ESG in 2021: The State of Play

February 25, 2021 by  
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ESG in 2021: The State of Play Date/Time: March 18, 2021 (1-2PM ET / 10-11AM PT) The world of environmental, social and governance metrics and ratings has entered a new and dynamic phase. Suddenly, nearly every publicly held company — and many privately held firms — are examining their policies and programs through the lens of investors’ rising interest in ESG metrics. For their part, investors are learning that corporate environmental and social activities are no longer a nice-to-do activity — they are core to well-managed and profitable companies. As a result, ESG has moved from the margins to the mainstream. What are the implications for today’s sustainability and finance professionals? How can they serve the interests of investor relations departments, risk professionals and other internal stakeholders who have become part of the ESG ecosystem inside companies?  In this one-hour webcast, you’ll hear the state of play from two industry insiders. Among the things you’ll learn: What are the key ESG metrics investors are examining? What are the opportunities for sustainability professionals to play a leadership role in their company’s ESG strategy? How will the Biden administration affect the trajectory of ESG transparency and disclosure? What are the rising ESG issues that investors are considering in assessing companies? Moderator: Joel Makower, Chairman & Executive Editor, GreenBiz Speakers: Thomas Kamei, Executive Director, Investment Management, Morgan Stanley Tessie Petion, Head, ESG Engagement, Amazon If you can’t tune in live, please register and we will email you a link to access the archived webcast footage and resources, available to you on-demand after the webcast. taylor flores Thu, 02/25/2021 – 11:53 Joel Makower Chairman & Executive Editor GreenBiz Group @makower Thomas Kamei Executive Director, Investment Management Morgan Stanley Tessie Petion Head, ESG Engagement Amazon gbz_webcast_date Thu, 03/18/2021 – 10:00 – Thu, 03/18/2021 – 11:00

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ESG in 2021: The State of Play

Investors are failing African entrepreneurs — it’s time for a change

February 25, 2021 by  
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Investors are failing African entrepreneurs — it’s time for a change Salma Okonkwo Thu, 02/25/2021 – 00:10 Despite the global economic slowdown caused by COVID-19, the case for investing in Africa is stronger than ever. Africa will remain a competitive investment destination for decades to come because of its improving relative risk profiles, regional integration and strong economic fundamentals. However, many challenges remain for local founders despite the record -breaking fundraising year African startups had in 2019. This is especially the case when it comes to women-led companies. The energy sector will be critical for Africa’s post-COVID economic recovery and will be one of the most attractive investment sectors in 2021. Stakeholders ranging from the African Development Bank to large-scale private funds recognize the need cost-efficient industrial energy access as well as universal household electricity. To expand the impact of their investments in the energy sector, development finance institutions (DFIs) and private investors should pay more attention to empowering African-led energy firms by adjusting their risk analyses and to closing gaps for off-grid solar project financing. Representation of local African founders, and female founders, remains a challenge in the African startup funding space. While it is a positive sign that African companies are attracting international investors’ attention, only 20 percent of private investment into African startups and companies came from Africa-based investors during the last five years. Further, eight of the top 10 African startups that attracted the most capital in 2019 were led by foreigners. These figures get more concerning when considering the number of women-led or co-founded startups in Africa. Although 25 percent of all sub-Saharan African women are engaged in early-stage entrepreneurial activity, women-led startups receive a fraction of the investments compared with their man-led counterparts. This year’s projected drop in funding for African startups is a perfect opportunity for the investment community to reflect on these trends and make changes for the coming surge of financing needed for the post-COVID recovery. The economic recoveries of African economies are underway , and investors can take advantage of strong positive economic trends that existed pre-COVID to invest in strategic sectors such as energy. Investing in African markets always has been associated with risk , but now the COVID-19 pandemic has made safe markets risky, and traditionally risky markets look attractive. Off-grid solar projects in Africa consistently have outraised their competitors in other countries, making Africa the leading global destination for off-grid solar investment. From China to the U.S ., geopolitical crises already were stressing major economies, and COVID accelerated this trend. Now, investors are increasingly looking elsewhere for stable returns and reassessing their risk profiles. Compared to traditional markets, Africa is young , connected , entrepreneurial and poised for immense growth through regional integration via the African Continental Free Trade Agreement (AfCFTA), which will create the world’s largest free trade area. Renewable energy is a priority sector for Africa’s post-COVID recovery because small and midsize enterprises need reliable and clean energy to get back to business and continue growing. Over $200 million in funding last year went to energy sector startups. Off-grid solar projects in Africa consistently have outraised their competitors in other countries, making Africa the leading global destination for off-grid solar investment. The importance of off-grid and mini-grid projects will only grow as they are the most cost-effective way to bring hundreds of millions of Africans without electricity online and reinforce power supplies for businesses. DFIs and investors should prioritize supporting African-led renewable energy companies to achieve stable returns, close the energy access gap and elevate African founders. Despite expanding programs for solar energy financing, outdated risk analyses keep critical funding out of the hands of African entrepreneurs. Some of the largest off-grid solar companies in Africa are co-founded and backed by Western CEOs and investors. Thinking that local African firms with market expertise cannot deliver the same returns with the same, if not better, risk profiles are outdated. More developed economies do not have a monopoly on talent either. African talent, combined with recruited international talent, can result in world-class teams to lead companies capitalizing on the African solar opportunity. Africa’s off-grid solar sector represents a $24 billion annual opportunity, and the continent faces a significant energy gap. DFIs can serve as bridges between the private sector and governments by expanding credit enhancement services to hedge against project risk. These institutions already have several tools at their disposal to help investors hedge against risk, including credit and political risk guarantees, and serving as lenders of record for project financing to secure favorable loans using their preferred credit status. Promoting technology transfer and local content is a stated priority of DFIs. The best way to accomplish these objectives is by supporting African companies in securing investment. The golden age of African investment is just beginning. However, real developmental impact in critical sectors such as solar energy cannot occur without local empowerment and African firms taking a leading role. Investors are running out of excuses: African companies can be competitive, profitable and world-class when given the support they merit from capital markets and DFIs. Pull Quote Off-grid solar projects in Africa consistently have outraised their competitors in other countries, making Africa the leading global destination for off-grid solar investment. Topics Renewable Energy Africa Entrepreneurship Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Solar panels in the African country of Zimbabwe. Photo by Shutterstock/Sebastian Noethlichs

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Joe Biden can be the president for a sustainable private sector

February 15, 2021 by  
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Joe Biden can be the president for a sustainable private sector Lisa Woll Mon, 02/15/2021 – 01:00 Like no president in recent times, Joe Biden assumed office facing multiple interlocking crises. His ability to achieve his agenda will require action from key sectors across the country, including the investment and business community. Biden already has rejoined the Paris Agreement, committed to advocating for environmental justice and rolled out a government-wide focus on racial justice. He is advocating for a higher minimum wage, among other policies to address economic inequality. To accomplish this ambitious agenda, we believe the time is right for the president to establish a White House Office of Sustainable Finance and Business. It would create a focal point to engage the private sector to contribute to current and future priorities and to further accelerate the private sector’s focus on sustainability. The Office of Sustainable Finance and Business would develop a national strategy for U.S. leadership in sustainable finance and business. Here’s how it could work: The Office of Sustainable Finance and Business would develop a national strategy for U.S. leadership in sustainable finance and business through collaboration with the fast-growing network of businesses and organizations promoting such goals. Here’s why it can’t wait: The magnitude of the challenges facing the United States requires that the new administration leverage all sectors of society. Biden needs the private sector to help move this important work forward. This new office would significantly strengthen the administration’s government-wide approach to tackling urgent social and environmental issues. The sustainable investment community already is engaged in this effort, channeling dollars to companies with better environmental, social and governance (ESG) practices. One in every three professionally managed dollars in the United States — $17 trillion — is invested with an ESG focus. Sustainable investors were among the early voices urging companies to take action on climate change. They engage with companies to improve policies on issues ranging from human rights to diversity and water use. They also have been long-term investors in community banks and credit unions that are addressing economic and racial inequality in urban, rural and Indigenous communities. In parallel, more companies are embracing the shift to sustainable business practices that deliver important societal benefits as well as a strategic advantage. This includes committing to net-zero climate targets and changing their business models, products and services to accelerate the transition to a clean energy economy. In the last year, leading companies have made new commitments to diversity, equity and inclusion. Today, 90 percent of S&P 500 companies publish sustainability reports, up from 20 percent in 2011. Companies are being urged to transition from a shareholder primacy model to one focused on multiple stakeholders, including employees, customers, communities, the environment and shareholders. This is often referred to as stakeholder capitalism. In a July speech, Biden noted that “it’s way past time to put an end to shareholder capitalism.” We agree that this shift is overdue. A new White House Office of Sustainable Finance and Business would accelerate the growth of sustainable investment and catalyze the shift to stakeholder capitalism, both of which are critical contributions to Biden’s pledge to “build back better.” Advancing policies that support the growth of a sustainable American economy also supports U.S. economic competitiveness and our broader national interest. The office, in fact, could serve as an important tool for the restoration of American “soft power,” decimated by the past administration. Such an office also would reflect the priorities of an increasing number of Americans, particularly millennials and members of Gen Z, who expect that the places at which they shop and invest will be focused on positive outcomes for society and the environment. A White House office also will allow sustainable investors and companies to partner with the administration to achieve a more sustainable and equitable economy. By highlighting the critical role of the private sector, Biden can further drive alignment of investment capital and corporate actions with his administration’s policy priorities. Pull Quote The Office of Sustainable Finance and Business would develop a national strategy for U.S. leadership in sustainable finance and business. Contributors Aron Cramer Topics Policy & Politics Collective Insight BSR Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off GreenBiz photocollage

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Community investments pay dividends

February 15, 2021 by  
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Community investments pay dividends John Davies Mon, 02/15/2021 – 00:00 This article originally appeared in the State of Green Business 2021. You can download the entire report here . Corporate community investment historically has been the realm of philanthropy and volunteerism departments, but there are a growing number of examples where direct investment by businesses benefits operations as well as the communities in which they serve. In 2019, the Business Roundtable redefined the purpose of a U.S. corporation as being “to promote an economy that serves all Americans.” In a survey of 2,511 registered U.S. voters by Real Clear Opinion Research, 77 percent of respondents agreed: “The purpose of a corporation is to maximize financial returns for its shareholders, but also to deliver value to customers, invest in employees, deal ethically with suppliers and support the communities where they work.” When it comes to investing in employees, Tyson Foods faces the challenge of its plants being predominantly in rural areas with limited labor pools, and with many of its front-line team members recent immigrants. To address this labor shortage, the company launched the Upward Academy , offering free and accessible classes in English as a Second Language, High School Equivalency, U.S. citizenship, financial literacy and digital literacy. The program is still in its early stages but all signs point to the investment paying off in terms of employee engagement and retention, and leading to a stronger local community. Purchasing and sourcing strategies are also getting realigned to support local communities as well as smallholder farmers around the globe. Supply experts at Sodexo, a French foodservice and facilities management company, have worked with the Sustainable Purchasing Leadership Council to target local and seasonal produce, working with local farmers and producers around each of its client sites. This approach evaluates environmental, social and economic impacts on the community and helps local businesses to thrive, which in turn benefits the company’s clients. Corporate sourcing decisions can drive change for communities around the world. Companies such as Mars and Griffith Foods have established sustainable sourcing programs that seek to create societal value while generating business benefit. As noted in its 2020 annual report, Griffith receives high-quality raw materials from trusted partners while farmers receive on-farm and in-community support from a consistent buyer. The alignment of capabilities and community is a growing business trend as companies move away from pure checkbook philanthropy. In these and other examples, community investments typically start with nonprofit engagement, aligning with on-the-ground resources that provide local knowledge and connections. The alignment of capabilities and community is a growing business trend as companies move away from pure checkbook philanthropy. Companies such as HSBC and PwC have shifted to a more strategic approach by integrating their giving and volunteering. HSBC envisions a Venn diagram of urgent needs and financial literacy, where the overlap identifies opportunities to help the underserved develop soft skills to boost employability and financial capability. PwC took a similar approach to combining philanthropy with volunteering, providing employees paid time to support educational initiatives in entrepreneurship and financial literacy, leveraging their consulting skills to better the community. AT&T has reinvented its philanthropic approach so that it looks more like its store franchise model. AT&T Believes is a localized effort to create positive change in the communities where it operates, letting local employees determine how to best have an impact. Wells Fargo has launched pitch competitions to fund breakthrough ideas that promise new ways to create urgently needed affordable housing nationwide. Such initiatives are part and parcel of recent efforts to measure the social contribution of business. There are currently few standards to guide and measure community investment and other social impacts.  Danone, Patagonia and others have been certified as B Corporations , identifying them as businesses that meet the highest standards of verified social and environmental performance, public transparency and legal accountability to balance profit and purpose. B Lab, the organization behind the voluntary standard, offers an assessment tool that can start companies on their journey toward strategic community investment. Pull Quote The alignment of capabilities and community is a growing business trend as companies move away from pure checkbook philanthropy. Topics State of Green Business Report Corporate Social Responsibility Social Justice Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Image: Shutterstock/Rawpixel

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Community investments pay dividends

Biden’s new executive order cuts fossil fuel subsidies

February 1, 2021 by  
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In a recent executive order, President Joe Biden has directed federal agencies to eliminate fossil fuel subsidies. The agencies are to find new opportunities that will “spur innovation, commercialization, and deployment of clean energy technology.” While the news has caused jitters among big oil corporations, conservation groups welcome the move toward clean energy . Cutting fossil fuel subsidies is a crucial step in reaching clean energy goals. After all, continuing such subsidies in a country that aims to go green means that the U.S. is essentially paying fossil fuel companies to pollute the air. According to the Environmental and Energy Study Institute, there are several direct and indirect tax subsidies to the fossil fuel industry. In the U.S., direct subsidies to the oil industry reach a total of over $20 billion per year. Many of these subsidies intend to help American fossil fuel producers compete with producers in parts of the world where fuel production is cheaper. Among the direct subsidies is the Intangible Drilling Cost Deduction, which deducts costs incurred for drilling in the United States. The Percentage Depletion subsidy reduces taxable amounts, while the Credit for Clean Coal Investment offers tax credits for energy investments. Besides these direct subsidies, the U.S. also offers indirect subsidies for tax relief and foreign tax credits. According to a  Reuters  report, some fossil fuel industry leaders are not taking the new directives well. Before the ink dried on the order, the Western Energy Alliance filed a lawsuit challenging it. Specifically, Western Energy Alliance wants the order to reverse fossil fuel leasing on federal land declared unlawful by the courts.  This lawsuit represents some of the opposition against the country’s move toward clean energy. Some industry leaders have already lamented that the decision will make the U.S. reliant on foreign energy, alleging that this may put the country in a tricky economic position. “With a stroke of a pen, the administration is shifting America’s bright energy future into reverse and setting us on a path toward greater reliance on foreign energy produced with lower environmental standards,” Mike Sommers, president of the American Petroleum Institute, said in a statement. Despite complaints from the fossil fuel industry, environmental activists have outlined just how important this executive order is in addressing the climate crisis. As Angela Anderson, director of the Climate and Energy Program at the Union of Concerned Scientists, said in a statement, “ Climate change is not a distant crisis but rather one that has already reached our doorstep and can no longer be ignored.” Anderson also explained that “Black, brown, Indigenous and low-income communities are among the most devastated by the climate crisis. The executive order takes steps to remedy this unfair burden by incorporating equity and justice throughout the climate agenda.” Via CleanTechnica Lead image via Center for American Progress

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Hydrogen fuel cells good or bad for the environment?

February 1, 2021 by  
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Scotland is planning to have its first hydrogen-powered train ready to go by November of this year. It’s a huge undertaking involving many partners, including the Hydrogen Accelerator at the University of Saint Andrews and engineering firm  Arcola Energy . “With Scotland’s focus on achieving net zero emissions by 2035 and rail playing a leading role in this, hydrogen offers a safe, reliable and zero carbon alternative to other forms of rail propulsion,” Clare Lavelle, Scotland Energy business lead at project partner Arup said in a statement. “This project is not only a crucial step in helping us understand the practical challenges of using hydrogen traction power on our railways, but an example of the type of investment  Scotland  needs to take advantage of the opportunity to build a secure, flexible, cost effective and zero carbon energy network.” But not all experts are sure that  hydrogen  fuel cells are a clean enough power source to warrant enthusiasm. Many still question whether this mode of powering cars, planes and trains will actually help slow climate change. Some even worry hydrogen production will accelerate it. Related: Scotland to become first country to test 100% green hydrogen Hydrogen fuel cells 101 Even if you never took or passed chemistry class, you probably know that hydrogen is exceedingly common, putting the H in water’s H2O. Hydrogen is also present in compounds like methane and coal. This gas could be a potent source of clean  energy , and, according to the U.S. Energy Information Administration, it has the highest energy content by weight of any common fuel source. In terms of emissions, burning hydrogen for energy doesn’t hurt the environment, as the only byproducts it releases are heat and water. The problem comes when separating out the hydrogen. To make it usable as a fuel, hydrogen must be separated from water, coal, natural gas or animal or plant waste. Currently, most of the 9 million metric tons of hydrogen the U.S. produces annually comes from  methane  via steam reforming. This process releases greenhouse gases. Still, hydrogen can also be separated from water through a process called electrolysis, which can be powered by wind, solar or other renewable energy sources. The downside of this option is the much higher cost. Hydrogen is also currently used in food processing, treating and refining metals, NASA’s space fuel and to power a few exclusive car models, such as the Toyota Mirai. As  Popular Mechanics  explains it, hydrogen cars are electric cars. “When we talk about electric cars, that includes plug-in hybrids, hybrids, battery electrics, fuel cells, and anything else that may come along later that still uses an electric motor,” said Keith Wipke, laboratory program manager for fuel cell and hydrogen technologies at the National Renewable Energy Laboratory .  However, a fuel cell is much different than the giant lithium-ion battery you find in  electric cars . The hydrogen fuel cell produces electricity through electrochemical reactions when the hydrogen combines with air. Pros and cons of hydrogen fuel cells Inventors and engineers have experimented with hydrogen as a clean energy source for decades. Back in 2003, the Bush administration dedicated $1.2 billion for hydrogen  research . The fact that hydrogen is about three times as efficient as gasoline for fueling cars entices many. But, in addition to the cost challenges of clean hydrogen fuel production, there’s a danger of the gas escaping into the atmosphere while being stored or transported. Hydrogen is tricky to transport because it needs to be stored under high pressure. According to models designed by researchers at the California Institute of Technology, without a completely efficient way to produce, store and transport hydrogen, 10% to 20% of the gas will escape into the atmosphere. “More or less dramatic scenarios are equally imaginable, but clearly the potential impact on the hydrogen cycle is great,” the researchers concluded. These researchers theorized that oxidized hydrogen would cool the stratosphere and make more clouds, adversely affecting the polar vortex and increasing the holes in the  ozone layer .  But let’s say the production, storage and transportation problems could be overcome and hydrogen’s efficiency safely tapped into. Before there’s a hydrogen-powered auto in every garage, the costs will have to come down and the convenience will need to go up. Right now, the three premier hydrogen-powered  cars  — the Toyota Mirai, the Honda Clarity and the Hyundai Nexo — cost between $50,000 and $60,000. You could buy about three Civics for that. And you’re not going to get very far in a hydrogen-powered vehicle unless you have somewhere to refuel. For now, in the U.S., that means cruising through California or tooling around Wallingford, Connecticut, according to the  U.S. Department of Energy  website. Whether or not major oil companies will ever willingly add hydrogen tanks to gas station offerings remains to be seen. In addition to competing with their prime commodity — gasoline — companies also face the issues of safe storage and, so far, low demand. We obviously need to make some big energy changes, and there’s hope for hydrogen. But for now, better hold onto your Civic. Or, better yet, your  bike . Via How Stuff Works: Science , Physics World , and U.S. Department of Energy Images via Matthew Venn

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Hydrogen fuel cells good or bad for the environment?

Advene’s handbag reduces plastic, not style

February 1, 2021 by  
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Advene has just restocked its Age bag, an accessory that is transparently constructed and designed to eliminate unnecessary plastics. Advene releases one product at a time, using responsible materials to create its designs along with a commitment to reducing harmful plastic waste throughout the process. The name Advene is taken from “advenience.” This term was coined by Roland Barthes, a philosopher who used the word to describe art that stirs something up inside of you when you see it. Environmentalists may be stirred not just by the design of the Age bag, but by the fact that it is made from 100% traceable leather that has been upcycled from food byproducts. There are no unnecessary plastic fillers. The construction process of the bag is completely transparent thanks to a comprehensive video of how it is manufactured. Related: This backpack is made from locally sourced cork and recycled materials The leather used to make the Age bag is produced in a scope-C gold-standard tannery that has been certified by the Leather Working Group. Customers who opt for minimal packaging to reduce waste get a discount on the bag. The standard packaging is an FSC-certified grayboard box and dust cloth made from GOTA-certified hemp . That’s right: no plastic! That’s the whole point of the Age bag. This handbag features a classic silhouette with a handle and a triangular pouch. It can be fastened securely and easily with a magnetic closure. There’s also a detachable shoulder strap, so the wearer has an option to carry the bag two different ways. Both the shoulder strap and the handle strap are adjustable. True to the company mission, no plastic was used to give the bag structure. The Age bag sold out quickly after it was first released in November 2020. Advene has launched a restock of the bag, which is now available in cream and black. Advene is one of many companies making strides toward sustainable fashion in an effort to eliminate unnecessary waste and source materials responsibly. Companies that are using sustainable materials and eliminating waste in their designs are proof that perhaps the world can be saved — one handbag at a time. + Advene Images via Advene

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Amazon aims to clean up aviation

January 27, 2021 by  
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Amazon aims to clean up aviation Katie Fehrenbacher Wed, 01/27/2021 – 02:00 The aviation sector in a pandemic has 99 problems. And climate change remains a big one.  The industry aims to build back better, aware that it’s one of the few sectors that hasn’t yet embraced electrification. The key solutions today are biofuels, only displacing a mere fraction of fossil fuels-based jet fuel, and offsets. But in reality, with revenues and ticket sales way down, there’s only so much commercial airlines actually will do to meet decarbonization goals. And if you look at the aviation industry’s historical pledges to add in bio-based jet fuels, before the pandemic, it’s fallen woefully short. Enter air cargo. More specifically, Amazon’s air shipping business, which along with its entire global logistics supply chain juggernaut is booming.  A startup called Infinium announced it has raised a round of funding including backing from Amazon’s Climate Pledge Fund. Infinium makes biofuel by taking hydrogen made with clean power and electrolysis, combining it with carbon dioxide and running it through two thermochemical processes — turning it into a replacement fuel for airplanes, ships and large trucks. Infinium, spun out of another company called Greyrock Energy , says because the biofuel (dubbed an “electrofuel”) is made with clean energy and CO2, it’s a “net-zero carbon” fuel. The fuel isn’t yet being made commercially just yet, and it’ll take at least three years to build a factory and start making it at any kind of scale. Economic production at scale is the key metric for biofuel makers.  Still, Amazon’s support is the latest indicator that the logistics giant is eyeing ways to clean up aviation. Amazon Vice President of Worldwide Sustainability Kara Hurst released a statement about the investment: Amazon created The Climate Pledge Fund to support the development of technologies and services that will enable Amazon and other companies to reach the goals of the Paris Agreement 10 years early — achieving net-zero carbon by 2040. Infinium’s electrofuels solution has real potential to help decarbonize transport that carries heavier loads and travels long distances, including air and freight, as well as heavy trucks. This isn’t Amazon’s first investment in biofuels. Last summer Amazon announced that it plans to buy 6 million gallons of bio-jet fuel via a division of Shell and produced by World Energy, a big biodiesel producer. The companies said the jet fuel will be made from agricultural waste fats and oils (such as used cooking oil and inedible fats from beef processing). The world of bio-jet fuel is just getting started. Shell is emerging as a player, but so is Neste, a Finnish company that also makes a renewable diesel product for trucking. Last year, Neste delivered its first batch of sustainable aviation fuel via pipeline for airlines refueling at San Francisco International Airport to use. DHL Express is using Neste’s sustainable aviation fuel at SFO.  Amazon is worried about the carbon intensity of the fossil fuel-based jet fuel it uses because it’s trying to get to zero carbon by 2040. Air shipping, a growing sector, is the most carbon-intensive way to ship a product. As Amazon Air Director Raoul Sreenivasan said at our VERGE 20 online conference in October: “The world is watching what we do. And we believe we have a responsibility to use our scale for good and make the appropriate investments to achieve this goal.” Because bio-jet fuel is at such an early stage, Amazon can’t just go out and switch over its entire air fleet to the stuff. But there are a couple of things Amazon can do as the industry is still maturing. Amazon is already electrifying the ground air equipment at its airport facilities. It’s also putting solar up on buildings at the airports. Most important, Amazon can use its heft to help move the sustainable aviation fuel (SAF) industry forward. As Sreenivasan said about SAF at VERGE 20: “Our hope is that by making an investment and a commitment that others will partner with us and cause somewhat of a ripple effect in the industry that will drive demand and supply.” Essentially, if Amazon’s moving in, hopefully the rest of aviation will follow. With more supply deals and investments in new players, we’ll see if the logistics world leader can green up one of the hardest-to-abate sectors: aviation.  Want more great analysis of electric and sustainable transport? Sign up for Transport Weekly , our free email newsletter. Topics Transportation & Mobility Supply Chain Aviation Logisitics Featured Column Driving Change Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off

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Fighting deforestation should be a top priority for 2021, and here’s how it can be

January 11, 2021 by  
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Fighting deforestation should be a top priority for 2021, and here’s how it can be Heather Clancy Mon, 01/11/2021 – 02:00 One of the biggest stories of 2020 was the rise of the corporate tree-planting movement, with dozens of multinational businesses from virtually every industry pledging millions of dollars to one of nature’s most effective carbon sequestration solutions.  Now, NGOs and investors are urging consumer goods and food companies and financial institutions to devote more resources to addressing the root cause of shrinking forests, deforestation.  Many companies have promised to address deforestation related to their business activities for years, but few have fully delivered on those plans — and an astonishingly high number of companies don’t have an explicit commitment to ending deforestation.  A confluence of factors as we move deeper into the “Decade of Action” is raising the stakes: deepening global concerns over the loss of species habitat and biodiversity; an environmental justice awakening that has more of us attuned to systemic human rights issues, including encroachment of Indigenous communities, as well as child and slave labor; and a heightened awareness among the investment community about the long-term ecosystem and financial risks associated with deforestation. As 2021 begins, more companies are seeing their strategies for addressing deforestation deep down into their supply chains scrutinized.  “We need companies to make commitments that are specific to how they are addressing their supply chains,” says Jessye Waxman, shareholder advocate with Green Century Capital Management, which has so far engaged dozens of businesses encouraging them to improve their “no deforestation” policies and practices. Among those it has targeted: food service operator Aramark, meat company Tyson Foods and consumer products maker Procter & Gamble.  Green Century’s latest shareholder proposals related to deforestation were filed in late December with two of the world’s largest grain traders, The Archer-Daniels Midland Company and Bunge . Both companies already have commitments to eliminate deforestation, but the investment firm would like to see them become even more aggressive with members of their soy supply chains. “There is definitely increasing urgency around this issue,” Waxman says. Palm oil plantation at the edge of a rainforest. Many promises, limited followthrough Here’s what we’re up against. More than 1 million acres of forests have been lost since 1990, leaving the global stock at near 10 million acres, according to a July report by the United Nations Food and Agriculture Organization (FAO). While the rate of annual deforestation slowed to about 25 million acres between 2015 and 2020, the trendlines in several regions — especially countries in Africa and South America — aren’t moving in the right direction. Brazil, for example, recently recorded its highest rate of deforestation since 2008 during the period from August 2019 to July, an increase of 9.5 percent.  The vast majority of that destruction (up to 80 percent) is linked to commodities such as palm oil, soy, beef, leather, timber, and pulp and paper. Cattle-rearing practices in Brazil are of particular concern among multiple NGOs. Yet, many companies hugely reliant on these resources aren’t actively fighting deforestation , according to data from research organizations including CDP and Global Canopy.  What’s more, of the companies that have made commitments, many have failed to deliver or to set deadlines — with some continuously pushing dates into the future or changing the rules by which they judge progress, according to both organizations. CDP’s recent ” Zeroing In on Deforestation Report ” urged consumer products and food companies to devote more energy to this issue. It found, for example, that the supply chains for cattle and soy are particularly opaque — the largest meat processor in the world, JBS, fares “very poorly.” Food and consumer products companies that buy meat from organizations such as these need to become far more engaged in tracing the regional origins of the product they’re buying, says Ling Sin Fai Lam, lead analyst on the report. “CPG companies are going to find it harder to meet their own goals if they don’t seek collaboration from people closer to the ground,” she says.  While new forest strategies have been declared in recent months — Tyson Foods published its forest protection standard in November after a lengthy assessment by nonprofit Proforest — the dialogue around deforestation was relatively muted last year, when compared to the tree-planting movement.  “Are there more companies with stated strategies? Generally, yes, we have seen a few more commitments and improvements,” notes Sarah Rogerson, research associate at Global Canopy and lead researcher for its Forest 500 report , which evaluates corporate deforestation strategies. “But not a step change over what we have seen in previous years. There hasn’t been an obvious gearup. We were hoping [2020] would be a big year for forests and nature.” (The next edition of the Forest 500 is due in late January; here’s last year’s coverage .) Progress takes root There were some hopeful signs over the past 12 months. Cargill, which has been evolving its deforestation policy for decades, reported in June that it was on track to “eliminate deforestation in all commercial palm oil concessions in its third-party supply chain by the end of 2020.” After being contacted for an interview for this story, the company provided several written updates about its soy sourcing strategy including these highlights: More than 95 percent of the soy it purchased in Brazil for the 2018-2019 crop year was “deforestation- and land-conversion free” It had mapped 100 percent of its Brazilian soy supply chain by early 2020 It continues to develop a certification program in Brazil and Paraguay, in order to provide a “large market” for soybeans grown via verified methods Aramark was praised by Green Century in mid-November for its ” prompt progress ” on its no-deforestation policy . Within one year of publishing the strategy in December 2019, the company already has shifted to sourcing 100 percent of its soy and 99 percent of its palm oils from regions with no deforestation risk. So far, 60 percent of the beef it sources is “deforestation-free,” according to Aramark. In written responses to questions submitted for this story, Aramark Vice President of Sustainability Kathy Cacciola noted that Aramark’s biggest challenge in delivering on the strategy is its position of influence in the value chain for the covered commodities.  “For example, we do not source any raw palm oil, but it is present in tiny amounts of a vast number of products that we purchase, thus our ability to influence producers is limited,” she wrote. “Moreover, although our supplier partners are always willing to provide us with the information we ask for, they do not always have full visibility to where their raw commodities are coming from.”  We’re seeing the end of the commodity era, where materials are sourced from largely unknown origins and bought purely for price on a transactional basis. Mars also generated plenty of headlines in 2020 with its claim of a “deforestation-free palm oil supply chain,” an initiative related to the Palm Positive Plan it adopted in September 2019. Getting there required a drastic reduction in the number of mills that the company uses to source palm oil — to fewer than 100 this year, compared with 1,500 previously. It plans further reductions by 2022, according to the press release Mars issues to trumpet this achievement.  In written responses to questions submitted for this article, Kevin Rabinovitch, global vice president of sustainability for Mars, said simplifying the company’s supply chain through longer-term contracts and fewer suppliers was crucial for helping it verify that partners are meeting environmental, social and ethical standards and for laying the foundation for collaborative engagement. “We’re seeing the end of the commodity era, where materials are sourced from largely unknown origins and bought purely for price on a transactional basis,” he wrote. “That model doesn’t address some key elements of the world we want tomorrow. The future will leverage sourcing from known farms, with price, human rights and sustainability impacts evaluated side by side.”  As of this writing, there has been no independent verification of the Mars palm oil claim. Mars is also part of the new Forest Positive Coalition , launched in September by a group of 17 companies belonging to the Consumer Goods Forum — including Danone, General Mills, Nestle, P&G, PepsiCo, Unilever and Walmart. The group has pledged support of collective, systemic efforts to “remove deforestation, forest degradation and conversion from the key commodity supply chains of palm oil, soy and paper, and paper, pulp and fiber-based packaging.”  Another coalition of companies — including ADM, Bunge and Cargill — is working with the World Business Council for Sustainable Development (WBCSD) to improve the traceability of soybeans grown in Brazil’s Cerrado region, one of the least-protected regions in the country, which is experiencing higher rates of deforestation than the Amazon. So far, the Soft Commodities Forum has engaged with about 121 producers, according to a December update .  “Only by bringing producers to the center of the quest for solutions will we be able to contribute to a world without commodities-driven conversion, balancing environmental outcomes with resilient and prosperous rural communities,” said Tony Siantonas, director of the Scaling Positive Agriculture initiative for WBCSD, in a statement.  Soybean production and cattle raising activities are linked to deforestation in Brazil’s Cerrado region. Engagement seen as central to effective strategies That sentiment was echoed by a number of companies that have devoted considerable time and resources to the evolution of their policies for addressing deforestation, including food companies Cargill and Mars, food services firm Aramark, restaurant chain McDonald’s and fashion company Kering.  “I think the headline would be: Don’t work alone,” Yoann Regent, biodiversity and animal welfare specialist with Kering, told me in an interview. “Map your sourcing. You can’t do anything if you don’t know where to do it.” But the companies interviewed for this article have differing strategies for how to handle suppliers that don’t comply with their mandates. As already mentioned, Mars made the decision to pare down its partners to root out those with possible connections to deforestation. Kering also takes a relatively hardline approach, one that’s sewn into its contracts.  “Any leather suppliers that have a link to deforestation, especially in the Amazon, would be terminated,” Regent says. “There are so many other alternatives.”  Kering uses tools from NGOs, such as the Forest Mapper from Canopy, and certification information from the Forest Stewardship Council to guide decisions. It’s also planning to embrace an emerging resource from Textile Exchange called the Leather Impact Accelerator , which uses benchmarks to trace animal welfare and deforestation/land-conversion issues at the farm level. Other companies shy away from outright termination and advocate the notion of big companies using their buying power to inspire and demand change deep down into supply chains. Once you sever ties with a supplier, you lose leverage when it comes to convincing them to change business practices, they say.  “Fortunately, all of our suppliers for the relevant commodities are already working on ensuring that deforestation is happening in their respective supply chains,” writes Aramark’s Cacciola. “We focus on continuous improvement, so we engage with our suppliers to make improvements where relevant. We also expect quick and decisive action from suppliers if they do identify issues.”  “We don’t need to boycott, we need to choose the sustainable commodity,” observes Dan Strechay, global outreach and engagement director for the Roundtable on Sustainable Palm Oil , which represents more than 4,000 members of the palm oil supply chain with standards focused on sustainable production. “It’s time for everyone to uphold their sourcing policies. We need to implement the policies and reward the growers that we’ve asked to take these steps.”   And, companies need to act with more urgency, he urges: “Don’t take the policy you missed and kick it five years down the road. Make it count in the next two to three years.” Traceability transformed through technology The social distancing requirements related to the COVID-19 pandemic have made the already complicated task of tracing and verifying supply chain claims related to forest degradation more difficult — and underscored the critical role that digital technology can play in supporting successful “no deforestation” strategies. Kering is looking to solutions such as isotope tracking, genetic mapping and laser markings as a means of verifying that materials meet health and sourcing requirements, Regent says. McDonald’s is also looking to advanced technologies, notably satellite-mapping, to define its approaches to addressing deforestation. For example, it is working with agtech company AgroTools and Proforest to trace the origin of all Brazilian beef used in McDonald’s restaurants, notes Rachael Sherman, director of global sustainability for McDonald’s, in response to questions submitted for this article. “After determining risk level based on sourcing location, we use a combination of satellite imagery of the farm area and data analysis to assess whether deforestation has taken place and/or is projected to take place,” Sherman wrote. “This enables our suppliers to implement continuous improvement plans with farms that don’t comply with our policy.” McDonald’s is expanding this resource to other regions and has shared it with The Tropical Forest Alliance to encourage broader use, according to the company.  Elsewhere, Cargill is increasingly using a combination of GPS information and satellite imagery to pinpoint where forest degradation is taking place, specifically as part of its cocoa sourcing practices in the Cote d’Ivoire and Ghana. Bar-coding technology helps trace cocoa to individual farms.  “All of this tracking, mapping and ranking leads us to the most crucial step for making change: partnering with farmers and farmer organizations,” wrote Cargill’s vice president of global sustainability, Jill Kolling, in a GreenBiz article about the project . “The insights we collect can help Cargill determine precisely where to invest resources and how to tailor its farmer engagement initiatives to prevent new deforestation.” The integral role of Indigenous communities Indeed, the companies, NGOs and others contacted for this article echoed a similar conviction: That it will take active, authentic and at-the-ground-level engagement with the communities affected by deforestation — particularly Indigenous peoples — to deliver real progress in eliminating deforestation.  “We’ve seen a big movement in jurisdictional approaches, multi-stakeholder collaborations that include governments, NGOs and smallholder companies,” notes CDP’s Lam. She points to two programs that might serve as models for other initiatives. The first, the forest management program nurtured by paper company UPM, works with landowners to help diversify their revenue sources by co-locating activities such as cattle raising and agriculture alongside sustainable eucalyptus production. The partnerships currently cover more than 296,000 acres of lands — about 30 percent of the wood requirements for the UPM Fray Bentos pulp mill. UPM commits to timber purchases and helps with technical skills and seedlings.  I think the headline would be: Don’t work alone. Map your sourcing. You can’t do anything if you don’t know where to do it. The second, focused on the Leuser Ecosystem in Indonesia , is coordinated by the Earthworm Foundation and funded by a who’s-who list of multinationals including The Clorox Company, Colgate-Palmolive, The Hershey Company, Nestlé, Mars and Reckitt Benckiser, among others. It relies on a satellite system to hone which local communities should be priorities for engagement. Within the communities, the focus is on helping local farmers and mill owners secure their economic livelihoods in harmony with conservation practices. “Engagement is very, very important and that is why these multi-stakeholder collaborations are important,” Lam says. A crucial voice in these initiatives should be Indigenous communities, according to the executives and researchers who contributed insights for this article. “You can’t go in with your idea of what sustainability is. … You can’t bring your own perceptions about what will work,” says RSPO’s Strechay.  In particular, businesses should be more diligent about integrating the concept of ” free and prior informed consent ” into their supply chain engagement practices, if they want to take meaningful action on fighting deforestation, notes Global Canopy’s Rogerson.  By considering these rights upfront, companies can surface potential development issues at a much earlier stage. This should be a priority for 2021, Rogerson says, but “far fewer companies have policies for this [than for deforestation], even though these issues are intertwined.” Sustainability teams that feel they are too far removed from those actors to make an impact should engage with organizations that do have those connections, says Kering’s Regent. “Rely on local NGOs, scientific communities,” he says. “They might challenge you, but that is part of the game. Otherwise, you may address the program from the wrong angle.” Rabinovitch of Mars notes that the most important thing a company can do is grasp the reality of the challenges it will face.  “By fully understanding the scale of your carbon footprint and the systemic issues in your value chains, you’ll be able to set science-based targets to guide strategies leading to transformational, not incremental change,” he said. “It certainly isn’t easy work, and you won’t be able to do it alone, so finding partners who share your values and can help you identify achievable goals means your business can make a measurable, meaningful difference.” Pull Quote We’re seeing the end of the commodity era, where materials are sourced from largely unknown origins and bought purely for price on a transactional basis. I think the headline would be: Don’t work alone. Map your sourcing. You can’t do anything if you don’t know where to do it. Topics Supply Chain Forestry Deforestation Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Shutterstock Fires in the Amazon, photographer from space. Close Authorship

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Fighting deforestation should be a top priority for 2021, and here’s how it can be

New York state divests from fossil fuels in historic move

December 10, 2020 by  
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The retirement contributions of New York state workers will no longer be invested in fossil fuels. The state announced Wednesday that it is removing oil and gas stocks from its portfolio, making it the world’s largest pension fund to divest from the fossil fuel industry. The pension fund’s financial portfolio is worth $226 billion, and it disburses $1 billion to retirees every year. The new plan is to sell off the riskiest gas and oil stocks and be completely divested from fossil fuels by 2025. By 2040, the fund plans to completely axe carbon polluters. Related: BP to reduce oil, gas production by 40% to focus on clean energy “We continue to assess energy sector companies in our portfolio for their future ability to provide investment returns in light of the global consensus on climate change ,” said state Comptroller Thomas DiNapoli in a statement. “Those that fail to meet our minimum standards may be removed from our portfolio. Divestment is a last resort, but it is an investment tool we can apply to companies that consistently put our investment’s long-term value at risk.” First to go? Companies that produce ultra-dirty tar sands oil . Tar sands are a sticky mixture of sand, clay, water and bitumen that require an especially environmentally harmful process to extract. Saudi Arabia, Venezuela and Canada have the world’s largest reserves of tar sands. So Imperial Oil, Exxon Mobil Corp’s Canadian branch, is first on the chopping block. Then, the fund will review and probably eliminate frackers, such as Royal Dutch Shell and Exxon Mobil. Oilfield service companies, storage and pipeline builders are other top candidates. After that, fund managers will consider utility companies. Environmental activists have been pushing for divestment in fossil fuel companies for years. Ireland’s national government divested in 2018 and Norway’s in 2019. Oslo and New York City are planning to divest at the city government level. More than 1,200 universities, religious organizations, philanthropic foundations and other groups have also pledged to sell off their fossil fuel holdings. Via Huffington Post Image via Artem Sapegin

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New York state divests from fossil fuels in historic move

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