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Sustainability Newsletter #57

 Published on 23/08/2024

#Key Figure : 98%

South Korea recycles 98% of its food waste

South Korea recycles 98% of its food waste, transforming it into compost, animal feed, and biogas. This impressive system involves mandatory separation of food waste by residents, supported by fees and fines, and a network of facilities like the Daejeon Bioenergy Center, which powers about 20,000 households daily.

Such rigorous food waste policies were driven by the need to reduce landfill use and combat methane emissions. While countries like the U.S. struggle with low food waste recycling rates, South Korea’s system highlights the benefits of nationwide food-waste management, though it's challenging to replicate due to differences in population density and infrastructure.

Despite the success in recycling, South Korea faces challenges, such as ensuring the quality of recycled feed and fertilizer and adapting biogas production to seasonal demand.

Sources: The Washington Post, Illuminem

 

Trends and Initiatives

Viennese winemakers are using an ancient method to make climate-resilient wine

Wine grapes are extremely sensitive to weather, and the climate crisis is threatening winemaking on multiple fronts, from the survival of the plants to the changing taste of the wine. Mild winters followed by late frost can destroy a vineyard before it ever has the chance to bear fruit, and the rainy period that once helped nourish the growing plants in the first part of the year has moved to late summer and autumn, when the grapes are almost ripe and susceptible to rot. The rise in temperatures also impacts sugar and alcohol content, and grapes are now harvested two to three weeks earlier than they were 40 years ago.

The practice of strategically interplanting multiple grape varieties was long considered an insurance strategy, mentioned by Columella and Pliny the Elder back in Roman times. With different grape varieties reacting differently to cold, heat, rainfall and drought, at least some would survive a season regardless of what nature had in store. “It was a risk minimization strategy that developed from experience,” says Johannes Friedberger, a winemaker and lecturer at the College and Institute for Viticulture and Pomology Klosterneuburg. This started changing in 2006, when Christ and five other leading Viennese winemakers founded the group WienWein with the hope of resurrecting it. The first big win came in 2013, when Gemischter Satz was awarded a protected designation of origin in Austria, defined as a white wine made from at least three grape varieties — though winemakers like Christ recommend using seven or more — that are grown, harvested and fermented together. This once-ubiquitous and now unique growing method also earned it the EU Protected Designation of Origin in April 2024.

A handful of winemakers still make traditional field blends in Alsace in France, the Douro Valley in Portugal, California and Australia, but the Viennese Gemischter Satz is rightly known as the mother of them all. Since 2006 the area devoted to this type of cultivation in Vienna has increased from 30 to 200 hectares, and sales have skyrocketed from 40,000 to 1.1 million bottles, with one-fifth exported to over 40 countries worldwide. For these winemakers, bottling field blends is not only a nod to tradition, but also a way to future-proof their business in an increasingly unstable environment.

Source: Reasons to be cheerful

 

US backs global target to reduce plastic production

The United States, one of the world's biggest plastic makers, will support a global treaty calling for a reduction in how much new plastic is produced each year in a major policy shift, a source close to U.S. negotiators told Reuters in August. The change away from its earlier calls to leave such decisions up to each country puts the U.S. in direct opposition to countries like Saudi Arabia and China.

The policy shift also puts the U.S. in closer alignment with a group of so-called high ambition countries that includes EU member states, South Korea, Canada, Rwanda and Peru and has called for a global plastics treaty to cap and phase down the production of plastic. The group has also targeted a list of chemicals of environmental concern used in plastic production that should be eliminated.

The debate over whether a UN treaty should seek to limit the amount of plastic being made drove the last round of negotiations in Ottawa in April to overtime, with major plastic and petrochemical producers like Saudi Arabia and China blocking further negotiations around production caps, arguing that countries should focus on less contentious topics, such as plastic waste management.

Source: Reuters

 

Sustainable Finance

Capital at risk: nature through an investment lens

Blackrock Investment Institute has recently published its analysis on the natural capital links with valuation.

The economy depends on natural resources. Their value derives not only from their use as direct inputs to production – such as timber for construction – but also for their benefits to society like living trees that help clean the air. Economists use the term “natural capital” to refer to the total value that natural resources provide to the economy and to people. Only a portion of natural capital’s value to the economy is priced into markets today. But we expect asset prices will adjust to better reflect both the risks and opportunities linked to natural capital – a trend we are already starting to see.

The primary driver of asset repricing is increasing physical risks: natural resources are increasingly strained, which pushes up costs for companies that rely on them. Biodiversity loss is reducing nature’s resilience and productivity in many regions, further driving physical risks. In addition to these physical risks, the policy response to natural capital stress is growing, especially in Europe.

Fully accounting for natural capital-related risks in investment portfolios depends on overcoming challenges with data and analysis. Right now, there is limited data on how exposed companies are to natural capital risks, but new corporate disclosure standards, data collection tools and models may help in the future.

Sources: Blackrock, L'Agefi

 

Society and Planet

Climate records broken this summer

Numerous temperature and climate records were surpassed this summer. Here are some of the most striking ones.

A new marine heatwave in the Mediterranean. For several days, the water temperature reached remarkable levels, locally reaching 30°C off the coast of Corsica on August 5. According to Météo France, "a large part of the Mediterranean is experiencing water temperatures much higher than normal". This phenomenon is explained by the intense heatwave that has been hitting the entire Mediterranean basin for several weeks. In the Mediterranean, gorgonians (a species of coral) suffer heavy losses with each marine heatwave. To this, we must add the arrival of invasive tropical species, such as barracuda or lionfish.

The historic heatwave in Antarctica. In the middle of the austral winter, Antarctica is currently the world's most abnormally warm region. According to the Climate Reanalyzer site, the ambient air was 20 to 30°C warmer than the seasonal norm at the end of July, making this July one of the warmest measured at the South Pole. On average, the temperature was 10°C higher than the climatic average from 1991 to 2020. Due to polar amplification, Antarctica is warming twice as fast as the rest of the world.

In Japan, a heatwave has caused the death of at least 120 people in the last three weeks, while 37 000 individuals had to be hospitalized, according to official figures. The local press even described this heatwave as "kokusho", which literally means "brutal heat" in Japanese. And this summer has been particularly hot in Tokyo with temperatures approaching 40°C. In fact, the national average temperature reached records in July, making this month the hottest since 1898. And it is not likely to improve in August as the Japanese meteorological agency predicts a month that is still as hot with temperatures of 35°C or more.

Sources: The Guardian, Novethic

 

Escondida strike: Could a union halt production at the world's biggest copper mine?

A powerful workers union behind a strike at BHP's opens new tab huge Escondida mine, which produced nearly 5% of the world's copper in 2023, is looking to snarl production at the site as it pushes for a bigger share of profits. The union, which launched a strike in August, has paralyzed the world's largest copper mine before and driven up global copper prices. The union has about 2,400 members, about 61% of Escondida's workforce. It has strong financial reserves to take care of workers during a strike. And lastly, Chilean legislation doesn't let the company replace striking workers.

A three-year deal has been reached including changes in labour conditions such as "initiatives to optimize shift changes, increase equipment utilization and compliance with the 40-hour law," BHP said in a statement. BHP's statement didn't provide any further details on the deal with the union. But earlier in the week, sources at the company and the union told Reuters that BHP offered workers around $32,000 as a bonus and an additional $2,000 in soft loans.

Sources: Reuters, Novethic, Reuters

 

Company News

Thousands demand halt to Rio Tinto's lithium project in Serbia

-          Company: Rio Tinto

-          Sector: Mining & Materials

-          Clover rating: 4/10

Tens of thousands of people gathered in central Belgrade in August demanding a halt to Rio Tinto's lithium project in Western Serbia over fears it could pollute nearby land and water.

Zlatko Kokanovic, a protest leader and farmer from the Jadar region where the mine is planned, urged protesters to block two major train stations in Belgrade. Last month, Serbia reinstated Rio's licence to develop what would be Europe's biggest lithium mine, two years after the previous government halted the process due to concerns by environmental groups. The decision triggered nationwide protests in towns across Serbia. Protesters gave the government a deadline to ban the exploration and exploitation of lithium which expired on Saturday. "We are not going to give up. The mine cannot be built on agricultural land," said Mica Miliovanovic, a 63-year old worker. "This does not have anything to do with politics."

If implemented, the $2.4 billion Jadar lithium project could cover 90% of Europe's current lithium needs and make Rio Tinto one of the world's leading lithium producers.

Sources: Euronews, RFI, Reuters

 

TotalEnergies’ ad found ‘misleading’ over sustainability claim

-          Company: TotalEnergies

-          Sector: Energies

-          Clover rating: 4/10

A South African advertising regulator found TotalEnergies SE made a “misleading” claim over its commitment to sustainable development, marking the first time a challenge of this kind has been made in the country.

Fossil Free SA argued TotalEnergies is “lying to the public” about the nature of its business in a complaint filed with the Advertising Regulatory Board. The environmental group cited a promotion involving South African National Parks in which the French oil major states it’s “committed to sustainable development and environmental protection,” according to a copy of the document.

While many of Total’s projects are aimed at sustainable development, there is “no doubt that the core business of the advertiser is directly opposed to the issue,” as the “ongoing exploitation of fossil fuel is contra-indicated in this context,” the ARB said.

Sources: Bloomberg Green, Financial Post

 

Lilly's weight-loss drug cuts diabetes risk in overweight patients

-          Company: Eli Lilly and Company

-          Sector: Pharma & Biotechnology

-          Clover rating: 5/10

Eli Lilly's, opens new tab weight-loss drug, Zepbound, drastically cut the risk of developing type 2 diabetes in overweight or obese pre-diabetic adults after three years of weekly injections. In a trial involving 1,032 adults, patients who were on weekly injections showed a 94% reduction in the risk of progression to type 2 diabetes, compared with placebo, Lilly reported in August.

The Indiana-based company said the data comes from the longest completed trial of the drug, and reinforces the long-term benefits of tirzepatide - the chemical name of its Zepbound and Mounjaro treatments. Both Eli Lilly and rival Novo Nordisk have been pushing to extend the use of their obesity drugs to related conditions, which would help expand the patient pool and gain wider insurance coverage.

Sources: Reuters, Yahoo Finance

 

Studies

Holding 1.5C warming limit hinges on governments more than technology

The ability of governments to implement climate policies effectively is the “most important” factor in the feasibility of limiting global warming to 1.5C, a new study says.  The future warming pathways used by the Intergovernmental Panel on Climate Change (IPCC) suggest that holding warming to 1.5C is unlikely, but still possible, when considering the technological feasibility and project-level economic costs of reaching net-zero emissions.

However, the new study, published in Nature Climate Change, warns that adding in political and institutional constraints on mitigation make limiting warming to 1.5C even more challenging. They find that the most ambitious climate mitigation trajectories give the world a 50% chance of limiting peak global warming to below 1.6C above pre-industrial temperatures. However, adding ”feasibility constraints” – particularly those involving the effectiveness of governments – reduces this likelihood to 5-45%.

The study shows that, thanks to advances such as solar, wind or electric vehicles, “the technological feasibility of climate-neutrality is no longer the most crucial issue”. Instead, he says, “it is much more about how fast climate policy ambition can be ramped up by governments”.

Sources: Carbon Brief, Nature Climate Change

 

Sustainability Newsletter 57