global perspectives
Green bonds, decarbonisation wins and food chain innovations: key sustainability news
What news led the sustainability agenda in May? We cover the macroeconomic, corporate and financial stories that sustainable investors need to know.
As Earth's climate continues to warm, researchers predict wild animals will probably be forced to relocate their habitats to regions with large human populations -- dramatically increasing the risk of a viral jump to humans that could spark the next pandemic, Science Daily says. This link between climate change and viral transmission was described by an international research team led by scientists at Georgetown University and published on 28 April 2022 in Nature. The scientists conducted the first comprehensive assessment of how climate change will restructure the global mammalian virome. As they encounter other mammals for the first time, the study projects they will share thousands of viruses, bringing greater opportunities for viruses like Ebola or coronaviruses to emerge in new areas. It will also make them harder to track, and can allow spreading into new types of animals, making it easier for viruses to jump across a "stepping stone" species into humans.
The European Commission selects 100 cities for participation in the Cities Mission program, which aims to deliver 100 climate-neutral and smart cities by 2030. According to ESG Today, the cities will receive EUR 360 million over the next two years to address areas including clean mobility, energy efficiency and green urban planning. The initiative is part of Horizon Europe, the EU’s EUR 95 billion funding programme for research and innovation aimed at tackling climate change, achieving the UN’s Sustainable Development Goals (SDGs), and boosting the EU’s competitiveness and growth. In addition to delivering 100 climate neutral cities by 2030, the aim is to ensure that these areas act as innovation hubs to enable all European cities to follow suit by 2050. Addressing cities is a major step toward reaching the European Green Deal goal for a climate neutral EU by 2050. Interested in learning more about our climate engagement efforts with EU companies? Click here to read our latest Stewardship Summary.
European Union exports of recyclable raw materials, including waste, scrap and other by-products, hit a record high of 40.6 million tonnes last year, the bloc’s statistics office says. According to Reuters, Eurostat data showed the exports to non-EU countries, almost half of them being ferrous metals such as iron and steel, were up 2 million tonnes from 2020 and up 80% from 2004. EU imports of recyclable raw materials, mostly organic products such as wood, paper and textiles made with natural fibres, reached 46.8 million tonnes in 2021, up 7% from 2004. To help drive the global transition toward a circular economy, the Alliance to End Plastic Waste and LOIM have joined forces to launch a circular plastic fund. Click here to learn more.
South Africa's government is still analysing details of a USD 8.5 billion financing package offered by rich Western nations last year to help the country shift away from coal, Reuters reports. Environment minister Barbara Creecy made the announcement on 10 May. The United States, Britain, France, Germany and the European Union pledged the funding during the COP26 climate conference in Glasgow, Scotland, in November. South Africa is the world's 12th-biggest emitter of climate-warming gases and a major coal producer and user. "I think that the issue of speed is important, but the issue of the nuances and the quality of the decision is also important," Creecy said.
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[1] Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or securities. It should not be assumed that the recommendations made in the future will be profitable or will equal the performance of the securities discussed in this document.
DHL Global Forwarding1 decarbonises 100% of its global LCL ocean freight shipments. Logistics giant Deutsche Post DHL Group’s air and ocean freight business DHL Global Forwarding announced that it has neutralised the carbon emissions of all less-than-container load (LCL) ocean freight shipments since January 2021. According to the European Maritime Safety Agency, shipping accounts for 3% of global greenhouse gas emissions and contributes to air pollution close to coastal areas and ports. The company’s GoGreen Plus service provides shippers the option of climate-neutral shipping through investments in internationally recognised climate protection projects to offset emissions generated during transport. The service aims to provide emissions reductions through carbon “insetting”, enabling shippers to replace conventional fossil fuels with sustainable fuel. To learn more about investing in the climate transition, click here to listen to episode 2 of our podcast: Ice cubes, burning logs and the road to net zero.
Biotech start-up VitroLabs1 secures USD 47 million to support plans to build the "world's first" pilot production plant for lab-grown leather, BusinessGreen says. Founded in 2016, VitroLabs has been developing what it describes as a new scientific process to cultivate animal cells for producing leather. It aims to develop the leather at commercial scale to curb the environmental and animal welfare impacts of traditional leather. The US firm says its mission is to create high-quality cellular cultivated animal leather materials "that meet the uncompromising standards of the luxury industry while drastically lowering environmental impact and furthering animal welfare."
Unilever1 is set to trial increasing the temperature of its ice cream freezers in a bid to lower energy use. CNBC reported that the consumer goods giant, which owns Ben & Jerry’s, Magnum and Wall’s, said the move could cut energy use and GHG emissions by around 20% to 30% a unit. Two pilots, one in Germany and one in Indonesia, are due to take place this month and next year. According to the firm, the industry standard for freezer temperatures in many markets is -18°C (around 0 degrees Fahrenheit). The temperature of freezers in the trials will be -12°C. Emissions from retail ice cream freezers represent 10% of the company’s value chain GHG footprint.
Tesco1 and WWF1 to dish out grants for sustainable food supply chain innovations. According to BusinessGreen, Tesco is to pair its suppliers with start-ups and innovators geared toward reducing the environmental impact of the food supply chain, under a new funding accelerator programme launched in collaboration with WWF. The supermarket giant said the programme - dubbed “Innovation Connections” - will help identify suppliers well positioned to help scale up new green ideas and technologies, and support start-ups to pitch their sustainable innovations directly to firms in the food supply chain. Successful bidders will then work with Tesco's supplier partners to pilot and scale their innovations, with each receiving up to GBP 150,000 in funding support.
France’s Cie1. de Saint-Gobain produces the world’s first carbon-neutral flat glass using recycled materials and green energy, Bloomberg says. The development shows how manufacturers of building materials are joining other industries in investing to slash emissions. The zero-carbon flat glass, made for one week at a plant in Aniche, northern France, is part of Saint-Gobain’s strategy to reach carbon neutrality by 2050. Saint-Gobain “succeeded in adjusting all of the furnace’s technical parameters to this dual challenge of operating with 100% recycled material and 100% biogas, while ensuring the right optical quality of the glass,” the manufacturer said in a statement. It used about 25% recycled-glass content in its output last year. At LOIM, we believe companies that make the effort to transition to net zero will attract investors and increase in value, as a nature-positive world is among the most significant global economic transformations in history. To learn more about our investment philosophy, click here to watch a video with Thomas Höhne-Sparborth, Head of Sustainability Research.
Kraft Heinz1 announces plans to develop a paper-based version of its iconic HEINZ Ketchup bottle, in a move aimed at advancing the company’s sustainable packaging and climate goals. According to ESG Today, the new paper-based renewable and recyclable bottle, which would be made from 100% sustainably sourced wood pulp, is being developed in collaboration with sustainable packaging technology company Pulpex. Pulpex is a first-of-its-kind technology that forms bottles from wood pulp using 100% renewable feedstocks from responsibly managed forests. It was launched in 2020 as a collaboration between venture management company Pilot Lite and beverage alcohol company Diageo.
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1 Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or securities. It should not be assumed that the recommendations made in the future will be profitable or will equal the performance of the securities discussed in this document.
The green bond market is coming back to life with the biggest ever corporate sale. Bloomberg reported that Dutch power company TenneT Holding BV1 sold EUR 3.85 billion of green debt across four maturities to fund greener electricity grids across Europe. It is the largest deal for the environmental debt from a company, topping previous efforts from Honda Motor Co.1 and Engie SA1.
New emissions disclosure standard for private equity released. Climate-focused private equity initiative Climate International released a report introducing a standard for accounting and reporting GHG emissions for the private equity sector, developed in partnership with sustainability advisory firm ERM. According to the report, private equity GPs face increasing pressure to report on emissions and set climate targets for their portfolios, but many lack sufficient processes for carbon accounting, target setting and benchmarking. It suggests an approach to collecting, calculating and reporting of carbon footprint data, according to ESG today.
The Alliance to End Plastic Waste (“Alliance”) and Lombard Odier Investment Managers (“LOIM”) announce plans to launch a new circular plastic fund. The fund will aim to raise USD 500 million from institutional and other accredited investors for scalable solutions to removing plastic waste, increasing recycling, and driving the global transition towards a circular economy for the plastic value chain. The Alliance will serve as a cornerstone investor. There is tremendous opportunity for turning plastic waste into a resource, while driving economies of scale and economic returns. According to industry estimates, the transition to a circular value chain for plastic packaging represents a potential USD 1 trillion global economic opportunity by 2030. The fund will target key themes that can directly contribute to a circular economy for plastic and accelerate opportunities in overall waste management (both upstream and downstream) —including collection and sorting infrastructure, and design solutions for improved plastic durability and reuse.
Some of the UK’s biggest money managers are launching funds and investment products aimed at generating profits from a long-overlooked corner of green finance: biodiversity, Bloomberg report. Examples include Aviva Plc1, which has opened a natural-capital equity fund to invest in the likes of plant-based protein company Beyond Meat Inc1. Jupiter Asset Management1 has added to its series of so-called ecology funds, and Schroders Plc1 and Climate Asset Management1 − a joint venture between HSBC Global Asset Management and Pollination1 − are backing carbon-offset projects that offer biodiversity perks. The decline in biodiversity poses a growing long-term risk, not only to the planet, but also to the investment industry’s future returns. The World Economic Forum estimates that roughly half of global gross domestic product, or about USD 44 trillion of economic value, depends on the natural world in some way, meaning its destruction represents an enormous financial loss. For more on what we are doing to leverage and protect nature by keeping Earth within planetary boundaries, click here to read about our Natural Capital strategy.
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1 Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or securities. It should not be assumed that the recommendations made in the future will be profitable or will equal the performance of the securities discussed in this document.
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