Ending Greenwashing

Sadly, greenwashing and its perpetrators have been a common theme in this newsletter. However, recent moves in the UK and EU may mean the beginning of the end for the green sheen.?

In the UK, the Advertising Standards Authority (ASA) is banning ads that use terms like ‘carbon neutral,’ ‘net zero,’ and ‘nature positive’ when the underlying claim relies on offsets (buying credits, which can be shady, to offset the company’s impact).?

The ASA has a record of banning ads with misleading green claims . A Lufthansa ad got canceled earlier this year for false claims. The new policy is even stricter around how companies portray their climate and sustainability credentials. Jonny White , from leading advertising firm AMV BBDO, said, “The era of unspecific claims such as ‘environmentally friendly’ is over .”

Following suit, the EU approved new rules to ban carbon-neutral claims that include offsets and generic terms like ‘environmentally friendly, ‘natural,’ ‘biodegradable,’ or ‘eco’ if not substantiated by evidence. EU Justice Commissioner Didier Reynders said of the new rules, “This proposal aims to strengthen the fight against greenwashing by banning practices that mislead consumers on the actual sustainability of products .”?

Regulation should be one of many things concerning greenwashers. Reputation-ruining claims and court cases against those who obfuscate their climate or sustainability credentials have become commonplace. Just this week, pension funds labeled green were accused of greenwashing because they invest in oil and gas , and a court certified a lawsuit against TotalEnergies alleging false green claims .

Global Warming to Hit 1.5C in Under 5 Years

A new analysis from the World Meteorology Organization (WMO) forecast a 66% chance that global average temperatures will exceed 1.5C above pre-industrial temperatures by 2027. This is significant because it's the benchmark that most scientists agree will tip the planet into the worst effects of climate change.?

The analysis said that due to the coming El Ni?o and human activities, there is a 98% chance that one of the next 5 years will be the hottest ever and that the period between now and 2027 will likely be the hottest ever five-year period. Petteri Taalas , Secretary General of the WMO, said, “This will have far-reaching repercussions for health, food security, water management, and the environment .”

Biden’s Climate Agenda Hangs in the Balance

In stark contrast to the EU’s consensus on a progressive climate agenda, Biden’s climate plans have been significantly hampered as he makes concessions to both Republicans and some in his own party.?

West Virginia Democrat Joe Manchin this week claimed he would repeal the Inflation Reduction Act (IRA) - a law that, without his last-minute approval, would not exist. The IRA is Biden’s signature climate achievement and the most significant climate law in US history - funding upwards of $369bn for climate and renewable energy.?

Manchin soured on the law after EPA took action to limit carbon emissions from power plants. In an interview on Fox, Manchin said he is unhappy with the Administration’s climate agenda and “I will vote to repeal my own bill .” To appease Manchin, Biden this week approved a permit for a West Virginia gas pipeline despite opposition from climate experts and environmental groups.

As the debt ceiling approaches, a Republican proposal to reduce government spending is also looking to gut the IRA . The GOP’s bill to lift the debt ceiling would eliminate tax credits for electric vehicles and solar panels and an array of other climate incentives. RL Miller , a member of the Democratic National Committee, called the proposal “a hostage situation .”

Different State of Mind

At the state level, Republican lawmakers continue their anti-ESG and anti-climate crusade. Montana, this week approved the most far-reaching anti-climate bill yet . Under House Bill 971, state agencies are barred from considering climate change in permits that require environmental reviews, including coal mines and power plants. The law comes as a state judge mulls over a case brought by 16 youths, who say the state's pro-fossil fuel stance, violates their right to a “clean and healthful environment.”

In Texas, state legislators will fight national regulations to reduce methane emissions in spite of a new report forecasting 19,000 and 35,000 new Texas jobs as oil and gas companies are forced to plug leaks, improve monitoring, and upgrade wells.

Climate Investment Continues to Grow

Jigar Shah , the director of the Department of Energy’s loan office program, wields $400 billion to advance clean energy. The loan office program’s budget ballooned ten-fold due to the IRA, and Shah, a former host of a popular energy podcast, now holds the keys to this vast wealth.?

Shah is a proponent of solar and other clean energies, saying that they are the “largest wealth-creation opportunity of our lifetime .” And he is implementing his signature “Jigar Shah Rule” that “Countries should not have stupid policy.” He backed that up by showing that the overall DOE loan portfolio has made a profit, and its losses are similar to commercial banks.

To help investors incorporate carbon into their decision-making, BCG released this report featuring some important lessons for investors to start their low-carbon investing journey.

The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer.?

Other Notable News:

• EPA announces new stricter policy for the disposal of coal ash . Dumping of coal ash causes heavy metals, such as mercury and lead, to leach into soils and waterways. This new rule requires coal companies to monitor groundwater supplies and clean up any contamination.
• 94% of all UK and EU companies plan to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD) —even the majority of companies that are not covered by the mandate plan to comply.
• A few weeks back, we shared ChatIPCC . This week the world was introduced to ChatESG. The large language model enables users to ask ESG questions and get in-depth answers and gives sources. Lucidaxon is offering a demo on its website .
• Turkmenistan is releasing a mind-boggling amount of methane . Satellite imagery has shown methane leaks from just two of the main fossil fuel fields in Turkmenistan released the same amount of emissions as the whole of the UK in 2022.?
• The number of ocean-faring birds has reduced by 70% since 1950 ; recent research has suggested that restoring their numbers will increase carbon sequestering systems in the ocean, like plankton and seaweed.?
• Despite embracing clean energies like solar, some countries rich in oil and gas find it very difficult to move away from fossil fuels . Countries like Trinidad and Tobago - the second largest exporter of liquified natural gas in the Americas, say that even though clean energies are important, as long as there is a market for fossil fuels, they will continue to extract.?
• Climate scientists have been under increased attacks from climate deniers since Elon Musk took over Twitter .?

Notable Podcasts:?

• In this week’s Harvard Business Review (HBR) Climate Rising podcast . The team hosted another Harvard-affiliated podcast, the SkyDeck. The episode focuses on whether we can really engineer our way out of the climate crisis using carbon capture and storage technologies.
• This week’s The Climate Question podcast from the BBC explores whether we can trust Google on the carbon footprint it gives when booking travel. Recent evidence has shown that Google has been vastly underestimating the emissions of their plane journeys and overestimating emissions from train journeys. The presenter asks whether we can trust any carbon calculations and if people actually care.