Happy Tuesdayā¦ hot off the press US companies are about to face mandates to divulge risks and opportunities for their business caused by climate change – today we take a deep dive into why it matters and what companies can do.
In todayās edition:
š Microsoft heating homes in Helsinki
š Cleaning solar panels with static electricity
āāš Why is climate disclosure important?
Ā Big BusinessĀ (2-minute read)
EU countries agree world’s first carbon border tariffĀ
The EU has agreed to introduce a carbon tax on imports of highly-polluting goods like steel, cement and fertilisers from 2026.Ā
Context: Many EU manufacturers have been paying for their carbon emissions since 2005 through the Emissions Trading System (ETS), which makes producers pay for emissions (Around ā¬78 per metric ton of CO2)Ā
Ā Why? As carbon prices rise EU producers are put at risk of ācarbon leakageāā losing out to cheaper imports from countries with less strict climate regulation.Ā
Impactā¦ a renewed impetus for producers globally to accelerate decarbonisation effortsā¦ attention will need to be paid to ensure developing nations donāt get stranded with falling exports AND less money to invest into their green transitions.
Microsoft data centres to heat Finish homes and reduce emissions
Globally, 3% of all electricity used in the world goes to data centres. 98% of this electrical energy is lost as heat. Finish energy company, Fortum, have partnered with Microsoft to redistribute this waste heat to warm houses and businesses in Helsinki. Fortum will use underground hot water pipes to capture and distribute the excess heat to warm 60% of the surrounding area, with the location of the datacentres (powered by renewable energy) picked specifically to support the most efficient redistribution of the heat.
More than cutting carbon emissions: Russian oil and gas make up 27% of the total energy consumed in Finland, so this initiative will help Finland cut its reliance on Russia.Ā
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Shell could face lawsuits over climate transition plans
Environmental lawyers, ClientEarth, are preparing legal action against Shell over the companyās climate transition plan, claiming that Shellās net-zero targets are not reflected in their operating plans or budgets. Itās not the first time the quality of Shellās climate transition plan has been challenged having faced a Dutch court order last year. Both examples demonstrate that energy companies will continue to face scrutiny on their transition away from fossil fuels.Ā
š¤Ā Future of TechĀ (1-minute read)
GE produces world-first prototype of fully recyclable wind turbine bladeĀ
Landfill, where wind turbine blades go to dieā¦ In the U.S. alone, 8,000 ageing blades (and growing) will be decomissioned each year. The fibreglass resin used to make blades lightweight and efficient has also made them difficult to dispose of.
RecycleBlades: A prototype of a world-first 100 per cent recyclable wind turbine blade has been produced in Spain, marking a milestone for the Zero wastE Blade ReseArch (ZEBRA) consortium āclosing the loopā for wind power. The prototype turbine blade was made using thermoplastic resin and glass fabrics, all of which can be chemically recycled, where the resin is ādepolymerizedā ā a process that separates the fibre from the resin and recovers the materials to be reused.
Static electricity is being used to boost solar panel output
Problem #1: The biggest solar farms in the world are located in deserts. Yet, desert environments are dusty, and dust lowers solar panel output – a monthās worth of dust can reduce output by 40%.Ā
Problem #2: A common way of removing dust is by spraying water onto the surface of solar panels – 45bn litres of water is used annually to clean solar panels (enough water for 1mill people)
A solution: Scientists from the Massachusetts Institute of Technology have created a water-free way to keep solar panels clean using static electricity.Ā
How? By passing electric currents just above the surface of the solar panel, the dust particles become charged. This same charge is then applied to the surface of the solar panel, resulting in dust being pushed away.
š”Deep Dive (1-minute read)
All companies are facing climate-related risks and opportunities. Some are affected more than others. Disclosure of these risks/opportunities has now well and truly entrenched itself as a central theme of 2022. Every industry and asset class has seemingly been on the receiving end of pressure from regulators, industry bodies, or the market to report on climate alongside financial statements.
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Why is climate disclosure important?
What gets measured gets managed. As the impact of climate change intensifies, investors and regulators are increasingly seeking greater transparency of climate-related information. Disclosure helps companies identify and tackle risks.
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Just this weekā¦
- The US SEC unveiled proposals to mandate that for the first time American companies will be required to have their own emissions and those generated by suppliers (Scope 3) audited and included in annual financial reports
- Europe is already galloping towards mandated emissions disclosures (see here) ā¦ however, an assessment by the European Central Bank of 109 banks revealed that not one was meeting the basic requirements laid out by the ECB
- The Taskforce on Nature-related Financial Disclosure (TNFD) released draft guidance on how companies should go beyond disclosures on climate-related risk and account for nature-related risks and opportunities.
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One piece of the puzzleā¦ Mandates are critical however must be accompanied by:
- A global standard for ESG reporting – currently there is an āalphabet soupā of different standards making like-for-like comparison of companies’ reports challenging and opening the door to greenwashingĀ
- ESG data management – ESG data is often hidden in siloes across the business, a global, integrated picture of ESG opportunities and risks is hard to paint (and only going to get harder with increased reporting requirements like TNFD). Organisations will have to develop or acquire data literacy skills to get their ESG data ducks in a row.
š Little Bytes
Quote: Ā āClimate mitigation is no longer just a federal regulation problem for oil companies or manufacturers ā the broader business community and consumers are making it crystal clear that inaction has tangible economic and competitive consequences.ā NEXT Energy Solutions chief executive Daniel Emmett
Stat: 8 in 10 Britons are concerned about the UKās dependence on foreign countries for energy supply – Ipsos
Watch: How an initiative is bringing marginalised women together by teaching them to be professional beekeepers
š Deal room…
- Seattle startup IUNU landed a $24 million Series B round that will fuel growth of its technology used in greenhouses to analyze the health of crops and manage production.
- GPS Renewables raises over $20M in Series B funding for its modular and automated biogas solution
- AcreTrader Raises Over $20M in Series B Funding for its marketplace that enables investing in farmland for the everyday investor
- Loveseat Raises $7M in Series A Funding for its Returned Home Goods Marketplace
- Copper Labs Raises $5.5M in Series A Funding to Help Utilities Take Control of Energy Demand and Accelerate Grid Modernization
š In other news…
- The initiative to boost the market for carbon offsets is being scaled back following fierce debate as to whether the traded asset really does help avert global warming.
- Google is working with German airline company, Lufthansa, to lower carbon emissions and business costs by using AI technology to optimise the process of assigning individual aircraft to specific journeys.
- Through a partnership with Volvo, Starbucks is building an EV charging network with areas of low density of chargers across the states
- Bank of America (BofA) has released a study demonstrating that a lack of action on diversity and inclusion over the past 30 years has led to $70 trillion in foregone economic output, driven by less innovation, lower employee retention, and weaker revenue.
- Climate Action 100+ has released an Aviation Sector Strategy which outlines the urgent actions for the aviation sector to take to align with a 1.5Ā°C scenario = increase the use of sustainable aviation fuels (SAF), to maintain business travel at 2019 levels, to cap long-haul leisure flights of more than 6 hours at 2019 levels
š£ Gone Phishing
Three of these stories are true, one we made up, can you guess which?
