Upcycling plastic, EV accelerations, ECB targets climate risk: key sustainability news in March

Asda and Tesco are to begin employing new technology to double the shelf life of fresh fruit. According to an article by The Grocer, the move will see both Asda and Tesco employ tech company Apeel Technology, which will use a covering ingredient found in the peels or skins of fruit such as avocados, limes and cucumbers to act as an extra barrier to the fruit’s own skin. The process works by sealing moisture in and keeping oxygen out so that quality and freshness can be maintained for longer. Asda said it would roll out the technology to its citrus fruits and avocados in 150 stores, to increase shelf life and prevent food waste. Smart farming is continuing to build momentum. Click here to read our insight on the topic with Alina Donets, Portfolio Manager of our Natural Capital Strategy.

China's Tencent Holdings Ltd plans to achieve carbon neutrality in its operations and supply chain by the end of the decade, the firm said. According to Reuters, the company, whose businesses range from messaging app WeChat to games and cloud-based services, is also committing to using green power for all its electricity by 2030. The company aims to reduce energy consumption per unit of output in its operations and increase its renewable energy usage by engaging in green power trading, exploring investments in renewable energy projects, as well as adopting carbon offsets for some business segments while promoting a low-carbon ethos to its consumers and businesses. An internal review found the company's total greenhouse gas emissions were equivalent to 5.111 million tonnes of CO2 last year.

Far behind Asian manufacturers in building electric car batteries, US automakers and their suppliers are racing to develop a new generation of batteries that are cheaper, can pack in more energy and charge faster, says Bloomberg. The chemical makeup of batteries has become one of the hottest topics of discussion in the corporate boardrooms of General Motors, Toyota, Ford Motor and Volkswagen, as well as in the White House. With financial and technological support from the government, these companies are embracing start-ups working to remake the battery so they are not left behind by the motoring revolution unleashed by the electric car. Automakers’ ability to master battery technology could help determine which companies thrive and which are overtaken by Tesla and other electric car leaders.

On 4 March 2022, Sony and Honda announced a collaboration that would offer Honda the chance to launch a competitive electric car in 2025 using the complementary expertise of Sony in consumer entertainment. Sony, however, gets a strong automotive partner to help it launch an electric vehicle of its own and get a head start on Apple, which is rumoured to be developing its own electric car, says Fortune. “Although Sony and Honda are companies that share many historical and cultural similarities, our areas of technological expertise are very different,” Honda Motor CEO Toshihiro Mibe said. Information on how exactly the partnership will work has not been released yet.

Environmental lawyers ClientEarth are allegedly preparing legal action against the directors of Shell over the company’s climate transition plan, in what they said would be the first such case of its kind. “Addressing a challenge as big as climate change requires action from all quarters. The energy supply challenges we are seeing underscore the need for effective, government-led policies to address critical needs such as energy security while decarbonising our energy system. These challenges cannot be solved by litigation,” Shell stated. Shell has pledged to halve the emissions from its operations by 2030, but its net-zero target to reduce those from the use of its products – the bulk of emissions from an oil and gas company, was not far-reaching enough, ClientEarth said. With surging gas prices and energy bills, the power crisis in Europe is proving to be nothing short of challenging, underscoring the urgency to increase the development of renewable-energy sources, like green hydrogen. Click here to read our views about its growth potential.

Microsoft released its annual sustainability report, highlighting the company’s progress towards its sustainability goals, which include commitments to become carbon negative, water positive and zero-waste by 2030. Microsoft reported that its Scope 1 and 2 emissions fell 17% year-over-year, driven largely by the company’s renewable-energy purchases. Despite this progress, Microsoft’s full-scope carbon emission grew in 2021, as scope 3 emissions, which represent the majority of the company’s footprint, increased by 23% last year. The scope 3 emissions increase was driven by a variety of factors, including purchases of capital equipment, emissions related to the construction of new datacentres and offices, the increased use of products and creating emissions associated with powering products such as Xbox and Surface devices, the report claims.

Amazon has launched five pure-electric heavy goods vehicles (HGVs) in the UK, in a move that will mitigate 170 tonnes of greenhouse-gas emissions each year, reported Edie News. The new 27t vehicles will operate from Amazon’s fulfilment centres in Tilbury and Milton Keynes and are the online retailer’s first fully electric HGVs in Europe. Amazon has chosen DAF’s CF Electric model, which has an impressive 350kWh battery pack and a maximum range of 155 miles. The new trucks will be replacing five diesel trucks, resulting in Amazon expecting a 170-tonne reduction in its annual emissions footprint due to their implementation. Its Tilbury and Milton Keynes sites are already served by 100% renewable electricity, which will be used to charge the HGVs.

European banks could earn almost EUR 6 billion (USD 6.6 billion) in annual revenue if they choose to finance the transition to a more sustainable economy, their top regulator says.  Andrea Enria, leader of the European Central Bank’s supervisory board has stated that “the balance sheet choices banks will make about green and non-green assets will materially impact their bottom lines,” according to a recent Bloomberg report. Transition can also give a chance for lenders to boost their earnings, Enria added. He also claimed that there is an additional revenue opportunity for listed European banks based on the USD 2.3 trillion each year in financing that will be needed from global banks for the green transition, citing an average of estimates for the funding needs.

Just 1% of companies which submit climate change-related data to non-profit environmental disclosure platform CDP provide investors with the information they need to assess whether they have a credible plan for the transition to a low-carbon economy. According to Reuters, new data underscore the wide gap between companies announcing ambitious plans to help tackle climate change and their limited follow-up with detailed plans needed for them to have any chance of meeting their targets. CDP has emerged as the world's biggest repository of environmental data submitted on a voluntary basis by companies, which are under pressure from their shareholders to disclose how they plan to navigate the transition to a lower-carbon future. CDP analysed submissions from 13,120 companies, representing 64% of the world's market capitalisation, and found that just 135 companies met the grade of disclosing information for all 24 key indicators CDP has judged as vital for a credible plan.

The European Union (EU) should add an amber category to its green investment rulebook to flag investments that are not fully environmentally friendly but play a role in the transition, EU advisers will propose. The move follows criticism of a proposal by the EU executive to include gas and nuclear energy as green investments in its sustainable finance taxonomy, which will list activities that will help meet Europe's climate goals. The inclusion of gas and nuclear has split opinion in the European Parliament and among member states, and could yet be rejected. "The platform will shortly recommend an extended taxonomy framework which includes an amber category," Nathan Fabian, the chief adviser for the new system, told a meeting of the European Parliament's environment and economy committees, Reuters states.

The European Central Bank (ECB) is pushing lenders to be more transparent with information on climate and environmental risks they face after finding that just 15% publish data on the emissions they finance. The ECB has told banks “to take decisive action,” saying that only around half of institutions release relevant performance or risk data. The watchdog is expecting to see “major progress” by year-end, according to a top official. European authorities are looking at banks to prepare for potential losses from extreme weather or costs from heavily polluting companies going out of business. This year will see the ECB taking the most detailed look yet at climate risks on lenders’ balance sheets and says exposed banks will eventually face a higher bar for financial reserves, which could have implications for shareholder dividends, Bloomberg reports.

The New York Stock Exchange (NYSE), has announced the introduction of the NYSE Sustainability Advisory Council, a group of senior sustainability officers selected from NYSE-listed companies. According to the NYSE, the group will work to advise companies on environmental, social and governance (ESG) issues, identifying, developing and sharing best practices. Lynn Martin, President of the New York Stock Exchange, said: “ESG is a primary focus of the leaders I speak with, whether they are CEOs of our largest NYSE-listed companies or the founders of start-ups working toward their IPOs. ESG continues to move higher on the agenda as investors ask companies to broaden their focus to all stakeholders.”