The latest insights from the We Mean Business coalition

March 24, 2023

Net zero transition – the latest signals of change: March 24, 2023

We Mean Business Coalition

Signals of change in the net zero transition this week show businesses advocating for strong climate policy in the finance, transport and land sectors.

Net Zero Economy

Following publication of the Intergovernmental Panel on Climate Change’s AR6 Synthesis Report this week, attention quickly turned to the ways that businesses and governments must respond. In their summaries of takeaways for business, both edie and BusinessGreen point to the imperative for business to speak up in support of government policies to accelerate the clean energy transition.

At Ceres Global in New York City, 250+ investors and businesses launched a call for policymakers to protect the freedom to invest responsibly, following recent political attempts to frustrate sustainable investment practices. In a Reuters op-ed, Ceres CEO Mindy Lubber details why there’s no time for hold-ups in greening the financial sector. Signatories to the Freedom to Invest letter, published by the We Mean Business Coalition and Ceres, include businesses such as Patagonia and investors such as the California State Teachers’ Retirement System (CalSTRS) pension fund.

And in the week that the UN Secretary-General focussed on the need to bring net zero commitments forward, auto component company Dana is the latest company to aim for net zero by 2040. Building on its current targets – recently validated by SBti – it has submitted new goals for a 75% reduction in Scope 1 and 2 emissions by 2030, and a 25% Scope 3 reduction over the same period. CEO and Chair James Kamsickas said that “the acceleration of these targets is a testament to our team’s focus on implementing strategic sustainability initiatives across every level of the organization.”

Energy

In South Africa, wind turbine manufacturer Vestas has won a 370 MW order for three new wind farms. The order comes from Cape Town-based independent power producer Red Rocket. The Danish firm will install 81 turbines, which it will maintain for 15 years under an active output management agreement.

Germany’s EnBW has confirmed plans for a €2.4 billion offshore wind farm in the North Sea, with a capacity of 960 MW. The He Dreiht farm, one of the biggest planned in Europe, is expected to be operational by the end of 2025 and will generate electricity for 1.1 million households. EnBW has already signed power purchase agreements for up to 335 MW of the generated power with companies including Salzgitter and Bosch, with talks with other firms underway.

And in the UK, Budweiser has announced plans for a green hydrogen plant to power its Lancashire brewery. When operational, green hydrogen would meet the demand for the site’s thermal, heating and transport needs, with the brewer set to switch parts of its fleet to hydrogen fuel cell vehicles. Budweiser and its implementation partner Protium aim to have the project, which could save up to 11,000 tons of CO2 per year, operational by the end of 2025.

Transport

A group of 47 large businesses has written to the European Commission, warning that an overturn of the ban on the sale of petrol and diesel cars by 2035 would undermine the bloc’s efforts to reach its climate goals. Despite agreeing last year to phase out polluting internal combustion engines in the next 12 years, several countries including Germany have recently held up the ratification of the ban. The letter was coordinated by the Climate Group’s EV100 initiative, and signed by members including Ford, Volvo and Vattenfall.

To Ivory Coast, where mobility startup EVTech has launched a €6.4 million Series A funding round. “We are moving up a gear after more than a year of development and various full-scale tests in the city of Abidjan with the aim of closing at the end of the second quarter of 2023,” says founder Florent Thomas. The funding will go towards the deployment of EV charging stations and an accompanying app, in partnership with fellow startup Auto24, which specializes in the sale and repurchase of second-hand vehicles.

And a consortium of major businesses including Coca-Cola, DPD and Diageo have set up an updated initiative focused on the decarbonization of heavy goods vehicles (HGVs) across Europe. HGVZero2023 has expanded to include new members. It aims to spend the next six months exploring the challenges related to HGV decarbonization and co-developing potential solutions.

Land & Nature

PepsiCo has partnered with the Cool Soil initiative to reduce the greenhouse gas emissions from its canola oil production. The initiative works with grain producers to test and validate management practices to boost sustainability, profitability, and productivity of farming enterprises. Each year, PepsiCo uses an estimated 7,000 tonnes of canola oil to produce its major snack brands like Doritos.

In an open letter to European Commissioners, 280 organizations, businesses and individuals have called on the EU to provide “an ambitious and progressive” legislative proposal for an EU soil health law. “Healthy soils are fundamental to achieve the climate, biodiversity, water and zero pollution targets of the European Green Deal, and to support the… transition to a sustainable food system,” the letter says. Unilever, Danone and Weleda are among the business signatories.

And UK pension provider Scottish Widows has called on the government to start regulating carbon offsets. “The financial services industry has yet to make ample progress on nature action,” Maria Nazarova-Doyle, Head of Responsible Investments at Scottish Widows, which is part of Lloyds Banking Group, said in a statement.

Built Environment & Heavy Industry

Adobe has officially opened a new, all-electric headquarters building in California, USA. The space, capable of accommodating up to 4,000 employees, has been certified under the Leadership in Energy and Environmental Design (LEED) rating system. The building’s energy use is covered by an agreement for renewable energy credits sourced from a combination of California wind and solar.

This comes as a new report from JLL has outlined the benefits that both landlords and tenants can generate through ‘green lease’ clauses in office contracts, while helping to decarbonize the retail sector. Using data around leasing activity for new office buildings in London, the report concludes that buildings with an ‘A’ or ‘B’ energy performance certificate achieved a rental premium of 10% for landlords. There are also cost savings for tenants. In the US alone, which has 1.2 billion square feet of office space facing lease expirations before 2030, the report estimates that more than $3.3 billion could be delivered in annual cost savings by introducing green leases.

And to Germany, where the government plans to launch a subsidies program for industries to support their switch to climate-neutral production. Intentions were shared last year to establish ‘climate protection contracts’ from 2023, with 15-year subsidies for companies in energy-intensive industries such as steel, cement and chemicals, in exchange for reducing carbon emissions in their production. Companies will be asked to express interest in April.

Company Commitments

1 company joined RE100:

Far EasTone Telecommunications – Taiwanese telecoms company

8 companies submitted their science-based targets to SBTi through the Net Zero pathway:

Accolade Wines – Australian winemaker

Charlie Bigham’s – UK food company

Hexagon AB – Swedish software company

HTC Corporation – Taiwanese tech company

Noblis – US-based professional services company

PGP Glass Pvt. Ltd. – Indian glassmaker

Tokuyama Corporation – Japanese chemicals company

Wise Travel India Private Limited – Indian taxi firm