Climate Investment Newsletter 3/20 - 3/26

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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

Highlights of the Week

Tilting markets towards material nature [Environmental Finance]

• Simon Zadek outlined a six-part framework for reshaping markets and economies in ways that reward nature-friendly, and penalise nature-destroying, investments.

BlackRock finds axing fossil fuels may boost performance in study for US pension funds [Responsible Investor]

• Investment behemoth BlackRock has concluded that divesting fossil fuels does not harm - and may even boost - returns, in a long-awaited draft report commissioned on behalf of New York City’s pension funds.

Individual Deals and Market Watch

Adani Green Energy raises USD 1.35 billion in one of Asia's largest project financing deals [Cision]

• Adani Green Energy Limited (AGEL) raised a USD 1.35 billion debt package for its under-construction renewable asset portfolio through definitive agreements signed with a group of leading international lenders. The revolving project finance facility would initially finance the 1.69 GW hybrid portfolio of solar and wind renewable projects to be setup in four SPVs in the state of Rajasthan, India.

New biofuel project from Delta Air Line partner receives $600 million investment [Smart Energy Decisions]  

• Stonepeak Infrastructure Partners executed a Memorandum of Understanding (MoU) with Northwest Advanced Bio-Fuels committing to the investment, which will be arranged by Morgan Stanley & Co. With this investment, the project could become the largest announced SAF/renewable biofuels project using cellulosic feedstock in the world.

ADB secures US$300 million for green recovery programme [The Asset]

• The Green Climate Fund (GCF) has allocated US$300 million to support efforts by the Asian Development Bank (ADB) to help Southeast Asia shape a climate-resilient, environmentally sustainable economic recovery from the Covid-19 pandemic.
• The Association of Southeast Asian Nations Catalytic Green Finance Facility’s (ACGF) Green Recovery Programme aims to leverage GCF and ADB funds to support more than US$4 billion worth of green infrastructure projects across the region.

Soltage and Harrison Street announce $250 million commitment for solar and clean energy infrastructure [Cision]

• Soltage LLC, a leading independent power producer and Harrison Street, one of the leading investment management firms exclusively focused on alternative real assets, announced a $250 million partnership to fund solar and other clean energy infrastructure assets developed by Soltage. The partnership will deploy 450 megawatts (MW) of new distributed solar and storage projects across the United States. These assets will be owned by the partnership and operated by Soltage.

Eat just closed $200M funding round [The Spoon]

• Food tech company Eat Just announced it has closed a $200 million funding round led by Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar. Charlesbank Capital Partners and Vulcan Capital also participated in the round, according to a press release sent to The Spoon. Eat Just’s total funding to date now exceeds $650 million.

UKRI has awarded £171 million to projects in pursuit of the UK government’s net zero targets [JD Supra]

• UK Research and Innovation has moved its industrial decarbonization program further forward by awarding £171 million in funding to the projects that were selected earlier this year to support delivery of significant emissions reductions in heavy and energy intensive industries. When taken together with the £260 million amount that is required to be matched by industry as part of the program, this represents a significant step in the UK government’s pursuit of its net zero emissions targets.

Investors urge Europe to prioritize climate in agriculture reform [Financial Post]

• A $2 trillion group of investors on Monday, March 22nd, urged the European Commission to be more ambitious in its planned overhaul of the bloc’s huge farming subsidy program to tackle climate change and protect biodiversity.

Macro Commitments

Scatec to invest $11.8 bln in renewable energy in the next 4 years [Reuters]

• Norwegian renewable energy producer Scatec plans to invest 100 billion Norwegian crowns ($11.8 billion) by the end of 2025 in a drive to increase output capacity fivefold, the company said on Tuesday March 23rd. Scatec produced just over 3 gigawatt hours (GWh) of electricity across 3.3 gigawatts of installed capacity in 2020, and the company plans to expand its portfolio to 15 GW over the next four years.

S2G Ventures Commits to Transforming the Food and Agriculture Sector [Raising Regenerative]

• S2G is challenging the private market to catalyze $10 billion of investment over the next three years directed at transitioning to a carbon negative food and agriculture sector. This means that instead of emitting carbon, the processes involved in food production, distribution, and consumption would actually remove excess carbon from the atmosphere.

Church of England plots science-based nature targets for £8.7bn investment portfolio [Business Green]

• The Church of England's £8.7bn asset management arm has become the first investor to join a new initiative to develop a framework for tackling nature loss in line with scientific guidance.

Deutsche Post DHL Group announces €7 billion climate-friendly investment [Smart Energy International]

• German multinational package delivery company Deutsche Post DHL Group has released its new sustainability roadmap. The firm plans to invest €7 billion ($8.2 billion) in climate-neutral logistics by 2030.

New York City pension funds surpass climate change goal [Pensions & Investments]

• New York City pension funds will invest more than $6 billion in projects that tackle climate change, surpassing their $4 billion goal, trustees said Tuesday, March 23rd.

DBS Private Bank targeting more than 50% assets in sustainable investments by 2023 [Reuters]

• The private banking arm of Southeast Asia’s largest bank DBS aims to expand its suite of sustainable investments to more than half of its assets under management by 2023.

USDA announces $218 million investment in land and water conservation [Newton County Times]

• Agriculture Secretary Tom Vilsack announced the USDA Forest Service will invest more than $218 million to fund Great American Outdoors Act projects to conserve critical forest and wetland habitat, support rural economic recovery, and increase public access to national forests and grasslands. Funds will also support work with state agencies to encourage private forest landowners to protect their land through conservation easements or land purchases.

CalSTRS adopts plant to invest $150m per year in sustainable PE programme [PEI]

• The California State Teachers’ Retirement System officially adopted a plan to commit $150 million every year to sustainable private equity co-investments with a focus on “low-carbon solutions” to the climate crisis.

Clean Energy and Total form JV to develop carbon-negative renewable natural gas and infrastructure [Green Car Congress]

• Clean Energy Fuels Corp. and its largest shareholder, Total SE, formed a 50/50 joint venture to develop carbon-negative renewable natural gas (RNG) production facilities in the United States, as well as credit support to build additional downstream RNG fueling infrastructure. (Earlier post.)
• The initial firm commitment is $100 million and can increase to $400 million as development opportunities progress.

BP details plan for UK’s largest hydrogen project [Power Mag]

• The global market for hydrogen development has taken another step forward, as oil and gas major BP announced it is studying development of what it said would be the UK’s largest blue hydrogen production facility. The company initially is looking at a project that could grow to 1 GW of production capacity by 2030, at a plant that could produce about 260,000 metric tons of hydrogen annually when fully operational.

Pathways, Frameworks, Case Studies, Research

White House prepares $3 trillion infrastructure bill which includes $400bn funding for climate measures [Washington Post]

• The infrastructure component is expected to include $400 billion in spending to combat climate change, including $60 billion for infrastructure related to green transit and $46 billion for climate-related research and development. The plan also would aim to make electric-vehicle charging stations available across the country. The measure would also include $200 billion for housing infrastructure, including $100 billion to expand the supply of housing for low-income Americans.

Conservation, nature-based impact funds raising €10bn - Phenix [Environmental Finance]

• Fund managers targeting positive impact through conservation and nature-based investments are currently raising a combined €10 billion ($12 billion), according to data provider Phenix Capital.
• Phenix said that, since 2015, €16 billion has been committed to 117 conservation & nature-based impact funds tracked on its database of 1,600 impact funds.

Indian regulator adopts mandatory sustainability reporting for listed firms [Responsible Investor]

• From 2022, the largest 1,000 Indian public companies will be required to disclose a suite of granular sustainability performance metrics relating to strategy, human capital, ESG risks, business conduct, supply chain due diligence and community relations as part of their annual corporate filings.
• Specific data points include exposure to biodiversity, water and climate risks, emissions and waste management, salary differentials for women and differently-abled employees at all management levels, details of consumer complaints, expenditure on CSR initiatives and board-level conduct.

African banks face $218 billion of climate change risk [Bloomberg Green]

• African banks are vulnerable to the increasing frequency and severity of climate change shocks unless lenders take action to manage these risks, Moody’s Investors Service said in a report.
• Moody’s estimates that the 49 banks it rates across 14 African countries have extended almost $218 billion in credit to environmentally sensitive sectors, an amount equivalent to nearly 29% of their total loans, Moody’s analysts including Malika Takhtayeva and Peter Mushangwe wrote.

CA100+ benchmark reveals 'painful' progress on climate as investors turn attention to pay, accounting, just transition [Responsible Investor]

• Climate Action 100+ has unveiled its inaugural ‘benchmark’, revealing that the world’s largest greenhouse gas emitters still have a long way to go in delivering a net zero transition.
• The new framework aims to provide “the first detailed, comparative assessments of individual focus company performance against three high-level commitment goals: reducing greenhouse gas emissions, improving governance, and strengthening climate-related financial disclosures.”

Global Alternative Protein Investment Triples To US$3.1 Billion In 2020 With Asia Surge, New GFI Data Reveals [Green Queen]

• Globally, US$3.1 billion was invested into alternative proteins in what was a record year for the industry in 2020, marking a tripling of the figure in 2019. The data, published by the Good Food Institute (GFI), also showed the enormous growth of the sector in Asia-Pacific, with the capital raised in the region increasing more than six-fold year-on-year.

Global business seen facing $53 billion hit from deforestation [Bloomberg Green]

• Global businesses sourcing commodities such as cattle, soybeans or rubber stand to lose some $53 billion due to deforestation unless they take action.
• In a survey of more than 500 global businesses, climate-disclosure platform CDP identified risks such as extreme weather, changes in consumer preferences, as well as market and reputational impacts from commodity-related forest loss. It would cost $6.6 billion in the coming years to address those risks, the London-based nonprofit said in a report last Monday.

Boston Consulting Group Announces Expansion of Global Climate and Sustainability Center and COP26 Partnership [Yahoo Finance]

• Boston Consulting Group (BCG) is expanding its climate and sustainability capabilities by transforming its existing Center for Climate Action into a global BCG Center for Climate & Sustainability, bringing together over 550 experts across the firm. It comes as the firm is announced as the Consultancy Partner of the 26th United Nations Climate Change Conference of the Parties (COP26).

'World first' industrial decarbonisation strategy developed in the UK [Pinsent Masons]

• New plans have been set out to slash the carbon produced by UK industry as part of the drive to achieve 'net zero' emissions in the country by 2050. The industrial decarbonisation strategy is being hailed by the UK government as the first of its kind anywhere in the world.
• The strategy acknowledges that the transition to a low carbon economy will create challenges for the industrial sector, since it is likely to increase their costs and therefore potentially risk placing UK industry at a competitive disadvantage compared to rivals elsewhere in the world where decarbonisation is less of a priority.

Report offers energy leaders solutions to decarbonization hurdles [Smart Energy Decisions]

• The REBA Institute and Grid Strategies released March 18 a new report that outlines a path to decarbonizing the energy system to urge action from national energy leaders.
• The key recommendations involve implementing large regional transmission organizations in all regions to facilitate more resilient power that reaches more customers and transmission planning to expand regional and interregional capacity.

UK-Norway collaborative initiative seeks to boost climate finance [IISD]

• The UK and Norway launched an initiative on sustainable finance that will serve as a platform for British and Norwegian financial institutions to share knowledge and best practices focused on actionable climate solutions in the financial sector and explore the regulatory frameworks and investment decisions that would be necessary to achieve a zero-emissions economy.

IFRS Foundation sets up working group to converge sustainability standards [Accounting Today]

• The International Financial Reporting Standards Foundation trustees formed a working group Monday to focus on harmonizing global sustainability reporting standards in preparation for a potential international sustainability standard board.

Cost of Lithium-ion batteries has fallen by 97 percent, study says [Yale Environment 360]

• A new MIT study shows that the cost of lithium-ion batteries — used to power phones, laptops, and electric vehicles — has fallen by 97 percent over the past three decades.

60 largest banks in the world have invested $3.8 trillion in fossil fuels since the Paris Agreement [CNBC]

• A new report, published Wednesday, March 24th, from a collection of climate organizations and titled Banking on Climate Chaos 2021, finds 60 of the world’s largest commercial and investment banks have collectively put $3.8 trillion into fossil fuels from 2016 to 2020, the five after The Paris Agreement was signed.
• Note from C4C: Last week IRENA estimated that the world needs to spend more than $4trillion per year to decarbonize by 2050.