What's going on in the world of ESG, CSRD, CSDDD, SDGs etc...
1. EXTREME WEATHER IS URGENT REMINDER OF CLIMATE CRISIS
You don’t need me to tell you, but the world is in a climate crisis. Today. Now.
We say this to the well-meaning sustainability workers who are guiding their companies on a compliance journey. Sustainability is not a one-time event. Resilience matters.
It has been another week of extreme weather events in Europe, with at least seven people dying in wildfires in Portugal, while Storm Boris caused landslides and floods in Italy having left vast swathes of central Europe underwater and more than 20 people dead.
This followed devastating floods elsewhere last week, which left villages submerged in Myanmar and chaotic scenes impacting more than a million people in Nigeria.
Please ask your company to take real action.
2. WORLD ON TRACK FOR ANOTHER YEAR OF SOLAR GROWTH
Solar power continues to surge in 2024 as the world is on track to add 593GW this year.
Analysis of national monthly data for solar capacity additions shows that the world will - once again - beat forecasts, even though expectations are higher than ever.
Ember’s analysis of the latest data on monthly capacity installations shows that the world is on track to reach 593 GW of solar installations by the end of this year. This would once again surpass most industry forecasts and comes after 2023 showed record growth in solar installations of 86% compared to 2022.
Countries need to exploit the high levels of solar capacity being built and ensure the continued build-out of capacity in the coming years.
Accelerating growth like this gives us a fighting chance of replacing coal and oil.
3. GLOBAL SUBSIDIES OF $2.6T DRIVE HEATING, DESTROY NATURE
New research from Earth Track has found that the madness continues.
Governments continue to provide billions of dollars in tax breaks, subsidies and other spending that directly work against the goals of the 2015 Paris climate agreement and the 2022 Kunming-Montreal agreement to halt biodiversity loss, driving deforestation, water pollution and fossil fuel consumption.
Examples include subsidies for large fishing vessels that drive overfishing, and policies that subsidise petrol, synthetic fertilisers and monoculture crop production.
Christiana Figueres, who was UN climate change head during the Paris agreement negotiations, said these subsidies are an existential issue.
Can’t be clearer than that.
4. SEC SHUTS DOWN ESG AND CLIMATE ENFORCEMENT ARM
The US Securities and Exchange Commission shut down its Enforcement Division’s Climate and ESG Task Force, disbanding a group of lawyers who have been fighting misleading ESG disclosures. The task force was critical to (for example) the $25m settlement from Deutsche Bank AG for misleading investors.
The SEC are distancing themselves from the term “ESG” amidst a Republican-led backlash. Last year they dropped ESG from a list of priorities for its examiners checking investment firms for compliance.
Pending ESG regulations, including reporting on workforce management and board diversity, are likely to remain unfinished in the time SEC Chair Gary Gensler has left before a new president takes office.
Politics (and money) drive everything.
5. MICROSOFT TO OPEN THREE MILE ISLAND NUCLEAR PLANT FOR AI
The dormant Three Mile Island nuclear plant would be brought back to life by its owner, Constellation Energy, to feed the voracious energy needs of Microsoft in a deal where Microsoft buys all its output for 20 years.
The restart of Three Mile Island, the site of the worst nuclear accident in U.S. history, is part of a quest to find enough electric power to support the boom in artificial intelligence.
Data centres from Microsoft and others have become so big and energy intensive that they are straining existing power supplies.
“The energy industry cannot be the reason China or Russia beats us in AI,” said Joseph Dominguez, chief executive of Constellation.
There’s a lot to think about here.
6. EU DEFORESTATION REGULATION IS UNDER INCREASING PRESSURE
The EUDR requires companies importing deforestation-linked goods, (e.g. cattle, cocoa, coffee,) to the EU must prove from the start of 2025 that they don’t cause deforestation.
Many EU and non-EU countries want the date postponed.
The lack of clear info and tools on how to link the land where products originate with the deforestation is a concern.
Brazilian ministers say the EUDR could reduce exports by $15B and hurt small-scale farmers. German Chancellor Olaf Scholz also asked “that the regulation be suspended until the open questions… have been clarified.”
Activists warn that any postponement will result in more emissions and deforestation and “will ultimately harm agribusiness.”
This is a tough one to resolve. We would like the EU to hold firm. Deforestation is killing us.
7. GREEN-LAUNDERING IS HIDING THE FINANCING OF FOSSIL FUELS
According to the Tax Justice Network (TJN), banks appear to understate their exposure to the largest oil, gas, and coal companies.
The banks just comply with self-imposed sustainability metrics, while hiding their true relationships with profitable O&G clients that they might be expected to cut ties with.
TJN’s analysis of fossil fuel financing of the world’s largest 60 banks found that 68% of the financing is given to subsidiaries in secrecy jurisdictions with weak transparency laws. Then the fossil fuel companies move the funds from those jurisdictions to expand their fossil fuel activities in other locations.
This is appalling. Banks are responsible for the use of the funds they provide, and more transparent reporting is needed.
8. GHG EMISSIONS DROP IN CALIFORNIA DUE TO CLEAN FUEL MOVES
California’s GHG emissions have dropped considerably in recent years across most sectors.
The release of GHG pollutants declined by 9.3m metric tons in 2022 compared to the previous year, largely due to the increased usage of clean fuels and zero-emission vehicles, according to a report from the California Air Resources Board.
That improvement from 2021 to 2022 alone is equivalent to removing more than 2.2m gasoline-powered cars from California’s roads for an entire year.
From the year 2000 to 2022, overall emissions dropped by about 20%, while the state’s GDP surged by 78%.
One state at a time. California is leading.
9. AZERBAIJAN OUTLINES COP29 PRIORITIES TO LAUNCH FINANCE FUND
Azerbaijan, the COP29 host, has said it will create a climate fund, sponsored by fossil fuel-producing countries.
It says it wants to build a global consensus around climate action, with several themes, such as green energy corridors, hydrogen and renewable storage.
The Climate Finance Action Fund will include voluntary contributions from fossil fuel-producing countries and companies across oil, gas and coal. "Members will commit to transfer annual contributions as a fixed-sum or based on volume of production."
Baku is being called the "finance COP," and Azerbaijan has a pivotal role to help bridge the divide on climate finance between developed and developing parties.
Let’s see what emerges.
