auctusESG | Insights | November H1 2024
Data dashboard
The figure, from the report titled 'Economic cost of extreme weather events', illustrates the global population's vulnerability to climate change, highlighting significant disparities across regions and socio-economic groups using data from World Bank Group. The impacts of climate-related shocks, such as extreme weather events, vary greatly in scale and nature, leading to different economic and social consequences.
Regions most affected often include those with existing inequalities, where marginalised communities bear the brunt of climate impacts. This vulnerability is compounded by socio-economic factors; for instance, women and marginalised racial groups face heightened risks due to historical exclusion and resource limitations. The IPCC notes that vulnerable communities, which have contributed least to climate change, are often the hardest hit, reflecting a profound injustice in climate impacts.
News roundup
Saudi desert snow signals urgent climate action at COP29
For the first time, snow blanketed Saudi Arabia's Al-Jawf region, highlighting the urgent need for climate action as world leaders gather for COP29 in Baku. This unprecedented weather event underscores the escalating impacts of climate change, prompting discussions on securing financial resources for vulnerable nations. Delegates are pushing for stronger emissions targets and updated national climate plans to combat rising temperatures and their consequences.
Brazil unveils ambitious climate pledge ahead of COP29 summit
Brazil announced a new climate change pledge ahead of the COP29 summit, committing to reduce greenhouse gas emissions by 50% by 2030 compared to 2005 levels. This initiative aims to enhance Brazil's role in international climate negotiations and demonstrates the country's commitment to sustainable development. The pledge includes efforts to protect the Amazon rainforest, which is crucial for global biodiversity and carbon storage. Brazil's actions are seen as vital in addressing climate change and fostering global cooperation.
European banks' climate targets threaten net zero goals
A recent analysis by ShareAction reveals that the climate targets of Europe's 20 largest banks, including HSBC and Barclays , are insufficient and misaligned, jeopardising net zero ambitions. The study found that 18 of these banks are unlikely to meet the International Energy Agency (IEA) 's required US $10 to US $1 ratio of green to fossil fuel investments by 2030. While decarbonisation targets are generally clear, only 13% of sustainable finance targets are backed by transparent methodologies, complicating accountability and effective climate action efforts.
Read more here. The Irish News Rebecca Speare-Cole
California climate disclosure law survives legal challenge
A California law mandating large U.S. companies to disclose value chain emissions and climate-related financial risks has survived a legal challenge from the U.S. Chamber of Commerce . U.S. District Judge Otis Wright II denied a request to block the law, citing insufficient information for a constitutional ruling. The law, effective from 2026, requires companies with revenues over US $1 billion to report on Scope 1, 2, and 3 emissions, while those with revenues exceeding US $500 million must disclose climate-related financial risks and mitigation strategies.
Read more here. ESG Today Mark (Moshe) Segal
NatureFinance launches NatureAlign tool for financial institutions
NatureFinance has launched NatureAlign, a new tool aimed at helping financial institutions assess their alignment with nature-positive outcomes, aligned with the Biodiversity Plan. This tool will enable asset managers and banks to evaluate their environmental impact and sustainability practices. NatureAlign integrates various datasets for comprehensive portfolio analysis and is one of the few free apps linked to major sustainability frameworks. Future updates may include features for setting nature-related targets and assessing investment impacts on biodiversity.
UAE plans US $54 billion investment by 2030 for sustainable energy
The UAE aims to invest up to AED $200 billion (approximately US $54.5 billion) by 2030 to enhance clean energy capacity and meet its climate goals, as announced by Energy Minister Suhail Al Mazrouei at the ADIPEC conference. This investment is part of the UAE's strategy to decarbonise its economy and achieve net-zero emissions by 2050. The updated Energy Strategy 2050 includes plans to triple the share of renewable energy and increase clean energy capacity to 30% by 2030, while also promoting energy transitions in over 40 countries globally.
Read more here. ESG Today Mark (Moshe) Segal
IFC partners with Bajaj Finance to invest US $400 million in climate finance
The IFC - International Finance Corporation has announced a partnership with Bajaj Finance to invest US $400 million as part of a US $1 billion fundraising initiative. This funding aims to expand Bajaj Finance's electric vehicle (EV) fleet, enhance energy-efficient consumer goods, and support women-owned micro-enterprises. The investment will significantly increase Bajaj Finance's climate loan portfolio, projected to reach US $600 million by 2027. IFC's commitment is expected to foster competition in the climate finance sector and support India's net-zero goals.
Read more here. Business Standard Aathira Varier
Spotlight
COP29 in Baku: Critical moments so far
The halls of COP29 in Baku are buzzing with intense negotiations as world leaders grapple with multiple pivotal issues that could redefine global climate action. The conference's opening days have already witnessed significant developments, some of them which have been anticipated all along.
Article 6.4 passes the mandate
In a swift move, delegates adopted rules for Article 6.4, establishing a new UN-supervised global carbon market scheduled to launch in 2025. This mechanism, designed to facilitate emission reductions through carbon trading, has drawn criticism for its rushed implementation. This mechanism will enable countries and companies to trade Article 6.4 Emission Reduction Credits (A6.4ER credits), theoretically allowing higher-emitting entities to offset their carbon footprint by investing in environmental projects elsewhere.
UK pledges 81% emissions reduction by 2035 in a new climate push
Setting an aspirational benchmark, the UK Prime Minister Keir Starmer announced a goal to cut national greenhouse gas emissions by 81% from 1990 levels by 2035. This ambitious target, set to be part of the UK’s updated Nationally Determined Contribution under the Paris Agreement, includes initiatives like expanding onshore wind, halting new North Sea oil licenses, and investing in carbon capture. The goal aligns with recommendations from the UK's Climate Change Committee to help meet the 1.5°C global warming limit.
Developments in climate finance negotiations
Initial climate finance discussions have been rocky, as the G77 and China bloc, representing more than 130 developing countries, have raised concerns on the initial negotiating text and have rejected it. The group has called for a re-evaluation of the financial framework, advocating for a minimum annual commitment of US $1.3 trillion from developed nations. Their proposal emphasises the importance of grant-based funding to support climate action without adding to the debt burden of developing countries, while seeking clearer definitions of climate finance that exclude non-concessional loans and export credits.
Argentina has also unexpectedly withdrawn its negotiators, signalling a significant diplomatic shift during its ongoing political transition. This move reflects the evolving priorities of President Javier Milei's new administration, highlighting the dynamic and multifaceted nature of global climate finance discussions.
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Revelations through State of Cryosphere report
Adding urgency to these discussions, the newly released State of the Cryosphere 2024 report brought out concerning issues through the conference. The report reveals that mountain and downstream communities could face survivable conditions by 2050 if current warming trends persist. The loss of Venezuela's final glacier and the imminent disappearance of Indonesia's Puncak Jaya serve as stark reminders of the accelerating climate crisis. Even more alarming is the report's revelation that global sea-level rise has doubled in the last three decades, with the Arctic Ocean potentially facing ice-free conditions for nearly half the year.
Looking forward
The finance gap between developed and developing nations remains a critical obstacle. Developing countries have argued that current financial commitments fall far short of actual needs, while developed nations push for a broader contributor base and varied sources of funding. This fundamental disagreement threatens to undermine collective action on climate change.
As COP29 progresses, negotiators face the delicate task of balancing market mechanisms with environmental integrity while ensuring equitable benefits for all nations. The success of these initiatives will largely depend on how effectively they can address both immediate climate threats and long-term sustainability goals. The conference's outcomes will be particularly crucial for vulnerable communities already facing the harsh realities of climate change.
The coming days in Baku will be decisive in determining whether these high-stakes discussions can translate into meaningful action. With the cryosphere report highlighting the rapidly closing window for effective intervention, the pressure is mounting on delegates to move beyond political rhetoric and deliver concrete, equitable solutions to the climate crisis.
United Nations S&P Global ESG Today Down To Earth The Hindu The Guardian International Cryosphere Climate Initiative
Featured events
With the COP29 underway, multiple side events, special events and press conferences are underway, summarising the pulse of this important convention. A few upcoming interesting picks from our side –
Strengthening capacities to mainstream human mobility into the National Adaptation Plans – 16th November
The IOM - UN Migration , leading UN migration agency, has been spearheading policy and advocacy efforts aiming at addressing international, regional and national concerns around environmental migration. The growing linkages between climate adaptation and migration and the accelerating climate crisis have brought these conversations into the fore. Mainstreaming migration into National Adaptation Plans is crucial in building community resilience and adaptive capacities, minimising displacement and forced migration.
Read more here.
Innovative Financing in Blue Carbon Ecosystems – 16th November
This side event organised by Conservation International , The Pew Charitable Trusts and Rare , aims to explore the various innovative financial mechanisms and strategies aimed at protecting, restoring and managing coastal blue carbon ecosystems for mitigation and adaptation action.
Read more here.
World Benchmarking Alliance: Just transition indicators for next-gen NDCs – 18th November
This press conference by World Benchmarking Alliance aims to tackle the need for clear metrics to track the significant leaps taken in just transition by entities. This is critical especially when countries are integrating these priorities into their NDCs and Long-tern Low Emission Strategies, needing the alignment of government policies with corporate actions.
Read more here.
Getting down to business: How SMEs can drive investments in climate adaptation – 18th November
This side event, led by UNIDO and UN Environment Programme aims at bringing together representations from SME financiers/funders highlighting the importance of mainstreaming climate finance solutions for SMEs to drive the low-carbon and resilient transition pathways targeted by developing nations.
Read more here.
Insights digest
Market trends and reports
Read more here. OECD - OCDE
Read more here. Council on Energy, Environment and Water (CEEW) Simran Sukhija , Jhalak Aggarwal , Sumit Prasad , Mohana Bharathi Manimaran , Ushashi Datta
Read more here. UN Environment Programme
Read more here. Ocean Risk and Resilience Action Alliance
Read more here. World Resources Institute Shuang Liu Lihuan Zhou Chris Qihan Zou Yan Wang and Ziyi Ma
Read the press release here. International Union For Conservation Of Nature
Read the press release here. – World Benchmarking Alliance
Read more here. UN Secretary General, Antonio Guiterres
Listen here. The Guardian
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