🧭 Stay ahead with climate fintech & ESG News

Uncover how the EU's new sustainability directive is reshaping corporate reporting, along with the latest trends in climate fintech and ESG innovation.

Author

Bhuva Shakti
August 15, 2024 • Estimated Reading Time: 9 minutes

Hey there 👋

Last week, I explored the latest in climate fintech, including the launch of Bill Gates' $839M climate fund and innovative green loans transforming the renewable sector.

I also highlighted a new tool for ESG compliance and Salesforce's survey on AI's sustainability impacts.

As we continue our journey with the BIG Risk Navigator, I’m committed to bringing you the most relevant insights and opportunities in the ever-evolving landscape of sustainable business.

The BIG Risk Navigator is your go-to source for understanding the risks and opportunities in climate fintech and sustainability.

Designed for C-level executives, it provides you with the expert insights you need to stay ahead.

So dive into this week's newsletter for the latest updates and share your thoughts with me. Your engagement helps me tailor my content to better serve your needs!

  • EU directive sets new standards for environmental and financial reporting: The European Union’s Corporate Sustainability Reporting Directive (CSRD) now requires companies to conduct a ‘double materiality’ assessment.

  • Quinbrook’s Net Zero Power Fund exceeds target raising $3 billion: Quinbrook secured $3 billion of new capital commitments in aggregate across the fund and co-investment vehicles for the NZPF strategy.

  • 3Degrees launches Supply Chain Emission Reduction solution to address Scope 3 emission targets: The new service from 3Degrees is aimed at companies in the food and apparel sectors that are striving to meet their Science Based Targets initiative (SBTi) goals.

  • Australian FinTech funding set to drop to its lowest level in five years: In the first half of 2024, the Australian FinTech sector experienced a substantial decline in both deal activity and capital invested.

  • Britain to propose law next year to regulate ESG raters: Britain plans to propose a law in 2025 to regulate ESG rating providers to increase transparency and ensure reliability in ESG benchmarks.

🎯 EU directive sets new standards for environmental and financial reporting

✅ Key Insights

  • This directive will apply to about 40,000 firms globally.

  • Double materiality integrates environmental impacts and their financial implications.

  • Currently, only 37% of major polluting companies report climate-related financial risks.

  • Companies must conduct materiality assessments, with 19% already underway according to a WTW poll.

The EU’s Corporate Sustainability Reporting Directive (CSRD) mandates a ‘double materiality’ assessment, requiring companies to evaluate both financial and societal impacts on the environment. This regulatory push is aimed at enhancing transparency and promoting a more sustainable global business practice.

🎯 â‚¬Quinbrook’s Net Zero Power Fund exceeds target raising $3 billion

✅ Key Insights

  • Quinbrook raises $3 billion in capital commitments for Net Zero Power Fund (NZPF).

  • The latest closing marks Quinbrook’s third fund closure this year, totaling over $4.3 billion in capital raised.

  • Investments span sectors like solar+storage, data center infrastructure, and renewable fuels.

Quinbrook Infrastructure Partners, a global investment manager specializing in energy transition infrastructure, has closed its Net Zero Power Fund (NZPF) with $3 billion in capital commitments. This fund is Quinbrook’s fifth energy transition-focused initiative, attracting institutional investors from around the globe.

🎯 3Degrees launches Supply Chain Emission Reduction solution to address Scope 3 emission targets

✅ Key Insights

  • 3Degrees launches the Supply Chain Emission Reduction Agreement, targeting scope 3 emissions in the food and apparel firms.

  • This product helps companies reach scope 3 goals by collaborating with suppliers on lower-emission products.

  • Initially, this is available to companies with North American agricultural supply chains.

  • 3Degrees uses a pay-for-performance model, linking payments to actual emissions cuts achieved by suppliers.

The Supply Chain Emission Reduction Agreement simplifies the process of reducing emissions by allowing 3Degrees to partner with upstream suppliers. Through this collaboration, 3Degrees sources, finances, and develops emissions reduction projects that result in lower-emission products.

🎯 Australian FinTech funding set to drop to its lowest level in five years

✅ Key Insights

  • Trend analysis showed a potential 60% drop-in deal activity in YoY comparison base on deal making pace in the first half of 2024

  • Average deal value dropped to $17.6m which could indicate a shift in investment strategies

  • Cover Genius secured the largest deal for H1 2024 in the Australian FinTech market with $80m Series E funding

Globally, the funding market has been on the decline. However, the average deal value has been following the opposite trend. But, for H1 2024 the Australian FinTech market has gone against the grain where the average deal value decreased to $17.6m from $23.6m in H1 2023. The decrease in average deal value indicates a significant drop in both the number of deals and the size of investments.

🎯 Britain to propose law next year to regulate ESG raters

✅ Key Insights

  • Britain plans to propose a law in 2025 to regulate ESG rating providers to increase transparency.

  • ESG raters in the UK adhere to a voluntary code of conduct, unlike the European Union which already has mandatory rules.

  • This can boost investor confidence and channel more funds into truly sustainable projects.

The UK government is set to propose a law in 2025 aimed at regulating providers of ESG ratings, a move that could reshape the landscape of sustainable finance. This initiative, led by Finance Minister Rachel Reeves, seeks to address the growing concerns over the transparency and reliability of ESG ratings, which play a crucial role in directing billions of dollars into sustainability-focused investments.

How AI and ESG considerations are changing the InsurTech landscape in 2024

According to industry experts, the InsurTech sector is on the cusp of a transformative period in the latter half of 2024. Emerging technologies such as AI, machine learning, and large language models are expected to drive substantial advancements in risk assessment, underwriting, and customer engagement. Concurrently, a heightened focus on ESG considerations is anticipated to shape the industry's trajectory. 

✅ Highlights 

  • Air Doctor is integrating AI to streamline operational management and enhance the customer experience.

  • 75% of customers expect companies to utilize new technologies for better interactions.

  • Novidea anticipates a rise in the integration of ESG data into existing InsurTech offerings.

  • InsurTechs such as Ecologi, Watershed, and Claims Carbon have created both strong brands and services.

The second half of 2024 presents a dynamic landscape for InsurTech firms across the space. With a growing emphasis on AI, the customer experience, and ESG considerations, firms must position themselves to adapt to the changing dynamics. With legacy systems seemingly on the way out, and the rise of Gen-Z as consumers, companies are now adjusting to the times or lagging behind.

Financing the blue carbon wealth of nations

✅ Highlights 

  • 2023 COP UEA proposed a global target to restore and protect 15 million hectares of mangroves by 2030.

  • Coastal ecosystems are located in more than 110 countries across the world.

  • Australia provided almost AUS $ 2bn in value in the avoided damages to coastal property.

  • Launching the ‘Mangrove Breakthrough Financial Roadmap’ in late 2023 has been a galvanizing call to action.

  • Impact investment could be key in future coastal prosperity in solidarity with the Global South

Mangrove forests help to protect nearby populated areas by reducing erosion and absorbing storm surge impacts during extreme weather events. The ‘Global Mangrove Alliance’ estimates a net loss of 5,245 km2 since 1996. There are estimated 147,000 km2 of mangroves remaining worldwide, an area about the size of Bangladesh. Around 818,000 hectares are currently considered as restorable areas. Investing in the mangrove forests re-establishment is almost a one-size-fits-all strategy through coastal protection, blue carbon storage, and multiple local benefits for livelihoods and biodiversity.

Why an early startup should hire a COO in 2024

Discover why having a Chief Operating Officer (COO) is crucial for early startups in 2024, emphasizing strategic value and operational guidance.

https://www.bhuvas-impact.global/post/why-an-early-startup-should-hire-a-coo

Current AI policies, legislation, regulations, and more in the EU vs the US

Explore the differences in AI regulations between the EU and the US, and their impact on businesses in the climate fintech sector.

https://www.bhuvas-impact.global/post/ai-policies-legislation-regulations-eu-us

The AI ethics expert in Climate Fintech

The strategic acquisition of funding can be a critical determinant of its capacity to scale, innovate, and ultimately succeed in fintech.

https://www.bhuvas-impact.global/post/ai-ethics-expert-for-startups