Global Climate News

Robeco, a Dutch asset manager, has expanded its engagement in climate and nature, focusing on natural resource management, deforestation (expanding from palm oil to soy, beef, leather, paper and pulp), biodiversity, and human capital management. They are also initiating new themes on transition minerals (supply chains in electric vehicle batteries) and protecting shareholder rights from weakening regulations.

Finland-based Nordea Bank has been elected to the Executive Committee of the Green Bond Principles (GBP) and Social Bond Principles (SBP). Since 2014, Nordea has helped issue more than 280 sustainable bonds totaling over USD 17 billion. The bank is also a founding member of the UNEP FI Principles for Responsible Banking and participated in the European Commission’s Technical Expert Group on Sustainable Finance.

Danish startup EIVEE, providing carbon accounting solutions, attended Nordea’s investor speed dating. They help companies reduce their carbon footprint by calculating scope 1, 2, and 3 greenhouse gas emissions. EIVEE had eight meetings with investors and received positive feedback.

Global biodiversity loss is at an unprecedented rate, with up to one million species at risk of extinction. More than 50% of global GDP depends on natural resources. The World Economic Forum estimates business opportunities in sustainable resource use to be worth up to USD 10 trillion annually by 2030. Nordea launched a biodiversity fund investing in sustainable resource use and biodiversity restoration.

The Norwegian company Farmforce has developed a software solution to trace agricultural goods, helping its 70 customers meet sustainability targets by tracing crops of 1.1 million small farmers across Africa, Latin America, and Asia. Farmforce, with financial support from Nordea, focuses on documenting the absence of child labor and deforestation in production. The company aims to improve farmers' living standards and empower them in the international market. The EU's deforestation-free regulation further emphasizes the importance of Farmforce’s work.

The article discusses the growth of ESG data services and ratings in financial markets, driven by the European Commission’s Action Plan on Sustainable Finance. It highlights the increasing investment in ESG data services, the need for harmonization of concepts and methodologies, and the importance of improving data availability and quality. The article also points out inherent biases in ESG ratings and suggests best practices for corporations in working with ESG ratings and data.

Swedish LKAB, Boliden, and Vattenfall were mentioned in the context of discussions around corporate governance, sustainability, and long-term investments. The article highlights how these companies approach sustainability and emission reduction goals, particularly in mining and energy sectors. No specific actions or targets are announced.

The Nordic sustainable bond market saw a record-breaking year in 2023, exceeding USD 60 billion in issuance, a 16% increase from 2022. This growth outpaced the global market, and three out of four quarters saw record issuance levels. The sustainable share of the total Nordic bond market reached 13% in 2023, up from 9% in 2021 and 11% in 2022. Denmark showed particularly strong growth, with sustainable bonds representing 21% of its yearly bond volume in 2023.

Dr Christine Chow, PhD, CEO of Tracker Group, has 25+ years of experience in investment management, research & consulting, focusing on technology, governance, and sustainability. She's a board member of the ICGN, an honorary advisor to the AFRC Hong Kong, and holds various academic positions. Her work significantly contributes to sustainable finance and responsible investment.

The Tracker Group, home to Carbon Tracker and Planet Tracker, appointed Christine Chow as its inaugural CEO. Chow has 27 years of finance experience and a focus on sustainable and impact investing. The appointment aims to accelerate the group's work in transforming global financial activities to achieve a net-zero and nature-positive future.

The International Capital Market Association (ICMA), Climate Bonds Initiative, and the EU have provided guidance on transition finance to achieve climate goals set in the Paris Agreement. The guidance includes handbooks and reports on transition finance pathways, use of proceeds instruments, and aligning with Sustainability-Linked Bond Principles. The EU report clarifies how companies can disclose compliance with the EU Green Bond Standard. The Climate Bonds Initiative offers a labelling framework for credible transitions.

Nordea, the largest financial services group in the Nordic region, launched a SEK/NOK 4.1 billion sustainability-linked bond. The bond finances sustainability-linked loans aligned with the Sustainability-linked Bond Principles, contributing to climate change mitigation through reduced greenhouse gas emissions or energy consumption. The bond's performance is reviewed annually by ISS ESG and a Nordea committee. Several Nordic investors, including Storebrand Asset Management and AMF, participated in the bond issuance.

Taiwan's Ministry of Environment (MOENV) unveiled an expanded carbon reduction reporting plan that includes various sectors consuming high levels of energy. Businesses emitting over 10,000 metric tons of CO2e annually or with single branches emitting over 5,000 MtCO2e must report greenhouse gas emissions starting in 2026. Carbon fees will be levied in 2026 on entities emitting more than 25,000 MtCO2e a year, affecting 281 enterprises.

Swedish startup WorldFavor has created a platform used by over 20,000 organizations to access and share sustainability data, highlighting the role of digitalization in the transition to a sustainable future.

Nordea's Sustainable Finance Advisory lead in Norway, Catrine Birkevold Liem, discusses the integration of sustainability into banking, the challenges of the sustainable transition, and the increasing awareness and standardization in sustainability reporting. She highlights the importance of aligning high-level commitments with realistic company actions and the need for a holistic view of sustainability beyond climate.

The article discusses various sustainability reporting initiatives, highlighting the harmonization progress between GRI and SASB, and the increasing interlinkage and mandatory nature of climate disclosures. It recommends corporates familiarize themselves with TCFD, CDP, and SBTi requirements. The lack of harmonization in social and other environmental impact reporting is also addressed.

The Environment Agency in England is consulting the public on an environmental permit application submitted by Old Knowle Square Management Limited for waste and mining waste operations, installations, water discharge and groundwater activities, and medium combustion plant and specified generators in Farnham, Surrey.

Danish companies are increasingly integrating ESG metrics into their financing, with sustainability-linked loans (SLLs) becoming a key instrument. The Nordic market for SLLs grew to approximately EUR 11 billion in 2021. Companies like A.P. Møller – Maersk, Pandora, and Coop Danmark have adopted SLLs, linking borrowing costs to sustainability targets. Nordea expects Danish companies to have sustainability-linked loan agreements worth around DKK 200 billion within three years.

The European Union proposed a European Green Bond Standard (EuGBS) to increase the convergence of green bonds internationally. The ECB recommended that the EuGBS should become mandatory for newly issued green bonds within 3-5 years to enhance market functioning and strengthen the green credibility of the EU green bond market. The EuGBS requires supervision of external reviews by ESMA and taxonomy alignment of use of proceeds. The global supply of green bonds in 2021 nearly doubled compared to 2020.

The article discusses the suitability of sustainability-linked bonds (SLBs) versus transition bonds for addressing the energy transition. It argues that SLBs, being forward-looking and focused on KPI improvements, are better suited than transition bonds, which only ensure projects are 'not as dirty as they could be'. The author acknowledges the nascent stage of the SLB market and the need for clearer definitions of 'material' and 'ambitious' but advocates for prioritizing SLBs.