SUSTAINABLE INVESTMENT

Investors ditching fossil fuel stocks as value drops by billions of dollars

Investment in fossil fuels, as well as the value of those investments, have rapidly declined since 2012. A new by think-tank Carbon Tracker contends the financial returns from fossil fuels had been in decline well before Covid-19 restrictions led to a slump in oil demand. The value of share offerings in fossil fuel firms has fallen by $123 billion since 2012, and share issuance has fallen by $70 billion within the same time period. This means the sector underperformed financial transparency firm MSCI’s ACWI Index by 52% – MSCI’s flagship global equity index. In contrast, share issuances in renewables totalled $56 billion between 2012 and 2020, and investors have gained $77 billion in value to date. This means that the sector outperformed the MSCI ACWI Index by 54%. (Edie)

DEFORESTATION

Consumer goods giants plot course to deforestation-free supply chains

A coalition of 20 multinational consumer goods firms have developed a roadmap to eliminate commodity-driven deforestation, after pledging last year to deliver a 'forest-positive' impact. The roadmap has been produced by members of the Consumer Goods Forum’s (CGF) ‘Forest Positive Coalition of Action’, which involves corporates that are dependent on forest-related key commodities, including Nestle, Mars, Carrefour, Colgate-Palmolive, Reckitt and Unilever. The roadmap outlines how Coalition members will use the CGF’s existing “commodity roadmaps” for tackling deforestation to baseline and then measure progress. The tools are designed to help businesses ascertain context-specific measurements based on commodity type, best practice and legislation. Highlighted in the roadmap is the importance of transparency for implementing more sustainable practices in a targeted way. (Edie)

STRATEGY 

Biden unveils $2 trillion investment plan with focus on green infrastructure and jobs

US President Joe Biden has unveiled a major plan for a $2 trillion investment in American infrastructure, with dedicated spending on green infrastructure and job creation. The plan calls for $50 billion to improve resilience to climate change, including by protecting electric grids, food systems, urban infrastructure and hospitals in communities most vulnerable to flooding and other severe weather events. The plan would also invest $35 billion toward clean-energy technology, new methods for reducing emissions and other broad-based climate research. It would establish an ‘Energy Efficiency and Clean Electricity Standard’ that would set specific targets to cut how much coal- and gas-fired electricity power companies use over time. The administration claims that 40%of the benefits of climate and clean-infrastructure investments would go to disadvantaged communities. (Washington Post)

NATURAL CAPITAL

Google, BMW, Volvo, and Samsung back WWF’s call for ban on deep-sea mining

Google, BMW, Volvo and Samsung are the first global companies to have signed up to a World Wildlife Fund (WWF) call for a moratorium on deep-sea mining. In backing the call, the companies commit not to source any minerals from the seabed, to exclude such minerals from their supply chains, and not to finance deep seabed mining activities. Deep-sea mining would extract cobalt, copper, nickel, and manganese – key raw materials commonly used to make batteries. At present, there are insufficient scientific findings to be able to assess the environmental risks associated with deep-sea mining. The moratorium calls for a ban until those risks are fully understood and all alternatives are exhausted. (Reuters)

POLICY

Germany allows carbon tax exemptions for industry, with strings

Germany’s cabinet has passed regulations to waive parts of a new emissions tax for industry. The bill will allow firms that operate internationally to be compensated when paying a tax levied in January 2021 on the greenhouse gas emissions of suppliers or consumers of German heating and transport fuel. The tax sets a carbon dioxide emissions equivalent price on gasoline, diesel, heating oil, coal and natural gas consumption. Companies benefiting from the exemption will have to commit most of the resulting savings to decarbonising their operations. The bill was based on a recognition that the global focus of industrial groups like steel, chemicals, or car makers made it harder for them to hike prices to recover the tax without losing their competitive edge against foreign rivals. (Reuters)