Weekly ESG News: Financial Services and Insurance Industry (30/2024)
News in the spotlight: Deloitte and Akila Partner for Decarbonization Solutions
Deloitte and digital twin platform Akila have formed a strategic alliance to provide decarbonization solutions for U.S. buildings.
Products & Services
Deloitte and digital twin platform Akila have formed a strategic alliance to provide decarbonization solutions for U.S. buildings. This partnership aims to reduce emissions, optimize energy use, and improve operational efficiency by integrating Akila’s technology with Deloitte’s expertise. Akila’s platform, which centralizes building data and supports advanced simulations, will be combined with Deloitte’s strategic insights to enhance building management. The collaboration seeks to significantly reduce carbon footprints and increase asset value through better management practices.
The UK government has announced the Great British Energy Bill to create a public-owned company focused on clean energy projects, funded by an £8.3 billion ($10.7 billion) windfall tax on oil and gas companies. Great British Energy, based in Scotland, aims to develop, invest in, and manage clean energy projects, working with local authorities and the private sector, and building UK supply chains. A partnership with the Crown Estate will facilitate up to 30GW of new offshore wind projects by 2030, potentially attracting £60 billion in private investment. This initiative is part of the UK’s strategy to enhance energy security and achieve clean energy goals by 2030.
Climate-tech startup CarbonBlue has raised $10 million in seed funding to scale up and deploy its water-based Carbon Dioxide Removal (CDR) technology. Founded in 2022 in Israel, CarbonBlue’s technology enables water-based infrastructure to remove CO2 from water, mineralizing it into limestone and using heat to extract pure CO2 for industrial use or sequestration. The company is building a facility at the Maagan Michael desalination plant in Israel and has projects in Europe, MENA, and the Americas. The new funding will help expand global operations and technology integration with industrial facilities. Co-founder and CEO Dr. Dan Deviri emphasized the importance of this funding for expanding collaborations and validating their approach. The funding round was led by Ibex Investors and FreshFund, with participation from strategic investors including Engie New Ventures and ZIM Ventures, as well as existing investors Jibe Ventures, MoreVC, and Secret Chord Ventures. Jonathan Schwartz of Ibex Investors highlighted CarbonBlue’s unique integration with critical infrastructure projects.
Leadership Announcements
Sustainability consultancy Revolt has named Kirsten Flanik, former President and CEO of BBDO, as CEO for North America. This move follows Revolt’s acquisition by London-based Anthesis earlier this year, aiming to strengthen Revolt’s U.S. market presence. Co-founder Alex Lewis highlighted the importance of the North American market for their sustainable transformation goals. Launched in 2017, Revolt supports C-suite executives with sustainability and DEI strategies, working with clients like ABInBev and PepsiCo. Anthesis’ Dean Sanders emphasized the enhanced expertise and strategic communication Revolt now offers. Flanik expressed enthusiasm for joining an organization committed to transforming business practices sustainably.
ESG & Green Bond Issuances
UAE-based clean energy developer Masdar has raised $1 billion through green bonds to fund new renewable energy projects. The bond issuance was highly successful, being 4.6 times oversubscribed, with $500 million each in 5- and 10-year bonds. The investor base comprised 70% international and 30% MENA-based investors. Masdar, established in 2006, aims to expand its global renewable energy capacity to 100 GW and produce 1 million tonnes of green hydrogen by 2030. Proceeds from this issuance will exclusively finance new greenfield renewable energy projects, including those in developing economies. CEO Mohamed Jameel Al Ramahi highlighted the investor confidence in Masdar’s sustainability and financial strength, emphasizing the role of these funds in supporting energy access in emerging markets.
Net Zero Commitments
The U.S. Environmental Protection Agency (EPA) announced over $4.3 billion in grants to 30 states for projects aimed at reducing greenhouse gas emissions across various sectors, funded by the Inflation Reduction Act. Key initiatives include $1.2 billion for zero-emission transportation infrastructure, over $1 billion for energy efficiency in buildings, and $931 million for sustainable agricultural practices. Pennsylvania received a notable $396 million for the RISE PA project to decarbonize its industrial sector. The selected projects are expected to cut emissions by 971 million metric tons by 2050. The funding is part of the Biden administration’s agenda to bolster clean energy and infrastructure investment. EPA Administrator Michael S. Regan highlighted the economic and workforce benefits of these sustainable projects.
Regulatory & Law
The European Securities and Markets Authority (ESMA) has published recommendations to enhance the Sustainable Finance Disclosure Regulation (SFDR). Key proposals include mandatory sustainability disclosures for all financial products to improve transparency and comparability, and regulation of ESG data providers to ensure data quality. ESMA also suggests creating categories for sustainable and transition investments with clear criteria and transparency obligations. The regulator advocates using the EU Taxonomy as the primary framework for assessing sustainability performance and recommends expanding it to cover all relevant economic activities and transition efforts.
UK Secretary of State for Transport Louise Haigh announced a mandate for sustainable aviation fuel (SAF), starting at 2% of jet fuel in 2025 and increasing to 22% by 2040. This initiative is part of the UK’s “Jet Zero” strategy to achieve net-zero aviation emissions by 2050. SAF, produced from sustainable resources, can cut lifecycle GHG emissions by up to 85%, but faces challenges such as limited supply and high costs. The mandate includes measures to promote innovation and diversify feedstocks, with buy-out options to ensure market stability. The policy is designed to support SAF production and drive the UK’s clean energy ambitions.