What's going on in the world of ESG, CSRD, SDGs...
1. FRESH CHALLENGES OBSTRUCT NATURE RESTORATION LAW
It was all supposed to be agreed, but support waned at the last minute, and the vote on the Nature Restoration Law had to be postponed.
The nature law – to reverse habitat decline and restore degraded ecosystems – was agreed last year and was expected to pass.
But farmers' protests and domestic concerns led some countries to change their position. Italy and Sweden have opposed the law, Belgium and Austria are set to abstain, and the Netherlands decided to oppose. Now Hungary has also taken a negative position.
The net effect is that the EU Presidency is short of the Qualified Majority needed, so the vote was postponed. It may be back on the agenda (March 25), but this critical initiative is definitely under threat.
2. EU COUNCIL ADOPTS THE CRITICAL RAW MATERIALS ACT
The EU Council has adopted the European Critical Raw Materials Act, as demand for these rare earth materials is exploding.
Critical raw materials (CRMs) are raw materials of high economic value to the EU. There is currently a high risk of supply disruption due to the concentration of supply from China and a few other sources.
The act aims to increase and diversify EU’s critical raw materials supply; strengthen circularity, including recycling; and support research and innovation on resource efficiency and development of substitutes.
This is very positive development, but it also highlights the challenges we have in front of us to create a circular economy and to reduce our dependency on raw materials.
3. BIG OIL BOSS SAYS PHASE OUT OF OIL AND GAS IS 'FANTASY'
During CERAWeek, the annual fossil fuel fest in Texas, the CEO of Saudi Aramco Oil, Amin Nasser, says the world should abandon the ”fantasy” of phasing out fossil fuels and stop investing in wind and solar.
"We should phase in new energy sources and technologies when they are genuinely ready, economically competitive and with the right infrastructure," Nasser said.
Aramco has been told by the Saudi energy ministry to slow production because of slow demand. This is because of the record build of renewable energy globally.
In most parts of the world renewable sources are cheaper than fossil fuels. They would be even more competitive if the world’s governments stopped subsidising fossil fuels with $7 trillion per year.
4. UN WEATHER AGENCY ISSUES RED ALERT ON CLIMATE CHANGE
We really have to get on it folks. I don’t like the constant gloomy news, but we must act.
UN weather agency is calling a 'red alert' on global warming, citing record-breaking increases last year in GHGs, land and water temps, and melting of glaciers and sea ice.
The World Meteorological Organization (WMO) said there is a “high probability” that 2024 will be another record-hot year and warned that the world’s efforts to reverse the trend have been inadequate.
But the agency also acknowledged “a glimmer of hope” in trying to keep the Earth from running too high a fever. It said renewable energy generation capacity from wind, solar, and water power rose nearly 50% from 2022 to 510 gigawatts.
5. ONLY 7 COUNTRIES IN THE WORLD BREATHE SAFE AIR
Only seven countries in the world met safe air pollution levels in 2023. The World Air Quality Report uses data from more than 30,000 stations around the world. Of these, most breached safe levels of PM2.5.
PM2.5 particles, measuring <2.5 microns across, can be inhaled into lungs and reach the bloodstream, causing lung disease, high blood pressure, and premature death.
Bangladesh, Pakistan, and India have PM2.5 levels more that 10x the safe level. Cities in Europe have improved, with 54% classified as green (less than twice the safe level) in 2023 compared with 39% in 2022.
Example: Each year there are about 1,300 deaths in Ireland due to PM2.5. How we heat buildings, and how we travel, directly impact the quality of the air we breathe.
6. U.S. TEMPORARILY PAUSES SEC CLIMATE DISCLOSURE RULE
We had predicted that the SEC’s climate disclosure rule would face multiple legal challenges and so it is.
The Fifth Circuit U.S. Court of Appeals has halted the SEC’s new climate-related disclosure rule in response to a petition from oilfield services company Liberty Energy, and frac sand company Nomad Proppant, requesting a stay pending review of the rule.
The companies said the SEC’s proposal aims to “inject the SEC into the world of climate politics,” and to compel “a breath-taking volume of information, much of it highly speculative,” including on GHG emissions, and climate-related risks.
This is going to be a long road. Companies will have to report in the end, so for now only the lawyers will win.
7. AFRICAN DISMAY AS LOSS & DAMAGE HUB BASED IN GENEVA
Governments have ignored UN experts and decided to host, the network advising on the loss and damage caused by climate change, in Geneva, not in Kenyan capital Nairobi as requested.
The United Nations said the HQ of Santiago Network to manage Loss & Damage should be in Nairobi as it is a relatively cheap and home to other UN environmental bodies.
In what seems like a self-inflicted injury by the Global South, it appears the Latin American governments were angry that Panama had been ruled out and argued Nairobi was difficult to get to.
As one commentator said, it is “yet another stitch-up by the Global North to keep power away from the places where the impacts of climate change are being felt”.
8. TEXAS PULLS $8.5BN FROM BLACKROCK OVER ESG INVESTING
There is something ironic about Texas claiming that Blackrock is pursuing a liberal agenda and pulling state funds. Blackrock is still doing climate investing but has backed off on its prior fervent support of ESG.
Nonetheless, the Texas State Board of Education announced it was pulling $8.5Bn in funds from the investment giant, citing BlackRock’s “dominant and persistent leadership in the ESG movement.”
“BlackRock … have been using Texans’ money to push a left-wing agenda. Texas continues to fight back ... they cannot use taxpayer money to hurt Texas jobs and attack our energy dominance.”
This extreme polarisation is really hard to hear and even harder to address.
9. UNILEVER TO LEAVE TRADE GROUPS WHO BLOCK CLIMATE ACTION
Unilever is threatening to walk away from any trade association that doesn’t align its policy positions with the Paris Agreement goal of keeping global temp increases below 1.5 C.
The company reviewed 27 associations who represent sectors with high emissions and where achieving Unilever’s climate goals is likely to be highly dependent on their climate policy. Eight associations failed the test.
"We know that becoming fully aligned will not be straightforward, but over the next 12 months we will focus our attention on the practical and realistic actions associations can take," said Unilever CSO Rebecca Marmot, in a blog. "We want our associations to be catalysts for positive policy change, and if they can’t, then we reserve the right to withdraw our membership fees."
10. SWITCHING BANK? AVOID BANKS WHO FUND FOSSIL FUELS
It is one of the ways we can have control. If a bank lies about its funding of fossil fuels, then we can choose to bank elsewhere.
HSBC, Lloyds, NatWest and BNP Paribas are financing major North Sea oil expander Ithaca Energy, despite pledges to stop propping up new fossil fuel projects. Ithaca is a ‘pure play’ fossil fuel company, dedicated to expansion, with no intention to transition away from oil and gas.
Almost all of the banks are in the Net Zero Banking Alliance, which requires them to align with the Paris Agreement, meaning they should not lend to major oil expanders.
HSBC, Lloyds, NatWest and BNP Paribas, have promised to stop financing new fossil fuel projects. They are lying, or exploiting loopholes in their policies. You decide.
11. KLM FOUND GUILTY OF MISLEADING CLAIMS ON SUSTAINABILITY
The District Court of Amsterdam has deemed KLM’s ads as greenwashing and illegal.
Setting a major legal precedent, the judge ruled that (1) the claims that flying can be or is becoming sustainable is illegal, and (2) saying that offsetting can compensate is misleading and unlawful.
KLM’s claims that it was ‘committed to the Paris Agreement’ were also illegal, as claims about KLM’s targets paint “too rosy a picture”. This ruling will set a precedent for all those promoting net zero commitments.
This ruling says that companies can not claim they are tackling climate change when in reality they are fuelling the crisis.
We know you cannot board a plane without harming the planet. No argument there.
12. U.S. ANNOUNCES RULE AIMED AT EXPANDING USE OF EVs
The U.S. issued one of the most significant climate regulations in the nation’s history, a rule designed to ensure that the majority of new passenger cars and light trucks sold in the U.S. are all-electric or hybrids by 2032.
New tailpipe pollution limits would transform the US automobile market. A record 1.2m EVs were sold last year, but that’s just 7.6% of car sales. The new regulation targets 56%.
This is not a gas-car ban, but the rule limits levels of pollution so, by 2032, more than 50% cars sold would most likely be EVs.
However, it is on the political stage that this battle will be won or lost. The American Fuel & Petrochemical Manufacturers is already up in arms and Donald Trump is promising to reverse Joe Biden’s climate programs if he retakes the Whitehouse.
About the author
Donal Daly is the co-founder of Future Planet, an AI sustainability software company that helps shape the sustainability strategy, implement transition plans, manage ESG data and emissions, and automate reporting for regulatory compliance.
