Climate Investment Newsletter 4/24 - 4/30

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Individual Deals and Market Watch

Public Market (liquid) Climate fund choices for investors are multiplying [Bloomberg Green]

• Some 76 new green funds were introduced in 2020, bringing the worldwide total to about 400 offerings.
• Europe remains further along, accounting for about three-fourths of the overall market with 282 offerings (as of Dec. 31), compared with only 42 in the U.S.

Vestas obtains EUR-2bn sustainability-linked revolving credit [Renewables Now]

• This is the first time Vestas reached for sustainability-linked financing, which comes after it received the Baa1 credit rating from Moody's earlier this year, the Danish wind turbine manufacturer said.

Corporacion Multi-Inversiones -CMI-, successfully issued green bonds for US$700 million [Cision]

• This is the largest green bond placement by a renewable energy company in this region to date and represents CMI Energy entering international capital markets with the largest and most diversified private, one-hundred percent renewable energy portfolio in Central America and the Caribbean.

SES completes Series D funding round ($139M) led by General Motors [Cision]

• SES, the world leader in development and manufacturing of next generation Li-Metal rechargeable batteries for electric vehicles, announced that it completed a Series D funding round of $139M. This funding is led by General Motors. Additional contributors include existing investors SK Inc., Temasek, Applied Ventures LLC, Shanghai Auto and Vertex.

Nautilus Solar Energy closes second community solar financing with $110 million tax equity commitment from Credit Suisse [Cision]

• The facility will provide competitive long-term financing for twenty-two community solar projects across Colorado, Maryland, Minnesota, New York, and Rhode Island, amounting to approximately 75 MWdc of nameplate capacity.

China’s biggest IPO this year looks to be in renewable power [Bloomberg]

• China Three Gorges Renewables Group Co. is set for an initial public offering that could be the biggest in the country this year after securing regulatory approval.
• The unit of China Three Gorges Corp. plans to sell up to 8.57 billion shares in Shanghai, it said in a prospectus filed to the Shanghai stock exchange, without giving the value of the funds to be raised.

UK investment consultant Redington (AUM €574bn) to align all default client advice with net-zero [Responsible Investor]

• UK based investment consultant Redington, which advises on over £500bn of assets, has announced that its default client advice will be aligned with the goals of the Paris Agreement.

3 largest U.S. pension funds challenge Exxon Mobil board [Pensions & Investments]

• The $460.8 billion California Public Employees' Retirement System, Sacramento, the $291.7 billion California State Teachers' Retirement System, West Sacramento, and the $247.7 billion New York State Common Retirement Fund, Albany, are joining the newly formed hedge fund firm in challenging the slate of directors backed by Exxon Mobil that will be up for election at the energy company's May 26 annual meeting.

Audi sees electric cars occupying half the global market by 2030 [Bloomberg Green]

• Hybrid cars that blend conventional and battery power are contributing to the transition, and purely electric vehicles will prevail after 2030, Chief Executive Officer Markus Duesmann said on Thursday, April 29th, in a speech at the Vienna Engine Symposium.

Honda aims for all-EVs by 2040, carbon neutrality by 2050 [Smart Energy Decisions]

• “Honda will strive to increase the ratio of battery-electric (EV) and fuel cell electric (FCV) vehicles within overall unit sales combined to 40% by 2030, to 80% by 2035, and then to 100% globally by 2040.”

Macro Commitments

Biden administration to finance $8 billion in power-grid improvements [WSJ]

• The Biden administration rolled out new programs Tuesday, April 27th, to bolster the U.S. power grid, framing them as part of its effort to fight climate change through infrastructure improvements needed to expand use of alternative energy.

Denmark plans to spend 60% (~$1.9bn) of EU crisis funds on climate measures [Bloomberg Green]

• The finance ministry has already spent a significant part of its allocation on a tax reform introducing a short-term tax cut on investments into emission reduction, research and green reforms in polluting industries like agriculture and transport.

NY State Pension Commits to $400 Million in Sustainable Investments [Chief Investment Officer]

• The commitments are part of New York State Comptroller Thomas DiNapoli’s climate action plan to lower investment risks from climate change and help shift the pension fund to net-zero greenhouse gas emissions within the next 20 years.

UNEP-FI launched their guidelines for climate target setting for banks [UNEP-FI]

• The Guidelines for Climate Target Setting for Banks outline key principles to underpin the setting of credible, robust, impactful and ambitious targets in line with achieving the objectives of the Paris Agreement.

Cisco commits $100 million to help address climate crisis [Cisco]

• The Cisco Foundation announced that it is committing $100 million over ten years to address the growing climate crisis. The Foundation’s endowment is funded by Cisco. This commitment will fund nonprofit grants and impact investments with a focus on technology-based solutions, GHG and carbon reduction, climate resilience, green jobs, and community education and activation.

Pathways, Frameworks, Case Studies, Research

Two new reports by the Energy Transitions Commission set out path to electrify economy and grow complementary role for clean hydrogen [Climate Action]

• Making Clean Electrification Possible: 30 years to electrify the global economy — Transitioning to clean electricity as the main source of final energy represents the cheapest and most efficient way to decarbonise the economy. The rapidly falling costs of renewables and storage solutions make it possible to achieve the required massive expansion of clean power systems at low cost, according to the reports. [Climate Action]
• Making the Hydrogen Economy Possible: Accelerating clean hydrogen in an electrified economy — The report sets out the complementary role for clean hydrogen and how a combination of private-sector collaboration and policy support can drive the initial ramp up of clean hydrogen production and use to reach 50 million tonnes by 2030. [Climate Action]
• $15 trillion global hydrogen investment needed to 2050-research [Reuters] — Decarbonising energy and other industries globally using hydrogen will require investment of almost $15 trillion between now and 2050, the Energy Transitions Commission (ETC) said in a report on Tuesday, April 27th.

‘Groundbreaking’ climate disclosure bill advances in California [Responsible Investor]

• A bill introducing mandatory climate disclosure requirements for large companies operating in California advanced through the state senate yesterday, laying the groundwork for new climate legislation which will be the first of its kind in the US.

Speed at which world’s glaciers are melting has doubled in 20 years [The Guardian]

• Between 2000 and 2019, glaciers lost 267 gigatonnes (Gt) of ice per year, equivalent to 21% of sea-level rise, reveals a paper published in Nature. The authors said the mass loss was equivalent to submerging the surface of England under 2 metres of water every year.

Efforts underway on ‘Nature 100+’ collective biodiversity engagement [Responsible Investor]

• Plans to establish a collective engagement effort on biodiversity similar to Climate Action 100+ are underway through the Finance for Biodiversity Pledge Foundation’s engagement working group, according to documents seen by RI.
• Signatories of the pledge - currently standing at 37 investors including Robeco, HSBC Global Asset Management, and Mirova - commit to collaborate, engage, assess, set targets, and report on biodiversity by 2024 at the latest.

The largest climate-aware funds in Europe [City Wire]

• Europe has the largest range of climate-themed funds, with the region claiming 77% of global climate assets.
• This is one of the takeaways from the latest Morningstar study, Investing in Times of Climate Change, which placed funds that invest along climate lines into five main categories: low carbon, climate-conscious, green bond, climate solutions, and clean energy/tech.

EU eyes new pollution-cutting trading system for cars, buildings [Bloomberg Green]

• European Union leaders will gather in Brussels for a special session on May 25 to discuss how to achieve the bloc’s collective 2030 target of cutting harmful greenhouse emissions by at least 55% compared to 1990 levels. Binding national targets are among the sticking points.

German investors welcome constitutional court decision on federal climate law [Responsible Investor]

• The court ruled on April 29th that the current law, which requires the government to reduce GHG emissions by 55% by 2030, was “incompatible with fundamental rights” as it lacked sufficient specifications for reductions from 2031 onwards. It said that the “provisions irreversibly offload major emission reduction burdens onto periods after 2030”.

UK public support green taxes to achieve net zero, survey finds [FT]

• The nationwide poll by Britain Thinks for the Green Alliance think-tank found that nearly two-thirds of the public supported taxing environmentally damaging behaviour and ranked the environment the third-most important priority, after healthcare and jobs.

Halting the vast release of methane is critical for climate, U.N. says [NYT]

• The global methane assessment, compiled by an international team of scientists, reflects a growing recognition that the world needs to start reining in planet-warming emissions more rapidly, and that abating methane, a particularly potent greenhouse gas, will be critical in the short term.
• The U.N. report is expected to be published next month by the Climate and Clean Air Coalition and the United Nations Environment Programme.

UN launches first artificial intelligence tool for rapid natural capital accounting [Mirage News]

• An innovative artificial intelligence (AI) tool that will make it easier for countries to measure the contributions of nature to their economic prosperity and well‑being was launched by the United Nations and the Basque Centre for Climate Change (BC3).

U.K. says nature contributes $17 billion to tourism spending [Bloomberg Green]

• The data mark the first figures covering the tourism industry in a new thread of research aiming to set out Britain’s “natural capital accounts.”

System of Environmental Economic Accounting report: Using Gross Ecosystem Product (GEP) to value nature in decision making [UN]

• To achieve sustainable development, there is a pressing need to move beyond conventional economic measures like gross domestic product (GDP). The authors of the GEP report have developed gross ecosystem product (GEP) to measure and summarize the value of the contributions of nature to economic activity.

Washington state passes cap-and-trade, LCFS bills with gas tax caveat [Carbon Pulse]