Edition for 03 June 2020

Top Stories

Banking imperatives for managing climate risk (McKinsey)

  • In this uncertain environment, banks must act on two fronts: they need both to manage their own financial exposures and to help finance a green agenda, which will be critical to mitigate the impact of global warming.
  • Disruptive physical impacts will give rise to transition risks and opportunities in the economy, including shifts in demand, the development of new energy resources, and innovations arising from the need to tackle emissions and manage carbon, as well as necessary reforms in food systems.
  • The good news is that these changes should also precipitate a sharp decline in emissions.

Sustainable Finance Live: How investment opportunities can transform the greenhouse gas landscape (Finextra)

  • This Co-Creation workshop detailed how investment opportunities can transform the greenhouse gas landscape and defined what investors require in order to track and securitise with confidence, and what asset managers need to build portfolios that institutional investors will select.
  • “We need to move to a higher energy density fuel and that is seen as hydrogen.” The European Commission recently revealed its Covid-19 recovery plan, with energy transition at the front and centre of the announcement and plans to stimulate investments into hydrogen production, utilisation and storage.
  • Following McGrane, Maya Hennerkes of the European Bank for Reconstruction and Development (EBRD) spoke of the issues and challenges in early stage investing in sustainable projects.

Warning of ‘green swan’ risks, climate group Ceres and bipartisan supporters lay out 50-step plan for markets and regulators (Market Watch)

  • The U.S. has sustained more than $1.775 trillion in costs from more than 265 climate-related extreme weather events since 1980, by some measures, and more than $500 billion in economic losses between 2015 and 2019. That means any move forward from COVID-19 and its economic malaise requires a concerted climate-change response from financial markets and their regulators, a new report says.
  • The call, leveled at major financial market and insurance regulators and with support from a key Democratic Senator, Sheldon Whitehouse of Rhode Island, was sounded in a report released Monday by sustainable investing advocate Ceres.
  • Advocates behind this latest report are instead largely emphasizing a market-driven regulatory revamp. 

InvestEco holds USD100m final close of Sustainable Food Fund III (Private Equity Wire)

  • InvestEco Capital has held the final close of the InvestEco Sustainable Food Fund III at USD100 million in capital commitments.
  • The Fund will continue the Toronto-based venture capital firm’s mandate of investing in private, high-growth Canadian and US companies that promote health and sustainability in the food sector.
  • This Fund follows two previous successful food funds managed by InvestEco that have invested in and partnered with many leading North American sustainable food brands, including Vital Farms, Mama Earth Organics, Maple Hill Creamery, Le Grand, NadaMoo, and LesserEvil, among a number of others.

Methodist church stops investing in "sin stocks" BP and Total oil (Evening Standard)

  • The move from a movement with at least 80 million churchgoers worldwide will come as a disappointment to new BP chief executive Bernard Looney, as it comes as he tries to convince investors that he will turn BP into a more sustainable business.
  • The church decided that, while BP had committed to cut Scope 3 carbon emissions (including emissions by its end users) by 2050, it had not yet provided details on how it would achieve it.
  • Those energy firms it still invests in had made commitments that implied they were aligned, or close to being aligned, with the 2015 Paris Agreement on climate change action.

Nodal and IncubEx Expand Environmental Markets with Five New Contracts and Twelve REC Vintage Extensions (Business Wire)

  • Nodal Exchange today launched new North American environmental futures and options contracts on the Oregon Clean Fuels Program and renewable energy certificates (RECs).
  • The new Nodal contracts, developed in collaboration with IncubEx, further extend the broadest suite of environmental products in the world and builds on the 62 emission allowances, renewable energy certificates and renewable fuels futures and options now offered on Nodal.
  • The newest addition to the renewable fuels product group on Nodal are the Oregon Clean Fuels Program (CFP) futures, a low carbon fuel standard futures contract that physically delivers CFP credits issued by the Oregon Department of Environmental Quality and corresponding options contracts on these futures.

Build Back Better by investing in Coastal First Nations Great Bear Forest Carbon Project (Corporate Knights)

  • As Canada ties economic stimulus strategies for corporations to its 2050 climate goals, both government and business have an opportunity to invest in a First Nations forest carbon financing model and make a meaningful commitment to address their climate impact.
  • The Great Bear Forest Carbon Project – led by nine coastal First Nations – is the world’s largest forest carbon initiative.
  • Carbon financing also offers a source of long-term funding for communities to explore meaningful opportunities for renewable energy projects on a diesel-dependent coast, sustainable shellfish aquaculture, ecotourism and non-timber forest product ventures.

Is Puerto Rico About to Give Another Terrible Energy Contract to an American Company? (The New Republic)

  • “They just want to flood Puerto Rico and the Caribbean with fracked gas,” said Ruth Santiago, an attorney with the Environmental Dialogue Committee supporting Queremos Sol (“We Want Sun”), a platform for clean energy development and climate justice backed by a number of environmental and community groups and unions across the island.
  • While FEMA wasn’t involved in the controversial $300 million contract Prepa entered into with Whitefish Energy in 2017—a congressional investigation later showed Whitefish had charged unusually high rates—two former FEMA officials were arrested in September 2019 on charges of taking bribes to hire the novice utility contractor Cobra Acquisitions to repair downed energy infrastructure after Hurricane Maria.
  • NFE’s promise to build “irreplaceable” fossil fuel infrastructure, according to another earnings report, seems  at odds with NFE’s clean-energy branding, which claims the company wants to be zero-carbon in the next decade and invest heartily in hydrogen.

Carbon intensity of global crude oil refining and mitigation potential (Nature Climate Change)

  • Changing market demand and increasing environmental regulations challenge the refining industry to shift crude slates and reconfigure production processes while reducing emissions.
  • These results provide guidance on climate-sensitive refining choices and future investment in emissions mitigation technologies.
  • Global industrial carbon emissions to reach all-time high in 2018.

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