The latest insights from the We Mean Business coalition

June 23, 2023

Net zero transition – the latest signals of change: June 23, 2023

We Mean Business Coalition

Hyundai and Ford funnel billions into EV business, as world leaders meet in Paris to discuss accelerating climate finance.

We Mean Business Coalition and partners this week launched A Framework for Responsible Policy Engagement (RPE) to help companies align their advocacy with their climate ambition.

Net Zero Economy & Finance

World leaders met in Paris this week at the first Summit for a New Global Financing Pact, convened by France’s Emmanuel Macron and Prime Minister of Barbados, Mia Mottley. The summit aims to bring new momentum to the push for global financial institution reform to aid the flow of climate finance. “We are all in this together,” Mottley reminded delegates, following an open letter from leaders including Joe Biden and Fumio Kishida said that such reform was a ‘top priority’.

The European Commission has released a new package of measures to strengthen the EU’s sustainable finance taxonomy. The taxonomy will extend to cover water and marine resources, circular economy, pollution prevention, and biodiversity. A proposal for regulating ESG rating providers has also been put forward for review.

While in Switzerland, voters have backed a new climate bill designed to cut fossil fuel use and reach net zero carbon emissions by 2050. In a nationwide referendum, almost two thirds of the population gave their support to the new package, which includes over $2 billion to replace fossil fuel heating with zero-emission alternatives, and almost $1.5 billion to support businesses in the transition.

Energy

Ørsted and WWF have launched a project to establish biogenic reefs around offshore wind farms in the Danish North Sea. The initiative falls under a five-year global partnership announced last year to jointly identify, develop, and advocate for offshore wind deployment initiatives and approaches that enhance biodiversity. The reefs of European flat oysters and horse mussels will be deployed in 2027.

India’s Ministry of Power has amended its Electricity Rules to include new provisions to support small consumers and businesses with better access to renewable energy sources. The rules will make more Micro, Small, and Medium Enterprises (MSMEs) eligible to purchase green energy via open access.

Meanwhile, Spain is on track to become the first country among Europe’s big five economies to generate more than 50% of its electricity from renewable sources. The country, which has reduced fossil fuel use over several years by scaling onshore wind and solar, is likely to surpass 50% renewable generation this year and hit almost 75% by 2030, according to a forecast by Rystad Energy.

Transport

Ford is to receive a conditional $9 billion loan from the US government to build three EV battery factories, in what is being called a watershed moment for the Biden administration’s green industrial push. The new factories are already under construction through a joint venture between Ford and battery giant SK On.

South Korea’s Hyundai has pledged one third of a new $85 billion investment by the end of 2032 towards accelerating its electric vehicle business. The automaker is taking what it calls both internal and external approaches to create advanced batteries through its own organizations as well as joint ventures with leading battery makers including LG Energy.

And Maersk has awarded Volvo Trucks a contract to deliver 25 electric trucks for container transport in Germany. The deal, following a similar order for 126 trucks in the US, will see the first Volvo FH Electric trucks delivered by the end of this year, with the rest to follow in early 2024. “We see a rising demand from our customers for cleaner end-to-end transportation solutions with minimal greenhouse gas emissions,” said Maersk’s Northern Europe Managing Director Jens-Ole Krenzien.

Land & Nature

Nestlé has signed an agreement with the Vietnamese government to support the transition to low-emission agriculture in the country. The company will share technology, research, and digital capabilities with the Ministry of Agriculture and directly with farmers. The collaboration includes a reforestation project to plant and grow over 2.3 million forest and fruit trees on coffee farms in the Central Highlands by 2027, estimated to sequester 480,000 tonnes of CO2 over five years.

Brazilian farming giant Amaggi is also launching a new phase of its regenerative agriculture program as part of its commitment to help slow climate change. The company has employed regenerative practices on its own farms to date and will now work to extend these to its 6,000-strong supplier network, from which it sources 95% of its grain.

Swiss impact investor responsAbility, meanwhile, has raised $106 million for its climate-smart agriculture and food fund, with commitments from investors including Global Affairs Canada, the Dutch Entrepreneurial Development Bank (FMO), and the Visa Foundation. The funds will go towards loans and technical assistance for agricultural small and medium enterprises in Asia Pacific, Latin America and Africa to support climate-smart interventions.

Built Environment & Heavy Industry

Cargill is the latest firm to enter into a multi-year agreement with Sweden’s H2 Green Steel for the supply of low-emission steel. H2 Green Steel’s plant is under construction, and will produce its own green hydrogen in a giga-scale electrolyzer, achieving emission reductions of up to 95% compared to traditional steelmaking with coke and coal in a blast furnace.

Hoffmann Green Cement Technologies and Saudi property developer Shurfah Holding have signed a letter of intent to build four Hoffmann plants in the country. The project follows a test phase initiated last year which enabled Hoffmann’s clinker-free cement to be tested in local settings. Shurfah now plans to license Hoffmann’s technology, for which the latter will receive royalties.

Lastly, Swedish firm Vargas Holding has announced it is launching a new clean energy tech company, which aims to reduce residential carbon emissions from heating. The company said it has ambitions for the new venture – called Aira – to become Europe’s leading direct-to-consumer brand for affordable heat pump solutions and active in 20+ markets by 2030. Chairman Harald Mix said that “Aira’s offering, together with national regulations and subsidies, will accelerate adoption across Europe.”

Company Commitments

Total number of companies committed to RE100: 411

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: 5,378 (2,438 committed, 2,940 approved)

Total number of SMEs committed to SME Climate Hub: 6,335

Total number of companies committed to The Climate Pledge: 417

Webinars & Events

London Climate Action Week: June 24-July 2