Pension funds pressed to protect portfolios from climate change
Only one in 20 pension schemes in Europe has taken steps to combat the risks of climate change, in spite of mounting warnings that global warming poses a serious threat to their investment returns. Pressure has increased on institutional investors to protect their portfolios from climate change, following the Paris Agreement signed by more than 190 countries in late 2015. But HR consultancy Mercer found that just 5 per cent of European pension schemes have considered the investment risk posed by climate change, after gathering information from 1,241 institutional investors across 13 countries that manage combined assets of about €1.1tn. “It is ironic that the pace of response to this enormous issue is best described as glacial. The findings highlight the urgent need for the pensions industry to do more,” said Phil Edwards, Mercer’s global director of strategic research. (Financial Times*)
Environment
Sainsbury’s and GE ink 100 per cent LED roll out deal
One of the UK’s largest ever energy efficiency projects is to get underway, after Sainsbury’s signed a deal with GE division Current to deploy LED lighting across more than 450 stores. The new partnership will see 100 per cent LED lighting installed across the supermarket giant’s stores, delivering more than 250,000 new light fittings and resulting in energy savings of 58 per cent. The companies said the roll out would cut greenhouse gas emissions for the supermarket by 3.4 per cent a year and make Sainsbury’s the first UK grocery retailer to fully switch to LED lighting. Paul Crewe, Sainsbury’s head of sustainability, energy, engineering and environment, said the project would play a significant role in helping the company meet its target of cutting emissions 30 per cent against 2005 levels by 2020. (Business Green)
Great Barrier Reef valued at $56 billion by economists
A new report by advisory firm Deloitte Access Economics has calculated the Great Barrier Reef’s “total asset value” at AUD $56 billion. This is the first time that a World Heritage site’s full economic, social and iconic brand value has been calculated. Deloitte arrived at the $56 billion figure after an extensive six-month analysis that drew on research from dozens of economic and scientific sources, as well as a survey of 1,500 people. At $29 billion, tourism is the biggest contributor to that overall value, followed by $23.8 billion from “indirect or non-use value”. Commissioned by the Great Barrier Reef Foundation, the report finds the reef added $6.4 billion of economic value to the Australian economy in 2015-16. Great Barrier Reef Foundation director Steve Sargent said “This report sends a clear message that the Great Barrier Reef – as an ecosystem, as an economic driver, as a global treasure – is too big to fail.” (Sunday Morning Herald)
Approximately 25 percent of the global supply chain for viscose, represented by major producers Birla Cellulose and Lenzing, has now been audited and found to be low-risk in terms of sourcing from endangered or ancient forests. The audits have been conducted by CanopyStyle – an auditing system for global viscose and rayon producers developed by Canopy and the Rainforest Alliance. The audit uses a risk-based approach to assess the risk of fibres being sourced from endangered or conflict sources. In recent years, the fashion industry has increasingly relied on forests to create alternative fabrics such as viscose, modal, lyocell and other trademarked textiles. 100 brands and retailers – including Zara, H&M, Stella McCartney and VF Corp – have now joined CanopyStyle, requiring their suppliers to undergo the audit. (Sustainable Brands)
Policy
France to ban all new oil and gas exploration in renewable energy drive
France is to stop granting licences for oil and gas exploration as part of a transition towards environmentally-friendly energy being driven by Emmanuel Macron’s government. Nicolas Hulot, the “ecological transition” minister, said a law would be passed in the autumn. “There will be no new exploration licences for hydrocarbons,” he said. The minister, previously famed in France for his environmental activism and nature documentaries, also outlined proposals to increase the taxation on diesel and to speed up to the decision-making process to curtail pollution. Around 75 per cent of France’s electricity is currently provided by nuclear power stations, with the industry employing around 200,000 people and led by state-owned EDF. A law was passed last year to reduce the nuclear proportion to 50 per cent by 2025, sparking controversy over potential job losses and the closure of up to 20 reactors. (Independent)
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