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Radical Truth - TBLI Podcast
The Clean Energy Transition: How Capital Markets React and why Fossil Fuels are Doomed
Mark Campanale is one of the true pioneers and champions of sustainable investing and using capital to address the climate challenge. Listen to the podcast to find out how to move the needle in capital mobilization away from a carbon-intensive economy
What will you learn?
- The energy system is changing now that renewables are cheaper than fossil fuels. How big is the ‘carbon bubble’ and why $100 trillion of lost fossil fuel revenues means something
- Manufactured energy vs commodity energy, why electrons are more important than molecules and what the future will look like
- Investors lose money – and make money – when a whole system changes. Where are the risks for investors in “business as usual” with fossil fuels?
Wealth & Society Summit 2024
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Sept, 26-27 Vienna, Austria
Wealth Transfer: Building a Sustainable Future
The world is changing, and so are the ways families manage their wealth. A historic generational transfer is underway, creating both challenges and incredible opportunities.
Asian and European forward-thinking families are leading the way by involving stakeholders and planning for a sustainable future. 50+ of the leading Chinese and European families will be joining us.
This is more than just passing on money. It's about building a legacy that considers society, culture, and family dynamics.
Wealth & Society's flagship ESG and Impact Investing Summit explores these critical aspects of wealth transfer. Join us for engaging discussions, real-world case studies, and insightful presentations from experts around the globe.
Together, we can navigate this transformative era and unlock the potential of responsible wealth management.
Controversial clean energy law takes effect in Washington
by Jerry Cornfield, Washington State Standard
Gov. Jay Inslee on Thursday signed a hotly contested bill to quicken Puget Sound Energy’s transition away from natural gas, leaving in place a provision that critics argued would unfairly benefit the utility’s investors at the expense of ratepayers.
Flanked by lawmakers and labor leaders at a union hall in Kent, Inslee said House 1589 provides the state’s largest utility with a road map and tools “to get out of the fossil fuel business.”
A short time later, the investor-owned utility, which serves 800,000 customers in six counties, issued a statement lauding the “thoughtful leadership” of Inslee and lawmakers.
“This is a positive step in what will be a lengthy process of planning for the future energy choices of our electric and natural gas customers and meeting our state’s aggressive clean energy goals,” the statement read.
Under state law, PSE must generate 80% of its energy from renewable energy sources by 2030 and 100% by 2045.
The new law is intended to speed up PSE’s shift toward clean energy, setting the stage for more customers to rely on electric appliances, rather than gas ones, for heating and cooking.
Natural gas energy use is already falling among the company’s ratepayers. It declined 7% for residential and 3% for commercial customers in 2023, according to PSE. Electricity use is increasing and forecasted to continue to rise, the utility reports.
While the new law deals heavily with utility planning requirements and includes provisions related to rate-setting, Inslee was pressed to veto a section focused on “accelerated depreciation.”
With depreciation, utilities spread the cost of major new projects over years, rather than letting the expense hit their books and ratepayers all at once.
HB 1589 requires the state’s Utilities and Transportation Commission to let PSE speed up how quickly it is passing the costs of natural gas infrastructure to customers. This would open the door for higher rates in the near term. It’s similar to a 15-year mortgage versus a 30-year.
Environmental and progressive organizations, including the Sierra Club, Washington State Budget and Policy Center, Washington State Community Action Partnership, and Sightline Institute had urged Inslee to veto the accelerated depreciation language.
They warned inclusion of the provision would lead to “significant short-term rate increases which will disproportionately impact low- and moderate-income households.”
Backers of the bill point out there is no rate increase tied to the bill. And, they said, accelerated depreciation ensures that current customers who are benefiting from the gas infrastructure pay their fair share of the costs before leaving the system, helping to protect against an undue cost burden falling on an increasingly smaller group of customers.
This legislation was one of the most divisive proposals of the session. It passed by votes of 27-22 in the Senate and 50-45 in the House of Representatives.
Republicans argued it would drive energy costs higher for lower-income ratepayers. Democrats and climate advocates framed the bill as a key step toward decarbonization, although some House Democrats who voted for the legislation expressed concerns about its impact on energy bills.
The law goes into effect immediately.
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Qantas and Virgin Australia put on notice over offsets after landmark decision on greenwashing
Dutch court’s ruling that KLM misled customers is a ‘wakeup call’ on decarbonisation plans, climate advocacy group says
Australian airlines could be found to have misled consumers in the way they present their net zero goals and market offset options during flight bookings, climate advocates have claimed, after a landmark legal decision on aviation “greenwashing”.
The warning from Climate Integrity, a new Australia-based advocacy group, follows a Dutch court late last month ruling that airline KLM misled customers with vague environmental claims, and that its affirmation to the goals of the Paris Agreement was “misleading and therefore unlawful”.
The Dutch greenwashing decision found 15 of 19 of KLM’s claims about its environmental ambitions were misleading, including that marketing statements about offsetting flights and sustainable aviation fuels (SAF) painted “too rosy a picture” of the technologies’ feasibility.
A billboard ad showing a child on a swing with the statement “join us in creating a more sustainable future” was also declared misleading because it failed to explain how it related to any environmental benefit. The impression was reinforced by the background of sky, mountain and water, the court said.
Claire Snyder, the director of Climate Integrity, said “Australian airlines should be paying close attention” to that decision.
“The ruling is a timely wake-up call to airlines with public net zero commitments, that they must put forward concrete and credible decarbonisation plans or face the legal risk of misleading consumers and investors,” Snyder said.
The Australian Competition and Consumer Commission has recently declared a crack down on “greenwashing”, and Snyder pointed to an analysis her group conducted that found Qantas’s decarbonisation plans featured “a number of low integrity practices”.
While Snyder commended Qantas as being an early mover to pledge support for the Paris Agreement goals, her group’s analysis has concluded the airline “has no comprehensive, full-costed or independently verified plan for reducing their emissions in line with a scientific pathway”.
Snyder was critical of Qantas’ interim emissions target of 25% by 2030, calling it “impossible to assess if they are on track”, and alleged Qantas had “no clear plan or timeline to phase out the use of fossil fuels”.
Heavy reliance on the ongoing use of offsets was also of concern, Snyder said, as the schemes have varying levels of integrity. She noted UN expert groups have urged companies to have plans to actively reduce emissions, and not just rely on future technologies.
Many industries are pushing ahead with decarbonisation plans but aviation has proved more difficult, in large part due to a lack of readily available technology such as electric replacements for modern commercial passenger aircraft.
Qantas and Virgin Australia, like most global airlines, have announced emissions reductions agendas that heavily rely on offsets, including buying credits from projects in Australia and overseas. They also give customers the option to pay for an individual offset when booking their flight.
Snyder compared Qantas’ “fly carbon neutral” option to the marketing strategies used by KLM in its scheme that was found misleading.
“As a consumer flying with Qantas you could be forgiven for thinking that a few dollars for an offset at checkout means your flight makes no contribution to the climate crisis,” Snyder said.
How AI can boost sustainable investing
In the European Union, large companies and most publicly traded firms will be required to publish updates on the environmental and social risks they face, with those reports due beginning in 2025.
Across the pond, the Securities and Exchange Commission earlier this month announced new rules that would require corporations to divulge to investors their greenhouse-gas emissions. “It’ll make it real for a lot of chief financial officers,” says John Mennel, managing director at Deloitte.
With disclosure requirements emerging in nations ranging from India to China, the demand for tools that help firms track environmental, social, and governance factors are expected to rise. Many of those tools are going to lean on artificial intelligence to help multinational companies remain compliant—but also transform their businesses along the way.
“What you see is about 40% of the world GDP now requiring not just climate disclosure, but full sustainability—the E, the S, and the G based on what’s called this sort of double materiality task, which is not just effects on the company, but the company’s effects on the world,” says Tim Mohin, partner and director at Boston Consulting Group.
“I think it’s really great for businesses,” says Meera Clark, an early stage investor at Redpoint Ventures. “Now that they have the visibility, they have this benchmark that they’re building towards as it relates to really setting up the reporting infrastructure that they will hopefully be able to rely on for the next 5, 10, or 20 years.”
AI is already helping companies track their ESG objectives in a wide variety of ways, with some of the most popular use cases ranging from machine learning to improve the accuracy of ESG metrics and address disclosure gaps, to using AI-powered satellite technologies to assess environmental risks, and predictive modeling to calculate greenhouse gas emissions.
“There’s just a whole range of areas where AI will play a meaningful role,” says Matt Slovik, head of global sustainable finance at Morgan Stanley.
But, Slovik adds, companies should proceed with some caution. “Is this a problem that AI can help solve?,” Slovik asks. “And if so, what does that solution look like and what does it mean within the context of your organization, your cost structure, and your other goals to ultimately get to the right decision.”
At Redpoint Ventures, Clark says the firm spends a majority of their focus on software and data infrastructure companies, looking for mass market opportunities and a key reason why a startup didn’t exist previously but should today.
“The regulatory environment continues to evolve,” says Clark, which in her view justifies Redpoint Ventures’ led investment in a $13 million Series A for AI sustainability platform Greenplaces. “There’s a very clear need for businesses to be able to more effectively report on this data.”
One question that’s emerging amid the rise of demand for AI and generative AI tools is the energy use needs for such computation. “Data centers continue to consume an outsize portion of energy and unless that energy is sort of sourced renewable or there is some way to mitigate its actual consumption, we’re going to have a bigger and negative side to the story,” warns Mohin.
Susannah Shattuck, head of product at AI governance software provider Credo AI, says that if an organization has set a target to achieve carbon zero by 2050, they need to make risk-informed decisions and be “aware of the fact that these large language models can have a tremendous carbon footprint and therefore be making decisions about deploying them really in the use cases that have the potential to have the greatest impact on my business.”
Large language models that can contain hallucinations, bias, or subject an organization to adversarial attacks can cause a model to lead them in the wrong direction, resulting in new governance risks when companies rely on these tools.
“An organization that wants to make use of that technology safely, needs to ensure that they’re the proper guardrails in place to protect against those possible risks and negative outcomes,” says Shattuck.
At Deloitte, Mennel says AI tools for ESG not only helps companies remain compliant with new standards, it actually can transform them. An agricultural company can use AI to track the environmental footprint of a new, lower carbon alternative source of protein, as an example, and market those claims to consumers. “With the data that I can produce, where are there the opportunities to create fundamentally new products or new businesses that generate value,” asks Mennel.
Canada-based Geotab has used AI for more than a decade to help Fortune 500 firms and the public sector manage their fleet, offering data intelligence to make more informed decisions about the efficiency, safety, and sustainability of the vehicles they use. “Sometimes there’s a strong overlap between some of the sustainability decisions and efficiencies,” says Neil Cawse, CEO of Geotab.
The most sustainable solution is a simple one: reduce vehicle idling. From there, Cawse says the public and private sectors can ascertain the range of their routes, and make sure the vehicle type matches the requirements of the route. But one common mistake is that some companies switch too aggressively to electric vehicles, a costly error if some vehicles in the fleet are sidelined because they cannot complete a journey.
“Good decisions are driven by good data,” adds Cawse. “Let the AI figure out what it is that you need to focus on first.”
In February, Geotab unveiled a generative AI analytics assistant called Geotab Ace, which taps into billions of data points daily including predictive safety analytics, predictive maintenance, trip data, EV statistics, and GPS tracking to answer questions from customers.
Solar panel waste to reach crisis levels in next two to three years, Australian experts warn
A 12-year industry roadmap has been unveiled to address the rising amount of solar panel waste headed for the tip
The solar industry is quickly approaching its tipping point, with unprecedented levels of waste headed for the tip.
Solar panel waste levels will reach a crisis point in the next two to three years instead of by 2030, as was previously forecast, according to a white paper released this week.
Led by Rong Deng, a renewable energy engineering researcher at the University of NSW, the paper predicted that if the production of solar panels expands by five to 10 times, as is hoped, “we will run out of the world’s reserves of silver in just two decades”.
“If it’s happening right now, [we] need to do something,” Deng said.
The immense scale of waste comes down to two factors. Victoria is the only state to have banned the disposal of solar panels in landfill, and the cost to recycle solar panels – $10 or $20 per panel – disincentivises recycling. Additionally, for panels that are recycled, the technologies needed to extract valuable materials is not available.
Most commercial solar panel recyclers simply remove the aluminium frame and the wiring, and shred the glass, Pablo Ribeiro Dias, the cofounder of Solarcycle, a solar recycling and sustainability company, said.
The design of solar panels, akin to a “fused, watertight, weatherproof sandwich”, made extracting valuable materials, such as silicon, silver and copper, and turning them into usable components difficult, Deng said.
The white paper outlined a 12-year industry roadmap, which included developing sophisticated technologies to extract valuable metals, establishing recycling centres in various metropolitan areas and the development of a product stewardship scheme for photovoltaics.
The product stewardship scheme will be introduced in 2025, and could mandate recycling (or penalise not recycling) and make solar panel manufacturers financially responsible for the disposal of end-of-life panels, the paper suggested.
Deng said she was confident the suggestions of the roadmap would be implemented, but was less confident that they would be implemented in the recommended timeframes.
She said Australia lacked a “strong recycling infrastructure”, and attributed this to waste being exported to China prior to 2016.
Richard Kirkman, the chief executive of energy and waste recycling management service Veolia Australia and New Zealand, said the federal government needed to invest in pilot projects to ensure solar panels were designed to be easy to recycle and develop large-scale processes to recycle solar panels.
“If we get this right we can close this loop in a way that will underpin the Australian way of life for generations with the recovery and recycling of the precious metals and rare earths inside discarded end-of-life panels,” he said.
The federal government announced on Friday a $1bn funding boost aimed at increasing the number of Australian-made solar panels, which may increase the number of solar panels designed in a manner that makes recycling easier. Currently, 90% of solar panels used in Australia are imported from China.
Renate Egan, the executive director of the Australian Centre for Advanced Photovoltaics based at the University of NSW, said previous predictions did not consider that two-thirds of Australian solar panels were installed on residential rooftops and were frequently replaced. One in three Australian homes generate solar energy, the highest per capita of any country.
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