Sustainability Progress Report #10

How is the EU managing its climate stripes?

Legend:?

??? climate change??

?? litigation?

???? regulatory/policy changes?

?? green energy

?? financing??

?? emissions?

?? decarbonization?

?? transportation

?? biodiversity

?? water

???? labour or human rights

? innovation

?? apparel

Regulatory talks.

The European Securities and Markets Authority (ESMA) released guidelines for the use of ESG and sustainability-related terms in investment fund names, following a sharp increase in ESG-focused funds. The guidelines remove the 50% sustainability-related threshold, maintain an 80% minimum proportion, and introduce a commitment to meaningfully investing in sustainable investments. (to the source ) ??????

The Council has adopted a regulation aiming to reduce CO2 emissions from heavy-duty vehicles, including smaller trucks, urban buses, coaches, and trailers. The updated rules set new targets for 2030, 2035, and 2040. Heavy vehicles are expected to reduce CO2 emissions by 90% by 2040. (to the source ) ??????

The EU is preparing for the upcoming wildfire season by pre-positioning 556 firefighters from 12 countries and assembling a dedicated fleet of firefighting aircraft. The Commission has allocated €600 million to acquire 12 new planes, ensuring a coordinated approach to preventing, preparing, and responding to wildfires, thereby mitigating their devastating impact. (to the source ) ???????

The European Commission has registered a citizen initiative 'Save the Planet by shifting taxation from labour to greenhouse gas emissions', aiming to strengthen the Fit for 55 Package, EU carbon pricing system, redistribute revenues to low-income households, and promote robust carbon pricing. (to the source and to the initiative ) ???????

The European Commission has introduced new recommendations to streamline renewable energy permitting procedures and auctions, aiming to boost demand, enhance industrial competitiveness, and achieve the European Green Deal. (to the source ) ??????

The Science Based Targets initiative (SBTi) is preparing a major revision to the Corporate Net-Zero Standard, which occurs every two to five years. The revision aims to align with scientific thinking, address challenges in scope 3 target setting, integrate continuous improvement, and improve interoperability with other SBTi standards. (to the source ) ??????

Industry talks.

Microsoft signed a large-scale carbon removal agreement with re.green , purchasing 3 million tons of credits over 15 years. This is part of Microsoft's carbon-negative goal by 2030. The deal follows a 1.5 million ton offset deal with Brazil-based Mombak. (to the source ) ????

Microsoft is implementing a strategy to reduce its Scope 3 emissions. The company has developed over 80 measures to reduce emissions, including a requirement for select suppliers to use 100% carbon-free electricity by 2030. The company’s sustainability progress includes use of renewable energy, renewable energy assets, and reduction in single-use plastics in packaging. (to the source ) ????

Green hushing, the practice of companies concealing their sustainability efforts, is a growing concern with companies worldwide. Even the companies that invest the most in sustainability engage in this practice, with 44% admitting it has become more challenging to communicate climate targets. In the US the leading cause is the Republican Party's anti-environmental stance, in Europe it is due to the Green Claims Directive, and Asian companies simply have insufficient regulatory guidance.? (to the source ) ????

Blue bonds mobilise capital to ocean-friendly projects and critical clean water resource management projects. They could offer a way to conserve ocean biodiversity and maintain its function as carbon sequester and oxygen provider while supporting recycling and offshore renewable energy projects. The shipping industry could benefit from blue bonds to achieve a 50% decarbonization target by 2050.? (to the source ) ????

Exxon Mobil faces criticism from environmental-focused investors at its annual shareholders' meeting, as the company has sued climate-focused groups Arjuna Capital LLC and Amsterdam-based nonprofit Follow This, accusing it of falling short of climate-related commitments. (to the source ) ????

Risk models used in 2023's lucrative bets are being tested by climate change-driven weather shocks, with catastrophe bonds and insurance-linked securities potentially underestimating high-frequency events like wildfires and thunderstorms. (to the source ) ??????

Biofuel firms are investing over $1 billion in China's first plants to convert waste cooking oil into aviation fuel for export and domestic demand.? (to the source ) ?????

The US has banned imports from 26 Chinese cotton traders and warehouse facilities, citing forced labour of Uyghur minorities in the Xinjiang region. The move, criticized by the Chinese embassy, restricts goods tied to the ongoing genocide. (to the source ) ????

LEGO Group plans to tie employee bonuses to annual emissions as part of its commitment to reducing emissions. The company aims to reduce emissions by 37% by 2032 and achieve net zero by 2050. The policy aligns with HR and ESG leaders' desire to integrate climate strategy into employee compensation. (to the source ) ????

Shein has not addressed excessive working hours in its supply chain, despite promises to do so. The investigation in January 2021 found workers working over 75 hours per week, with an average of 12-hour days. Shein claims to have established clear requirements on suppliers' wages and working hours. (to the source and to the report ) ????

The EU should appoint a dedicated carbon capture and storage (CCS) envoy to address climate change, despite mistrust. Industry groups and oil companies agree one is needed to convince the public of a solution where CO2 is captured at source and pumped underground for permanent storage. The EU's Net-Zero Industry Act requires firms to develop storage sites with an annual injection capacity of 50 million tonnes by 2030. (to the source ) ????

The European Commission predicts EU inflation will decrease to 2.2% next year, despite price increases in major commodities. The EU economy is expected to grow faster than competitors, with interest rates hiked and calmer markets cooling inflation. (to the source ) ????

The European Consumer Organisation filed complaints against Chinese online marketplace Temu under the Digital Services Act, alleging breaches of EU regulations, manipulation, and inadequate information about sellers. The organisation is calling for Temu's investigation, which has expanded to 49 countries. (to the source ) ??????

Estonia has vetoed EU plans to digitalise invoicing for value-added tax, potentially increasing online rental and ridesharing costs by up to 25%. The move, backed by Belgium's finance minister, also halts a wider tax reform aimed at modernising invoicing and reporting rules to combat fraud. (to the source ) ???

The German climate and transformation fund, which supports new heating systems, may face a potential €10bn shortfall due to decreased electricity prices. The state must provide more funds for feed-in tariffs, potentially increasing costs to €20bn. The German economy ministry is in close contact with grid operators. (to the source ) ???

Eleven EU members are urging their peers to support a new Nature Restoration Law to reverse biodiversity loss in Europe. Germany and Ireland have secured support from nine EU member states, while Hungary reversed its previous support vote. A vote on the Nature Restoration Law is expected during an EU Council summit on 17 June. (to the source ) ??????

Integrating AI-powered predictions into in-flight software can reduce contrail formation by 54%, demonstrating scalability and cost-effectiveness in aviation. The study shows that only 15% of flights need altitude adjustments, and the climate benefit leads to avoiding 20x the additional CO2. (to the source ) ???

German climate protesters have clashed with police as they attempted to break into Tesla's factory site near Berlin during a five-day demonstration against the company's local expansion plans. Tesla's controversial expansion of its European Gigafactory near Berlin was approved yesterday. (to the source ) ????

Global talks.

The UK government is considering using past emissions reduction goals to offset future emissions, requiring doubled reduction rates later this decade. This would allow the country to release more emissions without violating its own rules. (to the source ) ????

According to an EY report, global business leaders prioritise sustainability due to climate change challenges, with 54% prioritising it more than a year ago. 77% believe it will impact supply chains and ecosystems, while 67% of institutional investors fear stranded assets. 50% of CEOs seek sector input in shaping sustainability regulations. (to the source ) ????

A Deloitte survey shows that Generation Z and millennials are increasingly concerned about environmental sustainability and are pushing businesses to take action. The majority believe businesses should enable consumers to make sustainable purchasing decisions. 6/10 reported feeling anxious or worried about climate change, and 2/10 have changed jobs or industries. (to the source ) ???

The US and EU warned of import restrictions due to Chinese subsidies threatening their green industries, significantly underpricing solar (by 80%), offshore wind (by 73%), onshore wind (by 57%), and electric batteries (by 80%). China currently produces 80% of the world's solar PV modules, 60% of wind turbines, and 60% of electric vehicles and batteries.? (to the source ) ????

A study reveals that land-based climate change mitigation strategies like tree-planting benefit global biodiversity, but have negative impacts in certain regions. Researchers used an integrated assessment model to assess the impacts of bioenergy, carbon capture, storage, and afforestation on climate change and biodiversity. (to the source ) ????

ESG factors in finance face scepticism, with US fund managers experiencing their worst-ever quarter in 2024, with client withdrawals reaching $8.8bn. Core ESG industries like wind and solar have suffered setbacks, leading to poor returns.? (to the source ) ????

Yara Clean Ammonia has signed a long-term deal with India-based Greenko ZeroC, ensuring 50% renewable ammonia supply to manufacture low-emission fertilizer and decarbonize industries. The deal aims to produce and export renewable ammonia derived from carbon-free energy by 2027, complying with EU RFNBO and Renewable Energy Directive requirements. (to the source ) ????

Trust in carbon credit mechanisms for net zero emissions is declining due to corporate scandals and debates over voluntary carbon markets, with scepticism about their feasibility and effectiveness. Critics argue these schemes are greenwashing and can exacerbate the climate crisis suggesting a framework for carbon pricing and offsetting is needed. (to the source ) ????

Skardu, home to over 7,000 glaciers, is vital to the local ecosystem for freshwater, agriculture, and electricity generation. However, the Karakoram range's glaciers are shrinking, causing water levels to rise and flooding in the Shigar River. Skardu experienced a rare water shortage in 2023 due to the low Satpara Dam. (to the source ) ?????

Green grabbing involves large-scale appropriation of public lands for wind and solar photovoltaic power development in Brazil. Global investors, mainly from Europe, occupy 78% and 96% of wind and solar parks, respectively. (to the source ) ??????

The Biden administration plans to increase tariffs on Chinese EV imports from 25% to 100%, along with solar and other clean-energy products.? (to the source ) ????

Climate crisis is causing avocados to decline, with suitable areas for growing the superfood predicted to shrink by 14-41% by 2050. (to the source ) ?????

The world's top 60 banks have provided nearly $7tn in funding to the fossil fuel industry since the Paris agreement. In 2023, the total financing for fossil fuel companies was $705bn, with $347bn going towards expansion. US banks were the biggest financiers, with JP Morgan Chase providing the most. (to the source ) ?????

A detailed chemical analysis of ancient Antarctic ice, revealed a 10 times faster increase in atmospheric CO2 than in the past 50,000 years due to human emissions.? (to the source ) ??????

Climate activists protested at the Italian Open, disrupting two matches.? (to the source ) ??????

Heat-related deaths per 100,000 people in Europe have increased by 31% between 2003-12 and 2013-2022, according to a new report. It results in new diseases spreading, hay fever starting earlier, and exercise risky hours extending beyond hottest hours. (to the source ) ??????

Resources:

GRI has launched the "CSRD Essentials" series, a comprehensive guide to understanding the EU's Corporate Sustainability Reporting Directive, targeting over 42.500 companies and focusing on stakeholder engagement, legal interconnections, and SMEs implementation.

(to the source and to the resource )?

What are your takeaways for the week? What caught your eye?? What was surprising? Comment below, let's discuss sustainability.