Invert Climate Roundup - June 2
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A new analysis by PwC reveals that the cost of corporate carbon offsetting could increase significantly in the coming years as businesses strive to achieve Net Zero targets. The report estimates that by 2030, the cost of purchasing the same volume of offsets reported in 2022 by FTSE 350 companies could rise by 256%, reaching over ￡135 million. Furthermore, if only removal offsets are permitted, the cost could surge by 1,051% to ￡438 million by 2030 and peak at ￡2.6 billion in 2037. The lack of transparency in reporting offset costs poses challenges for investors and stakeholders in assessing the impact on companies' Net Zero plans.
Invert Insights:
It is crucial for companies to consider the potential financial impacts of increasing offset prices as they engage in their net-zero planning. In order to mitigate the risk of rising offsetting costs, companies should continue to invest in decarbonization initiatives wherever feasible and consider entering longer-term purchase agreements or project co-investment to address any residual emissions.?
France has implemented a ban on domestic short-haul flights for trips that can be completed in under two-and-a-half hours by train. However, the new law emphasizes that train services on these routes must be frequent, punctual, and well-connected to cater to passenger requirements.?
Invert Insights:
Opting for train travel instead of a domestic flight can reduce an individual’s emissions by approximately 84%. Domestic flights tend to have higher CO2 emissions per passenger-km compared to short-haul international flights; and long-haul flights are slightly lower still.?
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HSBC has announced the launch of the HSBC ESG Risk Improvers Index, which aims to track the performance of companies expected to financially benefit from improvements in ESG risk. The index will track the performance of 1,000 liquid stocks, and assess their risk using public sources like ESG related news and NGO data.
Invert Insight:
By focusing on changing ESG sentiment versus static ESG ratings, this new index aims to deliver improved financial performance by focusing on companies generating positive news within the general public.?
Japanese financial services institution Sumitomo Mitsui Banking Corporation (SMBC) invested $10M into the Closed Loop Circular Plastics Fund. The fund aims to support innovation and infrastructure for the recovery and recycling of plastics in the U.S. and Canada.?
Invert Insight:
Plastics can take hundreds of years to decompose and thus their recycling is a significant opportunity to promote the circular economy and extend the lifecycle of these long-life materials beyond a single-use. Opting for recycling helps mitigate environmental pollution and harm by reducing the accumulation of plastic waste in landfills and oceans, conserving resources, and minimizing long-term ecological repercussions.
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