Sustainability Newsletter #27
#Figure of the month - 9 millions
Pollution causing more deaths than COVID, action needed, U.N. expert says
Pollution by states and companies is contributing to more deaths globally than COVID-19, a U.N. environmental report published in February said, calling for "immediate and ambitious action" to ban some toxic chemicals.
The report said pollution from pesticides, plastics and electronic waste is causing widespread human rights violations and at least 9 million premature deaths a year, and that the issue is largely being overlooked. The coronavirus pandemic has caused close to 5.9 million deaths, according to data aggregator Worldometer. "Current approaches to managing the risks posed by pollution and toxic substances are clearly failing, resulting in widespread violations of the right to a clean, healthy and sustainable environment," the report's author, U.N. Special Rapporteur David Boyd, concluded.
"I think we have an ethical and now a legal obligation to do better by these people," Boyd told Reuters later in an interview. He urges a ban on polyfluoroalkyl and perfluoroalkyl, man-made substances used in household products such as non-stick cookware that have been linked to cancer and dubbed "forever chemicals" because they don't break down easily. He also seeks the clean-up of polluted sites and, in extreme cases, the possible relocations of affected communities - many of them poor, marginalized and indigenous - from so-called "sacrifice zones". That term, originally used to describe nuclear test zones, was expanded in the report to include any heavily contaminated site or place rendered uninhabitable by climate change.
Trends and Initiatives
Brussels to take EU funds from Poland for refusing to close giant coal mine
This is a first in the European Union. Brussels will fine Poland's EU funds. Warsaw was facing financial penalties related to the operation of its Turow coal mine in the south-west of the country, on the border with the Czech Republic and Germany, which it refuses to close because it would "endanger the energy supply" of the country. The mine feeds a power plant that provides about 7% of the country's electricity needs. Poland relies on coal for about 80% of its electricity and intends to operate the mine until 2044.
In May 2021, the Court of Justice of the European Union (CJEU), seized by the Czech Republic, ordered the Polish government to close the open-cast mine because of its harmful effects on the environment, pending a decision on the merits. Then in September, the court ordered Warsaw to pay a penalty of 500,000 euros per day until the mine is closed. According to Prague, the open-pit mine has negative environmental effects on the border regions, where residents complain of noise, dust and reduced water supply.
The European Commission informed Poland on 8 February that it would be taking money from EU funds to be paid to it for non-compliance with the CJEU ruling, without specifying the fund concerned. 15 million is only for the period from 20 September to 19 October 2021, and a further deduction is expected shortly. Warsaw has already announced its intention to appeal, said Polish government spokesman Piotr Muller
ECB Has Banks Bracing for Capital Hit as Climate Risk Is Tested
European banks are concerned that their top regulator will use its upcoming climate stress test to raise the bar for capital. The mass of data banks must soon submit to the European Central Bank could be used to justify higher capital requirements as soon as next year, according to lobbyists representing the industry. In its public statements, the ECB has made clear that the tests are a chance for the banks and the regulator to learn about how vulnerable they are to extreme weather and to tougher climate-related laws. Individual test results won’t be made public, and the ECB has sought to reassure the industry that it will take a nuanced approach to drawing any conclusions for capital. But it has also made clear that climate change will ultimately be treated like any other risk.
The exercise starts in March with aggregate results due in July. Banks have railed against the idea of the ECB using the test to roll out new rules to address climate risk. The ECB says the results will feed from “a qualitative point of view” into this year’s review of the risks that individual banks face. That means they could indirectly affect the capital requirements that regulators set for each bank individually on an annual basis. Banks often campaign against higher capital requirements as they can reduce funds available for bonuses and investor dividends.
Society and Planet
Plastic pollution in oceans to rise for decades even with immediate action
Plastic pollution at sea is reaching worrying levels and will continue to grow even if significant action is taken now to stop such waste from reaching the world’s oceans, according to a review of hundreds of academic studies. The review by Germany’s Alfred Wegener Institute, commissioned by environmental campaign group WWF, examined almost 2,600 research papers on the topic to provide an overview ahead of a United Nations meeting later this month.
“We find it in the deepest ocean trenches, at the sea surface and in Arctic sea ice,” said biologist Melanie Bergmann who co-authored the study, which was published Tuesday. Some regions—such as the Mediterranean, the East China and Yellow Seas—already contain dangerous levels of plastic, while others risk becoming increasingly polluted in the future, it found. The authors concluded that almost every species in the ocean has been affected by plastic pollution and that it’s harming important ecosystems such as coral reefs and mangroves. As plastic breaks down into ever-smaller pieces it also enters the marine food chain, being ingested in everything from whales to turtles to tiny plankton. Getting that plastic out of the water again is nearly impossible, so policymakers should focus on preventing any more of it entering the oceans in the first place, said Bergmann.
Climate change and population growth could drive a 26% rise in US flood risk by 2050 – disproportionately impacting black and low-income groups
The study, published in Nature Climate Change, models property-level changes in flood risk across the US over the next three decades. It finds that in 2020, the US saw an “average annual loss” of $32bn from flooding, but that cost could rise to $41bn by 2050.
The authors find that population growth will be the main driver of increasing flood risk, causing 75% of the rise in “average annual exposure” to flooding by 2050. The impacts of climate change – including rising sea levels, intensifying hurricanes and changing rainfall patterns – will account for 19% of the increased risk.
The study notes that white and low-income communities are currently the most strongly impacted by flooding in the US. However, in the coming decades, black communities – especially in the Deep South – will face the largest increase in flood risk. The results will allow adaptation measures to be targeted towards the most at-risk areas in the US, the paper says.
Spotify's content exposes it to ESG risks that investors are slow to integrate
- Company : Spotify
- Clover rating : 3/10
- Sector : Internet, Content, Software and Services
Raj Thamotheram, a leading expert on sustainable finance, looks at the current controversy surrounding Spotify. Musician Neil Young has called for a boycott of the online music company because of the conspiracy and anti-Vaxx rhetoric in Joe Rogan's hit podcasts on the platform. He has called for access to his music to be withdrawn in order to combat the misinformation that Spotify is promoting.
Raj Thamotheram says that misinformation is the cancer of the online media. He is surprised that so few responsible investors hold them to account for the way they frame and regulate even the most committed of their content. The expert mentions in his post LinkedIn, for example, Baillie Gifford who owns over 11% of Spotify.
Credit Suisse back in court for money laundering
- Company : Credit Suisse AG
- Clover rating : 2/10
- Sector : Diversified Banks and Financials
Credit Suisse is once again in the dock at the Federal Criminal Court on Monday. The bank is on trial, along with four co-defendants, for laundering tens of millions of francs for a Bulgarian criminal organization. The Swiss bank is charged with aggravated money laundering alongside one of its asset managers, two Bulgarian nationals and a former employee of Julius Baer.
This case raises questions about the effectiveness of Switzerland's fight against the injection of money from criminal activities into the legal economic circuit. However, according to the Swiss Financial Market Supervisory Authority (Finma), money laundering is one of the main risks threatening the financial centre. According to François Pilet, co-founder of the magazine Gotham City, which specialises in economic crime, the country has fairly effective rules, but "technically, there is no anti-money laundering system that would stop absolutely all cases. What is needed, he says, is that "when it happens, the response of the authority should be quick, effective and proportionate".
Racism, harassment... the giant Rio Tinto weakened by its corporate culture
- Company : Rio Tinto Alcan Inc
- Clover rating : 2/10
- Sector : Mining & Materials
Rio Tinto, the world's third largest mining company, has been rocked by a new controversy: this time it takes the form of a survey of its employees, commissioned in the wake of the much-discussed blasting of the Jukaan Gorge aboriginal site in 2020. The scale of the revelations is more of a shock than a surprise in this hyper-masculine and opaque industry, but it could be the beginning of a new awareness.
The 85-page report makes harrowing reading: 30% of female employees are said to have experienced sexual harassment at work in the last five years, and 21 women reported being sexually assaulted or raped. 35% of employees of aboriginal origin say they face racist discrimination. More broadly, many respondents reported a macho culture on mining sites, fuelled by a heavy-handed silence. Commenting on the publication of the document in the Financial Times, CEO Jakob Stausholm said he was "ashamed and deeply sorry to learn of the extent of bullying, sexual harassment and racism at Rio Tinto". He pledged to implement all 26 recommendations of the report in a transparent manner.
Air Pollution Costs Wider Mideast $141 Billion, World Bank Says
Air pollution costs the Middle East and North Africa about $141 billion a year, or 2% of economic output, according to a World Bank report which urged nations to reform fossil-fuel subsidies, provide cleaner transport and create markets for emissions. The biggest cities in the Middle East are among the most polluted in the world, with the average urban resident breathing in air that exceeds by more than 10 times the level of pollutants considered safe by the World Health Organization, the bank said Monday. Air pollution led to nearly 270,000 deaths per year.
It also found that an average resident in the region throws away more than six kilograms of plastic that ends up in seas every year, the highest level in the world, leading to an economic loss equivalent to around 0.8% of combined GDP.
“As countries recover from Covid-19, there is an opportunity to change course and choose a greener, bluer and more sustainable growth path that has fewer emissions and less environmental degradation,” Ferid Belhaj, the World Bank’s vice president for the region, said in the report.
If everyone were vegan, only a quarter of current farmland would be needed
Eliminating meat, fish, dairy and eggs would reduce greenhouse gazes emissions. Enjoying a prime steak or vintage cheese, for example, means feeding the animals that produce meat and dairy with plants, rather than consuming those plants directly. Beef farming produces 31 times more CO₂ emissions per calorie than tofu production does and generates only 5% of the calories that go into producing it.
If everyone were vegan, agriculture would need just a quarter of the land it uses today. Even a diet avoiding only meat from cattle and sheep would cut land use in half. What might that surplus space be used for? Quadrupling food production is not a viable option. Some current pastureland, for example in the Scottish highlands, could not be converted to high-yield cropland. But in most places where agriculture is currently expanding, such as the Brazilian Amazon, a shift from animal to plant production would mean more food per acre. Surplus farmland could be used for other purposes, such as forestry, or restored to rainforest.
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