Tag: cleantech

An alliance of over 25 global companies with a combined market capitalisation of $1.2tr are to set ambitious new greenhouse gas emissions goals to bring themselves into line with the Paris Agreement’s 1.5C temperature threshold.

The UN Global Compact, We Mean Business coalition of green corporates, and the Science Based Targets initiative (SBTi) today issued a joint statement confirming the number of large companies publicly committing to become net zero emission operations by 2050 will increase more than seven-fold in the coming months. 

The move came just hours after it emerged that UN Secretary General António Guterres has written to every head of state calling on them to set out plans to ensure carbon neutrality by mid-century.

The letter sets out expectations for the next crucial UN climate meeting in September, where only the countries that have delivered the boldest emission reductions plans are expected to be invited to speak in a high profile plenary session.

Climate Home News reported that the letter calls on governments to provide “a brief summary or an indication of the plans” they are expecting to bring to the summit by 7 August. Guterres added that he had previously “asked all leaders to come to the Summit ready to announce the plans that they will set next year to reduce greenhouse gas emissions for 2030 and to achieve net zero emissions by 2050”.

Meanwhile, parts of the global business community are today similarly hoping to crank up pressure on government’s to deliver ambitious net zero plans.

Around 600 of the world’s largest companies have already signed up to the SBTi, which requires corporations to submit emissions targets that are in line with the Paris Agreement’s over-arching goal of keeping global temperature increases below 2C. The targets are then independently verified as being sufficiently ambitious by a scientific panel, with over 230 companies to date having had their targets approved by SBTi.

However, to date only a handful of companies have put forward more ambitious targets that extend beyond 2030 and are in line with the Paris Agreement’s stretch target to keep temperature increases below 1.5C. That select cohort – which includes telco giant BT, business software powerhouse SAP, and clothing brand Levi Strauss & Co – is now set to expand drastically in the coming months with up to 27 firms now pledging to submit new 1.5C targets.

The list of new businesses to make the pledge including Acciona, AstraZeneca, Banka BioLoo, Dalmia Cement Ltd., Eco-Steel Africa Ltd., Enel, Mahindra Group, Natura &Co, KLP, Royal DSM, Signify, Singtel, Telefonica, Telia, Unilever, Vodafone Group PLC, and Zurich Insurance, amongst others.

The move comes in direct response to Guterres’ calls for both political and business leaders to attend climate summit in New York on 23rd September and bring with them a series of more ambitious climate goals.

The UK and France, amongst others, are expected to tout their new net zero targets at the summit and the hope is that an expanding battalion of corporate leaders will confirm similar targets.

“Climate leadership has never been more important than it is right now, and it is inspiring to see so many diverse companies and brands boldly raising their ambitions,” said Lise Kingo, CEO and Executive Director of the UN Global Compact. “Leading companies are already proving that 1.5C-compliant climate targets are possible, and I encourage all businesses to seize this opportunity to position themselves at the forefront of this movement and contribute to the achievement of the Sustainable Development Goals.”

The move follows the official launch in April of a new validation process from SBTi, designed to assess whether emissions targets are in line with the 1.5C goal.

Paul Simpson, SBTi Board Member and CEO of investor-backed climate disclosure body CDP, said there was growing evidence that more ambitious climate targets could unlock a raft of benefits for leading businesses.

“The science is clear: to limit the catastrophic impacts of climate change, we must ensure warming does not exceed 1.5C,” he said. “The ambition is high, but it’s achievable – and science-based targets give companies a roadmap for getting there. We urge all companies to seize this chance to align their business with a 1.5C future and drive forward the transition to a net-zero carbon economy.”

His comments were echoed by Ambassador Luis Alfonso de Alba, the UN Secretary-General’s Special Envoy for the Climate Action Summit, who urged more governments and businesses to urgently take steps to strengthen their own emissions goals.

“The UN Secretary-General has called on leaders to come to the Climate Action Summit in September with clear plans for major cuts to emissions on the pathway to a zero-net emissions economy by 2050,” he said. “It is very encouraging to see these climate leaders in the global business community taking action, both to help tackle the climate emergency and because taking climate action presents huge opportunities for early movers. By sending strong market signals, these companies are showing Governments that they need to urgently ramp up their national plans in line with the latest climate science.”

Consumers booking flight tickets could soon be paying extra to offset their emissions, according to news last week that the government is considering requiring all airlines to offer a voluntary carbon tax on flight tickets.

In a new Call for Evidence released last Thursday the Department for Transport said it is considering both an ‘opt-out’ scheme, where carbon offset costs are applied automatically but passengers can choose not to pay them, and ‘opt-in’ schemes, where customers on all journeys could actively choose whether to pay extra for offsetting. The idea extends beyond just flights, with the government positing that the same approach could even be rolled out across the cruise, bus, and rail transport industries.

“An offsetting scheme could help inform travellers about how much carbon their journey produces and provide the opportunity to fund schemes, like tree planting, to compensate for those emissions,” Transport Secretary Chris Grayling said last week.

The additional costs applied to tickets would vary according to the carbon intensity of the trip – the cost of a flight between London and New York for example could increase by almost £30, according to The Times, while a flight between London and Madrid could cost £5 extra.

The call for evidence builds on an idea first floated by Chancellor Philip Hammond in his November 2018 budget, when he promised the scheme would offer “genuinely additional offsets” by funding climate mitigation actions in the UK and beyond.

The proposal that had its critics at the time, with Shadow Chancellor John McDonnell warning that a close look at carbon offsets “might reveal that they do not reduce emissions” and are vulnerable to “gaming fraud”.

Those in opposition appear not to have been won over in the intervening months, with many today raising concerns over the use of offsets and the notion that a voluntary scheme will drive radical enough change across the aviation industry. “This is exactly the wrong approach to take on the problem of aviation and climate change,” Leo Murray, director of innovation at climate charity 10:10, told Sky News yesterday.

There is little doubt that people will need to change their travel habits in a net zero world. Transport currently accounts for 27 per cent of UK emissions, with air travel a fast-growing proportion of the total. The government argues that making carbon offsets a universally accessible and much more visible part of the ticket buying process, alongside clearer information from travel operators on the carbon impact of an individual’s journey, could help shift behaviour change.

“The government wants consumers to have the opportunity to mitigate the climate change impact of their journeys, whilst the deployment of zero emission technologies ramps up,” the Department for Transport says in its Call for Evidence.

Most airlines today offer options for customers to offset emissions from flights, but less than one per cent of passengers choose to do so. Increasing that figure could not only raise vital cash for the low-carbon transition, but prompt more consumers to consider the carbon impact of their activities and prepare them for the changes that will come as the net zero transition starts to accelerate.

Research suggests the idea could prove most effective through an ‘opt-out’ scheme. One of the key tenets of the work by the Behavioural Insights Team (BIT), the social purpose company part-owned by the government, is that if you want people to change their behaviour it needs to be easy to do so.

BIT explicitly advises using default options to nudge people into change, arguing that making a choice default “makes it more likely to be adopted”. There are real-world examples of this strategy’s success; BIT frequently cites the experience of the government’s auto enrollment pensions policy, which saw pension participation rates of employees in large companies rise from 61 per cent to 83 per cent in the first six months of launch.

Meanwhile, a government-backed scheme requiring companies to deliver credible, verifiable offsets could help to clamp down on the rogue operators in the space, which the New Scientist warned earlier this month are still rife.

It could even prepare the ground for a bolder form of carbon pricing, by introducing consumers gently to the idea of an explicit added climate cost to journeys.

But there will be many left unconvinced that the government’s dedication to a voluntary approach is radical enough to drive the kind of change needed in the aviation sector. British people already fly more frequently than almost any other nation on Earth, and with take-up of offset schemes already low, there are doubts consumers will actually choose to pay more.

Yet the government has shown no signs of being willing to countenance a tougher approach. Speaking to MPs on the Business, Energy and Industrial Strategy Committee last week, acting Energy and Clean Growth Minister Chris Skidmore indicated his opposition to compulsory levies on flight prices, even when structured to target only frequent fliers, arguing they would create a “hostile environment for bearing down on individual freedom”.

It is also unclear how any offset scheme in the UK would interact with the international CORSIA scheme the aviation industry is working on, which plans to use offsets to hold emissions at 2020 levels while the sector continues its global expansion. “The government is aware that our involvement in existing environmental policies or schemes, including those such as CORSIA, that relate to offsetting, will need to be aligned with any future policy,” the consultation notes, without providing any indication of how this could be achieved.

Meanwhile, others will object to the idea of applying extra cost to journeys other than aviation, on the grounds getting a train for a ferry is a more sustainable way to travel than by air. With British train tickets already some of the most expensive in Europe, it is easy to see how piling on extra cost could send the wrong signal to the public.

And even if an offset model does raise extra cash, it probably wouldn’t curb demand – and therefore emissions, argued Murray. “The purpose of this offsetting charge is not to reduce emissions from air travel,” he said. “It is to collect money from passengers and pay for emissions to be reduced in other sectors.” He pointed out that demand for air travel is “price inelastic”, with people willing to pay for flights even if the price rises by a relatively large amount. Therefore adding £5 onto the cost of a European flight will not deter people from taking most flights, he suggested.

Instead, many in the environmental community favour a frequent flier levy, a compulsory additional tax applied to a customer’s flight price that varies according to the number of trips taken per year. This would avoid penalising those who fly once a year for their holidays, instead ensuring the polluter pays principle is applied to those who fly multiple times a month, supporters argue.

The government is positioning any offset offering as a bridging tool while the UK’s transport fleet decarbonises. “Fully decarbonising transport will take time,” it said in the consultation. “During this major transition, we want to ensure that consumers have the information they need to understand the emissions from different travel options and make informed choices.” It is notable the call for evidence came within the days of the government announcing new R&D funding to support the development of electric hybrid planes.

Yet while making offsets and carbon information readily available could indeed usher in a shift in public thinking, time is running out for the UK government to get a handle on transport emissions, which remain the largest single contributor to the UK’s carbon profile. For the aviation industry in particular, as the Aviation Environment Federation stresses, getting to net zero will mean delivering a cultural shift and “active demand constraint”. Individual offsets might be the start of the former, but there is almost no chance they can help with the latter.

This is only the very start of the government’s consultation process, and there is a long way to go before any final policy design is confirmed. Many environmental campaigners will need convincing that its time is really best spent on voluntary measures.

Further reading

Schroders has launched a global equity fund, targeting the transition to a low carbon economy by investing in companies focused on clean energy.

Investing across renewable power production, transmission, distribution and storage, as well as smart grid technologies and electric vehicle charging, the Schroder ISF Global Energy Transition fund will not allocate to companies with exposure to nuclear or fossil fuels.

The long-only portfolio of 30 to 50 stocks will focus on three significant global trends; the decarbonisation of power generation, the electrification of energy use and increased energy efficiency.

Managed by Schroders’ commodities and resources investment team, the fund will have a sustainability focus and a bias towards ‘best-in-class’ companies, and those that can demonstrate clear progress towards reducing their dependence on carbon.

The global energy transition will require $120tr of investment by 2050 to meet climate goals, according Schroders’ head of commodities and manager of the fund Mark Lacey, who added there was also “growing consumer demand for clean technologies…creating strong real earnings growth opportunities”.

Lacey said: “A significant inflection point has now been reached in the last two years which is allowing companies in the sector to become attractive investment opportunities.

“We therefore believe this could be a beneficial time for our clients to allocate to energy transition.”

Head of sustainable research at Schroders Andrew Howard added the “dramatic change in ways we produce and consume energy” means “exposure to the energy transition sector is not just an investment opportunity but also a necessity”.

He said: “There is now global recognition from governments, consumers and investors that the production of clean energy is essential for the planet. 

“The other recognition is that the scale of the investment required to achieve the transition to more sustainable energy is in the trillions of dollars.

“Renewable energy and electric vehicles are only a part of the change; the way we use electricity, the way it is stored and how it is distributed needs to be updated and this requires significant investment. 

“Schroders is excited to be able to offer investors exposure to this fast growing and exciting sector using an active approach.”

This article first appeared at Investment Week

Tate, the organisation which manages four of the UK’s most popular and prestigious art galleries, has become the latest high profile institution to declare a “climate emergency”, pledging to step up its efforts to reduce the impact of the cultural sector on the environment.

In a statement published on its website last week, directors at Tate said society had reached a “defining moment in the history of our planet and the cultural sector has a unique part to play in effecting change”.

They pledged to respond with actions across all four Tate galleries – Tate Modern, Tate Britain, Tate Liverpool and Tate St. Ives – by using their art exhibitions, cafes, and bars to raise awareness of the climate emergency and drive change throughout the cultural sector and beyond.

Last week the Tate Modern opened an exhibition by the artist Olafur Eliasson focused on climate change and the environment, as part of which the gallery said it held an event to discuss the role of artists, campaigners, and cultural organisations in addressing environmental issues.

For its own part, Tate has pledged to reduce its greenhouse gas emissions by “at least” 10 per cent by 2023 against 2019 levels, and is in the midst of switching to a green electricity tariff across all four of its galleries.

The organisation also said it had “helped shape international green museum principles”, including sustainably sourcing food for its bars and cafes, placing a greater emphasis on vegetarian and vegan options, and auditing its travel with a ‘train-first’ policy to cut down on cars and flights.

But Tate conceded that it faced “some hard truths about how we operate” on a national and international level, and therefore planned to make its long-term environmental commitments more “ambitious in scope”.

“We will interrogate our systems, our values and our programmes, and look for ways to become more adaptive and responsible,” it said. “And, as our audiences and communities across the world confront climate extinction, so we must shine a spotlight on this critical issue through art.

“Our declaration of a climate emergency is just the beginning in our determination to effect and inspire change.”

The move comes as the Proms gear up for a season of performances at the Albert Hall this summer with a theme based around the natural world and its destruction, including the performance of a new piece that sets words from speeches by teenage environmental activist Greta Thunberg to music.

The annual two-month-long classical music festival kicked off on Friday, and runs until the traditional Last Night of the Proms on 14 September.