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Sustainability Newsletter #55

 Published on 01/07/2024

#Key Figure : -3%

After an unprecedented decrease in greenhouse gas emissions, has China reached its peak?

China, the largest emitter of greenhouse gases, experienced an unprecedented decrease in its emissions in March 2024: -3%. This is the first time since the reopening of the Chinese economy after the lifting of "zero-Covid" controls in December 2022. As a result, some experts are questioning a possible peak in emissions in 2023 in the country. The government had previously committed to reaching this goal "before 2030".

This decrease can be explained, on one hand, by a massive increase in solar and wind power production capacities, which covered 90% of the growth in electricity demand in March. On the other hand, the real estate crisis and the collapse in construction contributed to reducing emissions in steel production by 8% and cement production by 22%.

In India, the share of coal in the total energy capacity has fallen below 50% for the first time since the 1960s. India has thus risen to third place in the global ranking of solar energy production, just behind China and the United States. Solar energy has been the fastest-growing source of electricity in the world for the 19th consecutive year. In 2023, the share of renewable electricity exceeded 30% of global electricity, compared to 19% in 2000.

Sources: Novethic, Carbon Brief

Trends and Initiatives

Cars are slowing down in european cities

Across Europe, cities are proving that lowering speed limits makes neighborhoods safer and more livable while reducing dependence on cars. The various initiatives — known as Tempo 30 in German-speaking countries, City 30 across Europe, Love30 by the WHO and 20’s Plenty in the UK and the US, the latter referring to miles per hour — have been gaining steam in recent years. Paris and Brussels introduced a default speed limit of 30 kilometers per hour in 2021, Lyon in 2022 and Bologna in early 2024, with Milan and Parma planning to follow suit this year. Beyond the EU, Wales introduced a 20 mph limit as the default for all residential roads in September 2023, and a couple of US cities, like Portland, have begun reducing their residential speed limit to 20 mph.

Many of these places took their inspiration from Graz, Austria’s second-largest city. In 1992 it became the first major city in Europe to implement a general 30 kilometers per hour limit on all but its main roads, covering 80 percent of the road network. The concerns back then were no different from those still heard today: the traffic will come to a standstill, there will be more noise and emissions from cars crawling through the city at a snail’s pace. But extensive studies in the two-year pilot phase were able to disprove those arguments — the noise level dropped, as did the emissions, and due to smoother traffic flow the average speed was only reduced by 0.5 kilometers per hour. Newer data from other European cities confirms these findings.

While it’s easy to dismiss something as amorphous as an improvement in quality of life, the dramatic reduction in traffic fatalities makes a stark case for what is often initially an unpopular measure. In Graz the number of accidents leading to serious injuries has dropped by 24 percent, despite an increase in the number of residents and traffic volume.

Source: Reasons to be cheerful


Vermont becomes the first state to make major oil companies pay for climate damages

This small state in the northeastern United States, known for its natural landscapes, has just enacted an unprecedented law. It aims to hold large oil companies accountable for the climate damages caused by their highly greenhouse gas-emitting activities. "Companies like ExxonMobil knew, they lied, and now it's time to make them pay," said Jamie Henn, spokesperson for the Make Polluters Pay campaign.

Under this new legislation, the state treasurer will be required to publish a report by January 2026 on the total estimated cost for residents of climate change from 1995 to 2024, taking into account its impacts on health, natural resources, agriculture, economic development, and housing. These costs will then be attributed to the largest oil companies that emitted over one billion tons of CO2 during that period and have a connection to Vermont. The exact amounts are not yet known, but it should be millions of dollars.

However, fossil fuel industries are likely to challenge the law in court. The American Petroleum Institute, which represents US gas and oil industry players, sent a letter to lawmakers in March urging them not to adopt this law, stating that it "constitutes poor public policy and could be unconstitutional." The lobby highlights disproportionate fines and excessive retroactivity. It also points out that the law targets only certain companies and not the entire chain, "while ignoring the usefulness of these energy sources in supporting the economy."

Maryland, Massachusetts, New York, and California have also introduced similar bills this year, but none have successfully been adopted yet. In the European Union, to address high energy prices, an exceptional tax on energy companies' windfall profits was implemented in 2022.

Sources: Novethic, The Guardian

Sustainable Finance

The majority of European businesses see an opportunity in the CSRD

The CSRD (Corporate Sustainability Reporting Directive), which focuses on sustainability reporting, has been often portrayed as a constraint, particularly by some business organizations. Collecting too much data, complex procedures to synthesize it, and an excessive administrative burden were some concerns raised. However, a survey conducted by PwC among European businesses challenges this notion. The survey, which involved 547 executives from European companies subject to the CSRD, reveals that most of them are confident in their ability to fulfill this new obligation. In fact, most of them see the CSRD as an opportunity to improve their internal processes.

Among the executives whose companies are required to publish a sustainability report by 2025, 57% view the CSRD as a lever to enhance their environmental performance. "The directive not only represents a significant new reporting obligation but also an opportunity for executives to gain a deeper understanding of how sustainability challenges current economic models and creates growth and reinvention opportunities," summarizes the report.

Sources: Novethic, PWC


India economic inequality to persist despite roaring GDP growth

The Indian economy is likely to remain the fastest-growing major one in coming years, but most of independent economists and policy experts polled by Reuters are not confident it will make any difference in narrowing stark economic inequality. Despite over 8% economic growth last fiscal year and a roaring stock market in Mumbai that is easily one of the world's most expensive, New Delhi still distributes free food grains to more than 800 million of its 1.4 billion people.

"Acknowledging that it is a problem will be a good first step ... Currently, reduction of economic inequality is not a policy objective of decision-makers," said Reetika Khera, a development economist at the Indian Institute of Technology in New Delhi. India has the second-highest number of billionaires in Asia but has tens of millions who depend on the government's 100 days minimum guaranteed wage employment programme, digging wells, building roads, and filling potholes for about $4 a day.

Source: Reuters

Society and Planet

In Catan: New Energies, the goal is avoiding climate catastrophe

In the classic board game Catan, players are settlers racing to develop an uninhabited island. They compete to build settlements, roads and cities as quickly as possible in a universe where growth and building development are good and even necessary. In the latest version of the game, Catan: New Energies, climate change is a known threat. Players build towns, cities and roads; trade commodities like steel and fabric; and erect power plants. The central decision facing them is whether to forge ahead with fossil fuels and urban growth, potentially precipitating disaster, or to invest in renewables, a slower and more expensive process that prolongs the game and offers other routes to victory.

In a parallel with real life, New Energies often becomes an exercise in brinkmanship. No one wants to lower their chances of winning by not building, or by waiting to build more costly renewable energy rather than fossil fuels. But more fossil fuels, and more development of cities and towns, means all players are more likely to trigger events such as floods and air pollution. Those events make it harder to develop, which makes cheaper fossil fuels even more attractive. It’s a snowball effect that can quickly run out of control.

Playing a game can be more instructive than passive activities like listening to a lecture or seminar, says Kris De Meyer, a neuroscientist and director of the UCL Climate Action Unit. “Playing games can induce what is called experiential learning,” he says.

Sources: Bloomberg Green, CNN


Recycling to kick in as long-term solution to EU rare earths challenge

EU companies are gearing up to take advantage of the huge potential for recycling to supply critical rare earths for the bloc's green transition, but it will take time before there is enough supply of old EVs and wind turbines to process. The EU will struggle to meet ambitious goals for rare earths in new legislation designed to boost domestic output of critical minerals and reduce dependence on China.

Under the Critical Raw Materials Act that entered into force last month, the bloc has set a target that recycling should meet 25% of EU demand for critical minerals by 2030, including rare earths. Today, less than 1% of rare earths consumed in the EU are recycled.

"Today you have magnets that are leaving Europe every day because there is no possibility to recycle them here," said Frédéric Carencotte, the founder of French start-up Carester. The company is already collecting old magnets to be ready when its plant is due to go into production in 2026. It is not viable to recycle every magnet, because by 2030 the EU will have about 1.1 billion end-of-life devices containing magnets, each of which only contain about 30 grams of magnets on average, said Ryan Castilloux at consultancy Adamas Intelligence. The EU should focus on mandating the recycling of magnets from EVs and wind turbines, which will comprise the bulk of magnets coming to end-of-life in the future, he added.

Source: Reuters

Company News

Volkswagen invests $5 billion in Rivian to develop technology for next generation of electric vehicles

- Company: Volkswagen

- Sector: Automobiles

- Clover rating: 4/10

A few camouflaged Audis arrived secretly from Germany early this year at a facility of electric-vehicle maker Rivian, in California, where some 30 engineers stripped the electronics and fitted them with the U.S. startup's harnesses and modules. The mission: to see whether future EVs from Audi parent Volkswagen, could benefit from Rivian's advanced technology. Rivian and Volkswagen sought to be "super secretive," aiming "to see if the electrical topology and everything would actually work and if they could pull it off," one of the sources told Reuters.

The deal is crucial for both companies. For Rivian, known for its R1S SUVs and R1T pickups, it provides the financial lifeline it needs to survive a sharp slowdown in EV demand, build its less expensive R2 SUVs and, it hopes, turn profitable. For Volkswagen, the deal brings low-cost, high-performance EV technology that traditional automakers have struggled to master.

Sources: Reuters, ESG Today


Microsoft launches “Datacenter Community Pledge” with sustainability and community commitments

- Company: Microsoft

- Sector: Software & Services

- Clover rating: 6/10

Microsoft announced in June the establishment of its “Datacenter Community Pledge,” aimed at ensuring that the company’s growing datacenter footprint helps to address societal challenges and create benefits in local communities, including a series of environmental sustainability and community commitments.

“We rely on a vast network of local suppliers, officials, stakeholders and residents to plan, design, construct and operate each of our facilities. To those communities, we owe a commitment to be responsible neighbors and contribute positively to local economies and ecosystems while advancing digital transformation. We recognize the importance of supporting communities, and our datacenters should be a resource that addresses local needs and priorities.” said Noelle Walsh, Corporate Vice President.

Actions outlined by Microsoft to bolster its community impact include partnering with local governments, businesses, schools and nonprofits to create well-paid jobs and apprenticeship opportunities, and providing digital skills training and STEM education, investments in local sustainability, as well as using sustainable development practices and building materials, utilizing noise and light reduction measures, and collaborating with neighbors and communities throughout development and operations.

Sources: ESG Today, Microsoft


Uber, Lyft agree to minimum pay for Massachusetts drivers to settle lawsuit

- Companies: Uber Technologies Inc, Lyft Inc

- Sector: Transportation, Transportation

- Clover rating: 4/10, 5/10

Uber Technologies and Lyft in June agreed to adopt a $32.50 hourly minimum pay standard for Massachusetts drivers and pay $175 million to settle a lawsuit by the state's attorney general alleging they improperly treated drivers as independent contractors who can legally receive lower compensation than employees.

The companies also agreed to give drivers paid sick leave, accident insurance, and healthcare stipends and to stop funding or supporting a ballot initiative that would have asked voters in November to cement app-based drivers' status as contractors, Attorney General Andrea Joy Campbell said.

Studies have shown that using contractors can cost companies as much as 30% less than employees. "For years, these companies have underpaid their drivers and denied them basic benefits," Cambpell said in a statement. "Today's agreement holds Uber and Lyft accountable."

Sources :  The New York Times, Reuters


Canada’s 2023 wildfires created four times more emissions than planes did last year

Catastrophic Canadian warming-fueled wildfires last year pumped more heat-trapping carbon dioxide into the air than India did by burning fossil fuels. Scientists at the World Resources Institute and the University of Maryland calculated how devastating the impacts of the months-long fires in Canada in 2023 that sullied the air around large parts of the globe. They figured it put 3.28bn tons of heat-trapping carbon dioxide into the air, according to a study update published in Global Change Biology. The fire spewed nearly four times the carbon emissions as airplanes do in a year, study authors said.

“The loss of that much forest is a very big deal, and very worrisome,” said Syracuse University geography and environment professor Jacob Bendix, who wasn’t part of the study. “Although the forest will eventually grow back and sequester carbon in doing so, that is a process that will take decades at a minimum, so that there is a quite substantial lag between addition of atmospheric carbon due to wildfire and the eventual removal of at least some of it by the regrowing forest. So, over the course of those decades, the net impact of the fires is a contribution to climate warming.”

Sources: The Guardian, The Washington Post

Sustainability Newsletter 55