Climate Investment Newsletter 12/5 - 12/11

Groundbreaking News

Fidelity, UBS Join Investors Making $9 Trillion Net-Zero Pledge

• A group of 30 asset managers overseeing a combined $9 trillion of assets said they will support efforts to limit global warming by running carbon-neutral investment portfolios by 2050 or sooner.

Individual Deals and Market Watch

EV bus and truck maker The Lion Electric to take SPAC route to public markets

• Canadian electric truck and bus manufacturer The Lion Electric Company said Monday it plans to become a publicly traded company via a merger with special purpose acquisition company Northern Genesis Acquisition Corp.

Calstrs plans green shift after Joe Biden’s victory

• The world’s largest public pension fund for teachers is planning to accelerate changes to its investment portfolio in a bid to become greener following the victory of Joe Biden in the US election.

Moody’s starting to range utilities on climate transition risk

• 40% of U.S. power generators are poorly positioned for a transition to a low-carbon economy because their business plans rely on coal and natural gas through 2025, according to a new framework that Moody’s Investors Service is applying to arrive at carbon transition assessment (CTA) scores for rated U.S. utility issuers.

Robeco launches Paris-aligned climate fixed income strategies

• Robeco, an early pioneer in sustainable investing, has launched RobecoSAM Climate Global Credits and RobecoSAM Climate Global Bonds, its first global fixed income strategies to be fully compliant with the EU benchmark regulation for Paris-aligned investments.

San Francisco Public Utilities Commission Announces Latest Details of Green Bond Offerings

• The San Francisco Public Utilities Commission (SFPUC) has posted details of its newest bond offerings, which includes a $342 million preliminary taxable green bond to refund bonds related to the agency’s Water System Improvement Program (WSIP) which will also be listed on the London Stock Exchange.

Climate Bonds Initiative’s Green Bond Market Summary Q3 2020

• Green bonds, loans and sukuk added to the Climate Bonds Database for Q3 2020 reached USD69.4bn, the second highest recorded amount in any individual quarter (following Q2 2019 at USD73.1bn), and 21% more than Q2 2020. Cumulative issuance volume since inception reached USD948bn.

Ping An Uses Artificial Intelligence to Detect Greenwashing and Assess Impact of Climate Risk Disclosure Transparency on Financial Performance

• Natural Language Processing (NLP) technology, used to analyze language from company disclosures, can help to detect potential "greenwashing" by high emission companies, according to the latest report from the Ping An Digital Economic Research Center (PADERC), a member of Ping An Insurance (Group) Company of China, Ltd. (HKEx:2318; SSE:601318), and the Brevan Howard Centre for Financial Analysis at Imperial College London, the world's leading climate finance research center.

Cbus and Brookfield to invest in built-environment innovation and technology

• CIO Kristian Fok said: “The market for emerging technology servicing the built environment is growing rapidly and will accelerate post-COVID, primarily across real estate and construction, transport and logistics, and healthcare.

Canada Pension Plan launches European renewables platform led by Psaradellis

• Canada Pension Plan Investment Board (CPP Investments) has established a European renewable energy platform based in the UK.

Macro Commitments

New York Pension Fund Pledges Net-Zero Emissions by 2040

• The New York State Common Retirement Fund pledged to reach net-zero greenhouse gas emissions across its investments by 2040, a decade before any other U.S. pension plan, and may divest from the riskiest oil and gas companies by 2025.

Aviva Investors pledges to provide £1bn of sustainability-linked loans for property sector by 2025

• Aviva Investors has announced it is to provide £1bn of sustainability-linked loans to the real estate sector over the next four years, a lending program it hailed as one of the industry's "biggest moves yet into sustainable debt".

Newmont invests $500 million to address climate change

• Newmont, the mining giant, announced that it will be investing $500 million in climate change initiatives over the next five years, from 2021 through 2025.
• Newmont recently committed to meet an industry-leading climate target of 30% reduction in greenhouse gas (GHG) emissions by 2030, with an ultimate goal of becoming net zero carbon by 2050.

Europe’s Biggest Utility Enel to invest a further $83 billion in renewables

• Enel SpA plans to spend €70 billion, equivalent to $83 billion, expanding its presence in wind and solar power in the coming decade, seeking to cement its position as the world’s largest renewable energy producer outside China.

Glencore pledges to become 'net zero total emissions company' by 2050

• Mining giant Glencore has pledged to achieve net zero emissions by 2050 by slashing its operational emissions, reducing its coal production, and ramping up investment in commodities crucial to the decarbonisation of the global economy.

S. Korea to revamp taxation, set up fund for carbon neutrality goal

• South Korea said Monday it plans to overhaul a taxation scheme related to carbon emissions and set up a fund designed to fight climate change in a bid to achieve the goal of carbon neutrality by 2050.

UK Doubles Up Efforts to Tackle Climate Change in Kenya

• The UK is stepping up to drive climate action in Kenya, British High Commissioner Jane Marriott has announced. During a visit to Lake Baringo, she reaffirmed that the UK is doubling its commitment to providing international climate finance by KES 1.7 trillion ($15.2 billion) over the next 5 years.

United Airlines invests in carbon-capture project to be 100% green by 2050

• United Airlines said on Thursday it had committed to a multimillion-dollar investment in a project to remove carbon dioxide from the air through air direct-capture technology as part of a plan to be 100% “green” by 2050.

BNZ Targets $10 Billion Sustainable Finance And SME Partnerships To Reduce Carbon Emissions

• Bank of New Zealand (BNZ) has released its first sustainability report and announced changes to its lending policy and ambitious targets to work with SMEs to reduce New Zealand’s carbon emissions.

World Bank boosts target for climate-friendly financing to 35% over five years

• The World Bank said on Wednesday it was setting a new five-year target for 35% of its financing, on average, to have climate “co-benefits,” up from a 28% target for the previous five-year period ended in 2020.

Macquarie Asset Management declares 2040 net-zero commitment

• Macquarie Asset Management (MAM), the world’s largest infrastructure manager, is committing to manage its portfolio in line with net-zero greenhouse gas emissions by 2040, it announced today.

U.K. Grids Get $40 Billion Budget to Meet Net-Zero Targets

• U.K. energy grids will have 30 billion pounds ($40 billion) to spend on ensuring the nation’s pipes and wires are able to cope with meeting the nation’s net zero emissions target by 2050.

Frameworks and Case Studies

Writing the book on the net zero transition

• The Climate Change Committee (CCC) has just published the book on the net zero transition. The CCC's epic new report provides the blueprint for a net zero economy, the rationale for following it, and hints at the high drama that will define the century - it could prove to be a canonical document.

ONE EARTH CLIMATE MODEL PLOTS POSSIBLE COURSE FOR REAL ECONOMY TO MEET PARIS 1.5°C SCENARIO

• The publication of the Net-Zero Asset Owner-commissioned study comes ahead of the UN Climate Ambition Summit (12/12/2020), held on the fifth anniversary of the landmark Paris Agreement.

UNEP: Net-zero pledges provide an ‘opening’ to close growing emissions ‘gap’

• The annual report, now in its 11th year, finds that global emissions will fall in 2020 due to Covid-19 related disruptions. But it also shows starkly how quickly the 1.5C goal is slipping out of reach, as well as how limiting global warming to the “well below” 2C goal is becoming more difficult with every passing year in which emissions continue to grow.

Ramping up renewables now could save Europe €363bn by 2050

• Academics from universities in Denmark and Germany have calculated Europe could save €363 billion of the cost of the energy transition by ramping up renewables installation now rather than delaying.

Reaching Net Zero Emissions In Virginia Could Increase State GDP More Than $3.5 Billion Per Year

• New modeling using the Virginia Energy Policy Simulator (EPS), developed by Energy Innovation and Rocky Mountain Institute, estimates the VCEA will reduce power sector emissions nearly 64% and cut economy-wide emissions 26% by 2050 compared to business-as-usual.