Climate Investment Newsletter 3/13 - 3/19

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Head of Research Integration

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• Build and maintain the definitive digital resource on funds, vehicles, large projects, prizes and incubators that are investing (or driving investment) in climate solutions aligned to science-based roadmaps

Highlight of the Week

Invest $131 trillion in clean energy by 2050 [4.5tn/year] to hit climate goals, International Renewable Energy Agency says [Reuters]

• Planned investment in clean energy must increase by 30% to a total of $131 trillion by 2050 to avert catastrophic climate change, with the need to massively scale up hydrogen production particularly acute, according to a study here published on Tuesday, March 16th.

Individual Deals and Market Watch

Valero and BlackRock Partner with Navigator to announce large-scale carbon capture and storage project [business wire]

• Valero Energy Corporation (NYSE: VLO, “Valero”) and BlackRock Global Energy & Power Infrastructure Fund III announced that they are partnering with Navigator Energy Services (“Navigator”) to develop an industrial scale carbon capture pipeline system (“CCS”). The initial phase is expected to span more than 1,200 miles of new carbon dioxide gathering and transportation pipelines across five Midwest states with the capability of permanently storing up to 5 million metric tonnes of carbon dioxide per year.

Swedish battery manufacturer Northvolt receives a $14 billion order from VW [Tech Crunch]

• Northvolt, the Swedish battery manufacturer which raised $1 billion in financing from investors led by Goldman Sachs and Volkswagen back in 2019, has signed a massive $14 billion battery order with VW for the next 10 years.
• The big buy clears up some questions about where Volkswagen will be getting the batteries for its huge push into electric vehicles, which will see the automaker reach production capacity of 1.5 million electric vehicles by 2025.

Apple Inc spending from 'green bonds' hits $2.8 billion [Reuters]

• Apple Inc said on Wednesday it allotted $2.8 billion raised from “green bonds” that last year funded 17 projects that will generate 1.2 gigawatts of renewable energy. It said the projects will avoid an average of 921,000 metric tons of carbon emissions each year, which it said is equal to removing nearly 200,000 cars from the road.

Alt protein Quorn owner Monde Nissin aims for Philippines’ first billion dollar IPO as its plant-based sales soar [Green Queen]

• Manila-headquartered Monde Nissin filed with the Philippine Securities and Exchange Commission to go public earlier this month, looking to raise as much as ₱63 billion (approx. US$1.3 billion), in what could be Philippines’ largest-ever IPO to date.

HSBC AM and IFC Real Economy EM Bond fund raises USD538m [Institutional Asset Manager]

• HSBC Asset Management and International Finance Corporation (IFC), a member of the World Bank Group, has held the final closing of the HSBC Real Economy Green Investment Opportunity GEM Bond Fund (REGIO), boosting access to climate finance and helping further develop the market for green bonds.

‘Flying taxi’ startup Volocopter picks up another $241M, says service is now two years out [Tech Crunch]

• Volocopter, a startup out of southern Germany (Bruchsal, specifically) that has been building and testing electric VTOL (vertical take-off and landing) aircraft, has picked up €200 million (about $241 million) in a Series D round of funding. Alongside its aircraft, Volocopter has also been building a business case in which its vessels will be used in a taxi-style fleet in urban areas. CEO Florian Reuter tells us that live services are now two years out for the two vehicle models it has been developing.
• Volocopter joins Lilium and other electric VTOL companies vying for the future of transportation.

3X5 Partners closes $100 million to invest in global health and climate action [Impact Alpha]

• 3×5 Partners says its mission is to “invest in what the world needs.” It raised $100 million for 3×5 Partners Fund III to make $15 to $20 million investments in startups responding to the climate crisis, particularly in water, energy, food and waste, along with better healthcare.
• “Far from being an encumbrance, investing in essential solutions is the source of our performance,” said 3×5 Partners’ Nicholas Walrod.

Macro Commitments

UK government to provide £1bn to help reduce emissions through energy efficiency projects and low carbon technologies [The Guardian]

• The government will spend more than £1bn helping schools, hospitals and industry to reduce greenhouse gas emissions and encourage the growth of new low-carbon technologies in the UK, under plans set out on Wednesday, March 17th.

EBRD and Green Climate Fund extend cooperation by US$500 million [The Financial]

• The European Bank for Reconstruction and Development (EBRD) has reaffirmed its commitment to scaling up green intermediated financing. The GCF-EBRD Green Energy Financing Facilities (GEFF) programme, inaugurated in 2018, spans three regions and directs new climate finance flows to Armenia, Egypt, Georgia, Jordan, Republic of Moldova, Mongolia, Morocco, Serbia, Tajikistan and Tunisia. Sums lent to local partner financial institutions are on-lent to private sub-borrowers for investments in climate change mitigation and adaptation projects. An extension of the successful cooperation by US$497 million supports thousands of individual investments in technologies that reduce emissions and enhance resilience to climate change.

UK pension Nest commits $350 million to Octopus Renewables for green infrastructure [Chief Investment Officer]

• The National Employment Savings Trust (Nest) has appointed Europe’s largest investor in solar and wind assets, Octopus Renewables, to expand its renewable infrastructure investment across the continent. The UK’s biggest workplace pension plan committed nearly $350 million this year to the endeavor, Nest said Friday. The $22.3 billion retirement system said the commitment could grow to nearly $2 billion by the end of the decade.

Natural Capital -- UK Government announces £150 million investment for world’s rainforests [Climate Action]

• The UK Government has launched a £150 million fund to help protect 2.1 million hectares of rainforest from deforestation. Through the newly launched Mobilising Finance for Forests Programme, the Government’s £150 million investment is for businesses and investors who support and deliver sustainable land-use projects and protect tropical rainforests, regions and communities across Africa, Asia and Latin America.

Pathways, Frameworks, Case Studies, Research

Climate-linked downgrades risk $270 billion-a-year price tag [Bloomberg Green]

• Climate change could lift interest payments on sovereign and corporate debt by nearly $270 billion a year by the end of the century, according to Cambridge University and the University of East Anglia. The authors of the study used artificial intelligence to simulate the impact of global warming on Standard & Poor’s credit ratings for 108 countries.

US solar industry saw 43% growth in installations in 2020 [Smart Energy Decisions]

• The U.S. solar industry installed a record 19.2 GW of capacity in 2020, representing a 43% increase from the year before. That’s according to a new report released by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. The U.S. Solar Market Insight 2020 Year-in-Review report found that solar was the most-installed renewable energy source for the second year in a row, representing 43% of new capacity.

Net-zero AOA targets climate solution investments ‘digital map’ [IPE]

• The UN-convened Net-Zero Asset Owner Alliance (AOA) is aiming to develop and publish a “digital map” to climate solution investments, and has launched a tender for the attention of information and data providers who could support the work.

Scientists push to add “huge” fish trawling emissions to national inventories [Climate Home News]

• SURPRISE: A group of scientists and economists are pushing for bottom-trawling fishing emissions to be added to nations’ greenhouse gas inventories, as a study reveals the practice is responsible for 1 billion tonnes of underwater emissions every year.

Danish regulator sets up enforcement unit for SFDR and greenwashing and a potential US parallel [Responsible Investor]

• Denmark’s Financial Supervisory Authority (FSA) has set up a unit to monitor investors’ sustainability disclosures under new EU rules and to combat greenwashing, according to local media reports. The Sustainable Finance Disclosure Regulation (SFDR) came into force last week, requiring asset managers and other investment providers in the EU to provide information about how sustainability risks are integrated into their investment processes and remuneration policies, as well as individual products. Any firm that considers such risks immaterial will be asked to justify that standpoint.
• Similarly, in the U.S., the Securities and Exchange Commission is “...formally asking for input about how companies should disclose climate-related risks in filings with the regulators”.

ECB stress test reveals economic impact of climate change [FT]

• The European Central Bank has identified “a major source of systemic risk” in the preliminary results of its economic stress test to gauge the impact of climate change on 4m companies and 2,000 banks over 30 years.

France, Switzerland present roadmaps to reach net zero by 2050 [IISD]

• The UNFCCC Secretariat has published France’s and Switzerland’s long-term low-emission development strategies (LEDS), in which the two countries outline pathways to net zero greenhouse gas (GHG) emissions by 2050.
• France’s LEDS titled, ‘National Low Carbon Strategy,’ or Stratégie Nationale Bas-Carbone (SNBC), describes the country’s “ecological and inclusive transition towards carbon neutrality.” Along with the National Adaptation to Climate Change Plan, this mitigation strategy forms France’s two-pronged climate policy.

China dominates global wind industry after record installations [FT]

• Record wind power installations in 2020 have secured China’s position at the top of the global industry despite waning subsidies from Beijing.
• The 52 gigawatts of new wind power added last year doubled the capacity China installed in 2019, according to a report released by the Global Wind Energy Council, a Belgium-based international trade association.