Tuesday, December 10th, 2024

Author: Sam Rubinstein

Your weekly guide to Sustainable Investment

 
 

TBLI Radical Truth Podcast

REDD+ projects - the facts: Investing in high-impact solutions to deforestation

Everland is a global leader in community-led forest conservation, ensuring financial stability for projects through Verified Emission Reductions (VERs) while championing climate change mitigation. Joshua Tosteson, Everland's CEO & Pamela Brazier, co-founder & president at  Everland joined us for a conversation discussing REDD+, their work, and investing in high-impact solutions to deforestation.

What will listeners learn:

  • Carbon crediting from REDD+ projects has been systematically robust, and new methodologies and safeguards continue to drive integrity.

  • REDD+ projects deliver demonstrable impact for climate, nature and communities; just the five projects Everland works for benefit more than 215,000 local people.

  • The REDD+ mechanism is ready to scale today to meet global sustainable development goals and companies’ demand for high-integrity carbon credits.

Listen to the podcast

More than 75% of asset managers predict sustainable funds will grow despite political headwinds


 
By: Steve Kerch - Equities.com 

Asset managers around the globe see growth in sustainable funds continuing for the next two years, despite political headwinds from U.S. election results and backlash to ESG investing in other parts of the world, a new Morgan Stanley survey shows.

The reason: Asset owners are asking that more of their portfolios be directed toward sustainable investments.

The new Sustainable Signals report by the Morgan Stanley Institute for Sustainable Investing, out this week, found that 78% of asset managers expect their assets under management in sustainable funds to increase through 2026.

The survey, which polled more than 900 institutional investors across North America, Europe and Asia Pacific in July and August 2024, assesses attitudes of asset owners and asset managers toward sustainable investing, as well as emerging trends in the space.

The managers say that growth will be driven by a combination of new investing mandates and requests for higher sustainable allocations from existing clients. The survey found that 80% of asset owners expect the proportion of their assets allocated to sustainable investment options to increase during the next two years.

More than three-quarters of asset owners “strongly” or “somewhat” agree that sustainable investing offerings influence mandate decisions, with 80% requiring their asset managers to have a sustainable investing policy or strategy in place.

“Institutional investors see a growth trajectory for sustainable assets globally in the coming years to meet increasing client and stakeholder demands in a more mature sustainable investing market,” said Jessica Alsford, chief sustainability officer and chair of the Institute for Sustainable Investing at Morgan Stanley.

“This year the Institute has released Sustainable Signals reports with views from individual investors, corporates and institutional investors, with each group seeing sustainability as an opportunity for growth and value creation,” she said in a press release announcing the survey findings.

Other key survey results:

  • Challenges and concerns. The top reported challenge in sustainable investing for both asset owners and managers is data availability (71%), followed by fluctuating regulatory guidance (69%) and greenwashing (68%). Asia-Pacific investors cite challenges at higher rates than European and North American counterparts, with particular concerns around the burden of disclosure requirements for investors (71%).
  • Sustainable investment themes and solutions. Globally, institutional investors prioritize investments in health care (41%) and financial inclusion (40%). Regional differences emerged when asked about investment priorities for specific sustainable solutions, with European investors ranking nature and biodiversity solutions higher for example. Notably, climate adaptation solutions are seen as one of the most underappreciated investment opportunities across all regions.
  • Net-zero targets. Close to two-thirds of asset owners and managers have set a net-zero target, with almost all saying they have a plan to deliver their target. About 2% of institutional investors are reportedly already at net zero.

Sustainable debate: Carbon offsets

When it comes to assessing the use of carbon offsets, institutional investors have mixed views. Nearly 40% of asset owners currently use carbon offsets to mitigate portfolio emissions, and 31% of asset managers offer clients offsets linked to specific products or aggregated emissions.

But while some consider offsets a valid approach to decarbonization (32% of asset owners, 31% of asset managers), others think they should only be used for hard-to-abate emissions (21% of asset owners, 22% of asset managers). Still others are cautious about the use of offsets and are waiting for greater certainty (28% of asset owners, 27% of asset managers).

Read full article 

This county has an ambitious climate agenda. That’s not easy in Florida.

By: Sachi Kitajima Mulkey - Grist.org

Alachua County is preparing for a more dangerous future, even if the state government won't say "climate."

Florida keeps trying to kill Betsy Riley.

Riley says it as a joke, a way to make light of surviving three weather-related scares over the past three years. The first time was in 2022, a year after Riley and their partner moved to Alachua County in the northern part of the Sunshine State. On the June day that they brought their then-newborn baby home, a record-setting heat wave overwhelmed the air conditioner until it broke. The next summer, extreme heat struck again, leading to the explosion of a lawn mower’s battery close to where the family’s two dogs were sleeping. Then, this past September, Hurricane Helene sent an oak tree smashing through the roof of their home, bringing a ceiling rafter down on Riley’s partner. Though the branches missed their second child — then 4 months old — by about 5 feet, the infant was showered with insulation foam. 

“When I talk about it, I have to keep from crying,” they said. “But you know, nothing stops when you’re a hurricane survivor. You still have to go to work.”

About two months after the hurricane, Riley found themself in like-minded company. As Alachua County’s sustainability manager, the 35-year-old spent a recent Saturday helping lead the inaugural Alachua County Climate Action Summit in Gainesville. Facing a crowd of residents, local leaders, activists, and scientists, one presenter asked, “Who has lived through a hurricane when the power went out?” Hands flew into the air.

The daylong program was intended to tell the community about climate impacts in store for Alachua County and to get feedback on an official climate action plan, which organizers hope to finalize and begin executing early next year. Within the conference center’s rooms, the atmosphere hummed with urgency, and it was hard to believe that preparing for climate change was at all controversial. For decades, Alachua County has remained a haven for liberals, a blue dot in a deeply red state: Democrats hold most local offices and Democratic candidates for president have garnered landslide majorities since the county backed President Bill Clinton in 1992.

But in Republican-dominated Florida, where Governor Ron DeSantis has scrubbed several mentions of “climate change” from the state’s laws, Alachua County’s ambition looks like an easily popped bubble. Even though a large majority of Floridians say they want action on climate change, the state has become increasingly hostile toward many such policies. Recent headwinds, like state laws written to override local ones, precarious federal funding, and a battle over a local utility threaten to derail the county’s efforts. “To be a Floridian and to be an Alachua County citizen is to hold profoundly different realities,” said Cynthia Barnett, an environmental journalist, in a speech at the summit. 

Alachua County sits squarely in north-central Florida, with several hours of interstate buffering residents from coastlines and the nearest big cities, Orlando and Jacksonville. On the day of the summit, downtown Gainesville — the city at the county’s center — bustled with weekend traffic. The city is home to the University of Florida, and some of its 60,000 students were biking to brunch, while others joined throngs of orange-and-blue clad tailgaters in front of the football stadium. 

The university is the county’s largest employer, and its progressive influence radiates throughout Gainesville and its 150,000 residents. Leave the city, and the bohemian coffee shops and pride flags vanish, replaced by boiled peanut stands, billboards advertising fireworks, and “Make America Great Again” lawn signs. A little farther, and the Spanish moss-draped canopies of live oak trees give way to farmland and pine forests grown for timber. In this perimeter lie the county’s eight other towns, with populations ranging from less than 1,000 to nearly 10,000. 

Read full article 

 

Drylands now make up 40% of land on Earth, excluding Antarctica, study says


 

An area nearly a third larger than India turned permanently arid in past three decades, research shows

Drylands now make up 40% of all land on Earth, excluding Antarctica. Three-quarters of the world’s land suffered drier conditions in the past 30 years, which is likely to be permanent, according to the study by the UN Science Policy Interface, a body of scientists convened by the United Nations.

Africa lost about 12% of its GDP owing to the increasing aridity between 1990 and 2015, the report found. Even worse losses are forecast: Africa will lose about 16% of its GDP, and Asia close to 7%, in the next half decade.

Ibrahim Thiaw, executive secretary of the UN convention to combat desertification (UNCCD), said: “Unlike droughts – temporary periods of low rainfall – aridity represents a permanent, unrelenting transformation.

“Droughts end. When an area’s climate becomes drier, however, the ability to return to previous conditions is lost. The drier climates now affecting vast lands across the globe will not return to how they were, and this change is redefining life on Earth.”

Some crops will be particularly at risk: maize yields are projected to halve in Kenya by 2050, if current trends continue. Drylands are areas where 90% of the rainfall is lost to evaporation, leaving only 10% for vegetation. Two-thirds of land globally will store less water by mid-century, according to the report published on Monday.

Governments are more than halfway through a global conference in Riyadh, which concludes this Friday, under the UNCCD. Saudi Arabia is one of the world’s most arid countries, and is anxious to use the fortnight of talks to gain global agreement on halting the degradation of the world’s lands, and begin restoring affected areas.

Despite hosting the conference, Saudi Arabia has appeared reluctant to talk about the climate crisis, which is the key driver of desertification around the world. Saudi Arabia played an obstructive role at a key climate summit, the UN framework convention on climate change conference of the parties (Cop) in Azerbaijan last month.

The world’s water problems are fast growing more acute as a result of global failure to tackle greenhouse gas emissions. According to the UN SPI (science-policy interface) study, as of 2020, about 30% of the population – 2.3 billion people globally – lived in drylands, up from about 22.5% in 1990.

By 2100, this is projected to double, if too little is done to reduce carbon emissions. Nearly half of Africa’s people already live in drylands.

Barron Orr, chief scientist at UNCCD, said: “For the first time, a UN scientific body is warning that burning fossil fuels is causing permanent drying across much of the world, with potentially catastrophic impacts affecting access to water that could push people and nature even closer to disastrous tipping points.”

Climate breakdown is “inextricably linked” to the world’s water crisis, multiple studies have shown, but poor farming practices, overextraction of water, the erosion of soil and destruction of natural vegetation are also factors.

Praveena Sridhar, chief technical officer of the Save Soil campaign group, said: “Healthy soils are the foundation of life. Drying lands signify degraded soils, and the cause is clear: human activity.

Read full article 

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BP shifts offshore wind to joint venture amid retreat from renewables

 

By:  - The Guardian

Energy company’s deal with Japan’s Jera will allow it to focus on exploiting oil and gas assets

BP has agreed a deal worth up to £4.5bn to build offshore windfarms with Japan’s biggest power producer, in a shift that will allow it to gain some access to zero-carbon wind energy while focusing on fossil fuels.

The FTSE 100 company will create a 50-50 joint-venture with the Japanese power generator Jera to combine their offshore wind assets, the companies announced on Monday.

Oil companies are under pressure to show plans for the transition away from polluting fossil fuels, as renewables such as wind and solar are expected to take up a fast-growing share of global energy use.

The International Energy Agency has said that no new fossil fuel projects should be approved if the world is to meet targets to limit carbon pollution and global heating. However, some shareholders are pushing the other way, encouraging oil companies to focus on their strongest suit of producing profitable oil and gas.

BP has faced strong criticism for watering down carbon reduction targets, and has backtracked on plans to curb fossil fuel exploration and production under Murray Auchincloss. He was made permanent chief executive in January, after the shock departure of his predecessor, Bernard Looney, because of undisclosed sexual relationships with colleagues.

In June, Auchincloss imposed a hiring freeze and halted new offshore wind projects in a move Greenpeace UK described as “disappointing but sadly unsurprising”.

The joint-venture with Jera will combine the Japanese company’s existing windfarms, capable of generating about a gigawatt (GW) of power, with the projects in development from both companies.

BP has no windfarms yet generating power, but has prospects to generate as much as 10 GW, including two offshore projects apiece in Germany and the UK. Other prospects include the US Beacon project, which ran into trouble amid turmoil caused by rising materials prices and a backlog of projects.

Auchincloss said the joint-venture would create “a top five wind developer globally” while limiting the amount of money requested from shareholders. The joint-venture will seek to raise funding itself, separate from BP’s balance sheet.

“This will be a very strong vehicle to grow into an electrifying world, while maintaining a capital-light model for our shareholders,” Auchincloss said.

BP has said it will spend up to $3.25bn (£2.6bn) investing in joint-venture projects committed to before the end of 2030, while Jera will commit up to $2.55bn for a maximum of $5.8bn. However, that amount could be lower if the joint-venture finds alternative funding.

Jera was itself formed from the fuel and thermal power departments of the Tokyo Electric Power Company and the Chubu Electric Power Company. Its renewables investments form a relatively small part of its overall business, which includes oil and gas production, transportation and trading, as well as coal-fired power stations.

Read full article 

Goldman Sachs Withdraws from Net Zero Banking Alliance


 
By: Hanaa Siddiqi - Sustainable Times

In a move drawing sharp scrutiny, Goldman Sachs has withdrawn from the Net-Zero Banking Alliance (NZBA), a coalition of financial institutions committed to aligning operations with global climate goals. As one of the most high-profile members to leave the alliance, the investment bank’s decision raises questions about the future of corporate commitments to sustainability amid increasing political pressures.

Formed just three years ago, the NZBA aimed to unite financial institutions to achieve net-zero emissions by 2050. With over 140 global banks, including heavyweights like Wells Fargo and Morgan Stanley, the alliance has channelled funding toward sustainable projects and reduced investments in environmentally harmful sectors.

The investment bank emphasized its commitment to sustainability goals via other strategic avenues. A spokesperson mentioned, “We have the capabilities to achieve our goals and to support the sustainability objectives of our clients.” This statement reflects the bank's determination to maintain its relevance and responsibility toward environmental sustainability, albeit outside the framework of the NZBA.

Goldman Sachs’ departure, however, reflects growing tensions between the climate goals championed by such alliances and political opposition from key stakeholders in the United States.

While Goldman Sachs has not explicitly stated its reasons for leaving, analysts point to mounting Republican opposition as a significant factor. Critics, including Senator Eric Schmitt (R-MO), argue that such coalitions unfairly target fossil fuel industries, potentially limiting their access to credit and hindering broader economic interests. The 2022 introduction of a windfall tax and heightened scrutiny from lawmakers have added to these challenges, pushing banks like Goldman to reconsider their alliances.

Despite its exit, the firm remains committed to climate action, emphasizing progress toward its net-zero targets by 2050. Goldman Sachs plans to continue reporting on sustainability efforts and expanding its focus on critical sectors, including energy, power, and automotive industries.

Goldman Sachs’ decision follows ambitious pledges, including a $750 billion commitment to sustainable financing by 2030. The firm reached 75% of this target earlier this year, underlining its substantial contributions to sustainable initiatives. Therefore, its withdrawal from the NZBA seems paradoxical, given its active role in advancing climate-focused financing.

Environmental groups have expressed concerns that Goldman Sachs’ departure may set a troubling precedent, emboldening other institutions to scale back climate commitments. With shifting political landscapes and the potential resurgence of policies favouring fossil fuels, the decision could weaken the collective momentum required to combat climate change.

The NZBA, known for its rigorous requirements, has been a cornerstone for member reputations. Goldman Sachs’ departure signals a shift in how multinational banks navigate regulatory, political, and voluntary climate initiatives, particularly as the financial sector braces for evolving climate disclosure regulations under new political leadership.

Source 

 

 
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