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Barclays shareholders reject resolution on fossil fuel phase-out

Despite continued campaigning from non-profits, activists and investors, Barclays’ shareholders have rejected a proposal that would require the bank to reduce fossil fuel finance on climate grounds.

Green groups are concerned that Barclays' investors are potentially less engaged with climate issues than they were last year

Green groups are concerned that Barclays’ investors are potentially less engaged with climate issues than they were last year

The resolution was filed in February and, if passed, would require Barclays to align its energy financing with the Paris Agreement’s trajectories using a divestment-based approach.

Barclays has notably been dubbed Europe’s largest fossil fuel banker in terms of investment by some groups, including Market Forces. Bloomberg has estimated that, since the Paris Agreement was ratified in 2015, the bank has arranged $95.7bn of bonds and loans for oil, gas, coal and nuclear power.

In a statement published late on Wednesday (5 May) after a shareholder meeting, Barclays confirmed that just 14% of its shareholders had supported the resolution. This was an even lower proportion than for Braclays’ first climate-related resolution, filed last year. 24% of shareholders backed that initial resolution.

Barclays chairman Nigel Higgins said the bank “totally agrees that [tackling climate change] has to be about action and not just words” but inferred that shareholders likely prefer an engagement-focussed approach to divestment. Higgins added that more than half of the bank’s clients in the energy sector have net-zero pledges already.

He told the meeting: “We agree with the nature of the climate challenge, and we agree — and I hope we’ve made this very clear over the last year or so to shareholders — that we see a continuous need to raise the bar, and improve policies as time goes on.”

Barclays is a founding member of the Bankers for Net-Zero commitment, but the scheme has not yet released its white paper detailing initial policy recommendations and member targets. Its overarching net-zero financed emissions target is 2050, in line with the UK’s national target.

Climate activists and investors have said that the bank has, historically, not moved fast enough on climate issues, calling for more detail on how it will reach its future ambitions without greenwashing.

Higgins said that the bank will develop interim climate targets to support the 2050 net-zero goal in the coming months, before putting them to shareholders at next year’s AGM.

Market Forces campaign lead Adam McGibbon, who helped develop this year’s resolution, said: “Having seen Barclays’ climate policies fail to rein in its investments in fossil fuels in the last year, to have investor support for climate change action drop this year compared to 2020 smacks of either indifference or incompetence from many major investors.

“[However,] there is a healthy group of investors who see past Barclays’ greenwash, who will need to work hard over the next year to convince their colleagues to demand stronger climate action from the bank.”

HSBC is also set to put a climate-related resolution to a vote at its upcoming AGM. If passed, the resolution will require the bank to end financing for coal-fired power and thermal coal mines globally by 2040.

Mounting pressure

Aside from facing increasing climate pressure from their own investors – the HSBC resolution is backed by a coalition representing more than $2.4trn of AUM – banks are also facing calls to action from their own customers.

A recent Market Forces survey of ore than 2,000 bank customers in the UK has found that more than one in ten would switch banks if they thought their choice of company was investing heavily in fossil fuels. The impact could be significant for big high-street brands, that could lose millions of customers each.

Customers are becoming increasingly aware of the climate impacts of banks’ financing activities. The reports by campaign groups are now making national headlines, for example, and the Make My Money Matter campaign, set up last year by Comic Relief co-founder Richard Curtis, is mobilising UK residents to demand greater climate action from their pension funds and other financial services providers.

Organisations to have changed their climate commitments as a result of Make My Money Matter’s work include Smart Pension and Brunel Pensions Partnership. There have also been movements from firms in other nations, including the US.

Sarah George

News

Rare Minerals

IEA: ‘Critical minerals are crucial to achieving net zero’. A new report reveals the need for critical minerals could increase by as much as six times by 2040 and warns if action is not taken to guarantee supply, targets will be even harder to meet.

Future Net Zero 5th May 2021 read more »

A mismatch between the world’s climate ambitions and the availability of critical minerals could mean a slower and more expensive energy transition, according to a new report from the International Energy Agency (IEA). The Paris-based organisation describes its special report, The Role of Critical Minerals in Clean Energy Transitions, as the most comprehensive global study to date on the importance of minerals such as copper, lithium, nickel, cobalt and rare earth elements in a secure and rapid transformation of the global energy sector.

World Nuclear News 5th May 2021 read more »

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Survey: UK businesses set to invest almost £16bn in EVs this year

UK businesses are planning to spend £15.8bn on electric vehicles (EVs) between April 2021 and March 2022, a 50% increase in spending from the previous year.

Centrica is aiming to electrify its own fleet by 2025

Centrica is aiming to electrify its own fleet by 2025

That is according to a new survey from Centrica Business Solutions. The survey polled 200 UK businesses that operate fleets and the findings were published on Wednesday (5 May).

Two-thirds of the companies polled said that they are on track to switch to a fully electric fleet by 2030 – the time at which the UK Government’s ban on new petrol and diesel car sales will come into effect.

Despite Covid-19-related challenges, two-fifths of the companies said they had added more EVs to their fleet between April 2020 and March 2021, with most of these businesses planning further additions this year. Just one in ten firms had downsized their EV fleet during the 12-month period.

Centrica Business Solutions scaled these findings to cover the entirety of the UK’s private sector, finding that UK firms’ total EV spend in 2020-21 was £10.5bn, and that this figure should surpass £15.8bn for 2021-22. The figure covers pure electric and plug-in hybrid models. 

The survey also asked businesses about what was motivating their EV transition. The need to meet corporate sustainability targets was the most common answer. Some businesses were also motivated by the implementation of low and zero-emission zones across key routes and by the lower maintenance costs associated with EVs.

“Despite the disruption of the past year, it’s encouraging to see investment in EVs remain a key priority for many businesses,” Centrica Business Solutions’ managing director Greg McKenna said.

“The fact that firms are planning to increase their spending so dramatically over the next 12 months is proof that more businesses are recognising the advantages of adopting low-emission vehicles, especially as they recover from coronavirus and seek to create sustainable growth.

“Now that 2030 is set in stone as the end of new petrol & diesel sales we need to ensure three things to help get us there, sufficient electric vehicles to meet demand, reliable charging infrastructure that’s available to all and a flexible energy system that can deliver green power where it’s needed.”

To McKenna’s last point, a recent study from Policy Exchange revealed that the UK will need to increase the number of EV chargers installed each year fivefold if it is to meet its low-carbon transport goals. Centrica has raised similar concerns through its own research.

EV100

The trends tracked in the UK by Centrica Business Solutions echo those recorded on a more global basis by the Climate Group’s EV100 scheme.

According to the scheme’s latest annual report, partaking businesses collectively rolled out more than 89,000 EVs in 2020.  The Climate Group has forecasted that, if all members fulfil their commitments, they will collectively roll out more than 4.8 million EVs by the end of the decade.

Sarah George

News

Greenwashing

ScottishPower and Good Energy are calling for regulatory reforms to close “loopholes” in the energy retail market that allow for greenwashing. Greenwashing – a process whereby companies seek to make their products seem more environmentally friendly than they are – includes the use of renewable energy certificates without direct connection to the source through a Power Purchase Agreement (PPA) or investment into green energy, according to the two suppliers. Many suppliers sell ‘green energy’ utilising these renewable certificates, but this is misleading customers they continued.

Current 4th May 2021 read more »

News

Co-op targets carbon neutrality across own-brand food and drink by 2025

In what it claims is a first for a UK supermarket, the Co-op has pledged to ensure that all own-brand food and drink products are carbon neutral by 2025.

Offsetting will be used as the Co-op works to reduce the footprint of products directly by 11% by 2025 

Offsetting will be used as the Co-op works to reduce the footprint of products directly by 11% by 2025 

The ambition forms part of a sweeping new climate strategy, also including a long-term, group-wide ambition to reach net-zero emissions by 2040.

According to the strategy, Co-op has already successfully offset all emissions associated with stores, buildings and logistics across its food retail arm as well as its funeral care, insurance and power businesses. It will continue doing this as it works to decarbonise key sources of emissions from these business areas, including electricity, heat and road transport.

Reaching the 2025 target will require the supermarket to extend the offsetting approach to all own-brand products food and drink, covering their whole value chains, from farm to the end-of-life for packaging.

But the plan acknowledges that offsetting alone is not a complete and long-term solution. It states that the Co-op has developed approved science-based targets to support the 2040 net-zero target; specifically, it will work to reduce the greenhouse gas (GHG) impact of operations by 50% and products by 11% by 2025. All 200 of its home delivery vehicles will be electrified and fossil heating will be phased out to help meet these targets.

Beyond offsetting and in-house reductions, the retailer is also planning to explore insetting and to support carbon reduction research and innovation more broadly. Funds raised through the carrier bag levy will be used to support these projects.

Co-op Food’s chief executive Jo Whitfield said it is essential to “do more and do it quicker” in the face of the climate crisis, calling the new plans “comprehensive” and “rooted in science”.

Whitfield added: “This is a hugely significant year and the world will be watching as the UK Government hosts the largest climate change conference ever, COP26. Just as the Government must be ambitious in delivering against its own commitments, we must all be bold and take collective action to tackle climate change.”  

Consumer engagement

The plan also includes new measures to help customers choose low-carbon options.

For example, the Co-op has pledged to match the price of its GRO range of plant-based proteins with their meat equivalents, like pork sausages or beef burgers. The chain claims this is a first-of-its-kind move in the UK supermarket sector.

This will help reduce carbon because the global meat and dairy sectors are very carbon intensive. The global livestock industry accounts for 15% of the world’s carbon emissions and uses 83% of all existing agricultural land. Plant-based alternatives vary in terms of precise impact, depending on ingredients and place of origin, but are generally lower-impact.

Co-op will also expand the solar and wind buying service to more UK businesses and public sector organisations.

Additionally detailed in the plan is a commitment to link executive pay to the delivery of new climate targets. Recent PwC analysis revealed that almost half of FTSE100 firms have now taken this approach, with a steep increase in interest over the past two years. The idea is to build in accountability and motivate executives to better collaborate with sustainability and energy teams.  

Supermarket sweep

The news from Co-op comes after competitor Morrisons pledged to only use farms certified as net-zero when sourcing products and ingredients from British suppliers. This target has a 2030 deadline.

Most of the UK’s major supermarkets have updated their climate targets since the Government set the legally binding net-zero target for 2050. Tesco, for example, moved its net-zero deadline forward to 2035, as did Waitrose’s parent company John Lewis & Partners.

Pledges have also been bolstered across the food-to-go sector, with new ambitions from the likes of McDonald’s, Burger King, LEON and Gregg’s.

Sarah George

News

Bullfinch AG and Aquila Capital launch Joint Investment Vehicle for energy-efficient assets

Aquila Capital and bullfinch are pleased to announce the launch of a strategic joint investment vehicle intended to invest in energy efficiency assets across Europe. By combining Aquila Capital’s leading investment experience in real assets and renewable energy, with bullfinch’s unique expertise in decentralized renewable projects and next-gen technology platform, the partnership intends to make an immediate impact in the renewable investment landscape. – Cross reference: Picture is available at AP Images (http://www.apimages.com) – With… Source: RealWire

News

Netherlands – Geothermal

Work on a large geothermal energy project is to kick off May 10, 2021 on the outskirts of Leeuwarden, so an announcement by the project. The project consortium, Warmte van Leeuwarden, plans to supply sustainable heating from geothermal energy to buildings and home. This month work is preparing the site for construction with drilling to kick off during July and August 2021. If everything goes according to plan, the drilling of a 2nd well will proceed in Q3 of 2022.

Think Geoenergy 3rd May 2021 read more »

News

Scottish Energy Companies

The taxpayer has lost almost all of the £10 million invested in a not-for-profit energy company, which was backed by the SNP government. Our Power collapsed in January 2019 even though three loans, totalling £9.8 million of public money, were approved by ministers. Only £600,000 has been recouped from the administrators. In 2017 Nicola Sturgeon pledged to establish a new not-for-profit energy company by 2021, which she has not done. The SNP’s election manifesto restated the pledge, saying that “whilst work on a planned publicly owned energy company was halted during the pandemic, we will now refocus our efforts on a new dedicated national public energy agency”. Willie Rennie, the Scottish Liberal Democrat leader, accused ministers of being “oblivious” to the problems that led to the government losing 94 per cent of its investment. “Two years later they still haven’t even conducted a review of the investment to find out why they lost millions — despite Nicola Sturgeon announcing plans to mirror and scale up the not-for-profit energy company model,” he said. “It’s negligent beyond belief. The SNP have racked up high-profile high-value losses at BiFab, Prestwick, Fergusons, Lochaber and now Our Power.”

Times 3rd May 2021 read more »

News

Rare Earth Minerals

Fears China will “turn off the taps” on Britain’s green revolution has forced ministers to enter secret talks with seven commonwealth countries to mine their rare earths. Officials from the Department of International Trade and the Foreign Office have had meetings with representatives from Australia, Canada, Malawi and Tanzania in a bid to persuade them to supply rare earths, as well as critical metals such as lithium to the UK. Rare earths are found in abundance across the world, but are difficult to process and China controls around 90 per cent of the market. The UK has no known deposits of rare earths, unlike other major economies such as the US, Canada and Australia, which are also grappling with the problem. Rare earths are used in a wide variety of technology, from fighter jets, to MRI machines and loudspeakers, but also in the motors of electric vehicles and in wind turbines, and the worldwide transition to green infrastructure is expected to put pressure on global demand.

Telegraph 2nd May 2021 read more »

Cornwall and the Northeast could become hotspots in Britain’s race to secure critical metals to power the green industrial transition. China currently dominates the supply chain for batteries needed for electric vehicles and green energy infrastructure, including critical metals lithium, nickel and cobalt, and the rare earths that power wind turbines. In Cornwall, two companies are at the early stages of exploring for lithium in geothermal waters and repurposed centuries-old china clay mines, in the first step of a possible gold rush for metals in the southwest that could be worth billions. A third company, Northern Lithium, is hoping to extract the minerals from hot saline brines within the Weardale Granite of County Durham. Meanwhile, a site on the Humber has been proposed for the UK’s first rare earths processing plant, which could feed into a new hub of green industry, building batteries and wind turbines.

Telegraph 2nd May 2021 read more »

News

Tesco links supplier financial support to environmental goals

Tesco is offering preferential financing rates for suppliers that address their environmental impacts, under a new voluntary programme supported by Anthesis, KPMG and Santander.

The initiative is voluntary for suppliers

The initiative is voluntary for suppliers

Tesco’s supply chain programme will provide finance linked to the sustainability performance of companies located in its supply chain.

Launching in September, the programme is voluntary and has been in development for 18 months. Suppliers enrolled in the programme will provide annual greenhouse gas emissions data which will be verified by sustainability consultants Anthesis. KPMG will carry out assurance of the programme.

Suppliers that lead on decarbonisation will be offered preferential financing rates via Santander.

Tesco’s chief product officer Ashwin Prasad said: “In this critical year for climate action, we’re delighted to be able to offer thousands of suppliers access to market-leading supply chain finance linked to sustainability.

“This programme not only provides suppliers with a real incentive to set science-based emissions reduction targets, it will help embed sustainability goals throughout our supply chain and support the UK in realising its climate change targets.”

The initiative builds on the Tesco Supplier Network, an online platform giving more than 10,000 suppliers guidance on methods to improve sustainability.

On the emissions piece, Tesco was one of the first businesses in the world to have its targets approved in line with 1.5C by the Science-Based Targets initiative. It is aiming to reduce operational emissions by 60% by 2025, against a 2015-2016 baseline, and to reach net-zero by 2050.

Last year, Tesco established a £2.5bn revolving credit facility whereby rates and interest are tied to progress against the company’s key environmental targets.

Under the terms of the agreement, facilitated by BNP Paribas and NatWest, Tesco will benefit from a lower interest rate loan margin if it meets its commitments to reduce Scope 1 (direct) and Scope 2 (power-related) emissions; to source renewable electricity through on-site generation and power purchase agreements (PPAs); and to redistribute surplus food.

Santander Corporate and Investment Bank’s head Darren Jones said: “Action on climate change is crucial and from individuals to corporates, we all have a part to play. Supply Chain Finance can be an effective tool for influencing positive change by linking sustainability achievements with competitive financing.

“Santander recently announced its ambition to achieve net-zero carbon emissions across the group by 2050, and we are committed to supporting our clients in their transition to a low-carbon economy. We look forward to working in partnership with Tesco to provide this innovative solution.”

Deforestation concerns

The news comes as NGOs Mighty Earth and Greenpeace UK launch a campaign against Tesco urging it to cut ties with supplier companies that are driving the destruction of Brazil’s Amazon and Cerrado. 

A survey of Tesco customers from the two NGOs found that 88% believe supermarkets should do more to combat deforestation. The survey of more than 2,000 people (of which more than 800 shopped at Tesco) was issued after findings that retailers are failing to cut ties with suppliers linked to deforestation.

New data from Mighty Earth’s Soy and Cattle Deforestation Tracker, published this week, found that subsidiaries of JBS, the world’s largest beef company, and Cargill and Bunge, the two biggest soy traders globally – which manufacture animal feed ingredients – are heavily linked to deforestation of the Cerrado region.

Tesco has committed £10m over the next five years to fund a new initiative to transition to producing deforestation-free soy in the Cerrado region in Brazil.

Tesco, along with animal nutrition business, Nutreco, and Grieg Seafood have pledged to support soy farmers in the region, where around 50% of the natural landscape is believed to have been lost since 2000. 

However, research from the NGOs found that twice as much deforestation in the supply chains of these soy traders and meatpackers in the past year compared to the year before. Traders linked to deforestation supply to the UK’s biggest supermarkets, including Tesco, Sainsbury’s and Morrisons.

Cargill, which has a zero deforestation policy, is linked to more than 66,000 hectares of clearance, while Bunge, which has pledged to end deforestation by 2025, is associated with almost 60,000 hectares of deforestation in just two years – an area larger than the New Forest – according to the report.

Mighty Earth’s UK director Robin Willoughby said: “Forest destruction in Brazil driven by supermarket meat is getting worse every year. This is accelerating climate change and wiping out the home of the jaguar. Tesco customers are crystal clear, they do not want their supermarket to do business with the companies involved in this destruction.

“It’s high time Tesco listens to its customers and drop the worst-performing companies driving the destruction of Brazilian forests – JBS, Cargill and Bunge.”

Tesco has previously committed to achieving net-zero deforestation for its soya and beef supply chains by 2020, as part of the Consumer Goods Forum. However, the company’s policy was tweaked in 2018 to move the date for soya to 2025. The NGOs claim that Tesco is yet to publish a credible plan outlining steps to achieve this goal.

Last year, Tesco spearheaded a call to action involving 160 of the world’s leading food companies to end deforestation arising from soy farming in the Cerrado Savannah. In 2018, a string of big-name investment corporations including Legal and General Investment Management (LGIM), APG and Robeco joined dozens of large corporate buyers such as Unilever, Tesco and Marks and Spencer (M&S) in signing the Cerrado Manifesto to protect the area from biodiversity loss.

A Tesco Spokesperson said: “Clearing forest land for crops must stop – we are committed to fully playing our part to prevent deforestation and have met our commitments including our 2020 industry-wide target of certified ‘zero net deforestation’ for our own direct soy sourcing a year early. Recognising there is more to do, we were the first UK retailer to set an additional industry-leading target for the soy we use in the UK to be from entire areas that are verified deforestation-free by 2025, as well as a roadmap to reach this.

“Tesco sources a very small proportion of global soy and so we can’t transform the system alone, but we are working hard with other signatories of the Statement of Support (SoS) for the Cerrado Manifesto, through industry forums like the CGF and with the WWF to build the industry-wide support needed to deliver this. We’re playing a leading role in convening industry and government to protect the Cerrado but we need our suppliers, industry, NGOs and governments to work with us to end deforestation and protect our natural environment. Recognising our leading position in fighting deforestation, Mighty Earth ranked us top in their recent scorecard which evaluates the beef sourcing practices of the world’s largest grocery and fast-food companies.”

Additionally, Tesco informed edie that all its suppliers must meet environmental and zero-deforestation standards. Working with suppliers, Tesco met the 2020 industry-wide target of certified ‘zero net deforestation’ for its own direct soy sourcing a year early.

Matt Mace

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