Sustainability Newsletter #40

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#Figure of the month - 450 tons of CO2 

Second life battery : a saving of nearly 450 tons of CO2 per device

Battery repurposing and recycling is set to play a massive role over the coming years as the automobile industry attempts to decarbonize and the world more broadly attempts to fight waste. The production of electric vehicle (EV), which uses lithium-ion batteries, is accelerating. Tesla, for example, is aiming to sell 20 million EVs per year by 2030 — more than 13 times the current level. In turn, 12 million tons of EV batteries could therefore become available for reuse by 2030, according to one estimate. The study by Lancaster University, commissioned by Connected Energy, calculated that a second life battery system saved 450 tons of CO2 per MWh over its lifetime.

European regulations aimed at cutting emissions and reducing waste are bolstering the secondary battery market. From 2024, for example, manufacturers in the EU will be required to provide "battery passports", which display detailed information on the supply chain, use of the battery, and battery health, after a comprehensive battery policy was passed in December 2022. The US is catching up. In January, the Department of Energy awarded $73.9 million in funding for research to advance technologies and processes for recycling and reusing EV batteries.

There are a broad range of “secondary” uses for EV batteries - from energy storage to powering fixed infrastructure such as street lights or elevators - that don’t preclude those batteries from eventually being recycled. After around a decade, an EV battery no longer provides sufficient performance for car journeys. However, they still can retain up to 80% of their original capacity, and with this great remaining power comes great reusability.

Source : Reasons to be cheerful


Trends and Initiatives

Conscious Quitting, a ticking bomb for companies

One in three employees in the UK and the US has resigned because their company's values did not align with their own. This trend, known as 'conscious quitting', has just been revealed in a new study published in the Net Positive Employee Barometer. Former Unilever CEO Paul Polman warns, "Any CEO who thinks they can win the war for talent by offering a little more money, a little more telecommuting and a gym membership will be disappointed. The era of conscious quitting is upon us." This phenomenon, which particularly affects young people, refers to the fact of resigning from one's company because it does not correspond to one's social or environmental values. According to a survey of 4,000 workers - 2,000 British and 2,000 American - half of them would consider leaving their employer because their values are too different. In fact, 33% said they had already left their company for this reason.

This is detrimental to companies, as 76% of British respondents and 73% of Americans say that the environment is one of the key factors in accepting a job. They are almost equally committed to equal pay and social equality. One in three respondents even said they would be willing to take a pay cut to join an employer more in line with their own values. While the environmental criterion is certainly not the most important factor in the choice of candidates, it remains a differentiating factor in today's highly competitive world. The former CEO of Unilever therefore advises companies to think more carefully about their business model so that it is profitable, sustainable and responsible.

Sources : Novethic - Euronews


The remuneration of top executives is increasingly indexed to the climate

The remuneration of top executives of major European companies is increasingly indexed to the CSR strategy of their company. A British study by PwC and the London Business School shows that 82% of the executives of the 50 largest European companies have environmental, social and governance (ESG) objectives in their remuneration criteria. Of these, 76% have their variable compensation specifically indexed to targets for reducing their company's greenhouse gas emissions. This is apparently good news because, despite these financial incentives, the trajectory of large European groups is still far from the objectives defined by the Paris Agreement. Of the 50 companies studied, 14 are on the list of major greenhouse gas emitters of the Climate Action 100+, the coalition of global investors. In its October 2022 report, the coalition found that the companies mostly have climate commitments, but few credible decarbonisation strategies.

The study finds that current levels of bonus payments do not appear to be consistent with the very slow progress on climate change. Indeed, in order to really improve the climate trajectory of companies, the integration of ESG criteria must be drafted in a sufficiently clear and binding manner. Without this, there is a risk that the practice will only benefit senior executives, resulting in an increase in their remuneration. This is precisely what seems to be happening, as the climate targets were very easily met by the managers of large groups, compared to their financial targets. According to the study, they received an average of 86% of their climate bonus, while they only received an average of 75% of their financial bonus. Emissions reduction targets appear to have been set at a very low level, which does not provide an incentive to transform the company's business model.

Sources : Novethic - PwC


The new Responsible Travel Time initiative to avoid flying

Who hasn't taken a plane instead of a train to save time at the weekend? To promote and encourage employees' ecological commitments, a company has just launched a new scheme in France, the TTR (Temps de Trajetage Responsable). The concept is clear: allow employees to take two days per year, which can be split into half-days, to favour more responsible travel. "In concrete terms, the employee who chooses a more responsible journey is given a "semi-off" day for his or her journey. The employee is invited to work only if and when possible," explains Ubiq's communications director, Margaux Beaunez. For these two additional days off, Ubiq estimates the cost at between 600 and 700 euros per employee per year. "It's part of a wider reflection on working time, flexibility and employee expectations, rather than a CSR economic costing approach," says the CEO.

The initiative has been welcomed by several members of the environmental community. Quota Climat stresses that this measure is one of the many ways in which companies can help their employees to change their consumption patterns in favour of the ecological transition. While Ubiq hopes that Responsible Journey Times will inspire other companies, the company also points to the need to develop the train to make it more accessible. To develop rail transport, the French government has just put 100 billion euros on the table. Relaunching night trains, metropolitan RERs, modernising railways... there are many issues at stake.

Sources : Novethic - FranceInfo - Les Echos


Sustainable Finance

Sweden bans non-ESG funds from $90 billion pensions pot

Sweden is inviting international asset managers to help allocate 1 trillion kronor ($90 billion) of pension savings but says it won’t accept applications from firms that don’t incorporate ESG into their strategies.

The new framework will replace a system tainted by an embezzlement scandal that infuriated Swedish taxpayers and triggered calls for a more robust setup. The upshot is that only investment firms that integrate environmental, social and governance goals into their work need apply, according to the Office of the Swedish Fund Selection Agency, which is overseeing the process. Erik Fransson, executive director of the agency, said: “Unlike the current system, there will be a requirement that the manager systematically integrates sustainability into its operations.” Sweden’s rules for this particular mandate will require fund managers to adhere to the United Nations’ Global Compact, the OECD guidelines for multinational corporations, or the UN’s guiding principles for human rights. Furthermore, firms will only be allowed to offer investment products that are registered as ESG fund classes under Europe’s Sustainable Finance Disclosure Regulations, known as Article 8 and Article 9 funds. It is expected that the Swedish Fund Selection Agency will conduct its first selection process in the second quarter, choosing a total of around 150 funds.

Sources : Bloomberg - Funds EuropeLes Observateurs


Deep sea mining at the heart of debates

A growing number of countries are calling to delay plans to strip-mine the seabed for metals to make electric car batteries as US defense giant Lockheed Martin Corp., the biggest corporate player in deep sea mining, exits the nascent industry. The sale of Lockheed’s UK Seabed Resources subsidiary to Norwegian startup Loke Marine Minerals was announced just as the United Nations-affiliated organization tasked with regulating deep sea mining kicked off a conference in Jamaica. The International Seabed Authority (ISA) is meeting to hit a July 2023 deadline for approving regulations that would allow unique deep ocean ecosystems to be mined as soon as 2024. Tensions at the conference are rising as scientists, lawyers and activists charge the Authority’s administrative arm, known as the Secretariat, with pushing a pro-mining agenda. The ISA conference is taking place amid rising demand for cobalt, nickel and other metals used to make batteries for electric cars, and comes less than two weeks after 193 nations reached agreement on a landmark treaty to protect marine biodiversity in international waters. Pressure to delay or ban implementation of seabed mining centers on the lack of scientific knowledge about deep sea ecosystems targeted for exploitation. The UK has stated it will not support any exploitation licenses for deep sea mining projects without sufficient scientific evidence about the potential impact on ecosystems.

With regard to metal mining more generally, the European Union Commission presented a draft regulation this month aimed at securing the supply of critical raw materials that are essential for the European industry. Among the solutions proposed is the extraction by the EU of 10% of its consumption of strategic raw materials on its territory by 2030, compared with 3% today. To achieve this, Brussels is proposing to simplify and accelerate procedures for extraction projects in Europe. It also intends to set up cooperation with partner countries, particularly in Africa, Latin America and North America.

Sources : Bloomberg - Novethic


Society and Planet

Climate change is making allergy season last longer

As warmer weather has spurred a boom in pollen production, it is prolonged what might very well be everyone’s least favorite time of year: allergy season. One side effect of milder winters and increased annual average temperatures is that plants not only begin producing pollen earlier but also that they produce it for a longer period of time. “This really shows another marker of how climate change could be influencing people’s daily lives,” said Allison Steiner, a professor of atmospheric science at the University of Michigan. 

Between 1990 to 2018, the North American pollen season lengthened 20 days and pollen concentrations increased more than 20%, according to a 2021 study published in the academic journal Proceedings of the National Academy of Sciences of America. Warming temperatures, in conjunction with changing rainfall patterns and rising atmospheric carbon dioxide levels, could cause plants’ pollen production to triple by the end of the century, the University of Michigan team said in a report last year.

Consumer health and pharmaceutical industries are already aiming to take advantage of increased demand for allergy products. French pharmaceutical company Sanofi, which makes allergy treatments Allegra and Xyzal, said in a release last year that respiratory allergies were among the “main health consequences of climate change.” A Sanofi spokesperson said that the company sees “much potential within the allergy market.”

Sources : Bloomberg - Forbes


Amazon delivery firms say racial bias skews customer reviews

Amazon delivery contractors have accused the company of racial bias affecting feedback and job security for drivers of color. Indeed, Amazon is relying on customer feedback to determine how much to pay delivery drivers' employers. However, delivery contractors have claimed that their employees of color consistently receive negative feedback compared to their White counterparts, resulting in the risk of termination of their jobs. Amazon spokesperson Maria Boschetti acknowledged that racial bias may be influencing driver customer reviews, but the company investigates any credible complaint and takes appropriate action based on the facts available.

This issue is not unique to Amazon, as other tech companies, such as Uber and Airbnb, have also faced accusations of allowing racism to influence their business practices. The claimed racial bias by delivery contractors is challenging to identify, as it is often covert and difficult to spot in any one response. This type of feedback is vulnerable to "implicit bias" from clients who might be more tolerant of small mistakes made by those who resemble them and assess those viewed as outsiders more harshly, according to Nicole Buchanan, a psychology professor at Michigan State University.

Sources: BloombergYahoo !Finance


Company news

Sanofi to cut US price of its most-prescribed insulin by 78%

-          Company : SANOFI SA

-          Sector : PHARMA & BIOTECH

-          Clover rating : 6/10

On March, Sanofi SA said it will cut U.S. list prices for its most-prescribed insulin product, Lantus, by 78% starting next year after similar moves by rivals Novo Nordisk and Eli Lilly and Co. The French drugmaker will also extend its $35 out-of-pocket pricing program to all patients with commercial insurance using Lantus. The move comes as U.S. President Joe Biden has pushed to extend to most Americans the $35 cap on out-of-pocket insulin costs made available to Medicare recipients by the Inflation Reduction Act. In addition to Lantus, Sanofi said it will cut by 70% the list price for its fast-acting insulin, Apidra.

About 8.4 million of the 37 million people with diabetes in the U.S. use insulin, according to the American Diabetes Association. However, many Americans cannot afford insurance and often have to pay the full list price, forcing many patients to ration or skip doses. This medical breakthrough could therefore change the lives of a very large number of people. For its part, Sanofi said it had a 40% share of the US market for long-acting insulin and a 4% share of the market for rapid-acting insulin.

Sources : Reuters - Sanofi


BMW bets on design and recycling, not mining, to lower battery costs


-          Sector : AUTOMOBILES

-          Clover rating : 8/10

BMW is betting on efficient design and recycling to bring down battery costs and is steering clear of investing in mines, setting it apart from some competitors digging deep into the supply chain. "We don't think it is right to invest in mines. We view it as more important to get back raw materials from cars and other products," Chief Financial Officer Nicolas Peter said in an interview.

Bringing down battery costs, most of which come from raw materials, is the key challenge for carmakers attempting to generate profits from electric vehicles (EVs) equivalent to those reaped from combustion engine cars, a target BMW hopes to reach with its "Neue Klasse" EV-only line launching mid-decade. Some, such as Volkswagen, are betting big on expanding their own battery production and investing in mines to secure control down the supply chain. BMW is taking a different approach, focusing on creating demand via car production and relying on partners with more expertise to build large-scale infrastructure required for electrification. 

Sources: Reuters - Capital


Microsoft signs a deal for direct air capture carbon removal

-          Company : MICROSOFT CORPORATION


-          Clover rating : 8/10

California-based climate tech company CarbonCapture announced in March an agreement with Microsoft for the purchase of carbon removal credits generated through its Direct Air Capture (DAC) technology. DAC technology, listed by the IEA as a key carbon removal option in the transition to a net-zero energy system, extracts CO2 directly from the atmosphere for use as a raw material or permanently removed when combined with storage. Adrian Corless, CEO and CTO at CarbonCapture, said: “Validation of CarbonCapture’s scalable approach to DAC from a forward-thinking company like Microsoft is an important signal to the entire market, demonstrating the value of high-quality carbon removal credits.” The agreement marks the latest in a series of carbon removal deals announced by Microsoft, forming part of the company’s initiative to become carbon negative by 2030, and to remove all of its historical emissions by 2050. Microsoft has also recently announced its first agreement for ocean-based carbon dioxide removal, with ocean health company Running Tide.

Sources : ESG Today - Business Wire



Artificial intelligence is booming — so is its carbon footprint

Artificial Intelligence (AI) has been rapidly expanding in recent years, but with this expansion comes a significant carbon footprint. One of the biggest contributors to carbon emissions from AI is the energy required to train models. Large technology companies like Microsoft, Google, and OpenAI use cloud computing to train AI algorithms, which consumes a substantial amount of electricity. In fact, training a single model can use more electricity than 100 US homes consume in a year.

The growth of AI has been so fast that the total amount of power used and the carbon emissions attributed to AI remain unknown. Therefore, researchers believe that greater transparency is necessary to determine whether using large AI models is worth the electricity and emissions. However, such transparency could also result in greater scrutiny, as seen in the criticism faced by the crypto industry for its power consumption. In 2021, OpenAI's GPT-3 required 1.287 gigawatt hours of electricity to train and generated 502 tons of carbon emissions, equivalent to the emissions from 110 US cars in a year. Additionally, Google reported that AI made up 10-15% of its total electricity consumption in 2021, which is approximately the same amount as all the homes in a city the size of Atlanta.

Despite the significant carbon footprint of AI, Microsoft, Google and Amazon – the biggest U.S. cloud companies — are committed to sustainability and are working to improve efficiency.  OpenAI cited work it has done to make the application programming interface for ChatGPT more efficient, cutting electricity usage and prices for customers. “We take our responsibility to stop and reverse climate change very seriously, and we think a lot about how to make the best use of our computing power,” an OpenAI spokesperson said in a statement.

Sources: Bloomberg - Forbes



UK coal demand fell to its lowest level since 1757

UK coal demand fell to its lowest level since 1757

UK coal demand has fallen by a further 15% in 2022 to just 6.2 million tonnes. This is the lowest level since 1757, according to Carbon Brief's analysis of historical data. At the same time, UK greenhouse gas emissions have fallen by 3.4% in 2022. The UK's historical use of coal is the main reason why the country remains the eighth largest contributor to current warming. This contribution is all the more remarkable given the country's small population.

However, the trend appears to be reversing as coal consumption in the UK has fallen by 90% over the last decade. This is mainly due to the virtual disappearance of coal-fired electricity. There are several reasons for this: Firstly, UK electricity consumption has fallen by 3.8% in 2022 to its lowest level for around 40 years. This is largely due to a reduction in demand from households, who have curbed their consumption as a result of historically high energy bills. Secondly, wind power has reached a new high in 2022, with a 25% increase due to increased capacity and a rebound from the lowest wind speeds of the decade in 2021. Hydro, solar, nuclear and gas generation have also increased to a lesser extent. The combination of lower demand and higher supply of other fuels has allowed the UK to become a net exporter of electricity for the first time since 1978, while reducing coal-fired generation.

Source: Carbon Brief 


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