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October 2021

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Finance giants to G20 leaders: Close policy loopholes to end financing for activities that will derail net-zero

An alliance of finance giants collectively representing $90trn in assets is urging G20 nations to end fossil fuel subsidies, bolster carbon pricing and introduce new climate mandates for businesses, to ensure long-term net-zero pledges are credible.

G20 leaders are meeting in Rome on October 30-31, ahead of COP26

G20 leaders are meeting in Rome on October 30-31, ahead of COP26

The call to action is being made by the Glasgow Financial Alliance for Net-Zero (GFANZ) – an initiative established earlier this year in the hopes of uniting the global financial sector on the transition to net-zero by 2050, chaired by Mark Carney.

A new report from the Alliance, published today (11 October), is addressed to policymakers across the G20, ahead of the nations’ meeting in Rome later this month.

It urges unified commitments to the Paris Agreement in line with 1.5C; the UN’s recent Synthesis Report on Nationally Determined Contributions (NDCs) to the Paris Agreement concluded that current commitments would deliver a projected decrease in global emissions of 12% by 2030, compared to 2010 levels. However, a 25% decrease would be needed to deliver a 2C world, or a 45% decrease to deliver a 1.5C world.

The GFANZ report additionally calls for more clarity from governments on how net-zero will be achieved in high-emitting sectors, and more international coordination.

Beyond these top-level recommendations, the report makes the case for a string of changes to regulation regarding government subsidies and mandates for the private sector.

On the former, it calls for all G20 nations to follow the G7’s lead and outline plans to phase-out fossil fuel subsidies. The G7 meeting in Cornwall this year resulted in all nations pledging to end direct government support for new thermal coal generation capacity without co-located carbon capture and storage (CCS) technologies by the end of this year. All other “inefficient” fossil fuel subsidies will be phased out by 2025.

By some estimates, G20 member countries have collectively provided $3.3trn in subsidies to the fossil fuel industry since 2015.

For the private sector, the report recommends that governments introduce a mandate requiring all large businesses and public enterprises to develop transition plans for net-zero by the end of 2024. Such plans detail how organisations intend to manage the social and economic impacts of the transition. Organisations should also, the report states be required to disclose their emissions footprint and climate risks in a unified manner.

Additionally detailed in the GFANZ report are recommendations for aligning carbon pricing trajectories with net-zero by 2050; ending deforestation and supporting efforts to standardise and scale the Voluntary Carbon Market. This latter point comes as no surprise, given that Carney heads up the Taskforce on Scaling Voluntary Carbon Markets, which recently formed its new governance body.

“Financial firms can’t deliver sustainable economies alone — clear, credible, and ambitious climate policies are needed from G20 governments,” Carney, the current UN special envoy for climate action and finance, said. “The next few weeks in this decisive decade will help determine whether we avoid climate catastrophe. The core of the financial sector is stepping up – it’s time for major economies to do the same.”

Reports of reluctance

Despite the report’s tone and Carney’s rhetoric, the Financial Times is reporting that some of the 59 banks signed up to the GFANZ are resisting adopting measures that would align their activities with 1.5C – or recommending these measures more broadly.

A source close to the discussions told the publication that some banks believe that the International Energy Agency’s (IEA’s) roadmap to net-zero by 2050 is “a fairytale” that “no one is willing to put their name against”.

Published earlier this year, the IEA roadmap sets out more than 400 milestones on the global journey to net-zero, including some measures to be taken immediately. Among the milestones is a call for all new fossil fuel extraction and exploration to be halted immediately and for new petrol and diesel cars to be banned from sale globally by 2035.

With COP26 on the horizon, edie has completed its Primer Report series which provides businesses with everything they need to know regarding the five key themes of the talks.

The Primer Report on Climate Finance is sponsored by the UL and examines how crucial climate finance is in driving the net-zero transition and overcoming the climate crisis. It also explores the role that COP26 will have in creating new tipping points for nations to seize the economic, societal and planetary benefits of shifting finance streams towards a sustainable future.

Click here to download your free copy.

Sarah George


Renewables & Efficiency

A silver lining of the current crisis is that more companies will be persuaded of the merits of renewable energy. “If you’re a small business or manufacturer, now is a great time to think about green alternatives; does it make sense to install solar panels or does it make sense to get electric commercial delivery vehicles, for example.” Another impact of the price rise is that it has forced businesses to closely monitor overheads, he said. “People will now pay attention to energy prices and energy costs because it’s top of mind. This is an opportunity to simply remember that energy prices are volatile.” While he didn’t recommend that businesses switch immediately, “now is a good time to put it in your calendar to do later, while you monitor the energy prices”.

Times 11th Oct 2021 read more »


HSBC sets 2050 net-zero financed emissions target for £36bn UK pension scheme

One of the largest corporate pension schemes in the UK has set a 2050 net-zero financed emissions targets, with an interim aim to halve emissions by 2030.

The commitment from the HSBC Bank UK Pension Scheme will cover its entire £36bn portfolio of defined benefit and defined contribution assets.

A 2019 baseline year has been set for the 2030 target and, for both the 2030 and 2050 milestones, the scheme will be following the Net-Zero Investment framework developed by the Institutional Investors Group on Climate Change (IIGCC) – a coalition of dozens of major investors, including the pension scheme and collectively managing more than $11trn of assets.

The framework was first trialled in real-world scenarios in the second half of 2020, on portfolios totalling $1.3trn. It is designed to help investors assess how and when to divest from high-emitting companies without credible decarbonisation plans; engage with companies that are developing such plans, and invest in more projects and companies providing climate solutions on the road to net-zero. Trials were scaled up to $8trn of assets this spring.

The HSBC Bank UK Pension Scheme’s Trustee Board chair, Russell Picot, said: “The Trustee recognises the increased urgency with which climate change needs to be tackled and in it playing an active role in supporting the drive to decarbonise the economy.

It has been active in addressing ESG issues for a number of years, including working in collaboration with regulators, policymakers, asset managers and other asset owners to facilitate the system-wide transition to a net-zero economy.

“The time is right to take the next step to further embed climate change actions into our future plans for the benefit of our members.”

The new 2030 and 2050 targets come after the scheme signed on to the UN’s Principles for Responsible Investing (PRI) and joined the Climate Action 100+, an investor coalition specialising in corporate engagement on climate issues.

For HSBC more broadly, the financial giant committed last October to reaching net-zero financed emissions by 2050 and outlined plans to finance at least $750bn of low-carbon activities within a decade. However, ShareAction claims that in that HSBC funneled $1.8bn into fossil fuel companies in the build-up to the announcement.

Since then, shareholders have voted to pass a resolution requiring HSBC Holdings to phase out finance for the coal industry by 2030 in the OECD and by 2040 worldwide.

Pension pledges

Earlier this week, the £10.6bn Transport for London (TfL) pension fund, £4.5bn Avon Pension Fund, and Phoenix Group, which manages £250bn of investments, have all set interim ambitions to reduce financed emissions on the road to net-zero.

You can read edie’s full coverage of those announcements here.

Sarah George



This site’s Daily News content is provided by Edinburgh Energy & Environment Consultancy. EEE are experts in policy and analysis on energy and environment issues, particularly nuclear power.

Services include: supplying tailored news services, writing reports and briefings, drafting consultation responses and developing political campaign strategies.

Clients have included Greenpeace, Nuclear Free Local Authorities, WWF Scotland and the UK Government’s Committee on Radioactive Waste Management.


UK professional institutions launch Charter for Climate Action

The UK’s leading professional institutions have launched a new Charter for Climate Action, calling on bodies to reduce emissions in line with the Paris Agreement while upskilling their workforces to champion the sustainability movement.

UK membership associations currently cover more than 13 million working professionals

UK membership associations currently cover more than 13 million working professionals

A group of professional institutions has launched the new website for the Charter for Climate Action. The aim of the Charter is to get the UK’s professional bodies to align with both the Paris Agreement and the Sustainable Development Goals (SDGs).

UK membership associations currently cover more than 13 million working professionals, meaning the Charter can impact nearly half of the UK’s working population across every part of the economy

Early signatories include the Energy Institute, the Institute of Chartered Accountants in England and Wales (ICAEW), the Institute of Materials, Minerals and Mining, the Chartered Institute of Ecology and Environmental Management (CIEEM) and the Royal Pharmaceutical Society.

Nigel Topping, the High-Level Climate Action Champion for COP26, said, “The UK’s professional bodies have a critical role to play in accelerating climate action. Today’s workforce is critical for a successful transition to a net-zero economy and professional bodies are in a unique position to support millions of professionals across the UK in achieving this. I encourage more bodies to sign up to the Charter ahead of COP26, as the world’s eyes will be upon us in Glasgow.”

The Charter is currently supported by nine professional bodies representing more than 400,000 professionals and a further 300 member organisations.

It binds members to three overarching commitments to align to the 1.5C pathway, unify their voice to lobby for long-lasting change and to empower and develop their members.

The ambition is for the majority of the UK’s learned societies and professional organisations to commit to the Charter ahead of COP26 to bring wide-ranging expertise to focus on the climate crisis.

COP and net-zero

In related news, almost one-third of Europe’s largest companies have pledged to reach net-zero emissions by 2050 at the latest, but only 5% are on course to reach these ambitions, a new study has found.

The Charter arrives just days after a panel of expert speakers, representing the UK Government as well as business giants Virgin Media O2 and Centrica Business Solutions, discussed climate action at edie’s COP26 Climate Action Workshops, hosted in London for members of edie’s exclusive networking clubs.

The COP26 unit’s business engagement lead, Bridget Jackson, reiterated COP26 President Alok Sharma’s call to “keep 1.5C alive” through Nationally Determined Contributions (NDCs) to the Paris Agreement. The UN’s recent Synthesis Report on NDCs concluded that current commitments would deliver a projected decrease in global emissions of 12% by 2030, compared to 2010 levels. However, a 25% decrease would be needed to deliver a 2C world, or a 45% decrease to deliver a 1.5C world.

Matt Mace


Heat Policy – Scotland

With still no sign of the UK’s Heat and Buildings Strategy, the Scottish Government has unveiled its intention to cut emissions from the built environment by 68% by 2030 through a £1.8bn investment plan to transform the nation’s building stock to net-zero by 2045. The Scottish Government has published its domestic Heat and Buildings Strategy, featuring overarching commitments to eradicating fuel poverty and setting up a Green Heat Finance Taskforce to finance that transition to zero-emissions heat networks for buildings. The plan aims to reduce emissions from the nation’s built environment by at least 68% by 2030, which would set the nation up to reach its domestic net-zero target of 2045, which is five years ahead of the wider UK target. This would see a ban on oil and gas boilers introduced by 2030 and in some areas, five years sooner. However, the Scottish Government believes it cannot fully outline steps to decarbonising its building stock until the UK Government publishes the wider Heat and Buildings Strategy. This policy package initially consisted of two separate Strategies, both originally slated for publication in autumn 2020. Patrick Harvie, Minister for Zero Carbon Buildings, Active Travel and Tenants’ Right said: “Our homes and workplaces account for around a fifth of Scotland’s total greenhouse gas emissions. We can and must make very significant progress towards eliminating these emissions over the next decade and reduce them to zero by 2045. Transforming our homes and workplaces will be immensely challenging, requiring action from all of us, right across society and the economy.

Edie 7th Oct 2021 read more »

Ramping up delivery of renewable heating systems, driving a widespread improvement in the energy performance of buildings and investment of at least £1.8 billion are at the heart of a new plan for tackling one of Scotland’s biggest contributors to greenhouse gas emissions. The Heat in Buildings Strategy sets out the pathway for cutting greenhouse gas emissions from our homes and buildings – which currently account for about a fifth of Scotland’s emissions – by more than two thirds by 2030.

Scottish Government 7th Oct 2021 read more »


Wales – renewables

A new report from National Grid, dubbed Zero 2050, has highlighted the importance of onshore renewables if there is to be any decarbonisation of the energy system in South Wales. Teaming up with the Welsh Government, South Wales Industrial Cluster and other public and private sector representatives, National Grid took a deep dive into what it would take for South Wales to achieve a net zero energy system – the results are rather unsurprising. South Wales is currently a hub of activity for the UK’s whole energy grid, with the area playing host to several coal-fired and gas-fired power stations. That’s one of the key reasons National Grid undertook this analysis, as the firm understands the impact that decarbonisation will have on the area. The report took into account both the future impact on jobs in the area, as well as ensuring that any path to net zero came at a minimal cost to consumers. It also included input from National Grid Electricity Transmission, National Grid Gas Transmission, Western Power Distribution, Wales & West Utilities and the Welsh Government, as well as experts from Cardiff University and energy and transport consultants. These experts modelled future energy demands across the residential and commercial, industrial and transport sectors, and how this demand could be met.

Electrical Review 7th Oct 2021 read more »


UK performing strongly on energy ‘trilemma’ despite energy security woes

The UK isn’t alone in suffering from a lack of reliable energy sources, with a new report warning that nations are underperforming on efforts to improve energy security and reliability, despite cleaner energy becoming a dominant source of power across the globe.

The UK's poor performance on energy security stopped the nation from climbing the rankings

The UK’s poor performance on energy security stopped the nation from climbing the rankings

That is one of the key findings of the 11th annual World Energy Trilemma Index, published today (7 October) by the World Energy Council.

The Index ranks nations on how well they balance the “energy trilemma” of energy security, energy equity and environmental sustainability of energy systems. It gives out scores out of 100 to nations across these three themes.

The report found that collectively nations scored 75 for energy equity and the availability of energy to communities worldwide. However, more than 700 million people still lack lacking basic access to any electricity or clean fuels. The Index notes that while many countries have universal access to energy, many people in those nations are excluded due to costs, with energy poverty extending to all geographies, including the most developed nations.

On average, nations scored 66 for environmental sustainability, after a 50% recorded growth in renewable capacity and  80% of new capacity additions now classed as green projects. However, global carbon emissions from the energy sector continue to rise, impacting the score. Worryingly, energy security scored an average of 58 as evidence by the current global energy crunch.

The Council’s secretary-general Dr Angela Wilkinson said: “The World Energy Trilemma Index provides a useful reminder of how important it is for policymakers to address inertia and make progress by taking a more holistic view of energy through the three lenses of the World Energy Trilemma. Only then will societies succeed in recovering from crisis, repairing the planet and renewing the wellbeing of societies.

“Today’s energy landscape is crowded, competitive and increasingly costly. Confusion, confrontation and extreme polarisation have become commonplace. The world needs more sustainable energy. Our relationship with energy and, consequently, with each other, is shifting and transforming. There is an urgent need to better prepare societies for clean and just energy transitions and to involve more people and diverse communities in the process. The challenge to develop shared appreciation and navigate the critical role of energy in everyday life has never been greater.”

UK’s winter crunch

The UK ranks 4th in terms of overall national performance, behind Sweden, Switzerland and Denmark and level with Finland. However, the UK sits outside the top 10 for energy security, which covers how strong energy policies seek to make the most of domestic resources while decarbonising the energy system.

The National Grid has today issued a report claiming that electricity supplies could suffer over the winter periods due to rising demand and capacity constraints, but that it shouldn’t impact grid stability.

The National Grid’s annual winter outlook forecasts an electricity margin of 6.6% capacity, which is lower than the 8.3% recorded this time last year. It is also lower than the 7.3% forecast that was made earlier this year. It means that the UK can expect to have 6.6% supply left over on average at peak times.

The damage to an interconnector in Kent contributed to a lower margin and there are concerns that a similar unexpected disruption could tighten UK supplies further.

Already, record wholesale energy prices have seen nine suppliers go under in September alone, which has led to calls for the UK Government to do more to protect the market and domestic supplies.

Commenting on the National Grid outlook, Dr Simon Cran-McGreehin, head of analysis at the Energy and Climate Intelligence Unit (ECIU) said: “The UK has already started the work of creating a more modern, dynamic, flexible power grid that responds to both supply and demand, and today that translates into National Grid’s confidence that the lights will stay on this winter. But margins are tight and the current system still leaves households vulnerable to volatile international gas markets and the geopolitical game-playing of President Putin.

“To reduce exposure to fossil fuels and create greater energy independence, the implication is clear: the UK should build more offshore wind as the Government plans to do and accelerate investment in grid flexibility bringing technologies such as batteries and demand management into the mix. Let’s not forget that the simple way to insulate against energy shocks is to insulate. Shifting us away from our current gas addiction should be a top priority for the upcoming heat and buildings strategy if we want to secure a clean and homegrown energy system for the future.”

Matt Mace


European businesses off course to meeting net-zero pledges

Almost one-third of Europe’s largest companies have pledged to reach net-zero emissions by 2050 at the latest, but only 5% are on course to reach these ambitions, a new study has found.

The report found that just 5% of analysed firms are on course to reach their net-zero ambitions across scope 1 and 2 emissions

The report found that just 5% of analysed firms are on course to reach their net-zero ambitions across scope 1 and 2 emissions

The “Reaching Net-Zero by 2050,” report from Accenture analysed climate pledges from more than 1,000 listed companies across Europe’s major stock indexes. The analysis has found that 30% of these companies have now pledged to reach net-zero by 2050 at the latest.

However, the report also finds that just 5% of analysed firms are on course to reach their net-zero ambitions across scope 1 and 2 emissions, let alone value chain emissions.

Accenture notes that the pace of decarbonisation from these corporates has delivered a 10% emissions reduction on average over the last decade. Interestingly, businesses that do not have net-zero targets saw their emissions increase.

If businesses continue at the current trajectory, the report believes that only 9% will meet net-zero targets. Fortunately, even companies that have achieved carbon reductions of 0.5% annually can still reach net-zero by mid-Century if they double the pace of emissions reduction by 2030 and triple it by 2040.

“The European business community is more engaged than ever in the race to zero, with the number of companies publicly setting goals having grown over the last two years,” Accenture’s European chief executive Jean-Marc Ollagnier said.

“And as our study shows, the targets work. Net-zero should be managed as any strategic business priority: set clear objectives to drive the entire organization to the same direction, and monitor progress to correct the trajectory as appropriate. Making targets public also helps create the required collective momentum, as companies can’t solve it alone.”

The research finds that industries such as professional services and information and communications look set to be able to reach net-zero across their operations by 2050 if they double the pace of decarbonization and then accelerate another 50% to 70% in the following 10 years.

The average net-zero target year for European companies included in the study is 2043. Many companies in carbon-intensive industries — such as oil and gas and chemicals — have set net-zero target dates of or close to 2050, while many in services sectors aim for around 2035.

The UK leads Europe in terms of companies setting net-zero targets. In total, 37% of analysed UK companies had net-zero targets, compared to 27% in Germany and 18% in France.

The report comes just days after the UK COP26 Unit’s deputy director for engagement, Nick Baker, told edie that businesses needed to step up their own commitments and “turbocharge collaboration” on climate ahead of the conference, to help keep a 1.5C future within reach.

Delivering the keynote speech at edie’s COP26 Climate Action Workshops, hosted in London on 5 October for members of edie’s exclusive networking clubs, Baker recapped on a busy 18 months engaging non-state actors ahead of the crucial conference.

Watch the video here.

Matt Mace


Climate Justice

What is ‘climate justice’? The term “climate justice” captures the various ways in which global warming impacts people differently and the approaches that can be taken to address this problem “fairly”. Climate-justice language has been used to describe everything from retrofitting the UK’s poorly insulated homes to supporting cyclone-struck communities in Mozambique. As part of a week-long series on climate justice, Carbon Brief has asked a range of scientists, policy experts and campaigners from around the world what the term means to them and why they think it is important.

Carbon Brief 7th Oct 2021 read more »

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