Global Climate News

The European Energy Exchange (EEX) has introduced new \"Mon-Sun Peak Power Futures\" contracts for the Spanish market and short-term futures for the Greek power market, starting February 24, 2025. These aim to facilitate renewables integration by addressing the impact of solar power on electricity spot prices. EEX also extended expiries to ten calendar years for French and Dutch power markets to support renewables integration and provide PPA hedging opportunities.

Global leader in floating energy infrastructure, Höegh Evi, saw a 50% indirect ownership stake sale from funds managed by Morgan Stanley Infrastructure Partners to funds managed by Igneo Infrastructure Partners. Aequitas Limited retained its 50% shareholding.

The article discusses the importance of economic policy focused on combating climate change and accelerating the green and digital transformation. Helge J. Pedersen, Group Chief Economist at Nordea, highlights this as a crucial issue in the world economy.

The North American stock market shows a growing trend towards increased focus on ESG issues. Nordea's North American Stars fund actively selects companies with strong ESG profiles or those striving to improve them, requiring a minimum ESG rating of B. The fund uses a dedicated analyst from Nordea Asset Management’s responsible investment team for company analysis.

The United Nations Environment Programme Finance Initiative (UNEP FI) published a report to help financial institutions understand and apply IPCC-assessed scenarios for limiting warming to 1.5°C. The report aims to enhance the financial sector’s capacity to interpret and apply climate scenarios effectively, highlighting critical milestones and their implications for emissions, energy demand, and financing needs.

Nordea has integrated gender balance into its sustainability targets and as a factor for executive remuneration. They aim for at least 40% representation of both men and women at the top three leadership levels by 2025. The International Finance Corporation (IFC) has partnered with companies like Uber to boost opportunities for women and worked on providing financial services for women through its social bond program. Less than 12% of the sustainable debt market last year was focused on reducing gender inequality.

Nordea is exploring the use of customer banking data to provide personalized sustainability reports, including CO2 emissions reports, to help customers make greener decisions. This will be an opt-in service respecting customer privacy.

The European Central Bank (ECB) has emphasized the importance of managing climate-related and environmental risks in its supervisory priorities for 2025-27. The ECB will integrate the assessment of banks’ transition plans into its supervisory process, focusing on the accuracy and granularity of data. Supervisors will also conduct deep dives into reputational and litigation risks related to climate commitments, aiming to identify and share best practices. The ECB is using the full range of its supervisory tools, including periodic penalty payments (PPPs), to ensure banks address deficiencies in areas such as risk data aggregation and reporting, and operational resilience.

The Hong Kong Monetary Authority, European Central Bank, and Bank of Finland Institute for Emerging Economies held a joint conference on "Europe, Asia and the Changing Global Economy." The conference highlighted the need for structural reforms to boost economic growth, emphasizing cooperation in green innovations and technology transfers to support faster transitions, reduce pollution, and mitigate climate change.

Finland-based Lassila & Tikanoja (L&T), an environmental services company, has embraced its role as a leader of the regenerative society, focusing on circular economy and reducing its carbon footprint. The company implemented Nordea’s AutoFX currency robot to automate liquidity management and reduce currency risks.

Investcorp, a global alternative investment firm, launched its Investcorp Wealth mobile application, providing investors with real-time access to their accounts and investment opportunities. The app has already facilitated over \$350 million in investments. Investcorp also announced the acquisition of Epipoli, an alternative payments enabler, and continues its investments in fintech, such as its partnership with Awaed.

South Africa, during its G20 Presidency themed ‘Solidarity, Equality, Sustainability’, is committed to fostering economic growth with social inclusion and environmental stewardship. The country aims to leverage technological advancements for inclusive growth and enhance global competitiveness by modernising industries, advancing skill development, and improving public services. President Ramaphosa led a delegation including key ministers to the WEF annual meeting in Davos to strengthen partnerships and advance South Africa’s economic and social agenda.

South Africa, during its G20 Presidency themed "Solidarity, Equality, Sustainability", is committed to fostering economic growth with social inclusion and environmental stewardship. The country aims to leverage the G20 platform to address systemic disparities and promote unity to tackle shared global challenges. South Africa also highlighted its potential as a hub for global investments and ongoing structural reforms at the World Economic Forum.

Australia-based law firm Hamilton Locke has been ranked by Legal 500 across multiple practice areas, including a Tier 3 ranking for Capital Markets and Fintech, and newly ranked in Energy (Transactions and Regulatory) and Infrastructure Projects and Construction (both Tier 5).

The Nordea Sustainable Finance Advisory published a report on Sustainability-Linked Bonds (SLBs), highlighting investor perspectives and market trends. Around 60 SLBs have been issued, with coupon step-ups becoming the market standard. Investors generally view SLBs positively but express concerns about evaluating KPIs and SPTs, emphasizing the need for ambitious and material targets, ideally verified by third parties like SBTi. Concerns exist about the reversed incentive where investors benefit from issuers not meeting sustainability goals; Etihad Airways addressed this by committing to carbon offsets.

The AI-driven investment strategy ML10, developed by Aisot Technologies, has outperformed the S&P 500 for three consecutive years by focusing on a portfolio of just 10 stocks. The portfolio dynamically adjusted its sector allocation across Technology, Telecommunications, Healthcare, and Energy, demonstrating adaptability and resilience in both bullish and bearish markets.

Sweden's Kommuninvest launched a social lending program to support socially sustainable projects. The program includes three loan categories: housing, safety/security/accessibility, and health/education/sports/culture. Six of eleven local governments in the advisory group applied, with five receiving loans. The program aims to foster a more socially sustainable society and address social challenges.

The European Central Bank (ECB) acknowledges climate change as a financial risk and emphasizes the need for banks to manage climate-related risks. The ECB integrates climate risks into its monetary policy models and ensures banks' resilience to these risks. The ECB and EIOPA proposed increasing insurance coverage for natural catastrophes, involving Member States contributing funds. The ECB also addresses concerns about short-term investor views and the impact of rising bond yields on monetary policy.

The European Central Bank (ECB) acknowledges climate change as a significant financial risk, impacting monetary policy and bank supervision. The ECB emphasizes the need for banks to manage climate-related risks and incorporate them into their models. The ECB and EIOPA proposed increasing insurance coverage for natural catastrophes, involving member states contributing funds. The ECB also noted the impact of climate change on inflation, citing the example of the Rhine River's navigability issues impacting food prices.

Paul Hiebert, Agnieszka Smoleńska and Fabio Tamburrini from the Centre for Economic Transformation Expertise (CETEx) explained the benefits and implementation challenges of using a macroprudential perspective alongside the usual microprudential focus to support the development of transition plans that reduce greenhouse gas emissions while managing financial risks.