Transition Legal Risks, Disclosures, Biodiversity Risk, and Lithium

Here are 5 ESG insights you might have missed this week:

1. Singapore Exchange Plans Mandatory Climate-Related Disclosures-

• Singapore will require mandatory climate-related disclosures for listed companies under proposals that aim to meet rising investor demand for commitments to tackle climate change.

• Starting from the 2022 financial year, all firms will need to publicize information in line with recommendations from the Task Force on Climate-Related Financial Disclosures, according to a proposal by the regulatory arm of Singapore Exchange Ltd. Those that do not will be required to explain why.

• Singapore’s move would be among the more aggressive efforts amid a global push from investors for more companies and countries to meet Paris Agreement targets through an energy transition to lower carbon emitting sources. The requirements could aid the status of Singapore as a finance hub, where some $3.5 trillion worth of investors’ assets are parked, if local regulators can ensure compliance with tougher disclosure rules related to climate change and governance.

• Link to Source: https://www.bnnbloomberg.ca/singapore-exchange-plans-mandatory-climate-related-disclosures-1.1644349

2. Climate Group Sues Oil Firm Over Net-Zero Claims In A World First-

• The court case is “a landmark, world-first test case in relation to the viability of carbon capture and storage, and the environmental impacts of blue hydrogen, increasingly touted as a key element in gas companies’ pathways toward net zero emissions”

• The Australasian Centre for Corporate Responsibility (ACCR) filed on Thursday a lawsuit with the Federal Court of Australia, challenging claims of energy giant Santos that natural gas provides “clean energy” and questioning its net-zero targets, in a world-first court case to challenge the veracity of a company’s net-zero emissions targets.

• Australia-based gas producer and developer Santos aims to reduce its Scope 1 and Scope 2 emissions to net zero by 2040. Santos has set an intermediate target to cut its Scope 1 and Scope 2 emissions and emissions intensity by 26-30 percent by 2030. The company bets on carbon capture and storage (CCS) projects to pursue more drastic emissions reductions in the coming decades.

• Link to Source: https://oilprice.com/Latest-Energy-News/World-News/Climate-Group-Sues-Oil-Firm-Over-Net-Zero-Claims-In-A-World-First.html

3. Reuters: Tackling Biodiversity Loss Briefing-

• Biodiversity risk a blind spot for the finance industry.

• A recent 58-page briefing on biodiversity loss from Reuters features natural capital case studies from Natura, Olam, Kering, and 75 other organisations that participated in the Informal Working Group brought together by the Task Force for Nature-related Financial Disclosures (TNFD).

• The briefing also sets out how other corporates are connecting their plans for reaching net-zero greenhouse gas emissions with reducing their impacts on nature.

• Link to Source (Registration required):https://1.reutersevents.com/LP=30800

4. Vast Supply Of Lithium Discovered In UK, It Is Renewable And Carbon Neutral-

• A geothermal power plant in the UK discovered what currently is the highest concentration of lithium in the geothermal fluid.

• Third-party testing has revealed that the fluid holds over 250 milligrams (3.858 grains) of lithium per liter (1.05 qt). It might not seem like much, but that is a lot of lithium, and the best part about it is that it comes from a sustainable source, and it is made with zero carbon emissions.

• The geothermal plant will produce heat, power, and lithium. All three commodities will come from the same facility, and company representatives estimate they will be able to extract up to 4,000 tons of lithium annually.

• Lithium is essential for modern batteries, and it is needed in mobile devices and electric vehicles alike. The latter requires a larger quantity of lithium for bigger batteries, and the way lithium is extracted in many parts of the world has been criticized. However, there is an alternative, and it involves geothermal energy.

• Link to Source: https://www.autoevolution.com/news/vast-supply-of-lithium-discovered-in-uk-it-is-renewable-and-carbon-neutral-168386.html

5. Hedge Funds Are Waking Up To ESG (And Hiring)-

• Re-badging senior investment professionals as 'head of ESG' is kicking the can down the road.

• Most hedge funds in the market are either making their first ESG hires or are adding minimal resource to lean team structures. As such, unlike far larger ESG teams at institutional asset managers, these one or two hires often bear the weight of expectation from the business itself.

• Whereas larger team structures tend to specialise their employees around integration, research and active ownership, hedge funds will more likely need candidates who are generalists. Not only generalists, but those who are capable of operating in a highly visible role with high expectations often reporting directly into the CIO or CEO of the business. These candidates must have exceptional communication skills, be able to manage conflict and push back from the business, which should be expected in the early adoption phase for most firms.

• Link to Source: https://esgclarity.com/hedge-funds-are-waking-up-to-esg-and-hiring/

One more thing: From NYU’s Stern Center for Sustainable Business, the Return on Sustainability Investment Methodology. A framework to help firms identify material ways to implement and monetize sustainability strategies. In the link, you will find research publications, industry case studies, and super useful Excel tools.

Find the framework here: https://www.stern.nyu.edu/experience-stern/about/departments-centers-initiatives/centers-of-research/center-sustainable-business/research/return-sustainability-investment-rosi/rosi-resources-and-tools

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