auctusESG | Insights | September H1 2024
Data dashboard
Many banks have promised to achieve net-zero emissions by 2050 and invest heavily in climate solutions. However, the effectiveness of these commitments varies greatly. While banks are crucial for financing green technologies, it's unclear if their actions truly match their promises. The World Resources Institute 's Financial Institutions Net Zero Tracker evaluates 25 banks from 10 countries on their transparency, implementation, and credibility regarding net-zero goals.
Key findings show that many banks set net-zero targets without sufficiently aligning their portfolios with the 1.5°C global warming limit. Most lack adequate green financing strategies and do not uniformly reduce emissions across sectors. The report stresses the need for improved transparency in reporting, greater accountability for climate goals, and stronger alignment of targets with climate equity and just transition principles.
Read more here. World Resources Institute CDP
News roundup
India leads with over US $1.2 billion in climate finance contributions
A recent study conducted by the UK based think tank, ODI Global and the Zurich Climate Resilience Alliance reveals that by 2022, India contributed $1.28 billion in climate finance, surpassing several wealthy nations, including Canada and Japan. The report highlights India's commitment to climate action, with significant investments directed towards renewable energy and sustainable development. It also emphasizes the need for developed countries to fulfil their financial pledges to support developing nations in combating climate change.
Read more here. Deccan Herald
Typhoon Yagi takes over Vietnam
Hanoi and parts of northern Vietnam continue to face significant flooding following the impact of Typhoon Yagi, the strongest storm to hit Asia in 2024. The Red River's water levels remain high, and the Vietnamese weather agency has forecasted little change in the next 24 hours. Many low-lying areas of Hanoi are still submerged, with thousands evacuated earlier due to rising waters. Landslides and floods have affected northern regions, leading to a rising death toll of 197, with 128 people still missing. Additionally, over 200,000 hectares of crops have been damaged, and infrastructure in key provinces has been severely disrupted. Recovery efforts are underway, but rebuilding livelihoods and homes is expected to take a long time.
Read more here. Reuters Trong Khanh Vu Minh Nguyen
Storm Boris leaves Central and Eastern Europe devastated
Storm Boris has caused widespread destruction across parts of Europe, bringing heavy rain and strong winds. The storm has led to several deaths and left many missing. Rescue teams are working to find those affected as floods and landslides have worsened the situation. In some areas, homes and infrastructure have been severely damaged, and authorities have issued warnings to residents in high-risk zones. Emergency services are stretched thin as the storm continues to wreak havoc across the continent.
Data centre industry set to emit 2.5 billion tons of CO2 by 2030
According to a report by Morgan Stanley , the global data centre industry is projected to emit approximately 2.5 billion tons of carbon dioxide (CO2) from 2023 to 2030. This alarming figure underscores the environmental impact of the sector, driven by increasing demand for cloud services and digital infrastructure. The report highlights the necessity for data centres to adopt more sustainable practices and technologies to mitigate their carbon footprint, as the industry faces growing scrutiny from investors and regulators focused on climate change and sustainability efforts.
World Bank issues a US $225 million bond linked to Amazon reforestation carbon removals
The World Bank has priced a $225 million bond with financial returns tied to carbon removal units (CRUs) from reforestation projects in Brazil’s Amazon rainforest. This 9-year, 100% principal-protected bond is the World Bank's largest-ever outcome bond, supported by Brazil-based company Mombak. Investors will receive a variable component tied to CRUs generated by Mombak’s reforestation efforts, with proceeds supporting sustainable development activities globally. The bond aims to mobilize $36 million for Mombak’s projects and attract investors like Nuveen and T. Rowe Price.
Read more here. The World Bank
ADB commits to climate finance
The Asian Development Bank (ADB) has announced its commitment to allocate 50% of its annual lending to climate finance by 2030. This strategic move aims to support developing countries in addressing climate change challenges and achieving sustainable development goals. ADB's climate finance initiatives will focus on projects that promote renewable energy, enhance resilience, and reduce greenhouse gas emissions. The bank's leadership emphasizes the urgency of mobilizing resources for climate action, highlighting the critical role of financial institutions in fostering a sustainable and low-carbon future.
Read more here. Business Standard
Europe’s largest stock exchange launches two new sustainability offerings for SMEs
Euronext, Europe's largest stock exchange, has unveiled two new offerings to support small and medium-sized enterprises (SMEs) in their sustainability efforts. The first is an ESG benchmarking tool that allows SMEs to assess their environmental, social, and governance (ESG) performance against industry peers. The second is a Corporate Sustainability Reporting Directive (CSRD) advisory solution, which helps SMEs navigate the upcoming EU sustainability reporting requirements. These initiatives aim to empower SMEs in measuring, improving, and disclosing their sustainability practices, ultimately fostering a more sustainable business ecosystem across Europe.
Read more here. ESG Today Mark (Moshe) Segal
Spotlight
Southern Africa’s long-running drought situation
Drought conditions in Africa have been severe and persistent, expanding from the Horn of Africa to southern regions of the continent over the past few years. Countries in the Horn of Africa such as Ethiopia, Kenya and Somalia have been experiencing drought conditions for over a decade now, with the most recent severe drought lasting for five consecutive rainy seasons from 2020 to 2022 .
Conditions have continued to worsen, and this has forced close to 100,000 people, mostly women, children and elderly, to flee the region in search of safety and assistance. The drought has now spread to southern African countries, with the 2023-2024 growing season being particularly severe. February 2024 was the driest February in 40 years for parts of Zambia, Zimbabwe, southeastern Angola, and northern Botswana.
Read more here.
Exacerbating drought conditions
The region is a climate crisis epicentre, with increasing drought frequency and severity. Ethiopia has faced continuous drought for over seven years, while Kenya has endured cyclical droughts since 1975. Five consecutive failed rainy seasons in the Horn of Africa have caused unprecedented water shortages, crop destruction, livestock deaths, and dried water sources.
El Niño has worsened the drought in southern Africa, altering rainfall patterns and leading to crop failure, further threatening food and water security. Ongoing cholera outbreaks in Zambia, Malawi, and Zimbabwe have led these nations to declare national disasters.
Rising food prices, driven by inflation, global events like the Ukraine conflict, and the region's dependence on Ukrainian wheat, have worsened food insecurity. In Ethiopia and Somalia, food basket costs have surged by 66% and 36%, deepening hunger and poverty.
Recently, Namibia's controversial decision to cull animals in national parks to prevent mass starvation and temporarily address hunger has sparked debate, with critics warning it could lead to ecological imbalance.
Emergency response in Southern Africa
UNHCR, the UN Refugee Agency has been providing emergency shelter and household items, along with cash assistance, health and nutritional facilities. Additionally, UNHCR has also liaising local authorities to strengthen border monitoring and mitigate gender-based violence. Despite these efforts, there are significant funding shortfalls. UNHCR appealed for $137 million to respond to immediate needs in Ethiopia, Kenya, and Somalia for 2023.
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Various UN agencies and NGOs are also providing food assistance, cash transfers, and other humanitarian aid. For instance, by January 2023, 9,210 MT of food commodities had been distributed in the Horn of Africa. Funding for Ethiopia, Kenya and Somalia has been 27% and 34% of the required amount to adequately address the crisis.
Countries like Kenya, Uganda, and Ethiopia have developed drought contingency plans. The Integrated Drought Management Programme (IDMP) in the Horn of Africa has been working to promote drought resilience in countries like Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan, and Uganda. Ethiopia and Sudan have developed National Drought Plans with support from the IDMP Horn of Africa. However, these plans often have limitations, including unclear drought definitions, lack of enforceability, and insufficient coordination between agencies.
Read more here.
Way forward for the region
The existing plans typically include elements such as monitoring, early warning systems, risk assessment, and mitigation strategies. However, recognizing the need for more sustainable and long-term solutions, there has been a shift towards innovative financing approaches to support drought resilience.
At the national level, countries are integrating drought resilience into their budgets by allocating dedicated budget lines for drought management and climate adaptation and implementing climate budget tagging to track climate-related expenditures across sectors.
These innovative financing approaches aim to shift the focus from reactive, emergency-based responses to building long-term drought resilience, supporting the implementation of comprehensive drought management plans, sustainable land and water management practices, and climate adaptation strategies across the region.
NASA Goddard Space Flight Center USAID Down To Earth UNHCR, the UN Refugee Agency European Commission
Featured upcoming events
auctusESG at Climate Week NYC 2024
Climate Week NYC 2024, taking place from September 22 to 29, will bring together over 600 events focused on accelerating climate action. The event, the largest of its kind globally, includes a wide array of discussions and workshops, with participation from businesses, policymakers, and civil society. Topics range from renewable energy advancements and deforestation solutions to financing for nature-based climate solutions.
auctusESG has two webinars lined up during this week
Time: 09:00 AM – 10:30 AM (GMT) / 1:30 PM – 03:00 PM (IST) / 04:00 PM – 05:30 PM (PHT)
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Time: 1:30 PM – 04:00 PM (BST) / 06:00 PM – 07:30 PM (IST) / 08:30 AM – 10:00 AM (EDT)
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UN Summit of the Future NY 2024
The UN Summit of the Future running from 20th to 23rd of September attempts to bring together global leaders to address urgent challenges and gaps in international governance, exacerbated by recent global crises such as the COVID-19 pandemic, the Ukraine war, and the climate crisis. The summit aims to reaffirm commitments to existing frameworks like the Sustainable Development Goals (SDGs) and the UN Charter, while promoting enhanced global cooperation to tackle emerging challenges.
A key outcome of the summit will be the "Pact for the Future," a comprehensive document aimed at reinvigorating multilateralism and fostering a more resilient global system for future generations. It will include agreements on issues like a Global Digital Compact and a Declaration on Future Generations. This summit represents a rare opportunity to strengthen international cooperation and ensure that global institutions are better equipped to address future challenges.
Catch Namita Vikas , Founder and MD auctusESG, on 21st September addressing the panel on 'Scaling up Development and Climate Financing'!
Insights digest
auctusESG thought leadership
Read more here. Authors: Namita Vikas and Sourajit Aiyer.
Read more here. Contributor: Sanket Mate .
Read more here. Contributor: Malcolm Hendricks .
Market trends and reports
Read more here. Climate Bonds Initiative
Read more here. Transition Pathway Initiative (TPI) , Grantham Research Institute on Climate Change & the Environment and The London School of Economics and Political Science (LSE)
Read more here. Observer Research Foundation , Climate Policy Initiative - India and MacArthur Foundation
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