EU Takes the Lead in Protecting Marine Biodiversity and Addressing Climate Change
Welcome to this week’s ESG policy roundup. A home to find out some of the week’s headlines in the ESG world
This week, the EU has pledged €816.5 million at the Our Ocean Conference in Panama to protect the world’s oceans, with commitments covering all themes of the event, including marine protected areas, climate change, sustainable fisheries, and maritime security.
Meanwhile, Deutsche Bank aims to generate €1.4 billion revenue from its ESG business by 2025 and enable €500 billion in sustainable financing and investments between 2020-2025, with initiatives including linking supply chain financing to ESG criteria and providing additional financing for energy-efficient construction and renovation.
Concurrently, Divert and Enbridge have signed a $1 billion deal to support the expansion of anaerobic digestion facilities that convert food waste into renewable natural gas, aiming to reduce greenhouse gas emissions and support decarbonisation efforts in hard-to-abate sectors, while IKEA takes a significant step towards reducing its carbon footprint by shifting from fossil-based to bio-based glues, aiming to reduce fossil-based glue usage by 40% and climate footprint from glue by 30% while working towards having most board-producing factories in its supply chain using glues with lower climate footprints by 2030.
In a breakthrough for carbon removal technology, Planetary Technologies has unveiled a ground-breaking ocean-based carbon removal protocol, including a measurement, reporting, and verification (MRV) framework, which has the potential to remove billions of tonnes of CO2 from the atmosphere, instill confidence in buyers and support marine ecosystems.
There gave been several developments demonstrate positive environmental, social, and governance (ESG) action by Multi-National Companies, Institutions, and budding Startups, this week. Read more to find out the details.
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Divert and Enbridge sign $1 billion deal to fund food waste-to-renewable energy projects
Divert, a technology company focused on eliminating food waste, has secured a $1 billion infrastructure development agreement with energy infrastructure firm Enbridge. The deal will help to support the expansion of anaerobic digestion facilities to convert wasted food into renewable natural gas (RNG) across North America. Divert has also raised $100 million in growth equity, including $80 million from Enbridge and $20 million from Ara Partners, which acquired Divert in 2021.
The US generates more than 100 million tons of wasted food each year, contributing up to 10% of global greenhouse gas emissions. Divert's technology aims to eliminate this waste by recovering edible food to serve communities in need and by converting it into renewable energy. According to the company, the expansion has the potential to offset up to nearly 400,000 metric tons of carbon dioxide annually.
The expansion of RNG has significant potential to support the decarbonisation of hard-to-abate sectors such as road transport and heavy industry without needing to replace existing transmission and distribution infrastructure. Divert is planning to scale its facilities to be within 100 miles of 80% of the US population over the next eight years and is also considering new wasted food-to-RNG facilities in Canada.
Ryan Begin, CEO and co-founder of Divert, said the new funding marks a major turning point in the battle against the wasted food crisis. Caitlin Tessin, Vice President Strategy & Market Innovation at Enbridge, said the company's partnership with Divert aligned with Enbridge’s priorities in pioneering RNG as an effective solution to achieve net-zero greenhouse gas emissions.
In conclusion, the new funding agreement between Divert and Enbridge is a significant milestone in the fight against food waste and global greenhouse gas emissions. The expansion of RNG technology, combined with Divert's advanced technology and sustainable infrastructure, has the potential to significantly reduce the amount of food waste produced in North America while simultaneously supporting decarbonisation efforts in hard-to-abate sectors.
Deutsche Bank Aims for €1.4 Billion in ESG-Related Revenue by 2025
Deutsche Bank has announced a projected revenue of approximately €1.4 billion per year from its ESG business by 2025, up from 2022 levels of €800 million. The bank also set a goal to enable a total of €500 billion in sustainable financing and investments between 2020-2025.
To achieve this, the bank outlined a series of initiatives, including linking supply chain financing to environmental and social criteria, providing additional financing for energy-efficient construction and renovation in Germany, and growing its ESG financing in developing economies and emerging markets.
The bank also introduced new policies and goals for its financing activities in emissions-intensive sectors, including a requirement for transition plans by 2025 to access new lending, and a new target for at least 90% of its high emitting clients in carbon-intensive sectors seeking new lending transactions to have net zero plans in place
While Deutsche Bank has a presence in the US and in Asia, it anticipates the most significant sustainable finance volume growth rate in its corporate bank, with 2023 – 2025 volumes anticipated to roughly double to €70 – €85 billion, compared to €40 billion in the prior 3-year period.
For Deutsche Bank, sustainability is both a matter of responsibility and opportunity, said Jörg Eigendorf, Chief Sustainability Officer of Deutsche Bank. The bank focuses on supporting clients’ efforts to become more sustainable and exiting relationships only as a last resort.
Deutsche Bank’s announcement comes as global banks race to commit to achieving net-zero financing by 2050, amid mounting pressure from governments, investors, and activists. With Deutsche Bank's ambitious new sustainable finance goals, it is clear that the bank is taking sustainability seriously and aims to support its clients on their path to a more climate-friendly economy.
Overall, Deutsche Bank's efforts towards sustainable finance demonstrate that, while the financial industry may be traditionally viewed as a cause of environmental degradation, it can also play a key role in combating it.
IKEA Switches to Bio-Based Glue to Combat Climate Change
Swedish furniture giant, IKEA, is taking significant steps towards reducing its carbon footprint with the announcement of its shift from fossil-based glues to bio-based ones. This comes as a response to the production of glue accounting for 5% of the company’s total value chain climate footprint. IKEA has conducted 10 years of trials to find viable alternatives to the environmentally harmful glue.
The company aims to reduce fossil-based glue usage by 40% and climate footprint from glue by 30% while working towards having most board-producing factories in its supply chain using glues with lower climate footprints by 2030. Furthermore, IKEA has launched an accelerator program to pilot new glue solutions with external partners, enabling a transition to 100% bio-based glue use.
Venla Hemmilä, Material and Technology Engineer at IKEA of Sweden, commented that this development confirms the need for more environmentally friendly glues and that small changes can have significant impacts. Hemmilä further hopes that this move will inspire others to follow suit.
IKEA’s climate commitment seeks to be climate positive, reducing more emissions than the value chain generates by 2030. Nearly two thirds of the company’s climate footprint come from supply chain emissions. To support this, IKEA recently expanded its program to help suppliers gain access to renewable energy.
As an example of the company’s efforts towards sustainability, IKEA’s factory in Kazlu Ruda, Lithuania, is now using a glue system made of technical starch from corn, separated from the food value chain.
This change marks an essential step towards sustainable and responsible production in the furniture industry. With such a global player taking such significant steps, it is hoped that other companies will follow in the same direction, thus reducing the furniture industry’s negative impact on the environment.
EU commits €816.5 million to protect the ocean at Our Ocean Conference
The European Union (EU) has pledged €816.5 million at the Our Ocean Conference in Panama to protect the world’s oceans. The EU announced 39 commitments for action for 2023 covering all themes of the event, including sustainable fisheries, climate change, marine protected areas and maritime security.
The theme of the 2023 edition is ‘Our Ocean, Our Connection’, and the EU’s commitments include €320 million for ocean research to protect marine biodiversity and address the impacts of climate change. The funding will also facilitate the development of the Digital Twin of the Ocean and the implementation of the All-Atlantic Ocean Research and Innovation Alliance.
The EU will also renew its satellite constellation with the launch of Sentinel-1C for €250 million, to continue real-time observation of ice melting in the Arctic. The EU will provide €126 million to protect biodiversity and fight climate change in Benin, Guyana and Tanzania, and €24 million for actions to support Regional Fisheries Management Organisations and International Agreements in oceans across the globe.
The EU’s commitments support the objectives of the EU Mission ‘Restore our Ocean and Waters by 2030,’ which aims to clean marine and fresh waters, restore degraded ecosystems and habitats, and decarbonise the blue economy. The EU’s engagement for international ocean governance is now at its strongest ever, as it takes necessary steps to protect and preserve the world’s oceans.
The EU’s commitments at the Our Ocean Conference in Panama signify a strong engagement for international ocean governance. The commitments for action cover all themes of the event, including marine protected areas, climate change, sustainable fisheries and maritime security. The EU’s funding will facilitate ocean research, satellite observation, biodiversity protection and capacity building. The EU’s engagement supports the objectives of the EU Mission ‘Restore our Ocean and Waters by 2030.’ The EU’s commitment to protect and preserve the world’s oceans is now at its strongest ever.