Weekly ESG News: Financial Services and Insurance Industry (38/2024)
News in the spotlight: Meta signed a deal with BTG Pactual to buy up to 3.9 million carbon removal credits by 2038, supporting reforestation and its net zero emissions goal by 2030.
Meta will buy up to 3.9 million carbon credits from BTG Pactual by 2038 for reforestation and its 2030 net zero goal.
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Products and Services
Robeco Launches High Income Green Bond Strategy
Robeco has introduced a High Income Green Bonds strategy, focusing on high-yield green bonds issued by corporations worldwide. This strategy aligns with the EU’s Article 9 under the SFDR regulation and responds to rising investor interest in green bonds, which finance environmental projects. With green bond issuance exceeding $560 billion in 2023, Robeco aims to provide attractive income while supporting transition investing. The strategy follows a stringent five-step green bond framework to ensure investments meet environmental criteria, and is managed with a global, benchmark-agnostic approach across all credit sectors.
Carlyle Commits to Provide up to $1 Billion in C-PACE Financing
Carlyle, a global private capital investment firm, has announced a strategic investment in North Bridge, a company specializing in commercial property assessed clean energy (C-PACE) financing. Carlyle’s commitment of up to $1 billion will facilitate C-PACE loans, enabling property owners to secure long-term, low-cost financing for energy efficiency, water conservation, and renewable energy projects. This innovative financing model allows debt to be tied to the property, addressing concerns over the payback period for energy improvements. North Bridge, founded in 2021, aims to transform the C-PACE industry and better serve institutional sponsors and lenders with this partnership.
Morgan Stanley Invests $33 Million in ESG Risk Management Leader Datamaran to Fuel U.S. Expansion and AI Innovation
Morgan Stanley’s late-stage growth platform, Morgan Stanley Expansion Capital, has invested $33 million in Datamaran, a London-based AI-driven software provider specializing in ESG risk management. The funding will support Datamaran’s expansion into the U.S. market and advance its generative AI initiatives. Founded in 2014, Datamaran enables companies to monitor and manage external risks, including regulatory and reputational challenges, with clients such as Dell, Cisco, JPMorgan, and Deloitte. This investment follows a successful £11.7 million Series B round in 2022, during which the company more than doubled its subscription revenue. Datamaran’s CEO, Marjella Lecourt-Alma, highlighted the rising demand for ESG governance solutions as businesses face increasing regulatory pressure, such as the EU’s Corporate Sustainability Reporting Directive (CSRD). This investment will allow Datamaran to continue leading the market in AI-powered ESG analytics, addressing the growing need for comprehensive risk management strategies.
Net Zero Commitments
Meta Secures Major Nature-Based Carbon Removal Credits Deal with BTG Pactual
Meta has signed a long-term contract to purchase 1.3 million nature-based carbon removal credits, with an option for an additional 2.6 million credits through 2038, from BTG Pactual Timberland Investment Group. This deal, part of BTG Pactual’s $1 billion reforestation strategy in Latin America, supports climate change mitigation and local biodiversity. As part of its commitment to achieve net zero emissions by 2030, Meta will use forest monitoring technology to help establish a baseline for reforestation efforts. The strategy aims to protect and restore approximately 135,000 hectares of natural forests while providing economic opportunities for local communities.
Home Depot Eliminates Hard-to-Recycle Packaging Materials
Home Depot has announced the achievement of its goal to eliminate expanded polystyrene (EPS) foam and polyvinyl chloride (PVC) film from packaging for its private label products. Between 2017 and 2023, the company redesigned over 1,280 packages to reduce its environmental impact. In 2023 alone, 39 million square feet of PVC film and 6 million cubic feet of EPS were replaced with molded pulp and paper. By 2027, the company aims for all fiber packaging in its U.S. and Canada stores to be compostable, recyclable, or made from recycled materials.
Apple Reduces Carbon Footprint of iPhone 16 by 30%
Apple’s recent Product Environmental Report reveals that the new iPhone 16 lineup has achieved a 30% reduction in lifecycle greenhouse gas emissions. This improvement is primarily due to the increased use of low-carbon electricity in the supply chain, which has cut product emissions by over 20%. The iPhone 16 features more than 25% recycled content, including 100% recycled cobalt and over 95% recycled lithium in its battery, contributing to a 7% emissions reduction. Apple aims to be carbon neutral by 2030 and is committed to using 100% recycled cobalt in batteries by 2025.
ESG Data & Analytics
ERM Launches Carbon Credit Portal for Streamlined Purchases
Sustainability advisory firm ERM has introduced the ERM Carbon Credit Portal, providing clients with easier access to carbon credits through the voluntary carbon market. The platform allows users to select and purchase pre-screened carbon credits, giving them insights into project risks, benefits, and outcomes. ERM’s Head of Carbon Markets, Alexander Cox, highlighted the portal’s goal to offer transparent and strategic access to credits, complementing emissions reduction strategies. ERM has also partnered with digital platform CEEZER to enhance the portal’s capabilities, ensuring data-driven decisions for buyers.
MSCI Launches New Carbon Credit Project Ratings to Boost Market Confidence and Integrity
MSCI has introduced its Carbon Project Ratings, aimed at helping buyers, investors, and developers assess the quality and integrity of carbon offset projects. With growing demand for carbon offsets as companies work toward net zero goals, the market faces challenges due to inconsistent data and the inability to differentiate between high and low-quality projects. According to Guy Turner, Head of MSCI Carbon Markets, only 5% of current projects are considered high integrity, leading to hesitation among market participants. The new ratings will evaluate over 4,000 projects, considering factors such as climate impact, environmental and social outcomes, and legal risks. Projects will receive scores based on emissions impact and implementation integrity, graded on a scale from AAA to CCC. Turner emphasized that these ratings will give stakeholders greater confidence in carbon credits, enabling them to make informed investment decisions while meeting disclosure requirements.