a financial mechanism to cut the risk for bank loans for EVs. A $1 billion fund will provide first-loss guarantees to lenders in case of loan defaults. The move should remove barriers to purchasing EVs and help decarbonize India’s transport sector, which currently causes 13.5% of the nation’s emissions.
Finally, following the news shared in Signals of Change earlier this month of the first hydrogen-powered train fleet in Germany, the U.S. has followed suit, with California signing an MOU for four hydrogen trains. The trains will make their first journeys in 2027, while the deal includes an option to add a further 25 engines. The state of California is planning to make all its passenger rail 100% emissions free by 2035. Most trainlines in the U.S. are not electrified, making hydrogen trains a potentially key factor in the sector’s decarbonization.
Land and Nature
First up, a Singapore-based insect protein firm trading as Nutrition Technologies, has received $20 million USD in funding from a group of investors including Sumitomo Corp., ING Sustainable Investments and Mandala Capital Ltd. The company, which produces animal feed from insects, aims to use the money to expand.
Next to Holland, where 50 km of the Border Meuse project has now been completed along the Meuse River. Aimed at restoring floodplains back to how they were 500 years ago, the €550 million initiative is funded mainly by companies who want to extract sand and gravel from the riverbed. With completion expected in 2027, this nature-based solution is already proving its utility, when during serious flooding in the Meuse basin in July 2021 all villages remained safe and dry.
On forests, investment and insurance giant Axa is teaming up with green groups in France, to study climate and biodiversity impacts on 600 hectares of AXA-owned forest. The aim of the three-year program is to develop fresh solutions for restoring damaged forests and boosting climate resilience.
Meanwhile, the government of the Republic of Congo has just announced the creation of the country’s first three marine protected areas: Loango and Mvassa bays, located in Loango and Pointe-Noire respectively and an extension to the maritime area of the Conkouati-Douli national park. The move is aimed at protecting biodiversity, guaranteeing the productivity of territorial waters and defending the interests of local communities.
Over to the Science Based Targets initiative (SBTi), which has launched a month-long consultation on its corporate technical guidance for science-based targets for nature. The guidance will provide companies with methodologies to assess their impacts on nature, alongside advice for setting targets for freshwater. The finalized targets are expected to be released in early 2023.
Lastly, Australia has signed up to a global pledge endorsed by more than 90 countries committing them to reversing biodiversity loss by 2030 known as the Leader’s Pledge for Nature. The announcement came at an event taking place on the sidelines of the UN General Assembly in New York.
Built Environment and Heavy Industry
New analysis from Cambridge Econometrics and Greenpeace has found that insulating homes in Britain and installing heat pumps could benefit the economy by £7 billion a year and create 140,000 new green jobs by 2030. To achieve this, in 2030 the government would need to spend £4.2 billion on supporting heat pumps and insulation, with households spending £9.3 billion. However, in that year households would also save £11 billion through lower heating costs.
Meanwhile, three major South Korean groups have announced that they want to build a green energy export hub in Australia’s Queensland state, aiming to produce a million tonnes of green ammonia annually for export by 2032. Green ammonia is considered a key alternative to coal in power generation and is seen as the best way to ship green hydrogen, which could be used as a transport fuel as well as in steelmaking down the line.
Next up, the European Commission has approved up to €5.2 billion in public funding for hydrogen projects, a move it said could unlock a further €7 billion of private sector investment. The program, known as IPCEI Hy2Use, will support the construction of large-scale electrolyzers and transport infrastructure, for the production, storage and transport of renewable and low-carbon hydrogen. The initiative is aimed at producing hydrogen to decarbonize hard to abate sectors such as glass, cement and steel.
Lastly back to Climate Week, where new Sector Transition Strategies (STS) from the Mission Possible Partnership have been endorsed by more than 200 industry leaders from 60 companies including ArcelorMittal, SAB, Rio Tinto, Tata Steel, thyssenkrupp, Ørsted and Iberdrola. The plans aim to help to decarbonize production of aluminum, ammonia and steel across aviation, shipping, and trucking industries.
The Climate Pledge has now welcomed 375 signatory companies committed to net zero by 2040.
7 companies joined the SBTi through the science-based target pathway:
Cerba Healthcare – French healthcare company
Cosun Beet Company – Dutch food company
Eurocash S.A. – Polish food company
Matkahuolto – Finnish travel company
New Kinpo Group – Taiwanese electronics manufacturer
Primeo Holding AG – Swiss energy company
Trayton Furniture (Jiaxing) Co., Ltd – Chinese furniture manufacturer
20 companies joined the SBTi through the Net Zero Standard pathway:
Acuity Knowledge Services (India) Private Limited – UK-based professional services company
Anora Group Plc – Finnish wine and spirits producer
Bilecik Demir Çelik – Turkish mining company
Brenntag SE – German chemicals trader
Colt Group Holdings Limited – UK-based telecommunications company
Coveris S.A – Luxembourgish packaging manufacturer
DIN HAN ENTERPRISE CO., LTD – Cambodian clothing manufacturer
Feldmuehle GmbH – German packaging company
Fortinet – American software company
Gebrüder Weiss GmbH – Austrian trucking company
Genossenschaft ZFV-Unternehmungen – Swiss hospitality company
green4T – Brazilian IT company
Harith General Partners – South African investment company
Opal Cosmetics (Hong Kong) Limited – Hong Kong-based cosmetics company
Sika AG – Swiss chemicals company
Simon, Kucher & Co. Holding GmbH – German consultancy company
SIX – Swiss financial services company
TAL Apparel Ltd – Hong Kong-based clothing company
TDK Corporation – Japanese electrical components manufacturer
Volution Group plc – UK-based ventilation company
58 companies had their science-based targets approved:
Royal HaskoningDHV – Dutch engineering company
MANE – French fragrance company
HK Electric Investments (HKEI) – Hong Kong-based investment company
Amgen Inc. – American pharmaceutical company
Proximus – Belgian telecommunications company
SanMar Corporation – American clothing company
Kearney – American consulting firm
JetBlue Airways Corporation – American airline
H&M Group – Swedish clothing company
easyJet plc – UK-based airline
Cathay Financial Holding Co., Ltd. – Taiwanese holding company
DGB Financial Group Co. Ltd – South Korean financial services company
Orms Designers and Architects Ltd – UK-based construction company
PharmLog Pharma Logistik GmbH – German logistics company
BioGaia AB – Swedish health company
Dana Lim A/S – Danish chemical company
Hopkins Architects Limited – UK-based architectural company
Pip & Nut – UK-based food company
Thermoplan AG – Swiss equipment manufacturer
Nikkoh Confectionery Co., Ltd. – Japanese food company
NSW Land Registry Services – Australian land registry
Welltower Inc. – American real estate investor
NAKANIHON CASTING Co.,LTD. – Japanese car component manufacturer
Gifu Sanken Kogyo Co., Ltd – Japanese chemical company
Jiangyin Boway Machinery Complete Equipment Co., Ltd – Chinese electronics company
ZEN Energy – Australian electricity utility
Toyo Sangyo Co.,Ltd. – Japan ese textiles company
Altech Co.,Ltd. – Japanese trading company
Vizion Network Limited – UK-based vehicle repair company
iMicron CO., LTD. – Japanese software company
PRINCIPIUM SRL – Italian software company
Universal Computer System Co.,Ltd. – Japanese software company
Lactoprot Deutschland GmbH – German food company
SHINNIHON-KINZOKU – Japanese electronics company
Kabbara LLC. – Japanese professional services company
CHUBU TEPRO CO.,LTD – Japanese car component company
BelOrta – Belgian food company
GUUN Co., Ltd. – Japanese waste disposal company
TOTAL CREATE CO.,LTD. – Japanese construction company
Aderen Consulting SL – Spanish IT company
HLD Global Limited – Hong Kong-based consumer goods company
Emblem Solutions LLC – American mobile communications company
Checkerspot, Inc. – American pharmaceutical company
The ANSCO Co., Ltd. – Japanese electronics manufacturer
shandong yinying cooking machinery Co. Ltd – Chinese cooking machinery manufacturer
ASAHI FIBER INDUSTRY CO., LTD. – Japanese textiles company
Juustoportti Group – Finnish food and beverage processing company
Alison Hayes – UK-based clothing company
aoito soken Co., Ltd. – Japanese professional service company
ARC CO., LTD. – Japanese communications company
Daiwatech Co., Ltd. – Japanese electronics company
Oxwash Ltd – UK-based laundry service
Demcointer – Tunisian clothing company
Nathaniel Lichfield & Partners Ltd – UK-based planning and development company
SANWA INDUSTRY – Japanese packaging company
Vextrix – UK-based construction company
Lonsdale – French design company
Steffco Ltd (trading as “Resource”) – UK-based marketing company
Total companies committed to SBTi: 3,745 (1,962 committed, 1,783 approved)
Webinars & Events:
Climate Week NYC: 19-25 September Global Clean Energy Action Forum: 21-23 September Renewable Energy India Expo: 28-30 September The Economist 2nd Annual Sustainability Week: 3-6 October (use WMBC/S15 for discount) Chatham House: Climate Change 2022: 4-5 October (use CLIMATEWMB25 for in-person discount / CLIMATEWMB22 for complimentary virtual access) Climate Catalyst: the role of business in restoring peatlands: 12 October WBCSD Council Meeting Tokyo 2022: 25-28 October Moral Money Summit Americas: 26-27 October COP27: 7-18 November COP15: 5-17 December
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