On Facilitated Emissions, Net-Zero Playbook, Sustainability-linked Bonds, and Nord Stream
Here are 5 ESG insights you might have missed this week:
1. Capital Markets Facilitated Emissions Methodology-
The Partnership for Carbon Accounting Financials (PCAF) is pleased to launch the final public consultation on the capital markets facilitated emissions methodology.
PCAF released the discussion paper on capital markets instruments for its initial public consultation in late 2021, mirroring the public consultation process held for the first edition of the PCAF Standard in 2020. The discussion paper aimed to highlight the importance of capital markets to facilitate the climate transition and introduce the concept of facilitated emissions.
It explains the key choices necessary to develop guidelines for facilitated emissions and describes the complex challenges around making those choices. The methodology provides a suggested GHG accounting approach for the facilitation of capital markets activities. This method creates a mechanism that helps provide transparency and accountability.
2. Generation IM 2022 Sustainability Trends Report-
This series of annual reports surveys the broad landscape of what we often call the “sustainability revolution”.
We believe this transition is still in its earliest stages, and that accelerating it is essential to human welfare and to the preservation of the natural world. Each year, we take stock: where does the transition stand now, and where must it go next?
Two major developments this year have raised the chances of a rapid acceleration in the transition to clean energy. The Ukraine war has thrown the risks of European dependence on Russian fuels into sharp relief, prompting the European Union to raise its goals for renewable energy. Additionally, a new law in the United States could potentially cut emissions to as much as 40 percent below 2005 levels.
Link to Source: https://str2022.generationim.com/chapters/introduction
3. Net Zero Investor Playbook-
The Investor Leadership Network releases the net zero investor playbook.
To help investors navigate the challenge of transition financing, Part 1 and 2 of this Net Zero Investor Playbook synthesizes the current landscape of relevant investor-specific frameworks and methodologies, and case studies from individual ILN members on their customized implementation approaches.
The resources and methodologies are categorized into four themes: Portfolio emissions forecasting and target setting, Alignment with portfolio construction and investment risk parameters, Portfolio transition taxonomies, and Assessments of portfolio holdings’ transition capacity, and portfolio alignment metrics.
4. 8 Things to Know About the Environmental Impact of ‘Unprecedented’ Nord Stream Leaks-
Suspected sabotage will release large amounts of methane, but it’s a ‘wee bubble’ compared with what’s emitted globally every day.
Methane — a greenhouse gas up to 80 times more powerful than carbon dioxide — is escaping into the atmosphere from three boiling patches on the surface of the Baltic Sea, the largest of which the Danish military said was a kilometer across.
“We expect that gas will flow out of the pipes until the end of the week. After that, first of all, from the Danish side, we will try to get out and investigate what the cause is, and approach the pipes, so that we can have it investigated properly. We can do that when the gas leak has stopped,” Danish Energy Agency director Böttzauw told local media.
5. Some Sustainability-Linked Bonds’ ESG Benefits Fall Short Of Investors’ Expectations-
Only 47 per cent included a KPI considered core to their business under ICMA’s KPI registry, study finds.
After reviewing deals concluded between 2019 and mid-2020 by the world’s first 30 sustainability-linked bond issuers and their bonds’ key performance indicators (KPIs), analysts at data and ratings provider Sustainable Fitch found that only 47 per cent included a KPI considered core to their business under the International Capital Market Association (ICMA)’s KPI registry. Some 20 per cent had a KPI deemed secondary.
The study’s findings are significant because the issuance of global sustainability-linked bonds jumped more than tenfold to US$91.2 billion via 154 deals last year from US$8.3 billion through 16 transactions in 2020, according to financial data provider Refinitiv.
One more thing: Take a look at this piece that identifies the biggest energy producers by country and types of energy produced over the last 40 years of production.
Find the infographic here: https://www.visualcapitalist.com/cp/global-energy-consumption-and-production-since-1980/
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