Weekly ESG News: Financial Services and Insurance Industry (31/2024)
News in the spotlight: The UK has unveiled a £1.5 billion renewable energy auction budget, with £1.1 billion for offshore wind, to boost clean energy by 2030.
The UK government has announced a record £1.5 billion renewable energy auction budget, with £1.1 billion for offshore wind, to boost clean energy infrastructure by 2030 through the Contracts for Difference (CfD) scheme.
Products & Services
Masdar and TotalEnergies have signed an agreement to explore the development of a green hydrogen-to-methanol-to-SAF project in Abu Dhabi, aimed at decarbonizing hard-to-abate sectors like aviation and maritime industries. The project will use green hydrogen from renewable energy and capture CO2 from industrial sources to produce green methanol and SAF. Masdar, founded in 2006, has ambitious goals to expand its global renewable energy capacity to 100 GW and produce 1 million tonnes of green hydrogen by 2030. The partnership follows a successful test flight in December 2023, demonstrating the viability of converting methanol to SAF.
Cleantech startup Graphyte has raised $30 million in Series A funding to scale its carbon dioxide removal technology. Founded in 2023, Graphyte uses its Carbon Casting method to convert biomass into dense carbon blocks for underground storage, preserving nearly all captured carbon with minimal energy. The new funds will help launch four additional facilities by 2026, aiming to remove over 5 million tons of CO2 annually by 2030. The investment round was led by Prelude Ventures and Carbon Direct Capital, with support from Breakthrough Energy Ventures and Overture.
Leadership Announcements
L Catterton has named Devon Leahy as its new Global Head of Sustainability. Leahy, formerly Head of Sustainability at Ralph Lauren, will oversee sustainability projects and initiatives for the firm’s portfolio companies. With a background in sustainability roles at Futerra, Etsy, and Walmart, Leahy is set to enhance L Catterton’s commitment to driving sustainability across its consumer brands. Scott Dahnke and Michael Chu, Co-CEOs of L Catterton, highlighted her expertise as key to advancing the firm’s sustainability goals and supporting its global brands.
J.P. Morgan has promoted Chuka Umunna to Co-Lead of Global ESG Investment Banking and EMEA Head of Green Economy Investment Banking. Umunna, who previously led the firm’s EMEA ESG and green economy practice, will now oversee global ESG initiatives and coordinate investment banking efforts in emerging green sectors across Europe, the Middle East, and Africa. Joining J.P. Morgan in 2021, Umunna’s prior experience includes roles at Edelman and nearly a decade as a UK Parliament Member.
ESG & Green Bond Issuances
The UK government has unveiled a record £1.5 billion budget for its renewable energy auction, with £1.1 billion allocated to offshore wind. This budget, a 50% increase from previous levels, aims to advance clean energy infrastructure by 2030. The Contracts for Difference (CfD) scheme will subsidize renewable projects, ensuring fixed prices and encouraging investment. The auction also includes funds for onshore wind, solar, and emerging technologies such as floating offshore wind and tidal energy.
ESG Data & Analytics
Deutsche Bank has introduced a new sustainability-linked payables finance program with BASF in China, designed to encourage suppliers to adopt sustainable practices. The program uses EcoVadis to rate suppliers’ sustainability performance, offering preferential interest rates for higher ratings and motivating unrated suppliers to improve. This initiative supports Deutsche Bank’s broader goal of enabling €500 billion in sustainable financing by 2025 and aims to enhance BASF’s supply chain sustainability.
Regulations & Law
The International Accounting Standards Board (IASB) has published a consultation document proposing new illustrative examples to help companies improve their reporting on climate-related risks and uncertainties. These examples aim to address investor concerns about the adequacy and consistency of climate information in financial statements. The guidance focuses on materiality judgments, disclosures about assumptions and estimation uncertainties, and the disaggregation of information, enhancing the connection between financial statements and sustainability disclosures. This initiative follows the IASB’s ongoing efforts to refine climate-related reporting standards.
The Global Reporting Initiative (GRI) and the Taskforce on Nature-related Financial Disclosures (TNFD) have published a joint guide to help companies report on nature-related and biodiversity risks using both the GRI Standards and TNFD recommendations, aiming to avoid double reporting. This resource, developed in response to market feedback, highlights the alignment between the two frameworks, ensuring consistency in nature-related concepts and definitions. The guide supports companies in integrating TNFD recommendations into their existing GRI-based reporting, facilitating comprehensive and streamlined disclosures on nature impacts and risks.
Net Zero Commitments
Veolia has become the first company to have its decarbonization targets validated by both the Science Based Targets initiative (SBTi) and Moody’s, with its net zero plan rated “Advanced” by the latter. This milestone follows Veolia’s launch of its “GreenUp” strategic program, which aims to reduce Scope 1 and 2 emissions by 50% by 2032 and achieve carbon neutrality by 2050. The program also includes ambitious goals for avoided emissions. SBTi praised Veolia’s net zero ambition as the most advanced it tracks, while Moody’s awarded the company an NZ-2 score, reflecting a strong alignment with the Paris Agreement goals.