auctusESG | Insights | September H2 2024
Data dashboard
A recent study from the Earth Track, Inc. found that the world is spending over US $2.6 trillion annually on subsidies that have significant negative externalities on the environment. These government-directed support towards tax breaks, subsidies and other spending, work against the Paris agreement goals and the 2022 Kunming-Montreal agreement (towards halting biodiversity loss), directly supporting deforestation, water pollution and fossil fuel consumption. This figure, equivalent to 2.5% of global GDP, was found to have increased by over US $800 billion annually, since 2022, mostly because of the consequences of the Ukraine war, causing fossil fuel subsidies to increase.
Read more here. Doug Koplow and Ronald Steenblik
News roundup
?India’s climate tech startups lack capital
A recent report titled ‘Innovation for Impact: Indian star-ups driving climate action’ by IIMA Ventures and the MUFG , sheds light on the glaring financing gap for climate-tech start-ups. India’s growing climate-tech ecosystem having more than 800 active start-ups face critical barriers in securing capital in the later stages; fewer than 3% of these start-ups have managed to raise series B funding or beyond. This calls for the need for attracting growth-stage capital and an enabling policy ecosystem to help them scale. Given the rise of electric mobility in the country, 85% of the funding is directed towards the transport and mobility space, with over 350 start-ups. Decarbonisation, circularity and waste-to-value, alternative fuels sector, including EVs, biofuels and hydrogen, have been recognised as the 5 breakthrough areas to reshape this space.
Read more here. Business Today and Palak Agarwal
India most vulnerable to floods in Asia
A recent 穆迪分析 report highlighted India’s flood proneness, with 44% of its population exposed to flood risks. China, Pakistan, Bangladesh and Indonesia follow suit, making South Asia highly vulnerable to floods. The report indicated that more than one-thirds of the world’s population live in areas susceptible to inland or coastal flooding. In contrast, Oceania is the least exposed to inland flooding and Europe and North Asia have the least risk from coastal flooding.
Corporate decarbonisation levels decline, however leading companies gain US $200 million annually
A 2024 BCG and CO2 AI carbon emissions survey covering companies responsible for 45% of global GHG emissions, researching into corporate emissions management, reduction and climate action, finds that only 9% of these companies comprehensively report on their scope 1, 2 and 3 emissions. Only 16% of these have set targets across these 3 scopes, with only 11% reporting emission reductions aligning with their targets set. However, the survey also indicates that these actions yield financial benefits, with these companies seeing an average US $200 million in annual financial gains, equivalent to 7% of their revenues. Furthermore, companies adopting measures such as using AI and calculating product-level emissions noted significant decarbonisation gains.
Read more here. edie and Sidhi Mittal
Dutch Bank ING to ditch climate laggards as clients
ING bank has announced their intention of dumping large clients if they aren’t making significant progress on reducing their climate impact. The bank, having assessed 2000 of its largest clients, have given companies an ultimatum of 2026 to make sufficient progress on their transition plans. They’ve observed that some banks have introduced restrictions on lending to specific sectors, carbon-intensive ones like coal, however, limited policies exist that apply across large chunks of their total portfolios. Shipping and commercial real estate were among the companies that lagged in disclosing climate plans.
Read more here. Financial Times and Attracta Mooney
Packaging tax to raise the prices of everyday items in UK
The cost of soft drinks, beer, kitchenware and small appliances such as kettles and toasters are likely to increase due to the extended producer responsibility (EPR) scheme which shifts recycling fees of household items to companies using the packaging. The initial estimates given by the Department for Environment, Food and Rural Affairs (DEFRA) indicates that this would lead to a 10% price increase in the case of glass in the highest cost scenario.
Read more here.? The Guardian and Zoe Wood
Taskforce on Inequality and Social-related Financial Disclosures (TISFD) launched
TISFD aims to bring attention to the financial risks of global inequality to companies and FIs, by fostering transparency and accountability. The taskforce aims to develop a global framework for companies and FIs to include more effective disclosures about impacts, dependencies, risks and opportunities related to social issues within their public reports, to address and manage social risks in financial reporting. ??
Read more here. 联合国开发计划署 and Taskforce on Inequality and Social-related Financial Disclosures (TISFD)
EU Commission proposes carbon footprint labels for flights
The European Commission has announced the launch of a consultation on a new proposed EU Flight Emissions Label (FEL), an initiative aimed at providing passengers with information about their flight’s carbon footprint. 80% of passengers travelling by air have declared that they would like to know their flight’s carbon emissions, but only 5% have access to this information, which is not standardised. FEL provides a single standard and a regulated methodology when estimating flight emissions.
Spotlight
Reducing GHG emissions in the data centre industry
领英推荐
Data centres are physical storage facilities that support global technology by housing servers and equipment needed for managing digital data, allowing businesses to efficiently scale their IT operations. These are usually notorious about the amount of carbon and GHG emissions they contribute towards the environment. Major Big-tech companies like Google, Microsoft, Meta, and Apple, which operate the largest data centres globally, are expected to emit around 662% more carbon—about 7.62 times—than the reported 273 metric tons of carbon emissions.
Data centres are essential for digital services that support daily life and economic growth, but their increasing presence raises concerns about their environmental impact. Significant energy consumption and carbon footprint present challenges for investors seeking sustainable investments. Data centres consume vast amounts of electricity to power their servers and cooling systems, contributing to greenhouse gas emissions.
Currently, they consume approximately 3% of the global electricity supply and are responsible for about 2% of total greenhouse gas (GHG) emissions. As demand for data processing and storage grows, it is anticipated that their contributions will soon account for 5-7% of world emissions. This alarming trend underscores the urgent need for data centres to adopt cleaner energy sources and enhance energy efficiency.
Data centres must pivot towards more sustainable investment strategies that genuinely reduce their carbon footprints and implement sustainable practices to lower greenhouse gas (GHG) emissions. Some of the ways to inculcate sustainable practices are as follows:
In conclusion, the data centre industry must commit to consistent and collaborative efforts to effectively reduce greenhouse gas (GHG) emissions. By implementing best practices in emissions accounting, reporting, and carbon pricing, data centres can not only enhance their operational efficiency but also contribute significantly to global climate goals. These combined efforts will pave the road for a greener, more resilient data centre ecosystem that responds to the critical need for environmental stewardship.
Featured events
auctusESG has had an eventful September with an intriguing line-up of in-house and external events.
Launch of the report ‘Climate transition: A roadmap for banks in emerging markets’ on 3rd September
Climate Transition Roadmap Report, in partnership with the Asian Bankers Association , presents a prescriptive guidance framework to help banks in emerging and developing markets to plan, develop, and implement a holistic climate transition strategy. While these markets are at varying stages in their development journey, most banks in these regions are at a nascent phase in their climate transition journey. The report aims to serve as a practical roadmap for banks outlining key activities for navigating this critical undertaking.
The launch and the panel discussion can be accessed here.?
CWNY Webinars
Nature related risks and opportunities: Financing nature-positive climate action in emerging markets on 23rd September
This webinar, held in collaboration with Association of Development Finance Institutions of Malaysia (ADFIM) , Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) , and Iora Ecological Solutions , focused on addressing the key challenges and opportunities in incorporating nature-related factors into decision-making processes at both the policy and financing levels. It aimed to accelerate the flow of capital towards nature-positive sectors in emerging markets. By bringing together finance professionals, policymakers, and natural capital experts, the event fostered valuable knowledge exchange and insights to drive the adoption and scaling of nature-positive solutions.
The webinar can be accessed here.
Beyond carbon: Risks and opportunities in financing non-CO2 GHG emission reduction in emerging markets on 27th September
This webinar, hosted in collaboration with Institute for Governance & Sustainable Development (IGSD) , focused on examining the key challenges and drivers for incorporating non-CO? emissions into decision-making across policy, industry, and finance. It also aimed to accelerate capital flows towards reducing Short-Lived Climate Pollutants (SLCPs) in emerging markets. By convening policymakers, finance professionals, industry leaders, academic researchers, and regulators, the event provided a platform for sharing knowledge and insights to scale up solutions for non-CO? emissions reduction.
The webinar can be accessed here.
Insights digest
auctusESG thought leadership
Read more here. Contributor: Mithun Nair
Market trends and reports
Read more here. Climate Bonds Initiative , Co-operators , United Nations Office for Disaster Risk Reduction (UNDRR) , Inter-American Development Bank and Cadlas
Read more here. Climate Policy Initiative , CDP , ICLEI , The World Bank Group , Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ) , Bundesministerium für Wirtschaft und Klimaschutz
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