Sustainability Newsletter #32
#Figure of the month - Mining causing $3tn in damages every year
Greenhouse gas emissions from global mining and resource extraction result in up to $3tn in damages worldwide every year, according to a new study
Extractive industries provide the world with fossil fuels, metal ores and mineral resources, but the new research, published in the Journal for Cleaner Production, finds that their total environmental costs amount to as much as $3tn every year. Most are attributed to greenhouse gases, particulate matter and acidification – particularly from the coal and steel sectors.
While natural resources can bring wealth and jobs to countries, extracting them can also cause harm to human health, biodiversity and the environment. With this in mind, the research team estimates the ratio between these costs and the economic gains that these industries bring. To do this, they analysed the global production of 38 raw materials – such as coal, iron and natural gas – using databases from the US and British geological surveys. The researchers conducted a life-cycle assessment (LCA) that assesses the environmental impacts – including greenhouse gas emissions, particulate matter emissions, acidification, land-use change, resource depletion and toxicity – associated with all the stages of a product’s life, but not including use.
Trends and Initiatives
Dutch house approves to make work from home a legal right
The Dutch parliament approved legislation to establish work-from-home as a legal right, making the Netherlands one of the first countries to grant remote working flexibility by law.
The legislation was approved by the lower house of the bicameral parliament of the Netherlands in july. It still needs a nod from the Dutch senate before its final adoption. The law forces employers to consider employee requests to work from home as long as their professions allow it.
The pandemic has fueled a shift in attitudes about work, with many workers seeking to maintain some of the flexibility they’ve experienced over the last two years. But with companies seeking to respond to surging demand as the pandemic recedes, the topic has become increasingly polarizing issue.
G7 leaders commit to climate club, make carbon-cutting pledges
G7 leaders committed in July to creating an international "Climate Club" to forge cooperation on climate change and made pledges on decarbonising industrial sectors.
In a draft communique summary, they said they would commit to a highly decarbonised road sector by 2030 and a fully or predominantly decarbonised power sector by 2035.
They would also prioritise "concrete and timely steps" towards the goal of accelerating a phase-out of domestic "unabated coal" power.
Source : Reuters
European fund managers set to go all in on ESG, survey says
Over two-thirds of European asset managers and distributors are considering halting the launch or distribution of products that do not comply with environmental, social and governance (ESG) standards, a survey by PwC Luxembourg showed in July. Flows into ESG funds have surged in recent years, driven in part by a growing regulatory focus on issues such as climate change as governments seek to push more money to activities that can help them meet their net-zero emissions goals.
The PwC survey of 3,354 respondents suggested ESG assets domiciled in Europe could grow to between 7.4 trillion euros and 9.0 trillion euros ($7.8 to $9.5 trillion) by 2025 and account for up to 56% of total European mutual fund assets, against 37% at the end of last year.
Among independent financial advisers, private and retail banks, as much as 68% plan to cease their distribution of non-ESG products altogether, of which over half intend to do so within the coming two years, the survey showed.
ECB to revamp corporate debt holdings to favour greener firms
The European Central Bank plans from October to gradually revamp its 344 billion euro ($358 billion) corporate debt portfolio to favour greener firms, it said in July, taking another step in aligning monetary policy with climate change goals. The ECB has long said that the fight against climate change is crucial in maintaining financial stability and its bank supervision arm has been pushing the bloc's biggest lenders to improve risk management and disclosure.
The ECB will, however not exclude any company from its investment portfolio, hoping to give the big polluters an incentive. "Those companies that are the least green today will have to do the bulk of the transition, therefore we said that excluding them altogether is not the right approach," Schnabel, the head of the ECB's market operations said. "We want to give all those companies an incentive to become greener."
Society and Planet
Vietnam Needs to Spend $368 Billion to Avoid Severe Climate Pain
Vietnam should spend $368 billion through 2040 to mitigate and adapt to climate change while advancing its development goals, according to a report from the World Bank. The southeast Asian country, with a population of about 100 million, is one of the world’s most vulnerable nations to extreme weather events and rising sea levels.
Without taking the proper adaption and mitigation measures, investing approximately 6.8% of its annual gross domestic product, climate change could cost Vietnam as much as 14.5% of its GDP by 2050, according to the analysis released in July.“Vietnam should embrace a new development paradigm based on two connected pathways—to adapt to climate change and build resilience, and to mitigate climate change by decarbonizing growth and steering the economy away from carbon-intensive energy,” the report said.
If it follows that path, Vietnam can achieve its climate objectives while expanding its GDP per capita by more than 5% a year, the report said. The public and private investments needed must also be accompanied by structural and policy reforms including a carbon pricing mechanism and other reforms.
Activists pan G7's $4.5 bln pledge to fight global hunger
Activists sharply criticized a pledge by the Group of Seven rich countries on June 28 to commit US$4.5 billion to fight global hunger, saying the sum fell short of what was needed with millions of people on the brink of starvation.
The worst drought in decades in parts of Africa and soaring food prices, driven higher by Russia’s invasion of Ukraine, have sparked repeated warnings about threats to food security for the world’s poorest and possible famines.
At the end of a three-day G7 summit in the Bavarian Alps, the leaders committed the $4.5 billion to protect the most vulnerable from hunger and malnutrition, saying that amounted to $14 billion of assistance committed this year.
“Faced with the worst hunger crisis in a generation, the G7 have simply failed to take the action that is needed. Many millions will face terrible hunger and starvation as a result,” said Max Lawson, head of inequality policy at Oxfam.
Credit Suisse is fined CHF 2 million for money laundering
- Company : CREDIT SUISSE AG
- Sector : DIVERSIFIED BANKS & FINANCIALS
- Clover rating : 2/10
In July, the Swiss Federal Criminal Court imposed a firm fine of CHF 2 million on Credit Suisse in the trial for money laundering in connection with the Bulgarian mafia. One defendant received a partially suspended prison sentence, while the other three received suspended sentences. The Court of Criminal Affairs accused him of failures both in the monitoring of banking relations with the Bulgarian mafia and in the supervision of anti-money laundering rules during the period from July 2007 to December 2008. The facts prior to 27 June 2007 are time-barred.
The shortcomings of Credit Suisse allowed the criminal organisation to evacuate part of the deposited funds. The Criminal Court has ordered the confiscation of CHF 12 million deposited in accounts linked to this organization. In addition, the bank will have to pay a compensation claim of CHF 19 million for the amounts that could not be sequestered due to its failures.
Holcim sued for its responsibility in the climate crisis
- Company : HOLCIM AG
- Sector : STEEL, CONSTRUCTION MATERIALS, OTHER METALS AND MINING
- Clover rating : 0/10
The cement giant Holcim is being called upon to compensate the inhabitants of the Indonesian island of Pulau Pari for damage caused by global warming. Four of them have filed for conciliation in Zug, a first in Switzerland.
On this small island northwest of Jakarta, rising sea levels are causing increased flooding, damaging homes, streets and businesses and affecting the income of the inhabitants, who live mainly from fishing and tourism.
The Indonesian island is launching the first ordinary civil case in Switzerland against a company for its contribution to climate change. The case is part of a wider movement in Europe and around the world. "A company must be held accountable for the damage it causes," says Nina Burri, Head of Business and Human Rights at HEKS.
By 2019, Holcim had sold its Indonesian operations to local cement manufacturer Semen Indonesia. But the group is one of the fifty companies that emit the most CO2 in the world, argues the NGO, which wants to push Holcim to reduce its carbon footprint.
Nestlé Opens $340 Million Green Electricity-Powered, Zero Wastewater Coffee Factory in Mexico
- Company : NESTLE SA
- Sector : FOOD, BEVERAGE & TOBACCO
- Clover rating : 7/10
Global food and beverage company Nestlé announced in july the opening of a new $340 million Nescafé coffee factory in Veracruz, Mexico, powered by clean energy and producing zero wastewater.
The opening of the new plant follows the launch by Nestlé of a series of sustainability commitments for its Nescafé brand last year, including goals to achieve 100% responsibly sourced coffee by 2025, 100% recyclable or reusable packaging by 2025, alongside investments in climate-related actions across the supply chain to decrease environmental impact.
According to Nestlé, the new facility reduces water and energy consumption utilizing state-of-the-art equipment and green energies, including wastewater treatment systems to ensure 100% of water recirculation, zero wastewater discharges and zero waste to landfills, and a biomass boiler using biological waste from the coffee process to generate energy.
Wildfires rage across Europe as climate alarm sounded
Emergency services battled wildfires across swathes of southern Europe amid mass evacuations in july, as warnings sounded in London after Britain's hottest day that the fight against climate change needed to be stepped up. Hundreds fled in central Italy as gas tanks exploded in a forest fire near the Tuscan town of Lucca. Similar numbers fled in Greece as a blaze fuelled by gale-force winds raged in mountains north of Athens.
A brutal heatwave with spikes well above 40 Celsius (104F) settled over southern Europe last week, part of a global pattern of rising temperatures, widely attributed by scientists and climatologists to human activity. The Chief of Science and Technology of Britain's Met Office, Stephen Belcher, said that unless emissions were reduced, the country might experience similar heatwaves every three years.
The shift in climate is leading to more wildfires and will force France and the European Union to take "structural decisions[...]in the years to come", President Emmanuel Macron said in July.
Glaciers vanishing at record rate in Alps following heatwaves
The Alps' glaciers are on track for their highest mass losses in at least 60 years of record keeping, data shared exclusively with Reuters shows. By looking at the difference in how much snow fell in winter, and how much ice melts in the summer, scientists can measure how much a glacier has shrunk in any given year.
Since last winter, which brought relatively little snowfall, the Alps have sweltered through two big early summer heatwaves – including one in July marked by temperatures near 30 Celsius (86 Fahrenheit) in the Swiss mountain village of Zermatt. During this heatwave, the elevation at which water froze was measured at a record high of 5,184 meters (17,000 feet) – at an altitude higher than Mont Blanc's -- compared with the normal summer level of between 3,000-3,500 meters (9,800-11,500 feet).
Most of the world's mountain glaciers — remnants of the last ice age — are retreating due to climate change. But those in the European Alps are especially vulnerable because they are smaller with relatively little ice cover. Meanwhile, temperatures in the Alps are warming at around 0.3C per decade — around twice as fast as the global average. If greenhouse gas emissions continue to rise, the Alps glaciers are expected to lose more than 80% of their current mass by 2100. Many will disappear regardless of whatever emissions action is taken now, thanks to global warming baked in by past emissions, according to a 2019 report by the UN Intergovernmental Panel on Climate Change.
Source : Reuters
Overshoot day: 28 July marks the day when we have already consumed all the planet's resources
As of Thursday 28 July, we would need a second planet to cover all of humanity's needs. This is the famous Earth Overshoot Day, which comes earlier in the calendar every year, a sign that our consumption and production patterns have not yet made the necessary transformation. While heatwaves and fires are particularly severe this summer, we continue to consume far more resources than the planet is able to produce each year.
This indicator is particularly relevant. In concrete terms, it means that from July onwards, humanity has consumed all the resources the planet can generate in one year (food, textile fibres, wood, etc.) and will be living on credit until the end of the year, further increasing the ecological debt. To put it another way, it is as if we were consuming the equivalent of 1.75 planets. But there is obviously no second planet and, at this rate, the resources we are over-consuming will end up not having enough time to regenerate.
"Since the early 1970s, the world has been depleting the Earth's renewable capacity earlier and earlier. This worsens the natural capital and the ability of ecosystems to regenerate. We should set ourselves the goal of pushing back the Earth Overshoot Day by 10 days a year to 31 December in 2050," explains Laetitia Mailhes, of the Global Footprint Network, which calculates the deadline each year. For example, halving our meat consumption would save 17 days per year.
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