The latest insights from the We Mean Business coalition

July 21, 2023

Net zero transition – the latest signals of change: July 21, 2023

We Mean Business Coalition

Recent Signals of Change in the net zero transition include business calling for a UK green industrial plan and EU deals with Latin America.

Net Zero Economy & Finance

Telecoms companies including BT, Sky, Talk Talk, and Virgin Media O2 have announced a joint commitment to collaborate to reduce emissions from their supply chains. The 12 firms will work together as part of the Climate & Sustainability Work Group of the UK government’s Digital Connectivity Forum. The Forum’s Chair and Head of Sustainability at Talk Talk, Will Ennett said that in a complex and interlinked system like telecoms, it is “essential that the sector collaborates and works together to address these challenges and achieves industry-wide transformation.”

This comes as another 100 businesses active in UK markets signed a letter calling for its government to take a more strategic and ambitious approach to the net zero transition. The letter, signed by firms including Cemex, British Steel and Kingfisher, states that the UK risks being left behind in the green transition as other countries compete to incentivize economy-wide decarbonization. It follows a recent warning from the Confederation of British Industry that the UK risks billions in lost economic opportunity without a clear plan for industrial transformation.

And Amazon’s new sustainability report for 2022 reveals the ecommerce giant has managed to decouple its emissions from business growth. The company reports that its year-on-year emissions reduced by 0.4% while sales grew by 9%. Amazon now sources 90% of its energy from renewables, with a 29% drop in scope 2 (power-related) emissions since 2021. Amazon also announced that from 2024, all its new and existing suppliers will need to set climate targets and report progress annually.

Energy

At the EU-CELAC (Community of Latin American and Caribbean States) Summit this week, Uruguay and Argentina were among several nations to sign new green transition cooperation agreements with the bloc. Memoranda of Understanding were signed on renewable energy, energy efficiency and renewable hydrogen with provisions on the importance of a just energy transition that supports local communities and protections for ecosystems and biodiversity.

First Solar – the largest solar manufacturer in the U.S. – sealed a deal to supply Israel’s Energix with 5 GW of panels. The delivery, which will happen between 2026 and 2030 and is Energix’s biggest deal to date, will provide clean energy for projects in Israel, the U.S. and Poland. Energix will also work with First Solar Recycling Services on closed-loop semiconductor recovery for use in new solar modules.

Staying in the U.S., startup Fervo has reported a technological breakthrough in geothermal power generation. The Texas-based startup uses horizontal drilling techniques and fiber-optic sensing tools to access geothermal resources that are otherwise too expensive or technically complex to reach. “This proves that the way we’re developing geothermal can produce much more productive wells than anything that’s been done before,” said Fervo CEO Tim Latimer.

Transport

Energy management firm Schneider Electric has shared new research finding that more than half of Australian businesses are planning to replace petrol with electric cars in the next two years. The project polled more than 500 executives from small, medium and large businesses as well as industry groups. Medium-sized organizations are most likely to invest in electric transport, the study found, as were manufacturing and construction firms at 68% and 62% respectively.

Tata Group has announced plans for a £4 billion battery plant in the UK. The factory, slated to have a capacity of 40 GW of batteries when operational in 2026, could supply roughly half a million electric vehicles per year for Tata subsidiary Jaguar Land Rover. The company won an undisclosed government subsidy for the project, which will create 4,000 jobs in the west of England.

Meanwhile in Germany, Deutsche Post DHL rolled out 13 new zero-emission trucks on the streets of Berlin. The Volvo FL Electric trucks have a 300 km range, with their delivery part of DHL’s EV100 pledge for EVs to make up 60% of its fleet by 2030.

Land & Nature

AXA has shared plans to inject $49 million into reforestation projects in Brazil. The insurance firm’s alternative investment vehicle will take a minority stake in local startup Mombak to help scale up its operations and reforest over 10,000 hectares of degraded pastureland. The project, based on a model of buying land from farmers or partnering with them to replant native species, will generate high quality carbon credits with a greater assurance that the forest created is permanent.

Industry actors from the cocoa, soy, palm oil and coffee sectors met with representatives from government and civil society in Bern, Switzerland recently to collaborate on measures to tackle tropical deforestation in commodity supply chains. Convened as the EU Deforestation-Free Products Regulation came into force, the industry initiatives agreed to greater cooperation to ensure traceability along the supply chain, landscape approaches to forest protection and restoration, and coordinating investments in the transition to climate-smart agriculture.

Staying with climate-smart agriculture, the Biden-Harris administration has allocated over $3 billion in funding to projects in the U.S. aimed at slashing emissions from the country’s farming sector through practices such as planting cover crops. The U.S. Department of Agriculture estimates that over 5 years the program could eliminate or sequester carbon emissions equivalent to 2.5 million gasoline-powered cars, though critics suggest accurately measuring reductions will be challenging.

Meanwhile, ADM has announced the expansion of its regenerative agriculture program across North America. Since enrolling over one million acres in 2022, the company aims to expand to two million acres in 2023, and four million by 2025. Suppliers that enroll receive premium payments of up to $25 an acre per year for implementing practices such as cover cropping, improved nutrient management and conservation tillage.

Built Environment & Heavy Industry

German auto supplier ZF has signed a €1.5 billion low-carbon steel purchase agreement with H2 Green Steel. The deal will cover a significant share of ZF’s 2.5 million tonnes of direct and indirect steel processed per year, with CO2 emissions savings of 2.3 million tonnes compared to traditional processes. Deliveries of the steel are scheduled to begin in 2026.

Further good news for European industrial decarbonization came as the European Commission approved state aid measures of $2.85 billion to France’s ArcelorMittal and Germany’s Thyssenkrupp to ramp up green steel production. The grants will go toward the construction and installation of direct reduction iron plants and melting units to eventually be powered by green hydrogen.

And finally, brewing giant Heineken shared plans for a £25 million investment to install heat pumps in its brewery in Manchester, UK. The project, which secured a small amount of funding from the government’s Department for Energy Security and Net Zero, will install technology to capture heat from various sources, including on-site refrigeration units, which can then be redistributed and reused elsewhere in the brewing process.

Company Commitments

We will no longer include the list of company commitments in this email, but you can view the latest commitments in our company commitments table by filtering with the ‘updated since’ field: view the latest company climate commitments here.

12 companies committed to set near-term science-based targets.

17 companies committed to set net zero science-based targets.

22 companies had their science-based targets approved.

49 SMEs had their science-based targets approved.

Total number of companies committed to RE100: 412

Total number of companies committed to EP100: 125

Total number of companies committed to EV100: 130

Total number of companies committed to EV100+: 5

Total number of companies committed to SteelZero: 36

Total number of companies committed to ConcreteZero: 30

Total number of companies and SMEs committed to SBTi: 5,669 (2,503 committed, 3,166 approved)

Total number of SMEs committed to SME Climate Hub: 6,339