Published on 12/12/2023
COP28 - Key takeaways - click here
COP is the abbreviation for the annual United Nations conference on climate change, called the “Conference of the Parties”, which has been held since 1995. This year, the 28th edition of the conference was held in Dubai, United Arab Emirates (UAE), from 30 November to 12 December. So far, these conferences have made great strides, such as the Kyoto Protocol (COP3), which set the first legally binding emission reduction targets for developed countries, or the Paris Agreement (COP21), in which Member States committed to limiting global warming below 2°C above pre-industrial levels. This year, COP28 is an opportunity to take stock of the progress made, the culmination of a process called «Global Stocktaking» on the progress made by the world in the fight against the climate crisis and the scale of the need for a change of course. Find the key takeaways of the COP28 in our special edition.
Over 4% of global GDP at risk from climate change by 2050, S&P warns
More than 4% of GDP could be lost annually due to the physical impact of climate change, if temperature increase exceeds 2°C, with developing nations significantly more exposed and less prepared, according to a new study released by S&P Global Ratings. For the report, “Lost GDP: Potential Impacts Of Physical Climate Risks,” S&P Global examined a series of climate scenarios for projected greenhouse gas emissions and temperature changes, assessing the potential exposure of 137 countries to economic losses caused by the physical impacts of climate change, focused on seven specific climate hazards, ranging from extreme heat and flooding to wildfires and storms. S&P Global noted that the report comes as natural disasters are already leading to greater economic impact, with statistics provided by Swiss Re revealing a 5% – 7% annual growth in annual insured losses from 1992 – 2022. Although under a “slow transition” scenario, only 4.4% of the world’s GDP could be lost annualy in the coming years, South Asia would be exposed to almost 12% of GDP at risk annually by 2050. The bulk of the impact is driven by water stress and extreme heat, which in combination could result in depleted water resources, increased energy demand, disruption to agricultural production, and a greater risk of wildfires. The report also found that developing regions would be substantially more heavily impacted by climate hazards, with lower income countries 4.4x more exposed to climate risks that their wealthier counterparts, and less prepared to address economic losses.
Sources: ESG Today, S&P500 Global
For the first time, a commercial airliner completes a transatlantic flight powered 100% by «sustainable aviation fuel»
In November, the British airline Virgin Atlantic announced the success of the first transatlantic flight powered entirely by so-called «sustainable» fuels (SAF). The Flight100 flight on a Boeing 787, equipped with Rolls-Royce Trent 1000 engines, thus connected London and New York in less than 8 hours. Produced from used cooking oils, wood residues or algae, sustainable aviation fuels (CDA) or SAF (Sustainable Aviation Fuels) are usually usable in addition to kerosene (up to 50%) in current aircraft. For the Flight100 project, the aircraft’s engines were replaced to allow the aircraft to fly only with this new fuel type. Although these fuels are considered the main lever for decarbonization of the sector for the coming decades, their production is worrying due to the lack of sufficiently developed industrial sectors, and because of prices 4 to 8 times higher than that of fossil kerosene.
This first flight did not convince environmental associations such as "Stay Grounded" which called the operation as "greenwashing". The association cited the words of Finlay Asher, an aerospace engineer formerly employed at Rolls-Royce, explaining that CDA technology was a "technological impasse" because it could not, in theory, be developed on a large scale. For his part, the founder of the project, Richard Branson, said he was very proud of this first achievement and confided: “Sometimes you must show the world something can be done, to then spur action. This flight will hopefully achieve that. This is the defining challenge of the aviation sector, and we must always be pushing for innovation". In addition to showcasing the capabilities of SAF, Virgin Atlantic said that the flight will also assess the fuel’s usage on non-carbon emissions, improving the understanding of the effects of SAF on contrails and particulates, with research supported by ICF, Rocky Mountain Institute (RMI), Imperial College London and University of Sheffield.
Sources : RTS, ESG Today, Virgin Atlantic
«Paying Polluter»: former international treaties would slow down the ecological transition
Following the concept of "polluter pays" in environmental law, it now emerges that of "paying polluter". This is how the United Nations Special Rapporteur on Human Rights and the Environment, David R. Boyd, describes some investors who unscrupulously draw a weapon little known to the public yet formidable to thrill governments: the "Investor-state dispute settlement" (ISDS). This international arbitration procedure allows, among other things, investors who feel aggrieved to claim astronomical amounts from a State as soon as it takes environmental measures. In a report published in July 2023, David R. Boyd demonstrates the scale of the phenomenon and the risk that these regulations pose to the ecological transition. According to the United Nations, there are nearly 1’257 cases, including 127 claims for at least $1 billion in damages. The ISDS mechanism holds the record for the highest average of damages and compensation awarded, notes the report. Originally, the ISDS was created in the 1960s to protect investors from expropriation of their assets, without compensation, mainly in developing countries. Today, most applications concern fossil fuels and are made by investors from the North against countries from the South that are trying to introduce climate measures.
At present, 3/4 of the world’s coal-fired power plants are owned by foreign capital and therefore subject to ISDS. This raises fears of a certain reluctance on the part of Member States at a time when they should take measures to phase out coal. According to the report, governments that will meet their Paris Agreement commitments may have to pay nearly $340 billion to oil and gas companies in future ISDS cases, a major deterrent to ambitious climate action. According to Lauge Poulsen, a professor in the Department of Political Science at University College London and chair of the OECD’s intergovernmental work programme on climate change and investment law, discussions are underway. For its part, the UN therefore calls on States to withdraw unilaterally from these agreements.
Sources : The Lancet, UN Environnement Programme, United Nations, IEL , IISD, Novethic
European Union agrees to ban exports of plastic waste to poor countries
By 2026, the European Union (EU) will no longer be able to export its plastic waste outside the OECD. The decision, the result of an agreement between the Member States, urges European countries to take their own responsibilities. This agreement should make it possible to lay down a new regulation on the production and treatment of waste within the EU. The latter are still largely sent to third countries that do not necessarily have adequate infrastructure, thus becoming a source of environmental pollution.
If the association Zero Waste welcomes "a step forward in the fight against waste colonialism", that is to say, "the process by which rich countries strengthen their dominance over low- and middle-income countries, (…) through exports of toxic or hard-to-recycle waste", the association deplores the lack of solutions about the case of Turkey. According to the Environmental Investigation Agency (EIA), the EU exported one million tonnes of plastic waste in 2022, more than a third of which went to Turkey, an OECD country and will therefore not be affected by the ban. Yet, in a survey published in September 2022, the NGO Human Rights Watch found significant human rights violations in Turkish recycling plants. Exploitation of minor, dangerous working conditions, pollution, lack of controls... The situation is alarming and could therefore worsen with the new rules decided by the EU.
Sources : Novethic, The Guardian, Reuters
Mitsubishi misses its turn to the electric car and loses the Chinese market
- Company : Mitsubishi Motors
- Sector : Automobiles
- Clover rating : 3/10
This is a race that Mitsubishi Motors (MMC) just lost. According to the newspaper Nikkei, the Japanese car brand has decided to leave the Chinese market because of the fall in its sales in the country. It must be said that the too slow shift to Mitsubishi electric in a country where the appetite for this type of car is growing has been fatal for the company which saw its sales drop by nearly 60% last year. Indeed, electric vehicles are becoming very popular in the Chinese market with a record 6.8 million new sales last year. This year, the forecast rises to 9 million electric vehicles sold on the Chinese market. On electricity, the national brands represent 3/4 of sales in the country. In addition, exports of Chinese electric vehicles continue to rise, driven by competitive prices. Last year, the country became the world’s largest exporter of electric cars, with an average price of $10'000 for a small vehicle, compared to $30'000 in Europe.
Sources : Novethic, CNN, Electrive
Amazon sustainability initiatives: a new solar farm in the USA and 100% recyclable delivery packaging in Europe
- Company : Amazon.com
- Sector : Internet, Content, Software & Services
- Clover rating : 4/10
In November, Amazon announced its new project to source energy from Maryland’s largest solar farm planned at a former coal mine, the “Amazon Solar Farm Maryland – CPV Backbone”. Once completed, the project is expected to be the largest solar farm in Maryland, featuring more than 300'000 solar panels, and avoiding more than 133'000 tons of CO2 each year, according to project developer Competitive Power Ventures (CPV). The U.S. Environmental Protection Agency (EPA) estimates that there are more than 450'000 brownfields in the U.S., which is an emerging opportunity for solar energy projects. Brownfields—which can include abandoned factories, mines, or landfills—are often located near power lines and public roads, making it easier to connect a project to the grid and turn unused land into an economic opportunity for local communities. Since 2020, Amazon has purchased more renewable energy than any other company, according to market research firm BloombergNEF. The company now has a total of 479 wind and solar projects globally, and once operational, they are expected to generate more than 71'900 gigawatt-hours (GWh) of clean energy each year. Simultaneously, the company announced that it has achieved 100% recyclable delivery packaging in Europe. The achievement includes all boxes, bags and envelopes across all items sold by Amazon, as well as third-party selling partners that use Fulfilment by Amazon. The company said that it has saved more than 60'000 tons of cardboard annually.
Sources: ESG Today, Commercial Observer, Bloomberg
IBM launches free courses to help address green economy skills gap
- Company : International Business Machines Corporation (IBM)
- Sector : Internet, Content, Software & Services
- Clover rating : 7/10
Global technology company IBM announced the launch of free sustainability courses aimed at providing skills for the green economy. The new courses will be provided by IBM SkillsBuild, a free education that helps adult learners and university students, develop valuable new skills and access career opportunities. According to IBM, the announcement comes alongside new research from Morning Consult, with a survey of more than 3,000 global business leaders indicating a growing skills gap in sustainability. According to the study, 71% of respondents reported that they expect to implement more sustainability hiring criteria within the next two years. The launch of the new courses follows a commitment announced by IBM in 2021 to provide 30 million people with new skills for future job needs, with a focus on vulnerable communities.
Disability inclusion drives revenue and profitability, reveals Accenture study
Companies that lead in disability inclusion drive more revenue, net income and profit, according to a new research report from Accenture in partnership with Disability:IN and the American Association of People with Disabilities (AAPD). The report identifies that, over the last five years, the business case for hiring persons with disabilities has become even stronger. Specifically, companies that have led on key disability inclusion criteria over that time saw 1.6 times more revenue, 2.6 times more net income and 2 times more economic profit than other studied companies (study of more than 340 companies). Further, leaders are more likely to outperform industry peers in productivity by 25 %. Since 2018, the number of people with disabilities in the workforce has swelled from 29 % to 37 % with most progress occurring since February 2020 at the beginning of the pandemic. This increase can be attributed to increased work opportunities at home—making it easier for people with disabilities to participate in the workforce and an increased awareness and understanding of digital accessibility and inclusion in the hiring process. Additionally, newer and emerging technologies are excellent sources to advance disability inclusion, including AI-powered platforms.
“For too long, people with disabilities – individuals who are perfectly qualified and overwhelmingly willing to work – face enormous barriers to being offered a job,” said Ted Kennedy, Jr., disability rights attorney, former Connecticut state senator and immediate past Chair of the AAPD board. “Accenture’s recent report provides compelling evidence that disability inclusion actually accelerates business performance, brand loyalty and shareholder returns.”
