auctusESG | Insights | November H2 2024
Data dashboard
Climate Action Tracker’s ‘Warming Projections Global Update’ presents a bleak picture with no improvement in warming projections since 2021. 2024 saw no new climate targets at the national level or net-zero pledges, setting the world on a path towards 2.7° of warming. Governments have agreed to strengthen efforts to reach announced 2030 targets, however, the standstill points towards the disconnect between the reality of climate change and the pace of policies/actions by governments.
Renewable energy and electric vehicle deployment have witnessed rapid progress, projecting a positive outlook. Clean energy investments have surpassed that of fossil fuels, mainly oil and gas, and investments in clean manufacturing capacity is rising swiftly. However, these positive figures are being offset by increasing fossil fuel subsidies which remain at record high levels, with funding for fossil fuel prolonging projects increasing by 4 times between 2021 and 2022. These opposing trends indicate that emissions projections are to peak and plateau by the end of the decade; however, meeting the Paris Agreement goal seems uncertain.
Read more here. Climate Action Tracker Climate Analytics NewClimate Institute Institute for Essential Services Reform (IESR)
News roundup
Hedge funds receive lowest diversity and inclusion scores in 4 years
Hedge funds in the UK have received their lowest diversity and inclusion (D&I) score since 2021, according to the Reboot Race to Equality 2024 report. Based on surveys of over 100 employees, hedge funds scored 64.3, the lowest among financial services sectors. The report highlighted concerns about a lack of progress, with nearly half of ethnic minority respondents feeling pressure not to speak out on racial and ethnic equality.
Read more here. Reuters Nell Mooney Mackenzie
Bahamas debt swap unlocks US $124 million for ocean protection
The Bahamas has secured US $124 million for ocean and mangrove conservation through a groundbreaking debt swap. The deal, involving @Standard Chartered and private sector backing, allows the country to use savings from lower-cost loans to fund its marine conservation efforts. The Bahamas plans to enhance its marine protected areas and implement new management plans to ensure the resilience of its ocean ecosystems.
Read more here. IDB Invest The Nature Conservancy
Data centre developer Equinix issues US $1.2 billion green bonds for decarbonisation and renewable energy projects
Equinix has issued €1.15 billion (US $1.21 billion) in green bonds to fund renewable energy, energy efficiency, and decarbonisation projects under its Green Finance Framework. This makes Equinix a top 5 U.S. green bond issuer, with US $6.9 billion issued to date. As AI-driven demand for data centres surges, Equinix aims to reduce Scope 1, 2, and 3 GHG emissions by 50% and achieve 100% renewable energy by 2030.
Read more here. ESG Today Mark (Moshe) Segal
US moves to protect giraffes under endangered species act
The US Fish and Wildlife Service has proposed listing giraffes as endangered under the Endangered Species Act, aiming to curb poaching and protect the species from habitat loss and climate change. This action affects five giraffe subspecies, with some seeing population declines of up to 77%. While environmental groups welcome the move, they criticise the slow pace and express concern over the impact of potential political shifts on the final decision.
Read more here. The Guardian Oliver Milman Richard Luscombe
Iceland’s mammoth carbon capture plant marks major step in combating climate change
Iceland has launched the Mammoth carbon capture plant, the world's largest facility designed to capture and store atmospheric carbon. Developed by Climeworks , Mammoth uses direct air capture (DAC) technology to extract carbon dioxide from the air and store it underground, turning it into solid rock with the help of Icelandic partner Carbfix. The plant operates on geothermal energy, emphasising sustainability. At full capacity, Mammoth will remove 36,000 tons of carbon annually.
EU urgers banks to strengthen climate risk integration post stress tests
Following the "Fit-for-55" stress test, EU regulators emphasise the need for banks, investors, and insurers to embed climate risks into risk management. The stress test reveals that banks’ corporate loan books, exposed to hard-to-abate sectors like mining and transportation, are likely to suffer total losses worth €600 billion. While transition risks alone may not destabilise the financial sector, adverse scenarios could cause significant financial losses, particularly for investment funds. The stress test highlights vulnerabilities under the EU's 2030 emissions reduction goals, urging coordinated strategies to ensure the sector supports a green transition effectively.
Read more here. The Banker Anita Hawser
BNP Paribas launches sustainable forestry fund
BNP Paribas Asset Management introduced the Future Forest Fund, targeting US $500 million to US $750 million for sustainable forestry investments globally. Aiming to align financial returns with climate goals, the Article 9 SFDR-compliant fund will enhance biodiversity, carbon storage, and combat deforestation. Partnering with the International Woodland Company, it focuses on certified forestry projects in the U.S., Europe, Australia, and New Zealand.
Read more here. ESG Today Mark (Moshe) Segal
Spotlight
Updates from recent global discussions on climate finance
As the world grapples with escalating climate challenges, recent global discussions at the G20 and COP29 have emerged as critical inflection points in the international climate finance landscape. These forums represent more than diplomatic gatherings—they are strategic negotiations that are supposed to determine the trajectory of global climate resilience and sustainable development.
Developing countries require an estimate of about US $1.1 trillion annually in climate finance from 2025 by 2030 according to projections using the United Nations Global Policy Model for climate mitigation and adaptation. This warrants a leap in both quality and quantity in commitments from developed countries, given that the earlier climate finance goal was US $100 billion annually.
COP29 US $300 billion climate deal
COP29 was centred around climate finance, with an announcement awaited on the new collective quantified goal (NCQG) for climate finance. With discussions stretching beyond the last day, a broad target of US $1.3 trillion annually by 2035 was agreed; however, only an annual amount US $300 billion was agreed upon by developed nations in the form of grants and low-interest loans to aid the developing world in their green transition and climate adaptation journey.
Although thrice the amount since the previous commitment, developing countries deemed the amount as insufficient. Negotiators from least developed countries (LDCs) and small island developing states (SIDS) walked out of consultations and rejected the final text. The negotiators also demanded that of the US $1.3 trillion required, US $600 billion should be public or grant-equivalent finance, with the ‘historical polluters’ shouldering majority of the responsibility. However, the final text call upon all actors to scale up climate finance, encouraging developing countries to contribute towards this target on a voluntary basis.
Adoption of Article 6 on carbon markets
After nearly a decade of negotiations, Article 6 of the Paris Agreement was adopted establishing frameworks for voluntary carbon trading and global markets. Within Article 6, 6.2 refers to creating a decentralised system involving a bilateral agreement between 2 countries for trading carbon credits generated from emission reduction or removal, whereas 6.4 refers to setting a global carbon trading market. This is to bring in additional financing for developing countries with 5% of carbon credits dedicated towards the Adaptation Fund.
While developing nations welcomed the agreement, experts raised concerns about weak transparency, accountability, and potential misuse of carbon credits. Issues like double counting and insufficient environmental safeguards in the rules for carbon markets under 6.2 and 6.4 could undermine the intended climate benefits.
Voices for climate adaptation
COP29 saw the delivery of the establishment of a support programme for the implementation of National Adaptation Plans (NAPs) for the LDCs. To address the growing urgency of climate adaptation, discussions at the high-level dialogue on NAPs focused on accelerating innovative financing, technical support and actionable outcomes to meet the 2025 submission deadline for NAPs, setting the road towards COP30. The Baku Adaptation Roadmap and Baku high-level dialogue on adaptation to enhance the implementation of the UAE Framework was also unveiled.
Discussions at G20 summit in Brazil
The G20 Leaders' Summit, in Rio de Janeiro, marked a significant step forward in addressing global climate challenges. The summit reaffirmed the G20's commitment to multilateralism and climate action, despite ongoing geopolitical tensions.
A key focus was on expanding climate finance, with leaders agreeing on the need to mobilise trillions of dollars for low-income countries to support resilience and sustainable development. However, the summit fell short of establishing specific mechanisms for transitioning away from fossil fuels. Brazil's President Lula da Silva emphasised the role of central and development banks in supporting just energy transitions and promoted bioeconomy strategies.
The summit also saw progress on reforms to Multilateral Development Banks (MDBs) to unlock large-scale climate funding. In a notable initiative, Brazil proposed a taskforce called "Global Mobilisation against Climate Change" to enhance dialogue among governments, financial institutions, and international organizations for implementing climate goals.
While the summit made strides in integrating climate action into economic priorities, challenges remained in reaching consensus on fossil fuel phase-out and setting more ambitious climate neutrality targets.
Significant country announcements on climate ambition
The United Kingdom, Brazil and the UAE announced significant climate initiatives, widening their climate ambitions
UK: Unveiled guidelines for voluntary carbon and nature markets, aiming to ensure credits complement emission reduction efforts rather than replace them, signalling confidence in biodiversity-focused financial products. Also launched the Global Clean Power Alliance aimed at sharing expertise to facilitate renewable energy and energy efficiency commitments.
Brazil: Committed to reducing greenhouse gas emissions by 59-67% by 2035 through its updated NDC. This includes tackling deforestation, expanding renewable energy, and introducing sustainable fuels legislation, although experts view the targets as insufficiently ambitious
UAE: Announced a partnership with the Gates Foundation to enhance water forecasting for small-scale farmers in developing nations, supporting agricultural resilience. It also emphasised South-South climate finance collaborations to address challenges in the Global South
Featured events
Times Now ESG Impact Summit, New Delhi, 11th December 2024
With CSR and ESG emerging as critical concepts in today’s business landscape, managing societal and environmental impacts have become a critical part of business strategies. This requirement for ‘Action for Impact’, is the driving factor behind Times Now’s ESG Impact Summit, part of the Global Sustainability Alliance. This flagship platform aims to drive transformative discussions and actionable insights in E,S and G priorities.
African Financial Summit 2024, Casablanca – Morocco, 9-10th December
The annual African Financial Summit aims to bring together over 1000 leaders from the financial industry, including bankers, insurers, fintech representatives, capital markets, policy makers, and regulators from Africa and around the world. This platform deliberates on key topics and develops concrete solutions towards financial inclusion and a robust financial services industry in Africa.
Get more details here. IFC - International Finance Corporation African Guarantee Fund
IGF Middle East and Africa 2024 – A Limitless Future, Dubai, 24-27th November 2024
This marks the 4th edition of India Global Forum’s dialogue in the Middle East and Africa (ME&A) region, identifying new and thriving economic opportunities in the changing world. IGF ME&A aimed at identifying and unlocking new economic opportunities and focusing on collaboration and partnerships between India, UAE, Middle East and Africa. The forum explored various themes through specialised sessions, including WomenIN, Young Leaders Forum, The Future of Healthcare Forum, IGF Workforce Innovation Forum, and Culture and Sports Forum.
Access the programme agenda here. India Global Forum
Insights digest
auctusESG Blogs
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Market trends and reports
Read more here. Climate Action Tracker Climate Analytics NewClimate Institute Institute for Essential Services Reform (IESR)
Read more here. OECD - OCDE International Energy Agency (IEA)
Read more here. Centre for Research on Energy and Clean Air (CREA) International Society for Energy Transition Studies
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COP29 insights
Read more here. Down To Earth
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Senior Manager, Market Intelligence | Double Degree Master of Public Administration, Energy & Environment Policy from LSE SPP & Columbia SIPA | Sustainability | Climate Policy |
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