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- 🧠Stay ahead with the latest in sustainability and climate finance
🧠Stay ahead with the latest in sustainability and climate finance
Discover the latest trends in corporate sustainability budgets, emission credits, and Japan’s thriving ESG investment landscape.
Bhuva Shakti
August 29, 2024 • Estimated Reading Time: 9 minutes
Hey there 👋
Last week, we explored Goldman Sachs' exit from Climate Action 100+, the challenges of integrating climate rules into U.S. accounting standards, and the World Bank's groundbreaking $225M Amazon Reforestation Bond.
The BIG Risk Navigator continues to be your trusted guide through the complex terrain of climate finance, ESG, and sustainability, delivering essential insights tailored for C-level executives.
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Now, let’s dive into this week’s stories.
68% of large U.S. companies now have dedicated sustainability initiatives budgets: EcoOnline Survey: EcoOnline reveals that more than two-thirds of large U.S. companies have established dedicated budgets for sustainability reportingarge U.S. companies now have dedicated sustainability initiatives budgets - EcoOnline Survey.
New Zealand halves emission credits to restore ETS market confidence: New Zealand has made major changes to its Emission Trading Scheme (ETS), vowing to halve the number of units available from 2025 to 2029.
Japan offers lifeline to ESG investing amid global uncertainty: ESG investing is thriving in Japan, contrasting global trends, with a balanced approach appealing to corporations and markets.
Record-breaking trade in Xpansiv CBL Platform shakes up carbon credit markets: Amid the heated controversy over carbon offsets and renewable energy carbon credits, Xpansiv trading platform CBL reported record-breaking trends.
SEBI broadens sustainable bond frameworks amid growing market demand: The Securities and Exchange Board of India (SEBI) has announced expansion to its sustainable finance framework and plans to introduce new financial instruments.
🎯 68% of large U.S. companies now have dedicated sustainability initiatives budgets: EcoOnline Survey
✅ Key Insights
The survey included responses from 95 C-suite executives, Vice Presidents, and Directors at U.S. companies with annual revenues exceeding $500 million.
68% companies with sustainability budgets for hiring staff, developing technology and processes for reporting GHG emissions and other sustainability metrics.
13% are leveraging software solutions to enhance data collection and reporting accuracy for Scope 3 GHG emissions.
A recent survey by EcoOnline reveals that more than two-thirds of large U.S. companies have established dedicated budgets specifically for sustainability reporting. The survey had a particular focus on companies’ preparedness for new California laws SB 253 and SB 261, which require large companies doing business in the state to report on Scope 1, 2, and 3 greenhouse gas (GHG) emissions and on climate-related financial risks.
🎯 New Zealand halves emission credits to restore ETS market confidence
✅ Key Insights
New Zealand will cut emission credits from 45M to 21M units between 2025-2029.
The government retains current auction and reserve price settings to maintain market stability.
The move aims to restore confidence in the ETS and align with climate targets.
New Zealand Emissions Trading Scheme (ETS) has been updated to ensure New Zealand has a more credible market. The Government will retain the current auction floor price, the cost containment reserve price, and current reserve volumes of New Zealand units in the ETS.
🎯 Japan offers lifeline to ESG investing amid global uncertainty
✅ Key Insights
ESG investments in Japan boosted the sustainability bonds to ¥6.7 trillion in 2023
Japan's moderate ESG regulations have avoided the anti-ESG sentiments seen in the U.S. and Europe.
Bank of Japan is finally shifting toward higher rates to attract more investors in Japanese ESG investments.
Environmental, social and governance (ESG) investment is booming in Japan even as it stagnates globally, with the country’s middle-of-the-road approach making it more attractive to corporations and the financial markets and making it a more sustainable proposition over the long term.
🎯 Record-breaking trade in Xpansiv CBL Platform shakes up carbon credit markets
✅ Key Insights
Data provided by Xpansiv reflects the dynamic and evolving nature of these carbon credits markets
Paris Olympics set new records in sustainability by buying 1,472,550 metric tons of carbon credits
Vintage 2020 Katingan Peatland Restoration credits from Indonesia were matched at $4.90
The week saw a significant trade on Xpansiv’s CBL platform, with 39,414 tons of vintage 2023 ACR CCP-approved United States Landfill Gas credits trading at $7.15 per metric ton. This transaction was notable as the largest and highest-priced trade of the week. It is also one of the largest CCP-tagged credit transactions since ICVCM’s methodology approval in June.
🎯 SEBI broadens sustainable bond frameworks amid growing market demand
✅ Key Insights
Sustainable finance framework includes Social Bonds, Sustainable Bonds, and Sustainability-linked Bonds, alongside the existing green debt securities.
India’s sustainable bond market reached over $5.4bn in 2024 to date.
SEBI move reflects a strategic shift towards integrating social and environmental considerations into the core financial systems.
The Securities and Exchange Board of India (SEBI) has announced a significant expansion to its sustainable finance framework, unveiling plans to introduce a range of new financial instruments. This includes Social Bonds, Sustainable Bonds, and Sustainability-linked Bonds, alongside the existing green debt securities.
Can result-based climate finance speed up the oil phase-out?
Paul Boeffard, founder of Leavit, sheds light on the evolution of climate finance, and the emergence of innovative international collaboration tools aimed at combating climate change. Significantly, certain mechanisms within climate finance hold promise in accelerating the transition away from fossil fuels, responsible for 80% of CO2 emissions.
✅ Highlights
Carbon markets
Voluntary carbon markets
Article 6 mechanisms
Just energy transition partnerships
Debt-for-climate-swaps
The Paris Agreement's Article 6 supports the establishment of a public international carbon market. Under Article 6.2, countries can voluntarily trade emission reductions and removals (ITMOs) through bilateral agreements, counting them towards their Nationally Determined Contributions (NDCs). Article 6.4 aims to create a global carbon market overseen by a United Nations 'Supervisory Body.' Although these markets are still in their infancy and not yet fully operational, they hold considerable promise.
AI-powered sustainability: A new era for Scope 3 emissions management
✅ Highlights
LCAs can enhance Scope 3 insights
Challenges to performing an LCA
The role of AI in revolutionizing LCAs
Scope 3 emissions are becoming a critical focus for businesses to reduce their environmental impact. Scope 3 emissions cover a business's indirect emissions from non-owned or controlled assets and are often the scope with the highest environmental impact. These emissions include the entire supply chain and every stage of a product's lifecycle. A company must include the stages of a Life Cycle Assessment (LCA) to accurately understand their product’s emissions which includes: raw material extraction, manufacturing and processing, transportation, consumer usage, and end of life disposal.
