Net Zero Investor 6/12 - 6/18

We’re Hiring Head of Climate Funds Research and Evaluation

• 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 to net zero.

Individual Deals and Market Watch

Spain’s Acciona eyes €9.8bn valuation for renewable energy IPO [FT]

• Acciona Energía had previously been expected to be among a rush of flotations in the renewables sector in Europe over the next 18 months, but the decline in climate-related stocks since January led to its Spanish rival Opdenergy cancelling its planned listing in May.

Gecina’s EUR5.6 billion green bond offering [Global Legal Chronicle]

• Gecina, the leading office real estate company in Europe, the largest private residential portfolio owner in Paris and the largest French integrated player in student housing, requalified 100% of its bond issues as Green Bonds, representing a total amount of EUR5.6 billion.

PKN Orlen’s €5 billion Eurobond programme and €500 million green bonds offering [Global Legal Chronicle]

• PKN Orlen S.A., one of the largest and most advanced multi-energy groups in Central and Eastern Europe, completed the establishment of a €5 billion EMTN programme and the first issue of €500 million 1.125% Green Bonds due 2028 issued under the programme.
• The transaction was the first Green Bond issue from Poland by a company outside the financial sector, and was certified by the Climate Bonds Initiative.

Brief: Flagship closes $3.4bn fund to build ‘bioplatform’ companies in ag, nutrition & health [AgFunder]

• Flagship Pioneering, the fund manager and company formation group, has closed its seventh fund.
• Fund VII will create and grow what Flagship calls “bioplatform” companies that are “re-imagining how to prevent and treat disease, feed a growing population, and sustain our planet” using “chemistry, biology, and machine learning [and] AI,” the Cambridge, Massachusetts-based firm said in a press release.

Solid Power joins the battery SPAC fray with plan to go public at a $1.2B valuation [Canary Media]

• As part of an excellent overview of battery competition and SPAC listings Canary covers Solid Power's announced intent to SPAC onto Nasdaq through a reverse merger with Decarbonization Plus Acquisition Corporation III.

EQT fund wants to take Spain's Solarpack private for EUR 881m [Renewables Now]

• Swedish investment firm EQT AB (STO:EQT) is looking to buy and delist Spanish solar company Solarpack Corporacion Tecnologica SA (BME:SPK) for EUR 881.2 million (USD 1.07bn) in total.

Kensington Mortgages upsizes green securitisation Finsbury Square to £750m [Mortgage Solutions]

• The senior notes were deemed as green because they aligned with the ICMA Green Bond Principles and were formally accredited by governance provider ISS ESG. This was the first transition from a lender in the UK asset-backed securities market to be labelled a green bond, and the third such in Europe.

Hannon Armstrong (HASI) announces offering of $750 million of senior unsecured notes [Street Insider]

• Hannon Armstrong Sustainable Infrastructure Capital, Inc., a leading investor in climate change solutions, announced, subject to market conditions, a private offering of $750 million in aggregate principal amount of senior unsecured notes due 2026 by its indirect subsidiaries, HAT Holdings I LLC (“HAT I”) and HAT Holdings II LLC.
• The Company intends to utilize the net proceeds of this offering to redeem the Issuers’ 5.250% Senior Notes due 2024.

Morgan Stanley alum Atwan seeks $600 million for new firm VC Fuel [Bloomberg]

• Houston-based VC Fuel will bet on companies that help drive the transition to lower-carbon energy, such as renewable fuels, hydrogen, electric vehicles, carbon capture and storage, clean agriculture and sustainable manufacturing, among other areas. It’ll also invest in related infrastructure, Atwan said in an emailed statement.

£500 million Blue Planet Fund [Gov.UK]

• The UK’s £500 million Blue Planet Fund supports developing countries to protect the marine environment and reduce poverty.

G2 Venture Partners raises $500 million to fund sustainable tech [Tech Crunch]

• G2 Venture Partners, a firm that spun out of Kleiner Perkins Caufield & Byers, has raised $500 million to support entrepreneurs that aim to make existing industries more efficient, environmentally friendly and socially responsible.

Varma has invested €230m in State Street’s new climate bond funds [Responsible Investor]

• Varma provides pension insurance for work carried out in Finland. In the private sector, the company is responsible for the employment pension security of approximately 900,000 people. In 2020, Varma's premium income was EUR 4.9 billion, and the company paid pensions of EUR 6.0 billion. At the end of 2020, Varma's investments were worth EUR 50.2 billion.

Jay-Z invests in Plant-Based company valued at $250 million, Simulate [VegNews]

• Music legend and entrepreneur Jay-Z is now an investor in plant-based chicken company SIMULATE, which closed a $50 million funding round earlier this month. Led by SEVEN SEVEN SIX, an investment fund created by Reddit co-founder Alexis Ohanian, the investment round, a SIMULATE spokesperson confirmed to Bloomberg, included participation from Marcy Venture Partners (MVP), an investment fund created by Jay-Z, Roc Nation Managing Director Jay Brown, and venture capitalist Larry Marus.

Motif FoodWorks secures US$226m to scale & commercialise its plant-based protein tech [Green Queen]

• This is an elite syndicate for another contender in fermented proteins for diary and meat replacement: Boston-based Motif FoodWorks funding round was jointly led by the Ontario Teachers’ Pension Plan Board, through its Teachers’ Innovation Platform (TIP), and funds and accounts were managed by BlackRock.
• Other participating investors include AiiM Partners, Wittington Ventures, Rethink Food, Rage Capital, and Rellevant Partners alongside existing investors like Breakthrough Energy Ventures, CPT Capital, General Atlantic, Louis Dreyfus Company, and Viking Global.

Heliogen raises $108M for solar-powered industrial heat [Canary Media]

• Another Bill Gross startup, Heliogen's machine-vision technology aims to make concentrated solar a viable alternative for carbon-intensive tasks like manufacturing steel and cement.

US-Chinese energy firm EcoFlow raises over $100m in GL Ventures-led round [Deal Street Asia]

• US and China-based solar powered portable generator maker EcoFlow has raised more than $100 million in a Series B round of financing led by GL Ventures, the venture capital unit of private equity firm Hillhouse Capital.  

FarmTogether surpasses $100 million AUM as the company drives scalable and transformative capital to sustainable farming [Cision]

• FarmTogether, a technology-enabled investment platform providing accredited investors with direct access to more sustainably managed farmland, organic transition and regenerative ag today announced that the company has surpassed $100 million in assets under management as it nears its 30th farmland investment in just under two years.

Macro Commitments

UN’s $85bn pension fund promises to slash 40% of investment emissions by 2025 [Responsible Investor]

• The UN’s $85bn staff pension fund (UNJSPF) has committed to Net Zero by 2050, and will cut its investment related GHG emissions by 29% by the end of this year and 40% by 2025, compared with 2019.

GM boosts spending commitment to $35bn for electric vehicles, to add two new U.S. battery plants [Reuters]

• General Motors Co on Wednesday June 16th said it will now spend $35 billion through 2025 on EVs, an increase of 75% from March 2020 before the COVID-19 pandemic shut down the industry.

Germany plans to raise climate financing to €6 bln by 2025, welcomed by NGOs [Clean Energy Wire]

• Germany will raise its federal budget contribution for international climate financing from the current four billion euros to six billion euros annually by 2025. The success of the upcoming UN climate change conference COP26 “depends crucially on the commitments of the industrialised countries to climate finance”, said a government spokesperson at the sidelines of the G7 summit in the UK. German development cooperation minister Gerd Müller welcomed Angela Merkel’s promise.

Portugal's Galp moves to green hydrogen at refinery, eyes $1.2 bln investment [Reuters]

• Portugal's Galp Energia plans to install a 100-megawatt electrolyzer to power its refinery in Sines with green hydrogen by 2025, a project which could be expanded to up to 1,000 MW and be worth 1 billion euros ($1.21 billion), Chief Executive Andy Brown said on Monday June 14th.
• Thirty percent of Galp’s capex will now be directed to renewable energy.

Germany’s BMWi backs hydrogen market ramp-up with EUR 900m in funds [Renewables Now]

• Germany’s economy ministry on Monday June 14th announced a new auction-based mechanism to be facilitated by industry consortium H2Global Foundation to support the market ramp-up of green hydrogen. Germany’s plans provide EUR 900 million (USD 1.1bn) in what looks like price support.

Ukrenergo to issue 500 million euros of green bonds [Kyiv Post]

• Ukraine’s electricity grid operator Ukrenergo has announced plans to issue approximately 500 million euros ($606 million) in five-year ‘green’ energy bonds in order to raise money for payments to renewable energy producers.

Turkish development bank earmarks $310M for wind power plants [Daily Sabah]

• The Turkey Development and Investment Bank (TKYB) is set to provide $310 million more financing to Wind Power Plant (WPP) projects throughout 2021 as the bank aims to reach a total of $822 million in financing at year-end, TKYB Chairperson Ibrahim Öztop said Monday June 14th.

Pathways, Frameworks, Case Studies, Research, Climate Science

Europe carbon prices expected to rise to 2030-industry survey [Reuters]

• The survey by the International Emissions Trading Association (IETA) found members expect carbon prices in the EU ETS to average 47.25 euros ($57) a tonne between 2021 and 2025 and 58.62 euros a tonne between 2026 and 2030.

Top oil traders say emissions market could challenge crude [Bloomberg]

• “Carbon is already the largest commodity in the world, with the potential to be 10 times the size of the global crude markets,” Hannah Hauman Head of Carbon Trading at Trafigura said at the FT Commodities Global Summit last week. “We see a massive potential here.”

A quarter of global harvests at risk if agriculture does not adapt to climate change [EurekAlert]

• According to a study published in the Journal of Environmental Economics and Management, global calorie supplies are subject to continuing or even increasing vulnerability to climate change. Climate change could reduce global crop yields by 10% by mid-century and 25% by century's end, under a vigorous warming scenario, if farmers cannot adapt better than they did historically.
• C4C Note: Actually, and unfortunately, that sounds modest if we are on track to 2.6C to 3C warming by 2100.

‘UK’s solar sector will double by 2030 – but to hit net zero it needs to triple’ [Energy Live News]

• In a new report, Solar Energy UK predicts such a scaling up of capacity could create 13,000 new jobs across the sector and drive £17 billion of additional economic activity, while simultaneously cutting national carbon emissions by 21.2 million tonnes per year, or around 4.7%.
• The industry body claims 40GW of solar capacity must be in place by 2030 if the UK is to remain on target to reach net zero by 2050, as set out in its national climate commitments.

CEOs urge G7: End fossil subsidies, put a price on carbon emissions [Green Biz]

• The Alliance of CEO Climate Leaders, a World Economic affiliated group, has 78 of their CEO members saying "Not taking mitigating actions against climate change could shrink global GDP by up to 18 percent in the next 30 years," Members include the CEOs of BASF, Bayer, Enel, Engie, ING, IKEA, JLL, Salesforce, Swiss Re, Unilever and Zurich Insurance Company. "On the other hand, measures to green the production and use of energy could create 18 million additional jobs by 2030, while protecting the current 1.2 billion jobs that rely directly on a healthy and stable environment," the CEOs observe, citing research from the United Nations Climate Action for Jobs Initiative.

Fannie Mae expanded its nearly $88 billion green bond business in 2020, adding single-family green bonds to its offerings [Cision]

• Fannie Mae on June 16th published its annual Green Bond Impact Report, "Our Next Chapter in Green Bonds Leadership". As the largest green bond issuer in the world, Fannie Mae issued nearly $88 billion of Multifamily Green Mortgage-Backed Securities (MBS) from its first issuance in 2012 through year-end 2020, and has resecuritized approximately $11 billion Multifamily Green MBS into Real Estate Mortgage Investment Conduits (REMICs) as part of its Guaranteed Multifamily Structures (Fannie Mae GeMS™) program. In 2020 alone, the company issued approximately $13 billion of Multifamily Green MBS and, after introducing its first Single-Family Green MBS in April 2020, issued a total of nearly $94 million in Single-Family Green MBS during the year.

Mapping the depletion of natural capital [Environmental Finance]

• UNEP World Conservation and Monitoring Center and PRI are teaming up to provide investors with the means to see natural capital depletion hotspots (and thereby supply chain risks).  
• The maps are available on ENCORE, an online tool developed by the Natural Capital Finance Alliance to help investors visualise the economy's impact and dependencies on nature. A new biodiversity module, launched in May 2021, enables users to explore how they can direct investments in the agriculture and mining sectors towards a nature-positive future.
• As 'natural capital' – nature's stocks of renewable and non-renewable resources – is depleted, so too are the benefits (or 'ecosystem services') that nature contributes to people. Aware of the impact of this natural capital depletion on businesses and their portfolios, investors are increasingly paying attention to nature loss.

Companies with $2.1 trillion of debt face natural capital risks [Bloomberg Green]

• Companies with $2.1 trillion of debt are heavily dependent on nature for resources and materials, even as many of them contribute to its destruction, according to Moody’s Investors Service.
• Moody’s said last Wednesday that companies in 12 sectors, including mining, oil and gas, and shipping, have “high” or “very high” exposure to natural capital risks. The ratings company said its assessment includes both companies’ impacts and dependencies on the assets provided by nature.