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December 1, 2023

In Brief: Loss and damage fund pledges announced at COP28; Greenpeace sued again over protest

The latest ESG policy and regulatory news

COP28: Agreement on a loss and damage fund to help vulnerable countries cope with the impacts of climate change has been reached on the first day of COP28 in Dubai, with both the United Arab Emirates and Germany pledging $100mn each in contributions. Other countries such as the UK, the US and Japan are also set to make contributions. Following disagreements among nations on how it should be run, the fund will initially be hosted by the World Bank.

COP28: Oil and gas companies, which together account for more than half of all global energy supply, should commit to tackling emissions from their own operations and drastically change their capital allocation, according to “The oil and gas industry in net zero transitions” report by the International Energy Agency released ahead of COP28. The industry would need to allocate 50 per cent of capital expenditure towards clean energy projects by 2030, which is in stark contrast with the present 2.5 per cent, the report says. They also “must abandon the notion that they can continue with business as usual simply by ramping up the deployment of carbon capture technologies”, the agency warned.

COP28: The Financial Times reports that the United Arab Emirates will launch a $30bn climate-related fund alongside BlackRock, TPG and Brookfield, with a new Abu Dhabi-based asset manager, Lunate Capital, overseeing investments. People involved in discussions told the FT that at least $5bn are planned to go towards Global South countries.

Greenpeace is being sued by a Canadian company active in the exploration of deep-sea mining in a Dutch court. According to a press release issued by the non-profit, The Metals Company subsidiary Nauru Ocean Resources has filed an injunction to stop an ongoing protest by Greenpeace near a company vessel that is conducting exploration activities in a designated area in the Pacific Ocean. The company, which is sponsored by the Pacific Island nation of Nauru, is expected to apply for an exploitation licence of the seabed in the near future despite a current lack of regulatory framework. Earlier this month, Greenpeace announced it was being sued by Shell for its protests on the company’s onshore and offshore infrastructure.

Belgium-based activist group Klimaatzaak has won an appeal in court which will force the Belgian government, its Flemish regional government and the local Brussels administration to cut together emissions by 55 per cent by 2030, compared to 1990 levels. The court agreed that the governments were in breach of articles 2 and 8 of the European Convention on Human Rights and failed in a duty of care under Belgian law with their lack of emissions reductions.

Airlines British Airways and Virgin Atlantic are facing formal complaints under a mechanism of the Organisation for Economic Co-operation and Development for their claims about emissions reductions. Climate charity Possible has filed the complaints with the UK’s National Contact Point of the OECD, which sits under the Department for Business and Trade. This week, Virgin operated a test flight from London to New York saying it ran entirely on sustainable aviation fuel. The charity disputes the airlines’ claims about the emissions cuts that can be achieved through SAFs and considers these claims misleading.

The UK Financial Conduct Authority has published its final version of sustainability disclosure requirements, which will include an anti-greenwashing rule, product labels and naming rules. You can read an overview of the new rules here.

The UK government has released legislation on its new biodiversity net gain framework, which will set out rules for project developers to deliver a minimum 10 per cent biodiversity net gain in their developments.

The International Advisory Panel on Biodiversity Credits, set up by the UK and France, has published a “call for views” consisting of 40 questions to assist the panel in establishing a framework. The deadline for responses is January 12.

The Church of England Pensions Board has published its first climate action plan, following its decision to divest all of its oil and gas holdings earlier this year. The action plan focuses on engaging with companies that are significant users of fossil fuels, such as the automotive sector, utilities, steel and mining.

The European Council and parliament have reached a provisional deal on reducing emissions from agro-industrial sectors. Meanwhile, the EU Nature Restoration Law has been approved by the parliament’s environment committee after months of heated debate. You can find a detailed overview of these announcements here.

The council and parliament also agreed on a new directive for common rules across the bloc on renewable and natural gas, as well as hydrogen. The directive has the double aim of decarbonising the gas sector and ensuring stable energy supplies.

The council has given the go-ahead for the creation of the European Single Access Point, which will provide access to financial and non-financial information about EU companies (large and small) and EU investment products to investors. It also gave its final approval to recommendations to promote social inclusion and job accessibility of disadvantaged groups across the bloc’s social economy, after having reached a political agreement on the framework in October.

The European Commission has put together a list of 166 cross-border infrastructure projects that could be selected for faster permitting and EU financial support for their contribution to the bloc’s Green Deal. The proposal aims to end support for fossil fuel infrastructure and will be subject to approval by the EU parliament and council. The institutions have two months to either accept or reject the list in full, but cannot make changes.

In similar news, the commission has also announced an action plan to increase investment in the bloc’s electricity grids. This includes faster permitting, regulatory incentives, improving the resilience of supply chains and better network tariffs.

The EU and Canada have created a Green Alliance to enforce co-operation on climate action, ocean protection, energy transition, biodiversity finance and green industrial transformation. The announcement states that the alliance will work on the global phase-out of unabated fossil fuels, including ending the construction of new coal-fired power plants. The EU has also signed up to Canadian Prime Minister Justin Trudeau’s Global Carbon Pricing Challenge, which aims to establish carbon pricing mechanisms that cover 60 per cent of global emissions by 2030.

The marine ecosystems of the Baltic Sea, the Adriatic Sea and the North Sea are particularly vulnerable to the impacts of climate change, according to a new study by the European Environment Agency. Lower oxygen levels, acidification and overall warming of global waters are seen as a “deadly trio” for marine life, the analysis warns.

The European Central Bank has published a paper analysing the net zero commitments of the largest banks globally. Despite recognising progress, the report warns that “problematic disclosure practices” may impact banks’ reputation and litigation risk. The study encourages the use of transition plans to mitigate some of these risks.

The Partnership for Carbon Accounting Financials has published standards on how its signatory banks, which include HSBC, Citi and BNP Paribas among others, should account for the greenhouse gas emissions linked to their underwriting of bonds and equities, known as “facilitated emissions“. Reclaim Finance executive director Lucie Pinson criticised the methodology as “it measures only part of the true emissions impact of their capital markets activities. It counts the emissions from companies receiving new capital for only one year, whereas the infusion of money may be financing fossil fuel projects that lead to decades of future emissions”.

A group of financial institutions has launched the Impact Disclosure Taskforce with the aim to advance the UN Sustainable Development Goals among companies and countries, in an attempt to overcome investment gaps, especially in emerging and developing markets. The task force will provide guidance to assist with target-setting so that entities can better detail their contributions towards the SDGs most relevant to them. Monitoring and reporting of progress against targets will also be included in the guidance.

Australia is pursuing a “broad and deep climate change policy agenda”, but this has not yet generated the emissions reductions needed to achieve a government target of cutting emissions by 43 per cent by 2030 (compared with 2005 levels), according to the country’s climate change authority, which advises the government on climate matters. Some of Australia’s recent climate announcements include the expansion of the country’s energy grid by approximately 50 per cent by 2030, as well as a consultation on a “renewable diesel fuel quality standard”, which closes on February 2 2024.

A service from the Financial Times