Sustainability Newsletter #29

Family Offices

#Figure of the month - 11.1 million hectares of forest

Crucial tropical forests were destroyed at a rate of 10 soccer fields a minute last year

The area of tropical forest destroyed in 2021 was enough to cover the entire island of Cuba, and sent more carbon dioxide into the atmosphere as India does in an entire year from burning fossil fuels, according to an analysis published in April.

Some 11.1 million hectares of forest was destroyed, predominantly by logging as well as fires, the analysis by the World Resources Institute's Global Forest Watch and the University of Maryland found. Some of those fires were deliberately lit to clear land and many were exacerbated by climate change.

Of the area lost, 3.75 million hectares were primary tropical forest - sometimes called virgin rainforest - at the equivalent of 10 soccer fields every minute, WRI reported. Primary tropical forests in particular are crucial for the ecological balance of the planet, providing oxygen that supports life and as biodiversity hotspots.

They are also rich in stored carbon, and when these forests are logged or burned, they release carbon dioxide (CO2) into the atmosphere, contributing to global warming. The destruction of primary tropical forest loss alone emitted 2.5 gigatons of CO2 last year, comparable to emissions from fossil fuel burning in India, which is the world's third-biggest greenhouse gas emitter.

In the tropics, more than 40% of forest loss last year occurred in Brazil. Around 1.5 million hectares of forest in the country was wiped off the map, mostly from the Amazon. That's more than three times the DRC, which lost the second-largest amount of forest.

Sources : CNN, Bloomberg


Trends and Initiatives

UK sets target of 40% women on company boards

At least one senior position such as company chair, chief executive or chief financial officer should be held by a woman, the Financial Conduct Authority said, largely confirming early proposals. The FCA said companies will have to make annual statements showing how they are complying with the new rules, or explain any divergences.

“As investors pay increasing attention to diversity at the top of the companies they invest in, enhancing transparency at Board and executive management level will help hold companies to account and drive further progress,” said Sarah Pritchard, the FCA’s executive director of markets. The review raised a voluntary target to 40% for the top 350 companies by the end of 2025, up from a previous target of 33%.

The FCA’s new requirements will apply to financial accounting periods starting from April 1, 2022, meaning reporting would start to appear in annual reports published from early next year.

Sources : Reuters, Financial Post


Bangkok’s E-Ferry Fleet Grows With Money From Development Banks

Bangkok residents used to traveling in the smoke-belching, noisy boats in the Thai capital’s Chao Phraya river may soon have cleaner, quieter options, as the city’s electric ferry services grow. Chao Phraya Express Boat Co., a leading provider of water transportation services in Bangkok, plans to purchase 30 electric boats and gradually phase out its fleet of diesel ferries, it announced in April. International Finance Corp. will assist in buying and operating the new vehicles and developing environmental, safety and social standards, the two entities said in a joint statement.

Electrifying the city’s water fleet has become a priority in recent years, as Thailand looks to both grow its electric vehicle industry and make progress toward its emissions-reduction goals. Energy Absolute PCL, Thailand’s biggest electric-vehicle venture, debuted electric ferry services last year, and in April, the company announced a loan agreement with the Asian Development Bank to partially fund 27 more vehicles. That project will reduce greenhouse gas emissions by an estimated 18,900 tons of carbon dioxide equivalent a year, ADB said.

Sources : BNN Bloomberg, Business Times


Sustainable Finance

EU Council agrees to move ahead with creation of European green bond rules

The Council of the European Union announced in April that its members have greenlighted a proposal to create European Green Bonds, setting requirements and a supervisory framework for issuers wishing to use the ‘European Green Bond’ or ‘EuGB’ designation for their green bond issuances.

The proposed green bond rules were designed to help facilitate the financing of sustainable investments through the creation of a ‘gold standard’ for how companies and public authorities can use green bonds to raise funds on capital markets, while meeting rigorous sustainability requirements and protecting investors from greenwashing. Key components of the framework proposed by the Commission include requiring EuGB designated bonds to fully allocate funds to projects aligned with the EU Taxonomy, provide full transparency on how bond proceeds are allocated, and be checked by an EU-supervised external reviewer to ensure compliance with the regulation.

Following the agreement in the EU Council, negotiations will begin with the European Parliament to draft a final version of the European Green Bond text.

Source : ESG Today


Society and Planet

Antarctic sea ice has reached its lowest level since records began

It is a new sad record. In February, the end of the austral summer, the Antarctic ice pack reached its lowest level in 44 years, according to a group of researchers mainly from Sun Yat-sen University in Guangzhou, in a paper published in the journal Advances in Atmospheric Sciences. Normally, the natural cycle of pack ice - the ice that floats on the ocean - is that it melts in the summer and reforms in the winter, with satellites recording very precisely the areas covered in each season, year after year, since 1978.

Until now, the Antarctic seemed to be more resilient to climate change than the Arctic. But this year the Antarctic ice pack plunged and was measured at 1.9 million square kilometers on February 25th, a record low since records began in 1978, researchers report. Five years after a previous record decline of just over 2 million km2 in 2017, the area covered by sea ice has fallen below 2 million km2 for the first time. This is 30% less than the average over the three decades between 1981 and 2010.

Sources : Reuters, NBC news


South Asia suffers extreme heat wave, a sign of climate change

+44°C in India, +50°C in Pakistan... South Asia is experiencing an extreme heat wave as India recorded its hottest March in 122 years. These temperatures are a clear sign of the impacts of climate change. According to NASA, this area could become uninhabitable as early as 2050 because of the heat mixed with humidity, which prevents the body from sweating and therefore from cooling down. A risk that the climate experts, the IPCC, had already identified in one of their reports, and which is beginning to materialize.

While in early April, some regions benefited from pre-monsoon rains, scorching conditions continue in other Indian states. According to IMD, "hot dust storms" are expected to affect Punjab, Haryana and Delhi. While the Indian capital only experienced one day below 40°C last week, on April 21st to be precise, the thermometer is expected to exceed 44°C this week.

Sources : Novethic, Carbon Brief


Company news

Mastercard to link all employee bonuses to ESG goals

-       Company : MASTERCARD INC


-       Clover rating : 7/10

Payment processor Mastercard Inc will link all employee bonuses to environmental, social and corporate-governance (ESG) initiatives, expanding an earlier program which was limited to its senior executives, Chief Executive Michael Miebach said in April. The move will help Mastercard achieve its goals of cutting carbon usage, improving financial inclusion and gender pay parity. Mastercard in November accelerated its net zero timeline by a decade, to 2040 from 2050.

"We're tying compensation to emissions, financial inclusion and the gender pay gap because we have a substantial impact in these areas and because they closely align with our vision," Miebach wrote in a note on the company's website. Against a backdrop of growing public and political concerns about climate change and economic inequality, companies are under increasing pressure to show they are taking greater responsibility for how they run operations and generate their profits.

Last March, Mastercard said it would link compensations for executive vice presidents and above to ESG initiatives.

Sources : Reuters, Bloomberg


Groups Urge Investors, Grocers to Drop Brazil’s JBS on Rising Emissions

-       Company : JBS SA

-       Sector : FOOD, BEVERAGE & TOBACCO

-       Clover rating : 0/10

The Sao Paulo-based company’s emissions increased by 51% over the past five years along with a sharp increase in the number of animals it slaughtered, according to estimates from the Institute for Agriculture and Trade Policy (IATP) released Thursday along with Mighty Earth -- both of which describe themselves as nonprofit organizations.

While JBS made a commitment to reduce and compensate its emissions by 2040, it provides little detail and fails to include emissions from farms and feedlots that are not owned by the company but are part of its supply chain, as well as pollution related to deforestation, according to the report. Those emissions, which are categorized as scope 3, represent up to 97% of the company’s footprint, the same study.

Sources : Bloomberg, BankTrack


TotalEnergies, Shell in fresh South African oil exploration bid


-       Company :              TOTALENERGIES SE           ROYAL DUTCH SHELL PLC

-       Sector :                       Energy                                        Energy

-       Clover rating :       6/10                                              4/10


TotalEnergies SE and Shell PLC are seeking to drill oil exploration wells off South Africa’s southwest coast months after two attempts to conduct seismic surveys in the country’s waters were thwarted by legal challenges.

Shell was blocked from carrying out a seismic survey off the country’s south coast in December after local communities took legal action against it, saying they hadn’t been consulted and the program may harm marine life and disrupt fishing. Last month Searcher Seismic abandoned exploration off the west coast after a court ordered it to halt activity.

TotalEnergies hasn’t responded to requests for comment since April. It has said on its website that it plans to drill one exploration well in the area and then, if it is successful, as many as four more.

Sources : Bloomberg, FAR


Elon Musk’s Pursuit of Twitter Accentuates Tesla’s Key-Man Risk

-       Company : TESLA INC

-       Sector : AUTOMOBILES

-       Clover rating : 4/10

Elon Musk appears to be redeeming himself somewhat years after his failed bid to take Tesla private. Twitter is letting him try again, this time with the social media company.

The electric-car maker has long been clear about being highly dependent on its “technoking” and chief executive officer. Musk has laid claim to the tongue-in-cheek title for a little over a year and been CEO since 2008, a longer run than the head honchos at every American, German and Japanese auto manufacturer. But he’s also never been focused entirely on Tesla.

The fireworks the last few weeks around Twitter are highlighting again just how much value investors ascribe to Musk’s part-time role, and how invested he is in the company — figuratively and literally. Tesla’s stock plunged 12% on Tuesday, seemingly due to lingering concerns that Musk will have to sell a substantial portion of the 172.6 million shares he owns to cover almost half of the financing for Twitter. We already know he’s taking on substantial margin-loan risk.

Sources : Bloomberg, Yahoo



One quarter of US emissions since 2005 come from fossil fuels on public lands

Emissions equivalent to nearly a quarter of the US total since 2005 have come from fossil fuels extracted on the nation’s public lands and waters, according to recent analysis. The study, published in Climatic Change, assesses the volumes of greenhouse gases generated by extracting and burning coal, oil and natural gas from regions owned by the federal government.

On average, these emissions amounted to 1,408m tons of CO2 equivalent (MtCO2e) per year – equivalent to around 23% of domestic US emissions between 2005 and 2019. The study’s modelling predicts “minimal additional emissions reductions stemming from fuels produced on federal lands and waters”. The findings suggest they will fall by just 6% between 2019 and 2030.

The researchers conclude that given the “aggressiveness” of the Biden administration’s upcoming climate target – a 50-52% reduction in domestic emissions by 2030, compared to 2005 – the government “should consider how policies directed at federal lands and waters fit into their broader climate strategy”.

Sources : Carbon Brief, Red green and blue




Water cycle: a sixth global limit has been crossed, the second this year

Six out of nine. The world has just crossed a new planetary limit, for the second time this year. This sixth planetary limit concerns the water cycle, and more specifically green water, that which is absorbed by plants. It includes precipitation but also soil moisture and evaporation. Until now, it has not been sufficiently studied. Now, according to a new assessment by researchers at the Stockholm Resilience Center, in collaboration with other scientists from around the world, it appears that green water is outside the safe zone.

Water is one of the nine regulators of the state of the Earth system and the sixth boundary that the scientists have assessed as being transgressed. "Water is the lifeblood of the biosphere. But we are profoundly changing the water cycle. This is now affecting the health of the entire planet," commented lead author Lan Wang-Erlandsson. Other frontiers being transgressed are: climate change, biosphere integrity, biogeochemical cycles, earth system change and, in January 2022, chemical pollution.

Sources : Novethic, Stockholm Resilience Centre


Do not hesitate to contact your dedicated Relationship Manager should you need any more requirements.



This material was produced by BNP Paribas (Suisse) SA. The information and opinions expressed in this document are entirely those of the author hereof, but are not to be relied upon as authoritative or taken in substitution for the exercise of judgement by any recipient, and are subject to change without notice. No representation or warranty, express or implied, is made that such information, opinions and projections are accurate or complete and they should not be relied upon as such. Neither BNP Paribas (Suisse) SA nor any person connected with it accepts any liability whatsoever for any direct or consequential loss arising from any use of material contained in this document. This document does not constitute or form part of an offer document or any offer or invitation to finance. This material shall not constitute an offer or solicitation in any state or jurisdiction in which such an offer or solicitation is not authorized or to any other person to whom it is unlawful to make such offer, solicitation or sale. It is not, and under no circumstances is it to be construed as, a prospectus or advertisement, and the information contained in this material is not, and under no circumstances is it to be construed as, a public offering of any type. In making an investment decision, individuals must rely on their own examination of the terms of any potential financing proposal, including the merits and risks involved.

The Bank or the group to which it belongs, or its employees/directors may hold or have held positions or an interest in the products mentioned, or have acted as a “market maker” for these products and may be connected with the companies involved and/or their directors and furnish them with various services.

No representations or warranties of any kind are intended or should be inferred with respect to the economic return from any investment in any, financial product and/or services described herein. Nothing contained herein should be construed as constituting legal, tax or any financial advice. Individuals should consult their own professional advisors as to the legal, tax, financial or other matters relevant to the suitability of any of the financial products and services described herein.