Sustainability & ESG Insights June '24: Australian regulatory push-back on greenwashing & EU Election Results

??Via this monthly newsletter, we'll share more knowledge and content about what's arguably the most important domain of our generation: Sustainability and ESG. The goal is to inspire and share insights so each and every one of us can make a difference in the Environmental, Social and Governance domain we call Sustainability.

Valuable ESG and Sustainability news of June '24

- China Aims for Sustainability Disclosure Standard by 2030

- EU Election Results and their Impact on ESG Investing

- Australia’s Regulatory Push Against Greenwashing

- EU Launches €650 Billion Climate City Capital Hub to Drive Net-Zero Goals

- Japan Aims for Climate Neutrality

- And more…

China Aims for Unified Corporate Sustainability Disclosure Standard by 2030

China recognizes the critical role of ESG considerations in shaping sustainable economic development. As part of this commitment, the Ministry of Finance has initiated a process to create unified corporate sustainability disclosure standards. Here are the key points:

The Draft Guideline:

• China’s Ministry of Finance has posted a draft guideline titled “Corporate Sustainability Disclosure Standards — Basic Standards” on its official website.
• The goal is to establish a consistent framework for sustainability disclosures across Chinese companies.
• Currently, corporate disclosures in China are largely voluntary and lack uniform standards.
• The proposed guidelines will help companies engage more effectively in global trade, enhance their competitiveness, and align with international practices.

Gradual Implementation:

• Recognizing the diverse development stages and disclosure capabilities of Chinese companies, the guidelines won’t impose a one-size-fits-all approach.
• Initially, the focus will be on listed companies, gradually extending to non-listed ones.
• By 2027, China aims to introduce basic corporate sustainability disclosure standards and climate-related disclosure standards.

ESG Momentum in China:

• Since April, China has taken significant ESG-related measures:
• These actions reflect China’s commitment to addressing sustainable risks related to climate change, environmental pollution, and workers’ rights.

In summary, China’s push for unified sustainability disclosure standards by 2030 demonstrates its dedication to responsible business practices and aligning with global ESG trends. As companies worldwide increasingly prioritize sustainability, China aims to be at the forefront of transparent reporting and accountability.

Read more via the link below:

EU Election Results and their Impact on ESG Investing

The recent European Union (EU) parliamentary elections have sent shockwaves through the world of sustainable investing. With a significant shift towards right-wing and nationalist parties, the future of the EU’s ambitious environmental, social, and governance (ESG) agenda has been called into question.

The 2019 EU elections were hailed as a “green wave,” with the Greens making significant gains and paving the way for the European Green Deal. However, this time around, the Greens have suffered heavy losses, reflecting a growing disenchantment among voters with the perceived costs and inconveniences associated with the green transition.

A Populist Pushback:

• Populist and nationalist parties criticize the EU’s ambitious climate agenda.
• Policies like the 2035 ban on new petrol and diesel cars are viewed as ideological “folly” that must be corrected.
• Political pressure to water down or delay such measures is expected to intensify.

The shift in the political landscape casts a shadow over the EU’s Green Deal, aimed at achieving climate neutrality by 2050. The increased presence of right-wing and Eurosceptic parties in the European Parliament makes passing new climate and environmental legislation more challenging. While a complete reversal of existing climate policies is unlikely, concerns remain about potential weakening or delays.

Investor Considerations:

• ESG investors should assess the impact of political changes on their portfolios.
• Diversification across regions and sectors can mitigate risks arising from policy shifts.
• Engaging with policymakers and advocating for sustainable practices remains crucial.

In summary, the recent EU elections have introduced uncertainty into the ESG landscape. Investors, policymakers, and businesses must stay informed and agile as they navigate the evolving political landscape and its implications for sustainable investing.

Read the details via the link below:

Australia’s Regulatory Push Against Greenwashing

In response to the growing trend of greenwashing — where companies exaggerate their environmental, social, and governance (ESG) credentials — the Australian government is taking decisive steps to ensure transparency and credibility in sustainable investments. Here are some of the key points to look for:

ESG Labeling Requirements: Australia plans to introduce strict ESG labeling rules for investment products marketed as “sustainable.” This extends to superannuation funds, aiming to provide clear and accurate information to empower investors.

Climate Disclosures: The Australian Accounting Standards Board is developing climate disclosure guidelines for large businesses and financial institutions. These guidelines will enhance risk assessment and align with global best practices.

Active Policing and Enforcement: Australia actively monitors the ESG market, ensuring accountability for claims. This proactive approach distinguishes it as a responsible financial hub.

Timeline and Benchmarking: The regulations are set for 2027 rollout. Australia benchmarks against global standards to create a robust ESG framework.

In summary, Australia’s regulatory landscape is evolving to promote authentic ESG practices, combat greenwashing, and safeguard investor interests. As the APAC region looks to enhance sustainability, Australia’s proactive stance sends a powerful message: ESG claims must withstand scrutiny, and genuine commitment to sustainability matters more than ever.

Read more about it via Sustaira 's article below!

EU Launches €650 Billion Climate City Capital Hub to Drive Net-Zero Goals

The European Commission has launched the Climate City Capital Hub to provide financial support and advice to cities aiming for climate neutrality. With a €650 billion investment target, this initiative will leverage public and private capital, supported by the European Investment Bank (EIB). A group of 112 cities committed to eliminating their net greenhouse gas emissions by 2030 will require a combined €650 billion in investments to fulfill this pledge, according to a European Union initiative.

Project Overview:

• NetZeroCities, coordinated by EIT Climate-KIC, supports European cities in achieving climate neutrality by 2030.
• Funded by Horizon 2020, it aims to address greenhouse gas emissions reduction challenges.

Key Objectives:

• Develop a service-oriented platform for cities.
• Co-create net-zero solutions inclusively.
• Build capacity for systemic change, citizen engagement, and financial structuring.
• Promote tools and resources accessible to all cities.

Impact and Mission:

• Enable cities to lead toward an inclusive, climate-resilient future.
• Seek to scale activities across 100 cities, aligning with the EU’s Mission 100 Climate-Neutral and Smart Cities by 20301.

Feel free to explore the full article for more details!

Solar Power Installations Surge

Europe’s Solar Power Surge: A Shift Towards Storage Solutions

In a remarkable turn of events, Europe has recorded an unprecedented number of hours with negative power prices this year. This is attributed to a mismatch between demand and supply as solar power generation soars.

The surge in solar power generation has led to an oversupply during certain periods, causing power prices to dip into the negative. This situation presents a unique opportunity, potentially catalyzing a shift in investment towards much-needed storage solutions.

As we continue to transition towards renewable energy sources, the need for efficient and scalable energy storage solutions becomes increasingly apparent. The current scenario in Europe underscores this need, highlighting the importance of investment in this area. As we strive towards a sustainable future, addressing this need will be crucial.

Here’s a link to the full article:

EU Calls for a Common Sustainable Food Systems Framework

The European Union (EU) is advocating for a common framework for sustainable food systems. This call to action was made by Dirk Jacobs, the director general of FoodDrinkEurope. The proposed framework would align all industry players towards sustainability, ensuring that food systems are environmentally and socially responsible.

The EU’s commitment to sustainability is evident in its initiatives like the Farm to Fork and Biodiversity Strategies within the European Green Deal. These strategies aim to transform EU food systems, making them sustainable and resilient. Achieving climate neutrality is a key goal, and sustainable food systems play a crucial role in this transition.

In summary, the announcement emphasizes the importance of a common framework for food systems in the EU. This framework promotes sustainability and resilience across the entire food chain, ensuring that the EU’s food systems are prepared for the future.

Feel free to explore the full article for more details:

Global Carbon Removal Market Set To Hit $100B Annually By 2035

A recent report by Oliver Wyman, in collaboration with the City of London Corporation and the UK Carbon Markets Forum, reveals that the global carbon dioxide removal (CDR) market could reach up to $100 billion a year between 2030 and 2035, provided barriers to scaling are addressed.

• CDR projects aim to remove and durably store carbon dioxide from the atmosphere.
• The market is gaining interest from corporate purchasers, investors, and project developers due to its potential to address hard-to-abate greenhouse gas emissions.
• Over $30 billion has already been invested globally in anticipation of CDR growth.
• However, current demand for CDR credits needs to scale 3-5 times to support existing investment levels.
• Major barriers include the lack of guidance on removals in decarbonization targets and the absence of universally agreed standards on quality.
• Key actions to address these barriers include articulating the role of removals in net-zero strategies, providing guidance to companies, and establishing clear thresholds for monitoring and reporting.

In summary, the successful funding of CDR projects underscores the growing recognition of their role in the transition to a more sustainable future. Let’s continue championing climate solutions! ??

Feel free to explore the full article for additional insights:

Japan Aims for Climate Neutrality

The Japanese government announced in June they are preparing to a comprehensive strategy aimed at decarbonization and industrial policy by 2040. To be called the GX2.0 Strategy (after ‘Green Transformation’). Some key points to this strategy that we know so far:

• It will set out how the country aims to achieve the ambitious target to be net-neutral by 2050
• Prime Minister Kishida highlights the areas where investment are needed to aid this transformation: especially AI technology, and decarbonised power generation.
• Of course, for Japan power and energy security is a high priority. Therefore, the announcement hints at a possibility for subsidies to mitigate energy price fluctuations.?

Prime Minister Kishida had this to say: “At this conference, we have held discussions 10 times so far on new mechanisms for major changes in energy policy. Starting today, we have resumed discussions and presented a system that will actually work, providing answers one by one in the form of laws, budgets, tax systems, markets, and international certification.”

In summary the plans are ambitious but very needed. And will depend on many sectors working in close collaboration to succeed, but if they do should see country meet its ambitious targets.

Read more here:

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