Discover more from ESG on a Sunday
Week 17: A look on the bright side!
In this issue: ▸ Demand for EVs rises to record levels ▸ Miracle fuel hydrogen ▸ Coal demand drop in Europe ▸ Human rights rules ▸ And much more...
Ok, I get it. Solutions. Positive. See the opportunities. People need hope and something good to hook onto. After all, not everything is pitch dark. Yes, we can. I recall that slogan from the glory days. Yes, indeed we can.
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At least we can create a reality out of tiny streams of light in the darkness. Global CO2 emissions are increasing, oceans are overheated, glaciers are melting, inequality is skyrocketing, 300 people own more than 55% on this planet, 1% of the population on this planet emits 90% of all CO2 emissions, there is a war raging in Europe. Our entire economic system, aka capitalism, is unsustainable, yet we still go to that church every day. But let’s see all of this from a positive side, it is not all so dark.
Worldwide demand for battery-powered vehicles rises to record levels
Almost one in five cars sold worldwide this year will be an electric vehicle, the International Energy Agency has forecast, as sales passed the 10 million mark globally in 2022.
The remarkable surge in demand for battery-powered models means electric vehicles will account for 18 per cent of global car sales compared with just 4 per cent of global car sales in 2020, according to the agency’s annual outlook.
This year sales are projected to rise to 14 million vehicles, including both battery-only models and hybrids that plug in to charge. “They are no longer marginal or niche at all,” said Timur Gül, head of energy technology policy at the IEA.
China accounted for almost two-thirds of all electric car sales in 2022, mainly because of a subsidy programme. Europe and the US, which both also offer incentives, are the second and third-largest markets for the cars.
Decarbonising car sales is one of the pillars of reducing global greenhouse gas emissions. The EU aims to phase out almost all combustion engine-driven car sales by 2035, and the US wants half of sales to be electric by the end of this decade.
Tightening rules have prompted every major carmaker to invest heavily in zero-emission vehicles, whether electric cars or hydrogen-powered models.
Manufacturers such as Ford, Stellantis, General Motors and Mercedes-Benz are among those that have set out multibillion-dollar plans to sell only zero-emission vehicles within the coming two decades.
At the same time, new entrants such as Tesla and Chinese players including BYD are increasing competition in the electric segments, are pushing prices lower and potentially driving demand further.
Well, we never tried this thing with another type of transport system, instead of having one person (most of the time) in the metal box, collective solutions, and tax incentives to share a car. But apparently EVs are far better than fossil fuel-driven boxes. So, we stick with that. We will build out our infrastructure for battery chargers all over and it will all be fine. Ok, I get it, there will be “some” residual impacts, but you can’t make an omelette without breaking a few eggs.
Miracle fuel hydrogen?
EVs are a solution of the past. Hydrogen is the next big thing and with hydrogen we will get it all sorted. Although…
If it escapes into the air, this green fuel can contribute to global warming — which is why scientists say we need to limit leaks.
A world desperate for a climate-friendly fuel is pinning its hopes on hydrogen, seeing it to power factories, buildings, ships, and planes without pumping carbon dioxide into the sky.
But now scientists are warning that hydrogen leaked into the atmosphere can contribute to climate change much like carbon. Depending on how it’s made, distributed, and used, it could even make warming worse over the next few decades, even if carbon poses the bigger long-term threat. Any future hydrogen-based economy, they say, must be designed from the start to keep leaks of the gas to a minimum, or it risks adding to the very problem it’s supposed to solve. Some ideas now being tested, like shipping hydrogen in pipelines built to hold natural gas or burning it in individual homes, could cause an unacceptable level of leaks.
Hydrogen doesn’t trap heat directly, the way CO₂ does. Instead, when leaked it sets off a series of chemical reactions that warm the air, acting as an indirect greenhouse gas. And though it cycles out of the atmosphere far faster than carbon dioxide, which lingers for centuries, it can do more damage than CO₂ in the short term. Over 20 years, it has 33 times the global warming potential of an equal amount of carbon dioxide, according to a recent UK government report. Over hundreds of years, carbon is more dangerous, due to its longevity.
No need to worry and it is not all bad. We’ll go with the flow. Instead of changing the system, we will fine-tune some of the bad consequences it creates. Humanity 101.
Coal demand dropped in Europe over winter despite energy crisis
We stay on a positive note. The EU burned less coal this winter during the energy crisis than in previous years, according to an analysis, quashing fears that consumption of the most polluting fossil fuel would soar as countries scrambled to find substitutes for lost supplies of Russian gas.
The study from energy think-tank Ember shows that between October 2022 and March 2023 coal generation fell 27 terawatt hours, or almost 11 per cent year on year, while gas generation fell 38 terawatt hours, as consumers cut electricity consumption in response to soaring prices.
Renewable energy supplies also rose, with combined wind, solar and hydroelectric output outstripping fossil fuel generation for the first time, providing 40 per cent of all electricity supplies. The Financial Times checked Ember’s findings with the International Energy Agency, which said they broadly matched its own preliminary analysis of Europe’s electricity generation over the winter.
The study demonstrates that fears of a steep rebound in coal usage in Europe’s power mix were overstated, despite the continent’s worst energy crisis in 40 years following Russia’s full-scale invasion of Ukraine.
Ember cautioned, however, that Europe had been assisted by a mild winter that helped cut electricity demand for heating and there was no guarantee of such weather next winter. Companies and households had also endured a lot of pain because of the higher prices that had led them to cut consumption.
Total electricity consumption between October and March declined 94 terawatt hours, or 7 per cent, compared with the same period in winter 2021/22.
The air of positivity has taken a grip now, lights are brighter, air is cleaner, and when you read this, you will understand why.
Human rights rules could give bankers a run for their money
Banks, insurers, and asset managers could face fines of up to 5 per cent of global revenues for financing or underwriting companies accused of human rights and environmental violations.
It has been a decade since the Rana Plaza garment factory collapsed in Bangladesh, killing more than 1,000 people who had been making clothes for fashion brands such as Primark and Benetton.
To prevent this kind of disaster from happening again, regulators have been working on an overhaul of due diligence obligations.
Banks and financial institutions will also have to publish transition plans in line with the goal of reaching net zero emissions by 2050. And, for those with at least 1,000 employees, director pay will have to be linked in some way to the quality of these transition plans.
How has this happened? Draft rules approved by the EU parliament’s legal committee yesterday would force large companies that do business in the bloc to identify and prevent environmental and human rights risks in their supply chain for the first time.
The most controversial change? The requirements would also be slapped onto the financial sector — and directors’ bonuses could be on the line. This comes despite strong opposition from some EU ministers and finance sector lobby groups.
EU looks to exclude banks and funds from sustainability rules
EU ministers have backed a carve-out for banks and investment funds from a landmark regulation designed to force companies to report on environmental and human rights abuses in their supply chains.
The exemption, pushed by France and approved by ministers on Thursday, has prompted harsh criticism from campaigners who said the move will allow large banks and fund managers to continue financing fossil fuel or mining projects without properly scrutinising the environmental damage or social issues they might cause.
If the move is approved following negotiations with the European parliament next year, it would mark a significant weakening of the EU’s efforts to hold companies to account on their sustainability goals and improve the credibility of Brussels’ wider environmental and social governance agenda.
“Money is a coward,” Canadian mining billionaire Robert Friedland said this week. “It runs away at the first sign of trouble.” I tend to agree with him on this one.
The bright lights now. Real change, real impact.
A small Japanese town sets new precedent for women in politics
In Ebetsu and a handful of other municipalities, women are finding success in races long dominated by men. A handful of small cities in Japan have managed to do what the rest of the country hasn’t: Elect women.
Among the country’s city councils and assemblies, men held more than 80% of the total seats as of 2021. But in Ebetsu, a small city in northern Hokkaido, more than 40% of the city council members are women; voters in Takarazuka, a suburb outside of Osaka, awarded 14 of 26 seats to women; Nisshin City, about 17 kilometers from Toyota Motor Corp. headquarters, now has a local assembly with an even split.
These areas are a bright spot for a government that in 2018 passed a bill advocating for parties to put an effort into fielding an equal number of male and female candidates.
Overall, progress has been slow— women hold just 15% of seats in parliament. At the local level, women make up just 14% of elected officials, according to data from UN Women.
“Local government is a practice ground for democracy,” said Emiri Yamagishi, an associate professor at Ohtsuki City College who specializes in local politics. “Getting more women involved in politics means that the issues they face are reflected in decision-making bodies. At the end of the day, that’s better not just for women but for everybody.”
An evening light, soft, bit shady, nevertheless a light
John Kerry: relying solely on CO2-removal technology is ‘dangerous.’ US climate envoy says existing measures, such as the shift to renewable energy, must be deployed faster to stop global warming.
Relying too heavily on technology to remove carbon dioxide from the atmosphere is dangerous and a cause for alarm, John Kerry has warned.
The US special presidential envoy for climate said in an interview that new technologies may not prevent the world from passing “tipping points," key temperature thresholds that, once passed, could trigger a cascade of unstoppable physical effects.
“Some scientists suggest that it’s possible there could be an overshoot [of global temperatures, beyond the limit of 1.5C above pre-industrial levels that governments are targeting] and you could clawback, so to speak — you have technologies and other things that allow you to come back,” Kerry told the Guardian.
“The danger with that, which alarms me the most and motivates me the most, is that according to the science, and the best scientists in the world, we may be at or past several tipping points that they have been warning us about for some time,” he said. “That’s the danger, the irreversibility.”
He called on governments to deploy renewable energy faster, along with related technologies such as electric vehicles. These are already available for widespread deployment and could prevent the world from reaching the high levels of carbon dioxide in the atmosphere that would cause temperatures to breach the 1.5C threshold.
“Part of the challenge we face right now is countries that have technologies available to them are not necessarily deploying them at the rate that they should be,” he said. “Fatih Birol [executive director of the International Energy Agency] has made it very clear for some time that all you need to meet the 2030 goal of 45% reduction [in greenhouse gas emissions] globally is to deploy renewables in the current state of technology, and that’s not happening.”
“There’s a resistance right now that I see from several quarters to doing what we know we need to do,” Kerry said. “I think there are things that are really quite simple that we could be doing, but it requires political will, it requires resources, allocation and a determination to get the job done.”
After all, it is what it is and what we make of it. Good and bad, light and dark, it is always about us. We are the reality that we need to change.
Have a great ‘light’ week.
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