ESG Weekly News Update: April 14, 2023
General ESG News
ESG Today: Beyond 2023: Five Green Trends for the Next Five Years
If 2022 was the year of corporate commitments to sustainability, then 2023 is the year when “promises become proposals, mission statements become metrics, and aims become actions.” Other expectations for the year include:
Additional and sharpened regulations on sustainability-related disclosures;
Opposition to ESG and sustainability;
Confidence from CFOs on corporate sustainability disclosures to drive business performance;
Corporate data collection and strategies down the value chain to include suppliers; and
Deeper discussions on biodiversity.
Sustainable Brands: Employee Values: Why an Authentic Sustainability Strategy Will Win the Talent War
Individuals across the board are increasingly making career decisions based on potential employers’ environmental and social ethics. Young talent seeks employers with shared values. However, employee candidates from all age groups are also seeking social environmental accountability, so organizations should realize that social and environmental issues also strongly influence senior talent.
The talent pool is concerned about the future and well-informed about the realities of the climate crisis. A significant factor in talent retention involves the empowerment of workers to contribute to sustainability solutions, rather than simply raising awareness of corporate sustainability strategies. The demonstration of sustainability strategies integrated into overall business strategies will support companies to secure the best talent.
GreenBiz: Native Americans Get The $720 Million For Climate They Deserve
Over time, Native Americans have been subjected to some of the worst environmental abuses in American history. Many tribal communities have struggled to protect their lived environment from degradation. Native Americans are among the most affected by the ecological quality of natural assets with which they are affiliated.
The inflation reduction act will provide $720 million to focus on climate resilience and funding for native-driven climate solutions and development.
Companies and Industries
Bloomberg: Tesla New Battery Plant Cements China's Place in Energy Storage
Tesla has announced it will build a large new factory in Shanghai, further solidifying China's position as a leader in the global energy storage supply chain. Tesla will manufacture its mega-pack energy storage unit in the new facility, with production scheduled to begin in the second quarter of 2024.
China has more than 1400 GW hours of battery manufacturing capacity, surpassing the United States' capacity by 400 gigawatt-hours.
Elon Musk, CEO of Tesla, has a grand vision for the sector and is expected to pair storage with renewable energy in efforts to further decarbonize electricity.
GreenBiz: What’s needed to scale low-carbon hydrogen
Green hydrogen is gaining traction around the world and, in theory, it could be the solution needed to decarbonize some of the most difficult sectors. However, the current buzz around green hydrogen does not reflect how far away we currently are from scaling the technology.
There are a few issues that must be addressed in order to ensure the effective scaling of hydrogen:
Developing standards to verify the ‘clean’ hydrogen is clean;
Attracting additional capital;
Establishing longer-term offtaker agreements.
Bloomberg: One-Minute Battery Swaps Are Spurring EV Adoption in Asia
In Asia, many are embracing electric mobility with the help of battery-swapping services and subscriptions. While this is more complicated with electric cars, things like mopeds and other two- and three-wheelers are well-suited for battery switches.
In regions like India, where about 80% of vehicles sold are two-wheeler, electrifying these vehicles can help drastically reduce emissions.
While there is enthusiasm for battery swapping in Asia, similar efforts have failed to take hold in the West. Battery swapping is more difficult for cars than two-wheeled vehicles, largely due to the limited interoperability of car batteries.
Tesla once unveiled a plan to enable 90-second battery swaps for its Model S, but the plan was never deployed at scale.
For a true electric transition to occur, in addition to infrastructure development needs, battery-swap solutions will need to match, or at least compete with, the ubiquity of fueling.
Reuters: Japan’s three megabanks to face votes on climate change
Mitsubishi UFH Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group are all being targeted by a coalition of climate groups, putting pressure on the banks to cut financing linked to fossil fuels.
Other major corporations in the country are facing similar pressure from institutional investors and shareholder proposals. While many of these resolutions were voted down last year, they still prompted policy changes at many targeted companies.
Critics argue that many of the banks’ climate transition plans partly rely on unproven technologies.
ESG Today: Google Signs 15 Year Renewable Energy Purchase Agreement in The United States
Orsted, an energy provider, announced the signing of a 15-year, 150 MW power purchase agreement with Google.
Last year, Orsted generated enough energy to power an estimated 90,000 homes. This new agreement will help boost Google's commitment to operating all of its data centers, cloud regions, and offices on carbon-free energy all day, every day by 2030.
ESG Ratings, Standards, and Regulation
The new ISSB standards (from the IFRS Foundation) will now allow companies an additional year to provide disclosure on certain sustainability-related risks to give them time to prioritize climate-related reporting.
The new standards will be effective as of January 2024, with companies expected to issue disclosures aligned with them in 2025.
This new “transitional relief” will also give companies an additional year to report on Scope 3 emissions.
Government Policy
Forbes: Current Climate: The EPA Is Putting Billions Of Dollars Into Better Drinking Water
This week the EPA announced its commitment of more than $6.5 million to local governments to improve drinking water infrastructure. The Supreme Court also heard arguments for Arizona v. Navajo Nation, and the decision may obligate the Federal government to provide the Navajo access to water from the Colorado River.
GreenBiz: Oregon's data center-focused emissions bill squashed by Amazon
Amazon’s lobbyists successfully killed an Oregon bill that aimed to regulate industries by imposing a 100% reduction deadline by 2040, particularly energy-intensive data centers with large carbon footprints. Amazon’s representatives ignited fear that the proposed legislation would inhibit the development of data centers. It is also possible that Amazon wanted to preserve local jobs and accelerate growth.
Reuters: Analysis: Global Climate Coalitions Need Safer Harbor from Antitrust Turbulence
Legal experts have expressed the need for companies to have clear “safe harbor” guidelines from governments when forming alliances to help them tackle climate change. This concern is attributed to the fact that there is limited guidance from governments and how much companies can collaborate to reach climate goals without overstepping antitrust boundaries.
A European Commission spokesperson communicated the new draft guidelines on how companies can cooperate within the law. They have designed these guidelines to show agreements with a “genuine sustainability objective” will not violate antitrust laws.