Weekly ESG News: Financial Services and Insurance Industry (29/2024)
News in the spotlight: 3M Invests in Ohmium to Advance
Green Hydrogen Technology
3M announced a strategic investment in green hydrogen tech company Ohmium International to enhance green hydrogen production efficiency and scalability, aligning with 3M’s $1 billion environmental sustainability goals.
Products & Services
3M Invests in Ohmium to Advance Green Hydrogen Technology
3M announced a strategic investment in green hydrogen tech company Ohmium International to support the transition to a low-carbon economy. Ohmium, founded in 2019, designs modular, scalable proton exchange membrane (PEM) electrolyzer systems that use 100% renewable energy to produce green hydrogen. This investment follows Ohmium’s $250 million capital raise last year. Arne Ballantine, Ohmium CEO, expressed excitement about collaborating with 3M on innovations in electrolyzer materials. 3M’s Senior VP, Mark Copman, highlighted the potential for enhancing green hydrogen production efficiency and scalability, aligning with 3M’s $1 billion commitment to environmental sustainability goals, including carbon neutrality by 2050.
Clean Energy Platform LevelTen Raises $65 Million to Expand Market Reach
LevelTen Energy has secured $65 million in Series D funding to enhance its clean energy transaction platform and expand into new markets. Founded in 2016, LevelTen offers a range of tools and marketplaces for clean energy transactions, including power purchase agreements and asset sales. The new capital will support the company’s growth into new geographies, clean hydrogen, and energy attribute certificates. Led by B Capital with participation from major investors like Google, Microsoft’s Climate Innovation Fund, and Constellation, this funding aims to accelerate the deployment of carbon-free energy projects. LevelTen CEO Bryce Smith emphasizes the urgency of scaling clean energy solutions to meet climate goals.
Cleantech Firm Naked Energy Raises $22 Million to Advance
Heat and Power Decarbonization
British solar heat and power company Naked Energy has raised £17 million ($22 million) in a Series B funding round to accelerate its global expansion and enhance its decarbonization solutions. Founded in 2009, Naked Energy specializes in high energy density solar collectors, including the VirtuPVT hybrid system that combines solar PV and thermal technologies, and VirtuHOT, a solar thermal collector for heating water. The funds will support the company’s new manufacturing facility in Dallas and ongoing projects like the one at Creighton University, which is expected to save 40 metric tons of carbon annually. The funding was led by E.ON Energy Infrastructure Solutions, with support from Barclays’ Sustainable Impact Capital. Naked Energy CEO Christophe Williams emphasized the importance of transitioning away from natural gas for heating.
Schneider Electric Unveils New Sustainability Data Management Solutions
Schneider Electric has launched enhanced features for its EcoStruxure Resource Advisor platform, designed to help companies meet evolving sustainability reporting requirements. The updated platform addresses challenges such as ESG reporting, renewable energy management, and carbon footprint reduction. New capabilities include a library of ESG indicators aligned with global standards, AI-driven data integration, multi-entity reporting, and advanced tracking for renewable energy and carbon offsets. Steve Wilhite, President of Schneider Electric’s Sustainability Business, highlighted the platform’s role in supporting compliance with regulations like the EU’s Corporate Sustainability Reporting Directive (CSRD) and improving overall business sustainability performance.
Leadership Announcements
HSBC's establishment
of HSBC Infrastructure Finance (HIF) with Danny Alexander
as CEO
HSBC has launched HSBC Infrastructure Finance (HIF), a new business unit focused on infrastructure financing and project finance advisory for the low carbon transition. Danny Alexander, former UK MP and Vice President at the Asian Infrastructure Investment Bank, has been appointed CEO of HIF. The new unit supports HSBC’s Net Zero Transition Plan, which aims to finance and support the transition to net zero by 2050, including a $750 billion to $1 trillion commitment for low carbon transition projects by 2030. HIF will integrate elements of HSBC’s Global Banking Real Asset Finance and reactivate its Project Finance Advisory capability. Greg Guyett, HSBC’s CEO of Global Banking and Markets, emphasized the bank’s role in developing and financing critical infrastructure for a low carbon economy.
ESG Data & Analytics
74% of Public Companies to Invest in Sustainability Reporting Technology: Deloitte Survey
A Deloitte survey reveals that 74% of public companies plan to invest in new technology or tools to enhance their ESG disclosure capabilities over the next year. This shift comes as companies prepare for stricter regulatory requirements, such as the EU’s CSRD and SEC’s climate disclosure rule. The study, “2024 Sustainability Action Report,” highlights that 99% of companies are gearing up for increased reporting demands, with data quality remaining a top challenge. The formation of cross-functional ESG teams has significantly boosted companies’ progress and preparedness, with 98% of such teams meeting at least quarterly. Despite the investments, 88% of respondents still cite data quality as a major concern. The rise of roles like Chief Sustainability Officer and increased executive oversight reflect a strategic commitment to integrating sustainability into core operations.
Majority of M&A Dealmakers Willing to Pay Premium for High ESG Maturity Companies: KPMG Survey
A new KPMG survey reveals that ESG due diligence is increasingly integral to M&A transactions, with most dealmakers willing to pay a premium for targets demonstrating high ESG maturity. The survey, Global ESG Due Diligence+ Study 2024, found that 71% of respondents see ESG considerations as more important in transactions over the past 12-18 months, despite a downturn in overall M&A activity. Over half of dealmakers have encountered ESG-related deal-breakers, and nearly 60% are ready to pay a premium for high ESG performance. The study highlights a growing trend in ESG due diligence, driven primarily by its monetary value and regulatory requirements, with financial investors leading the integration of ESG into their decision-making.
Green & ESG Bond Issuances
Eurazeo Raises Over €700 Million for Transition Infrastructure Fund, Surpassing Target by 40%
Investment management firm Eurazeo announced that its inaugural transition infrastructure program raised €706 million in commitments, exceeding its initial €500 million target by over 40%. The Eurazeo Transition Infrastructure Fund (ETIF), classified as Article 9 under the SFDR regulation, focuses on transitioning essential services to a low carbon economy, investing in energy, digital, clean transport, and environmental sectors. Laurent Chatelin, Eurazeo Partner – Infrastructure, highlighted the strong market appetite for sustainable infrastructure investments. Sixty percent of the fund’s capital is already deployed across six companies, including Ikaros Solar and Electra. Notable investors include the European Investment Fund and other major institutional investors.
Regulatory and Law
First U.S. Green Economy Stock Market Proposed by GIX
The Green Impact Exchange (GIX) has submitted an application to the Securities and Exchange Commission (SEC) to become the first U.S. stock market dedicated exclusively to the green economy. This groundbreaking initiative aims to create a specialized platform for sustainable investments, providing more opportunities for investors interested in green projects. GIX’s focus will be on companies and financial instruments that contribute positively to environmental sustainability. The filing with the SEC marks a significant step towards establishing a market that prioritizes ESG criteria. If approved, this exchange will facilitate the growth of sustainable businesses by providing them with increased visibility and investment opportunities.