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Sustainability Newsletter #54

 Published on 06/06/2024

#Key Figure : 52.9°

52.9 Celsius : “unbearable” heat in Delhi is testing limits of human survival

India’s capital territory of Delhi experienced some of its hottest weather on record on Tuesday 29th May, with highs in some neighborhoods near the landmark threshold of 50 degrees Celsius. The exceptional heat has closed schools, endangered outdoor workers, stressed water supplies and infrastructure, and reached levels that would test the limits of human survival if sustained. The searing temperatures in northern India are part of a broader heat wave across much of Southeast Asia, which is one of multiple heat waves occurring around the world because of a combination of short-term weather patterns and long-term warming trends fueled by human-caused climate change.

The intense heat has sharply increased the number of fires in dwellings and comes alongside water shortages, said Ramanan Laxminarayan, president of One Health Trust in India, who has qualified many areas as “simply unlivable”. In fact, this last heat wave has at times surpassed a dangerous threshold. A Washington Post analysis found that the wet-bulb globe temperature (WBGT)*, which measures the amount of heat stress on the human body, reached 36 degrees to 38 degrees Celsius in Delhi on Tuesday 29th May. That is higher than the 32 Celsius threshold that researchers have identified as posing a risk to human survival if such heat is prolonged.

*The wet-bulb globe temperature (WBGT): is a measure of environmental heat as it affects humans. It is based on a combination of factors including air temperature, humidity, wind and clouds.

Sources: The Washington Post, Reuters, CNN

Trends and Initiatives

"Sailing freighter": the road to carbon-free shipping

After dropping anchor at the foot of New York's skyscrapers, the new sailing cargo ship from the French company Grain de Sail has returned to its home port of Saint-Malo. A successful first transatlantic crossing for this vessel, which can carry up to 350 tonnes of cargo. For the time being, the Breton company is carrying wine, chocolate, leather goods and luxury goods. In 2024, Grain de Sail hopes to make 5 rotations between Saint-Malo and New York, including its two cargo ships. The company, which hopes to add three more ships to its fleet within the next 5 years to offer departures every two weeks, is a prime example of the return to favor of sailing freight.

Sailing freight is thus establishing itself as one of the solutions for decarbonizing a sector that is heavily criticized for its environmental footprint, accounting for around 3% of global CO2 emissions. According to the Wind Ship Association, new boats equipped with wind propulsion systems can reduce fuel consumption and associated emissions by 30% to 80%. Seduced by these benefits, more and more players are positioning themselves in the sailing transport sector, accelerating its development. While only 21 boats worldwide are currently equipped with these technologies, Wind Ship estimates that there could be between 3,000 and 5,600 by 2030. By 2050, their number could even approach 40,000 vessels, according to estimates in the UK's Clean Maritime Plan.

Sources: Novethic, Le Monde

Sustainable Finance

More than 1/3 of S&P 500 companies now have compensation tied to climate goals

More than a third of companies in the S&P 500 have monetary incentives in place linked to company emissions reduction, although a lower proportion have climate-related compensation incentives for senior executives, and even fewer at the top executive ranks, according to a new study released by S&P Global. According to the S&P’s 2023 CSA data, 35% of S&P 500 companies have compensation for employees linked to emissions reductions, up from 30% in 2021. The study found, however, that fewer senior executives have emissions-related incentives in place, including 27% of named officers, and only 15% of CEOs. Notably, several emissions-intensive sectors stood out in the results, with 48% of energy companies linking CEO compensation to emissions reductions as well as 29% of materials companies and 27% of utilities. The Net-Zero Commitments Tracker database also indicated that 45% of the companies studied have any kind of net zero target in place, with net zero targets most common in the Utilities sector, at 81% of companies, and least common in the materials sector, at only 25%.

Sources: ESG Today, S&P Global


European Union adopts new rules requiring 90% emissions reductions from trucks and buses by 2040

In May, European Union (EU) member states in the European Council announced the adoption of new legislation, strengthening emissions standards for heavy duty vehicles in the EU, including a requirement for a 90% reduction in CO2 emissions from heavy duty trucks and buses by 2040. The announcement by the EU Council marks the last decision-making step towards the adoption of the new regulation, following the approval last month of the legislation in the European Parliament. As a reminder, trucks and buses account for over 6% of total greenhouse gas (GHG) emissions in the EU, and more than 25% of GHG emissions from road transport. The new rules maintain the EU’s current target for a 15% reduction in CO2 emissions from heavy duty trucks, and raises the existing 2030 target from a 30% reduction to 45%, while introducing a series of new targets over a longer-term horizon, including a 65% emissions reduction from 2035, and a 90% emissions reduction from 2040.

Sources: European Parliament, ESG Today

Society and Planet

Panama's islands suffer their first climate exodus

Faced with the inexorable rise in sea levels, the 300 families living on the island of Cardi Sugdupu in Panama, mainly Gunas, are preparing for a mass exodus to the mainland. Long dependent on the sea for fishing and tourism, they are forced to abandon their ancestral land, submerged by the effects of climate change. Carti Sugdupu is one of 365 islands in the archipelago of the Guna Yala indigenous comarca in north-western Panama. Some 50 of these islands, all between 50 cm and one meter above sea level, are inhabited. Panamanian authorities and scientists anticipate that the Gunas are the first in a series of coastal communities forced to migrate. A recent study by the Climate Change Directorate of Panama's Ministry of the Environment, estimated that by 2050 Panama would see almost 2.01% of its coastal territory disappear due to rising sea levels. Panama estimates that it will cost over $12 million to relocate the 38,000 or so inhabitants who will have to cope with rising sea levels in the short to medium term. These new homes promise a different life, far from the ocean, marking a profound break with more than two centuries of tradition. This exodus underlines the growing global challenge of climate change, affecting regions from Venice to New Zealand, forcing governments to rethink habitats in the face of the realities of global warming.

Sources: NBC News, RTN, Reuters


Claudia Sheinbaum, ex-IPCC scientist and Mexico's first woman president

Mexico elects scientist Claudia Sheinbaum, former author of the IPCC (Intergovernmental Panel on Climate Change) and the country's first woman president. Claudia Sheinbaum won the election, beating her main rival by almost 30%, and is due to take office on October 1. The former mayor of Mexico City, who has made the fight against poverty, social and educational policies, ecology, gender, sexual diversity and respect for human rights central to her program, embodies a new era in a country still marked by social and environmental problems. A committed scientist, expert and local politician, Claudia Sheinbaum became a member of the IPCC in 2007 and took part in drafting the organization's 4th report, notably on energy issues and mitigating the climate crisis. In the early 2000s, she joined Mexico City's mayor's office, first as Secretary of the Environment, then as Mayor. During her tenure, she contributed to the development of electric public transport and the promotion of cycling, with the construction of over 200 kilometers of bicycle paths.

Although candidate Sheinbaum didn't really put environmental and climate issues at the heart of her campaign themes, these issues should quickly become part of the new president's political agenda. Mexico has been facing an unprecedented drought for several years now. Faced with this crisis, Claudia Sheinbaum has made water a key issue in her program, proposing a national plan to modernize the country's water management infrastructure. The president-elect is also proposing to raise minimum wages, given that almost 36% of Mexico's population still lives below the poverty line. In terms of education, Claudia Sheinbaum would like to continue developing access to education, especially by offering scholarships to help the most disadvantaged access schooling.

Sources: The New York Times, Novethic, Reuters

Company News

Honda to invest $64 billion on electrification strategy by 2030

-          Company : Honda Motor Co Ltd

-          Sector : Automobiles

-          Clover rating : 4/10

Honda announced that it will significantly boost its investments to pursue its electrification strategy, outlining plans to invest $64 billion over the 10-year period through 2030, with a focus on launching new electric vehicles (EV) models and to build an integrated battery-focused electric vehicle value chain in its key markets. The new investment plans were revealed in a press conference by Honda CEO Toshihiro Mibe. While acknowledging “the sense of a slowdown in EV market growth” in some regions, Mibe said that “Honda is confident that the EV shift will continue to proceed steadily,” and that the company “must look ahead to the period of EV popularization,” anticipated to begin in the second half of this decade. One of the key aspects of Honda’s strategy outlined by Mibe includes the establishment of a vertically-integrated EV value chain with a central focus on batteries in key markets, including the U.S., Canada and Japan, aimed at securing long-term competitiveness. Honda said that it aims to reduce the cost of batteries procured in North America through these initiatives by more than 20% by 2030 compared with current costs, and to reduce overall production cost by approximately 35%. The company added that it has a positive outlook on its ability to produce the batteries necessary for its planned production of 2 million EV units in 2030.

Sources: Reuters, ESG Today, Bloomberg


LEGO group ties bonuses for all employees to emissions reduction goals

-          Company : LEGO Group 

-          Sector : Discretionary

-          Clover rating : Not Rated

In May, the LEGO Group announced that it will begin tying a portion of bonuses for all salaried employees to emissions reduction goals starting this year, as part of the company’s strategy to meet its climate targets. The announcement follows the launch by the LEGO Group last year of a series of climate-related commitments, including a pledge to drastically reduce its emissions by 2050, to invest over $1.4 billion in environmental sustainability initiatives over the next three years, to work with the Science Based Targets initiative (SBTi) to develop emissions reduction targets covering Scope 1 and 2 emissions. The company said that it aims to expand the KPI to cover Scope 3 emissions, or those originating in the value chain outside of the company’s direct control that account for approximately 98% of the LEGO Group’s carbon footprint. In the media, the LEGO group has announced its ambitious target to reduce its emissions by 37% by 2032. The company also pledged at the time to add a carbon KPI to executive remuneration in 2024, as well as to pursue responsible travel policies to reduce employee travel, with a particular focus on international air travel.

Sources: ESG Today, LEGO


Google to recover heat from data center and distribute to local heating network

- Company : Alphabet 

- Sector : Media & Entertainment

- Clover rating : 5/10

Google has announced a new partnership with energy provider Haminan Energia to recover heat from its data center in Hamina, Finland, and to provide it to the local heating network. Data centers globally are responsible for a growing share of climate impact, already reaching up to 2% of the world’s carbon emissions, nearly equivalent to that of the airline industry, as demand for data center resources continues to increase rapidly. Launched in 2011, Google’s Hamina data center uses seawater as a solution to cool the servers, and subsequently instituted a heat recovery initiative to heat its onsite offices and buildings. Under the new initiative, Google will provide the heat free of charge to offtake partner Haminan Energia. According to Haminan Energia, the project is anticipated to represent 80% of the local district heating network’s annual heat demand. In 2020, Google, parent Alphabet, has announced its ambition to run its entire business on carbon-free energy (CFE) by 2030, matching electricity demand with CFE supply every hour of every day, in every region where the company operates. According to Google, the Hamina data center currently operates with carbon-free energy at 97%.

Sources: ESG Today, Energy Digital, Sustainability Magazine


Climate change makes airplane turbulence more frequent and more intense

Though severe flight turbulence is rare, it can be deadly. In May, one passenger died and more than 20 people were injured on an extremely bumpy Singapore Airlines Ltd flight traveling from London to its home country. The exact cause of the turbulence that sent Singapore Air passengers out of their seats remains unclear, but studies show that severe turbulences have increased this past decade. Between 2009 and 2023, there were 185 serious injuries on 162 global flights involving turbulence for scheduled air carriers, according to the National Transportation Safety Board.

Hours likely spent in clear-air turbulence per 1,000 flight-hours, by region, annually

Source: Prosser et al, Geophysical Research Letters (2023)


Annual-mean change in the amount of clear air turbulence at cruising altitude from pre-industrial times to 2050-80,by turbulence severity (%)

Source: Prosser et al, Geophysical Research Letters (2023)

While pinpointing the exact relationship between climate change and any given turbulent flight is impossible, a series of studies published over the past decade suggest that climate change stands to make turbulence worse in the future, if it isn’t already. Last year, a study in Geophysical Research Letters found “clear evidence” of large clear-air turbulence increases in certain parts of the world between 1979 and 2020. Researchers from the UK’s University of Reading found that a doubling of carbon dioxide concentrations in the atmosphere could cause light turbulence to increase by roughly 59%, moderate turbulence by 4% and moderate-to-severe turbulence by 127%. A separate 2019 study in Nature found that climate change is already adding to turbulence via an increase in what’s known as the vertical shear in the North Atlantic jet stream.

Sources: Financial Times, Bloomberg

Sustainability Newsletter 54