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- 🧠China’s green financing, the true cost of data centers, and more ESG news for late September
🧠China’s green financing, the true cost of data centers, and more ESG news for late September
Stay ahead with insights on sustainability investments, corporate climate reporting, and innovations in AI for risk management.
Bhuva Shakti
September 19, 2024 • Estimated Reading Time: 9 minutes
Hi there! 👋
Last week, we explored how ESG investments are boosting performance yields, the landmark climate risk disclosure bill in Australia, and the exciting partnership between ESG Book and Vyzrd that is set to revolutionize climate risk management. Thank you for your continued engagement with the BIG Risk Navigator, and for being part of this incredible community of forward-thinking leaders committed to driving sustainable business practices!
The BIG Risk Navigator is your go-to resource for navigating the complexities of climate finance, ESG reporting, and fintech innovation. If you're a C-level executive or a board member, this newsletter is designed to equip you with the insights needed to stay ahead in the ever-evolving landscape of sustainable business.
But first – community updates!
The Emerald Summit is happening this week, and there’s still time to grab your last-minute tickets! Get your ticket here.
Emerald Summit 2024 brings together executive women, climate tech innovators, and impact investors. This year’s theme focuses on increasing venture capital and project finance for climate startups, with a particular emphasis on businesses led by women in the sustainability, inclusion, education, and technology sectors.
What to expect:
Network with leaders in business sustainability.
Attend keynotes and panel discussions on advancing climate action.
Participate in interactive workshops and breakout sessions.
Event Date: September 20, 2024, 9:00 AM - 7:00 PM EDT
Location: New York City
Now let’s get into the news.
IFC launches ClimaLab to tackle climate risks in Europe’s financial sector: International Finance Corporation (IFC) has launched a groundbreaking initiative called ClimaLab, aimed at enhancing climate resilience in the banking sector.
Data centers to emit 2.5 Billion tons of CO2 by 2030, driving demand for decarbonization solutions: According to Morgan Stanley report, surge in emissions opens a substantial market for decarbonization solutions.
China’s green financing reached $4.1 trillion in 2023, boosting ESG investments: China is accelerating its green transition, leveraging financial instruments to promote sustainable development.
TotalEnergies to make $100M investment in U.S. forest carbon credits: The projects designed to protect valuable forests and boost their capacity to sequester more atmospheric carbon.
India’s bioeconomy to triple to $300 billion by 2030 under new BioE3 policy for sustainable growth: BioE3 policy promotes a shift from traditional chemical-based industries to sustainable bio-based models.
🎯 IFC launches ClimaLab to tackle climate risks in Europe’s financial sector
✅ Key Insights
Climate-related disasters associated economic losses across Europe, amounting to €650 billion from 1980 to 2022.
IFC’s ClimaLab initiative aims to strengthen banks’ capacity to manage climate risks and seize sustainable investment opportunities.
ClimaLab is a pioneering effort to align financial institutions with climate resilience and regulatory requirements.
European financial institutions are grappling with significant climate-related risks, leading to substantial financial losses and regulatory pressures. To address these challenges, the International Finance Corporation (IFC) has launched a groundbreaking initiative called ClimaLab, aimed at enhancing climate resilience in the banking sector.
🎯 Data centers to emit 2.5 billion tons of CO2 by 2030, driving demand for decarbonization solutions
✅ Key Insights
Data centers are set to emit 2.5 billion metric tons of CO2-equivalent by 2030.
This surge in emissions opens a substantial market for decarbonization solutions.
Companies like Google, Microsoft, Meta, and Amazon are driving both emissions and investments in green technologies.
The global data center industry is projected to emit 2.5bn metric tons of carbon dioxide-equivalent (CO2e) emissions by 2030, according to a report by Morgan Stanley. This figure represents nearly 40% of the annual emissions of the US.
🎯 China’s green financing reached $4.1 trillion in 2023, boosting ESG investments
✅ Key Insights
China’s green loans reached $4.1 trillion in 2023, a 36.5% year-on-year increase, leading all loan categories.
Over 296 mutual funds in China now focus on sustainability, with assets surpassing $55.5 billion.
Financial institutions, like E Fund Management, are developing advanced ESG rating systems tailored to China’s market.
The People’s Bank of China reported a substantial increase in green loans, totaling $4.1 trillion at the end of 2023—a 36.5% rise compared to the previous year, marking it as the highest growth among all loan types. These funds are primarily directed towards green projects in sectors like energy, construction, and mining.
🎯 TotalEnergies to make $100M investment in U.S. forest carbon credits
✅ Key Insights
Projects designed to protect valuable forests from excessive timber harvesting.
TotalEnergies will purchase the generated forest carbon credits and plans to retire them after 2030.
TotalEnergies intends to use these credits to voluntarily offset a portion of its residual direct Scope 1 and 2 emissions.
TotalEnergies has entered into a substantial $100 million forest carbon credits partnership with Anew Climate, a leading climate solutions provider in North America, and Aurora Sustainable Lands, a U.S.-based carbon-stewardship firm and forest landowner.
🎯 India’s bioeconomy to triple to $300 billion by 2030 under new BioE3 policy for sustainable growth
✅ Key Insights
India’s bioeconomy grew from $10 billion in 2014 to over $130 billion in 2024, projected to reach $300 billion by 2030.
The new BioE3 policy aims to transition from chemical-based industries to sustainable bio-based models.
India requires $10-15 trillion in new investments to achieve its net-zero carbon emissions target by 2070.
India is on a path to significantly expand its bioeconomy, with projections indicating growth from $130 billion in 2024 to $300 billion by 2030. This expansion is driven by the newly introduced Biotechnology for Economy, Employment and Environment (BioE3) policy.
Will China’s new climate action plan match its great potential?
The country is making good progress towards its current goals, but it needs to do more to align with the 1.5C global warming threshold, says Lin Zi (Dialogue Earth’s China programme director).
✅ Highlights
Setting targets that support clean energy
Should China cut its emissions rapidly or gradually?
Uncertainties around peak carbon and GDP growth
Will the NDC targets include all greenhouse gases?
Signatories to the Paris Agreement must submit such action plans, known as Nationally Determined Contributions (NDCs), every five years. As a major emitter, China’s NDCs are closely watched. Research has found that the country is on track to meet its current NDC and, in some fields, is surpassing expectations.
Over half of EU funds need to divest or change name in coming months
✅ Highlights
Background to the ESMA guidelines
Reaction to the ESMA guidelines
Clarity AI research
Time is running out for funds to comply with ESMA’s guidelines around the use of ESG terms in fund names. Clarity AI research shows that more than half of the impacted funds are exposed to companies in breach of the Paris-aligned benchmark (PaB) criteria and will have to either divest from certain companies or industries, amend the name of their products, or otherwise risk falling short of the guidelines’ expectations.
