Sustainability Newsletter #39

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#Figure of the month - 4 days 

4-day work trial shows health benefits

The world’s biggest trial of a four-day working week has been hailed a “major breakthrough” after most companies involved said they will keep to the shorter week following the pilot. The trial saw 61 companies across a variety of sectors in the UK commit to reducing their working hours for all staff by 20 per cent, for six months from June last year. Crucially, the firms had to make sure there was no reduction in wages for their employees. At least 56 out of the 61 firms that took part said they plan to continue with the 32-hours working week.

Academics at the University of Cambridge and America’s Boston College carried out the research on this new initiative. The results revealed a significant drop in the rates of stress and illness among the approximately 2,900 staff involved. Around 39 per cent of employees said they were less stressed compared with the start of the trial, and the number of sick days taken during the trial dropped by around two-thirds. The results even found that company revenue increased slightly by +1.4 per cent on average over the trial period, and by a much higher +35 per cent when compared to the same six-month period in 2021.

However, even if researchers present the four-day week is “ready to take the next step from experimentation to implementation”, several staff at one large company reported concerns about increasing workloads or finding their work intensified. The results also revealed that some staff felt the focus on efficiency had made the workplace less sociable.

Sources: The Independant, Forbes


Trends and Initiatives

EU wants to ban products resulting from deforestation 

The European Union is set to ban imports of raw materials produced on newly deforested land anywhere in the world, in an effort to protect the rainforests that are a buffer against catastrophic climate change. The plan is to stop the felling of forests to grow products sold in Europe. Those include palm oil, soy, beef, wood, rubber, cocoa and coffee and some manufactured products such as chocolate, leather and furniture. To send them into the EU, companies must show they weren’t made on land that was deforested or degraded since Dec. 31, 2020. They will also need to prove they were produced in compliance with local human rights laws and laws protecting the rights of indigenous peoples. The measures are expected to take effect in May or June. Companies will then have 18 months to comply, with a further six-month grace period for small businesses. 

Up to this point, efforts to stop the destruction of the world’s forests focused largely on persuasion and positive incentives. Now, one of the most important players in the global economy is resorting to force. Companies that fail to meet the rules could face fines of at least 4% of their annual turnover in the EU. If the system holds up and importers comply, consumers will be able to enjoy their morning coffee in the knowledge that no trees were cut down to grow the beans. However, a study published in 2022 reveals the new measures would create compliance costs equivalent to as much as 3.5% of revenue and will penalize millions of small farmers across Asia, Latin America and Africa who lack the means to comply.

Sources : Bloomberg, Les Echos


Heat from an Amazon data center is warming Dublin’s buildings

This winter, Dublin University of Technology and the nearby South Dublin County Council building were the first customers of a new district heating system that became operational in mid-December. Datacenters servers generally emit excessive heat when processing data. This heat usually ends up in the atmosphere as waste. The larger the data center, the more heat is emitted. This is the case with Amazon's data centers in Tallaght (southwest of Dublin) where a new heating system has been developed. Indeed, the system recovers this heat to reuse it as green energy in the buildings of the city.

In Amazon's Tallaght data center, servers are cooled by water circulating through an "air-handling unit". The water, that has absorbed the heat from the servers, is then routed outside the warehouse to heat pumps that condense it at high temperature. The pump system sends this boiling water through pipes to heat various buildings in the city. The savings from the Tallaght project have been estimated at nearly 1,400 tons of CO2 emissions each year, a reduction of about 60% compared to the previous system of individual on-site boilers. When fully operational, the system is expected to heat 47,000 square meters of local public buildings, 3,000 square meters of commercial buildings and 135 apartments. Following this first initiative, many other residential developers have also expressed interest.                                                                                              

Sources : Reasons to be cheerful, RTE


Sustainable Finance

Fashion faces recycling fees similar to other industries

Electronics and packaging companies have banded together to help pay for recycling programs under government rules. Now, clothing makers are investing in recycling infrastructure as they prepare for similar requirements in Europe. Around 85% of textiles end up in landfills or are incinerated when most of the materials could be reused, according to the United Nations. Some $500 billion is lost every year because clothes are underused and unrecycled. Further, the fashion industry contributes about 10% of global greenhouse-gas emissions, more than aviation and shipping combined, in large part because of farming, manufacturing, shipping and fossil-fuel based chemicals. So-called extended producer responsibility programs (ERP) are one answer to textile waste. EPR programs charge producers tiny fees— often a fraction of a penny — on individual items to fund waste collection and recycling. Several U.S. states have recently adopted EPR legislation for packaging, and EPR policies have existed for years for paint and electronics in some states. There is a patchwork of EPR policies in European states for a variety of goods, but the European Union’s executive branch plans to propose EPR rules for the textile industry across the 27-member states by June 2023.

In January, H&M, the world’s second biggest fashion retailer, has announced it had formed a joint venture with German recycling group Remondis to collect, sort and sell used and unwanted garments and textiles. The venture is starting its operations in Europe and aims to extend the life cycle of some 40 million garments in 2023.

Sources : Wall Street Journal, Reuters


Global sustainability disclosure standards for companies set to take effect in 2024

The International Sustainability Standards Board said it has agreed to rules that would harmonize corporate environmental disclosures across the globe. At a meeting held in February, the board voted to release global guidelines midyear that would go into effect in January 2024. ISSB is part of the International Financial Reporting Standards Foundation, an accounting body overseeing financial reporting such as corporate earnings. More than 150 countries follow the IFRS, and the group will promote its sustainability disclosure standards to market regulators. Finance ministers of more than 40 countries have said they welcome the ISSB’s work, including the U.S., U.K. and Germany. Still, the ISSB gave companies an exemption of one year for reporting emissions from their value chains—known as Scope 3 emissions—due to the challenge of gathering data from suppliers.

Sources: Wall Street Journal, ESG Today


Society and Planet

Chili abandons mining project for environmental reasons 

It is a decision rare enough to be highlighted. In mid-January, the Chilean government rejected the Dominga mining project in the Council of Ministers because of its environmental impact. This highly controversial project was intended to extract 12 million tonnes of iron and 150 000 tonnes of copper per year. It also provided for the construction of a port and desalination plant. The mine was to be located in a nature reserve unique in the world, in the north of the country and close to the Humboldt archipelago, where many penguins live. The Andes Iron company has announced that it will appeal the decision in courts.

Those who defend the project claim that Dominga will bring economic growth and development to one of Chile’s poorest communities. The country derives the majority of its incomes from the mining industry, Chile being the world's largest producer of copper. Nevertheless, the country is particularly vulnerable to the impacts of climate change. According to a ranking established in 2022 by the American company Uswitch, Chile ranks in the top 10 countries that have suffered the most economic losses related to climate change with an amount of $82 billion over the period 1902-2021. And it is also one of the countries that could suffer most from drought by 2040, according to the WRI. The decision to ban a new mining project in the country, which is extremely water-intensive, therefore seems quite logical and is fully in line with the agenda of the new President, Gabriel Boric, who has placed climate change at the top of his priorities.

Sources : Novethic, Business & Human Rights


Skiiers urge sport’s governing body to act over climate crisis and lack of snow

Top skiers have signed a letter to the International Ski and Snowboard Federation (FIS) demanding action over the climate emergency. Global heating has meant that there is no longer guaranteed snow at some of the top ski areas, with the situation predicted to get worse as the planet heats and weather becomes more erratic. Now, leading athletes have called for the FIS to overhaul its sustainability strategy, as it is lacking. They have asked for a more “geographically reasonable” race schedule to reduce carbon emissions, as often the races entail flying across the world multiple times. This year, the men’s circuit will have travelled from Europe to North America and back twice. The Norwegian racer Aleksander Aamodt Kilde told the Associated Press: “We see that the world is changing. We see also the impact of our sport … I want the future generations to experience winter and to be able to do what I do.” The letter, signed by 200 athletes, was written by the Austrian downhiller Julian Schütter, ambassador for climate campaign group Protect Our Winters (Pow).

Source: The Guardian


Company news

LVMH partners with Dow on sustainable packaging for cosmetics and perfume brands


-          Sector : LUXURY 

-          Clover rating : 7/10

In February, Chemicals and materials science giant Dow Inc. has announced the launch of a new collaboration with LVMH Beauty, aimed at accelerating the use of sustainable packaging by using bio-based and circular plastics across LVMH’s key brands this year. LVMH Group’s sustainability commitments include eliminating fossil-based virgin plastic in packaging by 2026, with an interim 2023 goal to strengthen sustainable materials efforts. Under the new initiative, the companies will work to integrate bio-based and circular plastics for applications including premium perfume caps and cosmetic cream jars. The new collaboration follows the launch by Dow in October of a new business platform, Circular & Renewable Solutions, aligned with the company’s Packaging & Specialty Plastics operating segment, along with a target to commercialize 3 million metric tons of circular and renewable solutions annually by 2030.

Sources : ZoneBourse, ESG Today


Volkswagen to retrain 22,000 employees for electric vehicle production 

-          Company : VOLKSWAGEN AG

-          Sector : AUTOMOBILES

-          Clover rating : 3/10

Automotive giant Volkswagen announced the launch of a major retraining campaign, with plans to train 22,000 production employees in electric mobility at its Wolfsburg plant, the largest car manufacturing facility in Europe. The new training initiative comes as Volkswagen accelerates the shift of its fleet towards electric vehicles. In December, Volkswagen announced plans to invest €460 million in the Wolfsburg site by the beginning of 2025, primarily to prepare the facility to produce its new ID.3 compact electric car. As part of its “Way to Zero” plan unveiled in 2021, the company has committed to have at least 70% of its unit sales in Europe be all-electric vehicles by 2030. Volkswagen has also said that it will produce only electric vehicles in Europe from 2033.

Sources : ESG Today, ZoneBourse


Battery giant LG Chem prepares to lock in mineral supplies

- Company : LG CHEM LTD 


- Clover rating : 6/10

LG Chem Ltd. is prioritizing efforts to secure raw materials used in electric-vehicle batteries and establishing a self-sufficient global supply chain, including via potential partnerships and investments in mining companies. LG Chem makes cathode-active materials, a key ingredient for EV batteries. It is the parent of LG Energy Solution, the world’s second-largest battery cell maker and supplier for automakers including Tesla Inc., General Motors Co., Ford Motor Co. and Stellantis NV. “We are preparing ourselves first of all to secure supply of raw material, which is more important than the price,” LG Chem Chief Executive Officer Shin Hak-cheol said in an interview with Bloomberg Television in Seoul. “Our first and foremost priority is to secure enough raw material for the future.” The fragility of the EV industry’s supply chain has been exacerbated by disruptions caused by major global events such as the Covid pandemic and Russia’s war in Ukraine, driving up the cost of raw materials including metals like lithium, nickel, cobalt and manganese, which are used in batteries.

Sources: Bloomberg, Yahoo Finance



RHS scientists developing ‘wellbeing blueprint’ to determine health benefits of gardens

Scientists conducting tests at experimental garden in Surrey to determine effects plants and flowers have on people. At the Royal Horticultural Society (RHS) experimental garden in Wisley, Surrey, landscape designers have made a garden split into many sections, with different coloured flowers and scents. Dr Lauriane Chalmin-Pui, a scientist at the RHS in charge of wellbeing, said: “What we hope to find what are the different features that impact how gardens can best improve wellbeing?”. The RHS says its aim is to promote the health, social and cultural value of green spaces for the general population as well as for specific groups of people who may not otherwise have access to private gardens.

To find out what to plant in gardens, Chalmin-Pui is doing a range of experiments, including one that isolates different garden smells. Thousands of people visiting Wisley have provided her with data about what emotions each plant evokes – which calm, and which arouse. She has also monitored the heart rate and sweat levels of people doing difficult tasks while in a room with different types of flowers, to identify if flowers can have a calming effect. She hopes this blueprint can be deployed in schools that cater for children with special educational needs, as well in hospital gardens. Her findings will be available later this year.

Sources : IEEFA, Bloomberg


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