According to the Primordial soup theory, life originated in the ocean. Now, rising marine temperatures threaten mortal peril to oceanic species, and complications to life on land as well. 

Ocean temperatures reached record peaks in 2022, breaking the previous record set a year earlier, <a href="https://link.springer.com/article/10.1007/s00376-023-2385-2" target="_blank">a team of researchers reported</a> last week. Indeed, since 2018, scientists have observed record heat levels in the ocean, with each year eclipsing the last.

Since scientists began to document ocean temperatures in the 1950s, their research has revealed a steady rise in ocean heat levels. In fact, <a href="https://www.ipcc.ch/srocc/chapter/summary-for-policymakers/" target="_blank">in a 2019 special report</a>, researchers with the United Nations Intergovernmental Panel on Climate Change (IPCC) wrote: "It is virtually certain that the global ocean has warmed unabated since 1970 and has taken up more than 90 percent of the excess heat in the climate system (high confidence)."

<h2>Rising marine temperatures are linked to human activity</h2>

Further, scientists believe that humans are directly fueling the "unabated" rise in ocean temperatures.

The IPCC <a href="https://www.ipcc.ch/2021/08/09/ar6-wg1-20210809-pr/" target="_blank">followed up on its report in 2021</a>, outlining how the ocean warming processes it had previously detailed are increasing in frequency and severity. In its 2021 report, the panel declared: "Changes to the ocean, including warming, more frequent marine heatwaves, ocean acidification, and reduced oxygen levels have been clearly linked to human influence."

<h2>Effects on marine life</h2>

It's easy for humans to say, "if you can’t take the heat, get out of the ocean," but that doesn’t do much for the abundance of aquatic life reeling from endless marine heatwaves.

Coral reefs are perhaps the best publicized victims of oceanic heatwaves. A <a href="https://www.cell.com/one-earth/fulltext/S2590-3322(21)00474-7" target="_blank">2021 study published in the One Earth journa</a>l found that the world has effectively lost half of its coral reef ecosystems since 1950. As the coral reefs decline, so do all the life forms reliant on the coral reef ecosystem. One Earth researchers found that "at least 63 percent of coral-reef-associated biodiversity has declined with loss of coral extent."

It is important to note that not all species will be negatively affected by a rise in oceanic temperatures alone. But the effects that rising marine temperatures have on ecosystems will ultimately create negative conditions even for those species that can adjust or even thrive with more heat.

For instance, while whale species are able to adjust physically to rising temperatures, <a href="https://www.fisheries.noaa.gov/national/climate/whales-and-climate-change-big-risks-oceans-biggest-species" target="_blank">the warming waters are detrimental</a> to whale food sources like zooplankton. So, the change in distribution of these preferred food sources poses a significant threat, and means that whales must hunt more frequently, deeper and for longer periods of time. Meanwhile, warmer waters have altered the <a href="https://phys.org/news/2018-06-oceans-affect-sharks-brains.html" target="_blank">development of shark brains</a>.

These changes have profound implications for every living thing in the sea. It is no wonder that the IPCC described the effects of rising marine temperatures as observable "from the equator to the poles."

<h2>A ripple effect: How rising marine temperatures affect life on land </h2>

Oceanic life will continue to face the brunt of the consequences of rising marine temperatures, but the heating of the oceans also threatens humanity.

Regions that rely on fish (such as <a href="https://www.cnn.com/2020/07/02/weather/fish-vulnerable-ocean-warming-climate-change-scn/index.html" target="_blank">Atlantic cod, salmon, brown trout, and Alaskan pollock</a>) for food and commerce will be especially impacted. And that’s just the tip of the (melting) iceberg.

Just as the water in a tea kettle expands as it heats up, so too does the water in the ocean as it grows warmer. As ocean waters expand, sea levels consequently rise — destroying homes, businesses, and coastal, tourism-based economies.

"Coastal areas will see continued sea-level rise throughout the 21st century, contributing to more frequent and severe coastal flooding in low-lying areas and coastal erosion," IPCC researchers warned in the 2021 report. "Extreme sea-level events that previously occurred once in 100 years could happen every year by the end of this century."

Some <a href="https://www.theguardian.com/environment/2021/feb/09/climate-crisis-pushing-great-white-sharks-into-new-waters" target="_blank">scientists theorize</a> that warmer waters are sending shark species further north in search of colder waters, and that this in turn is leading to more encounters between sharks and humans. In 2021, the <a href="https://www.fisheries.noaa.gov/feature-story/effects-climate-change-sharks" target="_blank">National Oceanic and Atmospheric Administration</a> found that sharks are swimming beyond their typical ranges, following fish populations as they shift northward in search of cooler waters.

Every life form on the planet will be significantly affected in one way or another by this steady rise in heat.

To preserve the various creatures living in the waters that once stirred the ingredients for life itself, humanity must acknowledge its role in climate change and work to mitigate negative effects on the bounty of species in our oceans.

Image credit: <a href="https://unsplash.com/photos/jH7EBc1GvCg" target="_blank">Sven Piek</a>/Unsplash

Humans Fueling Steady Rise in Ocean Heat Levels, Creating Adversity for Aquatic Species

Over 90 percent of business leaders are prioritizing long-term decarbonization — and 89 percent believe carbon markets will play a key role, according to a recent <a href="https://www.conservation.org/press-releases/2023/01/12/businesses-are-setting-strong-climate-targets-and-decarbonizing-and-say-carbon-credits-are-key-for-taking-climate-action" target="_blank">survey</a> of 500 sustainability managers conducted by Conservation International and the We Mean Business Coalition. 

A third of the business leaders surveyed are already investing in a voluntary carbon market, while over half are considering carbon credits as an option for the future.

<h2>Carbon markets come under criticism...</h2>

Carbon markets allow carbon-emitting companies and individuals to offset their greenhouse gas emissions through the purchase of carbon credits. These credits are meant to be tied to certified emissions reductions from projects designed to reduce, or in some cases remove, greenhouse gases from the atmosphere. Credits are often from renewable energy projects, such as wind and solar installations, and nature-based solutions like reforestation and land restoration.

Carbon markets and credits have come under intense scrutiny in recent years due to lack of oversight and regulation. Companies and governments have been accused of greenwashing, as certain entities created fraudulent carbon credit programs that accepted payment, but never implemented carbon reduction projects. Other critics maintain that the carbon market allows companies to continue emitting greenhouse gases instead of finding methods to avoid emissions in the first place. 

A <a href="https://www.theguardian.com/environment/2023/jan/18/revealed-forest-carbon-offsets-biggest-provider-worthless-verra-aoe" target="_blank">recent investigation</a> from the Guardian, Die Zeit and SourceMaterial found that more than 90 percent of rainforest carbon offset credits from a leading provider are likely to be “phantom credits” that do not represent actual greenhouse gas reductions, adding more fuel to the skepticism.

<h2>... But business leaders seem to still believe </h2>

Net-zero targets represent <a href="https://zerotracker.net/" target="_blank">more than 90 percent of global GDP</a>, and the vast majority of business leaders believe that carbon credits are a critical piece in the global decarbonization puzzle.

Over 80 percent of the business leaders surveyed by Conservation International and We Mean Business say they would like to accelerate their decarbonization plans beyond credits or offsets. They claimed to face barriers such as budgetary constraints, technological limitations, lack of collaboration, concerns about greenwashing, lack of transparency and regulation in the carbon market, and the quality of carbon credits available, which held them back.

To overcome some of the roadblocks and confusion around carbon credits, businesses are increasingly relying on carbon credit ratings agencies such as the Integrity Council for the Voluntary Carbon Market and the Voluntary Carbon Market Initiative. Carbon ratings agencies help ensure the integrity of the carbon market through robust oversight, as well as stewarding a consistent taxonomy for businesses making carbon reduction claims.

"Without a transparent, high-integrity voluntary carbon market that functions at scale, we won't stay within 1.5 degrees [Celsius]," Annette Nazareth, chair of the Integrity Council for the Voluntary Carbon Market, said in a statement. "Companies' priority must be to decarbonize their own value chains. High-integrity carbon credits allow them to go further, accelerating climate mitigation beyond their value chain by providing finance to critical climate mitigation activities that do not otherwise meet the risk and return expectations of investors. We need to find a way to make it easy for investors to recognize and price a high-integrity carbon credit no matter which program issued it, what kind of credit it is, whether it is based on a removal or reduction, a nature-based solution, or an emerging technology."

Tackling challenges in the carbon market is urgent to the activation of climate finance. Another recent <a href="https://www.wemeanbusinesscoalition.org/wp-content/uploads/2022/12/Why-Corporate-Investments-in-Nature-are-Urgently-Needed.pdf" target="_blank">report</a> from the We Mean Business Coalition found that if the world's top 1,700 emitting companies purchased carbon credits for just 10 percent of their emissions, more than $1 trillion would be activated for climate finance by 2030.

"Climate change is the greatest test of collective action in human history, and a crisis of that scale demands an all-hands-on-deck, all-of-the- above strategy," Dr. M. Sanjayan, CEO of Conservation International, added in a statement. "Carbon credits are [a] proven tool for immediately reducing emissions, while also pursuing longer-term decarbonization ambitions. And though it isn't always reflected in the headlines, this study affirms that private-sector buyers are indeed gravitating toward high-quality credits, placing a premium on transparency and accountability."

The challenges to decarbonization are myriad, and the carbon marketplace is not yet ideal. However, many business leaders still feel a functional, scalable carbon credit system could accelerate the reduction of carbon emissions, perhaps just in time. 

Image credit: <a href="https://unsplash.com/photos/YtqUWAlL2GE" target="_blank">aiokr chen</a>/Unsplash

Carbon Markets Are Far From Perfect, But Businesses Say They’re Essential

For decades, environmental scientists <a href="https://www.nytimes.com/2015/06/01/us/the-unrealized-horrors-of-population-explosion.html" target="_blank">raised alarms</a> about overpopulation, its compounding effects on the climate and the <a href="https://www.bbc.com/future/article/20220905-is-the-world-overpopulated" target="_blank">inevitable limit</a> to the planet’s carrying capacity. And while the agricultural Green Revolution and lower birth rates put off mass starvation and allowed us to look away from the bigger problem of overconsumption in the Global North, now it seems <a href="https://www.cnn.com/2022/08/30/health/elon-musk-population-collapse-wellness/index.html" target="_blank">the shoe is on the other foot</a> with fears of population decline <a href="https://www.euronews.com/2023/01/17/the-countries-where-population-is-declining" target="_blank">making the news instead</a>. Nowhere is this about-face more obvious <a href="https://www.cnn.com/2023/01/18/china/china-population-drop-explainer-intl-hnk/index.html" target="_blank">than in China</a>, where concern over fewer births has come less than a decade after the country ended its one-child policy.

At best, the accompanying doom and gloom over labor shortages and supply chains appears foolhardy when taken into the context of <a href="https://theconversation.com/the-robot-revolution-is-here-how-its-changing-jobs-and-businesses-in-canada-155267" target="_blank">the robot revolution</a> currently unfolding in just about every industry. At worst, these fears around population decline reflect a lack of vision beyond skyrocketing profits built on an ever-expanding base of consumers and cheap workers. But the convergence of a declining population with artificial intelligence (AI) capable of relieving the burden of labor actually presents a unique opportunity in human history — one in which everyone is free to pursue meaningful work with purpose.

It’s difficult to imagine such a scenario when the narrative of creating jobs has dominated politics and economics for as long as any of us can remember. Just as self-serve gas, ATMs and self-checkouts have rallied cries of lost jobs, the trend continues with robotization. So it’s no surprise that an AI-powered McDonald’s being tested in Texas has been accused of threatening “<a href="https://www.newsweek.com/first-ever-mcdonalds-served-robots-texas-1769116" target="_blank">millions of jobs</a>."

That may have been a reasonable concern when there were more workers than there were jobs, but it is baffling when taken into the context of a shrinking labor force. There are <a href="https://www.businessinsider.com/mcdonalds-subway-chipotle-add-tech-robots-ai-to-speed-up-orders-2022-12" target="_blank">400,000 fewer workers</a> in the restaurant industry now than there were before the pandemic. Between the stress, low pay, unpredictable hours and poor treatment, restaurant jobs — and fast-food jobs in particular — could arguably be considered <a href="https://www.usnews.com/news/best-states/florida/articles/2022-03-05/thousands-of-people-leaving-restaurant-industry" target="_blank">some of the worst out there</a>. With the U.S. population screeching towards <a href="https://www.theatlantic.com/newsletters/archive/2022/03/american-population-growth-rate-slow/629392/" target="_blank">zero growth</a>, the labor shortage in the industry is also unlikely to abate. So, why not automate?

Of course, the labor shortage isn’t limited to fast food or even restaurants in general. Other areas of hospitality and retail are suffering too, as are healthcare, education and transportation — with too heavy of a burden placed on too few staff. The resulting burnout has led to an exodus of workers, with not enough new ones available to take their place. Paige Ouimet, a professor of finance at the University of North Carolina, <a href="https://www.washingtonpost.com/business/2022/09/16/worker-shortage-strikes-economy/" target="_blank">told the Washington Post</a>: “When you look at the jobs that are having trouble hiring, it’s the ones with really long hours, inflexible schedules, not great pay and limited benefits.”

In other words, the jobs that can’t be filled are not great jobs to begin with. But by automating within these industries, some of the burden of labor can be relieved from the workers who are left, thus improving their job satisfaction.

By shifting our perspective away from creating jobs and focusing instead on how to get the work done most efficiently via AI in light of population decline, humankind can create an enormous opportunity for itself. But such an opportunity won’t just happen. It requires strategic planning to ensure the most miserable forms of labor are automated first — namely, those jobs that are often erroneously referred to as “unskilled” labor — along with the implementation of a <a href="https://www.washingtonpost.com/magazine/2022/10/24/universal-basic-income/" target="_blank">universal basic income (UBI)</a> and access to free job training, apprenticeship programs and education.

Naturally, such a scenario would be a nightmare for some of the loudest alarmists over population decline. It will be pretty difficult to round up enough <a href="https://reason.com/2022/01/19/elon-musk-artificial-wombs-and-the-impending-shortage-of-mars-colonists/" target="_blank">colonists for Mars</a> unless enough people are miserable enough to want to leave Earth after all.

The population doesn’t need to keep expanding in order to avoid collapse — we can do more with fewer people by harnessing the power of technology. In truth, automation will happen regardless. The choice is between embracing and planning for it so that we can create a world where all people can pursue work that gives them purpose, or falling into it at the mercy of whatever the market forces decide, potentially leading to mass unemployment and squandering our opportunity to change the nature of work for the masses of people not born into privilege.

Image credit: <a href="https://unsplash.com/photos/0E_vhMVqL9g" target="_blank">Andy Kelly</a> and <a href="https://unsplash.com/photos/zwd435-ewb4" target="_blank">Andrea De Santis</a> via Unsplash

The Robot Revolution Will Negate Population Decline, Let’s Make the Most of It

Investors, insurers, and financial institutions in the EU have a new method for assessing the sustainability of their investments. Last week, the <a href="https://www.greenwashed.net" target="_blank">Observatory Against Greenwashing</a> launched its independent Science-Based Taxonomy, <a href="https://www.transportenvironment.org/discover/1-in-3-activities-labeled-green-in-eu-taxonomy-are-bad-for-the-planet-new-alternative-taxonomy-shows/" target="_blank">in direct response</a> to the EU Taxonomy system that some say is ineffective. 

The EU Taxonomy is a <a href="https://www.spglobal.com/esg/insights/a-short-guide-to-the-eu-s-taxonomy-regulation" target="_blank">classification system</a> that claims to give investors, businesses, and financial institutions a common language for identifying the degree to which a specific investment, financial product, or economic activity can be considered sustainable.

However, critics have said the draft guidance is not sufficiently science-based and certain aspects, such as classifying gas-fired power, tree-burning, logging and nuclear energy as sustainable, could do more harm than good.

To create a more sustainable system for classifying investments, a coalition of experts and NGOs including WWF, BirdLife International, and Transport and Environment, formed the Observatory Against Greenwashing (OAG). The group aims to improve on the EU Taxonomy and provide investors with better, science-based guidance on the sustainability of their investments. 

<h2>What is the independent Science-Based Taxonomy?</h2>

The independent Science-Based Taxonomy is based on the EU Taxonomy, but it only keeps the portions of the text that researchers found to be environmentally sound. It also makes more robust criteria for the parts of the EU Taxonomy that the OAG deemed unscientific or harmful to the environment.

“The EU Taxonomy was originally designed to eliminate greenwashing but instead has become another tool to deceive consumers," Vedran Kordić, EU Taxonomy coordinator from WWF Adria, said in a statement. "The science-based Taxonomy wants to succeed where the original Taxonomy failed: It will create rigorous criteria which financial institutions can use to properly assess what is green and what is not.” According to the OAG, 1 in 3 activities deemed sustainable in the EU Taxonomy actually cause planetary harm. 

The EU Taxonomy was established in 2018 with a mission to inject capital into projects that would help the EU meet objectives laid out in its <a href="https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en" target="_blank">Green New Deal</a>, including carbon neutrality by 2050. But critics argue the EU Taxonomy is disingenuous and fundamentally flawed due to the inclusion of natural gas and nuclear energy sources on its list of sustainable investment options.

“This isn’t good enough. We need a better taxonomy, one based on science," said Luca Bonaccorsi, sustainable finance director at Transport and Environment, a coalition of European NGOs working on transportation issues, in a statement. "Now the investor community has it.”

<h2>ESG regulations are expanding in the EU and beyond</h2>

While controversy continues to surround ESG regulation for financial products in the EU Taxonomy, the EU Commission is calling for an <a href="https://www.reuters.com/business/sustainable-business/eu-plans-law-forcing-companies-prove-green-claims-are-real-draft-2023-01-13/" target="_blank">increase in regulation</a> of other consumer goods and services in an attempt to respond to claims of bogus greenwashing. The EU has drafted a legal proposal that would require companies to provide scientific evidence to justify sustainability claims such as “carbon neutral” or “contains recycled materials." The draft rule also calls on EU countries to develop systems for evaluating the environmental claims of companies, including issuing penalties for businesses that do not comply. 

The expansion of ESG (environmental, social and governance) regulation is not limited to Europe. In the United States, the Inflation Reduction Act is expected to <a href="https://www.triplepundit.com/story/2023/doe-loan-programs-office-tesla/764691" target="_blank">channel over $400 billion</a> into clean tech companies over the next 10 years. Additionally, the U.S. Securities and Exchange Commission is <a href="https://news.bloomberglaw.com/environment-and-energy/bidens-latest-rules-agenda-focuses-on-climate-change-workers" target="_blank">expected to finally issue</a> its climate disclosure regulations in April, several months later than planned. The new SEC rules, if issued, would require companies to make disclosures surrounding their climate-related risks, as well as their greenhouse gas emissions and those of their supply chains. 

Image credit: <a href="https://unsplash.com/photos/ppN1zRQrCEg" target="_blank">Alexander Tsang</a>/Unsplash

New Taxonomy Released to Combat Greenwashing in Investments

When red-state policymakers began to target ESG (environment, social and governance) investing for attack, it was only a matter of time before someone got hurt. As it happens, that someone is the local taxpayer. A new anti-ESG state law in Texas has already induced one city to miss out on the most competitive bid for its municipal bond sale. As for cities in blue states, growth in the market for municipal green bonds could help ensure economic health and resiliency in the era of climate change.

<h2>Somebody’s gonna get hurt: Small city loses $277,334 on bond sale</h2>

An early sign of trouble appeared last September when <a href="https://www.bloomberg.com/news/articles/2022-09-16/citigroup-snubbed-on-muni-bond-deal-costing-texas-city-277-334" target="_blank">Bloomberg reported</a> that the city of Anna, Texas (<a href="https://www.texas-demographics.com/anna-demographics" target="_blank">population 16,792</a>) declined to pick the best bid for its bond sale. The bidder, Citigroup, apparently ran afoul of a new state law, SB 19. That law passed in 2021 with the goal of protecting gun industry stakeholders from being passed over by financial firms with ESG policies.

Citigroup is one such firm. In 2018, the company set a relatively mild "best practices" policy on gun sales for its retail clients. The new policy required background checks and a 21-year age threshold, and it limited the sale of extra-lethal equipment such as bump stocks and high-capacity magazines.

“It is not centered on an ideological mission to rid the world of firearms,” Ed Skyler, Citigroup's EVP of global public affairs, <a href="http://blog.citigroup.com/2018/03/announcing-our-us-commercial-firearms-policy/" target="_blank">said of the policy back in 2018</a>. “But we want to do our part as a company to prevent firearms from getting into the wrong hands.”

Skyler also noted that Citigroup's policy applied to retail clients only, not to the company's relationships with gun manufacturers, which he described as “few.” Even so, that was enough to set off alarm bells under SB 19. 

As described by Bloomberg, city officials in Anna rejected Citibank’s bid after discussing the matter with the state Attorney General. They dropped the opportunity to get the best deal, reportedly costing local taxpayers $277,334.

That’s just the tip of the iceberg. Earlier this month, a <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4123366" target="_blank">Wharton analysis</a> concluded that SB 19 and a similar bill, SB 13, will cost Texas municipal bond issuers <a href="https://www.triplepundit.com/story/2023/anti-woke-legislation/764301" target="_blank">$300 million to $500 million in additional interest</a> over the first eight months after enactment.

A follow-up analysis commissioned by Ceres and the investor group As You Sow also indicated that <a href="https://econsultsolutions.com/wp-content/uploads/2023/01/Sunrise-ESG-boycott-Impact_FINAL.pdf" target="_blank">similar losses are in store for cities</a> as a group of state policymakers consider similar laws. That group includes lawmakers in Florida, Kentucky, Louisiana, Missouri, Oklahoma and West Virginia.

<h2>Picking winners and losers in the market for municipal green bonds </h2>

The prospect of a negative bottom-line outcome for city residents will probably not make red-state policymakers change their minds and stop the <a href="https://www.triplepundit.com/story/2022/anti-esg-office-holders/761261" target="_blank">crusade against ESG investing</a>. After all, <a href="https://www.cnn.com/2021/06/08/politics/red-states-blue-cities-counties/index.html" target="_blank">punishing city dwellers</a> to make a point is par for the course among red-state policymakers.

In contrast, blue-state taxpayers can look forward to a competitive environment for their municipal bond sales, including municipal green bonds.

Earlier this month, an organization of international investors called the <a href="https://www.unpri.org/about-us/about-the-pri" target="_blank">Principles for Responsible Investment (PRI)</a> released a report in support of the U.S. municipal market titled, “The thematic ESG approach in U.S. municipal bonds.”

“As the largest liquid sub-sovereign debt market in the world, the U.S. muni bond market merits consideration by ESG-minded fixed income investors,” PRI emphasized.

PRI is tasked with promoting the six ESG principles outlined by the <a href="https://www.unglobalcompact.org/take-action/action/responsible-investment" target="_blank">United Nations Global Compact</a> in 2006. More than 1,500 investment firms have signed onto the principles, with assets under management totaling an eye-popping $62 trillion.

In the report, PRI noted that municipal bonds are “well-positioned for investors pursuing a thematic ESG approach.” While cautioning that investors still need to exercise due diligence, the report's authors noted that thematic or “labelled” municipal bonds can “help investors assess and report on the environmental and social outcomes of their investments.”

PRI analyst Jasper Cox elaborated: “U.S. municipal bonds are useful for fixed income investors seeking to contribute to sustainability outcomes, since issuers of these bonds are crucial for the wellbeing of most Americans and also the transition to a low carbon economy.”

Based on data culled from PRI’s ESG reporting platform, the organization observed that momentum is growing for “thematic ESG investing in U.S. muni bonds due to increasing investor interest in environmental and social themes.”

Among other factors, the report also took note of “growing opportunities to fund climate-related projects.”

Indeed, some PRI signatories are using muni bonds to align investment objectives with the U.N. Sustainable Development Goals or, alternatively, exclude bonds linked to revenue from certain sectors, such as tobacco.

<h2>Yes, interest in municipal green bonds is growing</h2>

Earlier this month, Goldman Sachs provided another indication that the outlook for municipal green bonds in the U.S. is a healthy one — at least for blue-state cities.

“The global bond market will be an important source of investment to drive the climate transition, and green bonds finance projects with positive environmental impact,” the firm’s lead portfolio manager for green, social and impact bonds, Bram Bos, wrote <a href="https://www.gsam.com/content/gsam/us/en/institutions/market-insights/gsam-insights/perspectives/2022/green-bonds-fixed-income-capital.html" target="_blank">in a company blog post</a>.

Bos explained that the market for municipal green bonds is expanding as the twin forces of investor interest and government policymaking come to bear. Though much of the activity has been centered in Europe, Goldman Sachs expects the pace to pick up in the U.S. and elsewhere in the coming years, Bos reported.

That outlook was affirmed back in 2021 by Fidelity, which issued a white paper noting that municipal green bonds were a <a href="https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/fixed-income/Green-Bond-White-Paper.pdf" target="_blank">small but growing segment of the market</a>.

“Provided that the bonds meet the investor’s current investment objectives and that the investor understands the associated risks, Green Bonds may present a unique investment opportunity,” Fidelity stated.

<h2>ESG is here to stay</h2>

<a href="https://www.cnn.com/2023/01/23/investing/premarket-stocks-trading/index.html" target="_blank">CNN ran the numbers</a> earlier this week and reported that “sustainable investing generated returns similar to the market” last year. That’s an interesting contrast with the New York Times, which ran a string of articles critical of ESG investing last year.

Among other data indicating strength in the ESG area, CNN cited the <a href="https://indexes.morningstar.com/our-indexes/details/morningstar-us-sustainability-FS0000CPHT?currency=USD&amp;variant=TR&amp;tab=overview" target="_blank">Morningstar U.S. Sustainability Index</a>, which fell 18.9 percent in 2022. That may look bad at first, but in the context of an overall market downturn, the Index actually did better than the S&amp;P 500 — which fell 19.4 percent.

Against this backdrop, the <a href="https://www.triplepundit.com/story/2022/anti-esg-office-holders/761261" target="_blank">anti-ESG, “anti-woke” movement</a> is simply another Republican exercise in performative politics, aimed at mollifying their supporters in the fossil energy and weapons industries while feeding the emotions of their angry base, regardless of the consequences for everyone else.

It's little wonder that the Republican Party underperformed expectations in the 2022 midterm elections by a wide margin. The world is passing them by, and that includes ESG investors and the voters who benefit from fact-based financial decision-making in the era of climate change.

Image credit: <a href="https://unsplash.com/photos/zLbx38fVZ7c" target="_blank">Perry Merrity II/</a>Unsplash

Municipal Green Bonds: The Next ESG Battleground

We've all heard about the <a href="https://www.triplepundit.com/story/2022/keep-paris-agreement-alive/758361" target="_blank">global push to cap temperature rise</a> at 1.5 degrees Celsius above pre-industrial levels, which scientists agree is critical to avoid the worst impacts of climate change. But this goal alone is not enough to safeguard humanity from the harmful consequences of a warming climate, diminishing biodiversity and increasingly degraded ecosystems. To ensure those most vulnerable do not take the brunt of these impacts, climate plans must also include environmental justice targets, according to seminal research on the topic. 

The Earth Commission, an international team of natural and social scientists and five working groups of additional experts, was formed in 2019 in an effort to create "the first holistic attempt to scientifically define and quantify a safe and just corridor for people and planet," according to the organization. 

Last week at the World Economic Forum annual meeting in Davos, the Commission announced the upcoming launch of its first piece of research, which it describes as the first quantitative, science-based attempt to factor justice into the way we understand the environment and act to protect it. 

The research, which will be published in the coming months, defines what the Commission calls “safe and just Earth System Boundaries." Researchers liken these boundaries to the 1.5-degree cap for climate, but for a much broader set of environmental factors that underpin the stability of societies, economies and human well-being. 

“By centering justice at its heart, this new science represents a quantum leap in our ability to understand Earth’s capacity to sustain life, and the role we humans play as guardians of our only home and each other," Johan Rockström and Joyeeta Gupta, two of the three co-chairs of the Commission and lead authors of the research, <a href="https://earthcommission.org/news/earth-commission-news/pioneering-science-reveals-set-of-earth-system-boundaries-that-can-secure-a-safe-and-just-planet-for-all/" target="_blank">wrote in a blog last week</a>. 

<h2>The world is on a collision course with 1.5 degrees Celsius </h2>

To say we as a global community have our work cut out for us is an understatement. Even as researchers with the Earth Commission challenge countries, localities and companies to think more broadly with their environmental plans, we're already falling short of the primary target we all agreed upon: the push to cap temperature rise at 1.5 degrees Celsius under the globally ratified <a href="https://www.triplepundit.com/story/2016/paris-agreement-what-it-means-business/26486" target="_blank">Paris Agreement</a> on climate change.   

According to some estimates, a strong El Niño pattern could push the world past the 1.5-degree threshold <a href="https://www.newscientist.com/article/2354672-strong-el-nino-could-make-2024-the-first-year-we-pass-1-5c-of-warming/" target="_blank">as soon as next year</a>. Researchers warn the results could be catastrophic. 

"If the world breaches 1.5C, we are likely to trigger at least five tipping points, including the irreversible melting of the Greenland ice sheet and loss of the world’s tropical coral reef systems," Rockström and Gupta wrote in their blog. "This will be devastating for future generations. It will literally change the world, and yet every month we use 1 percent of the remaining carbon budget for 1.5C."

<h2>Environmental justice targets are needed — not only for the most vulnerable, but for everyone </h2>

From deadly <a href="https://news.un.org/en/story/2022/09/1127051" target="_blank">flooding in Pakistan</a> to <a href="https://www.unicef.org/stories/climate-drought-horn-of-africa" target="_blank">devastating droughts across the Horn of Africa</a>, it's clear the impacts of climate change are not felt equally.

U.N. research found that <a href="https://www.voanews.com/a/un-says-most-deaths-from-natural-disasters-occur-in-poor-countries/3548871.html" target="_blank">90 percent of deaths from natural disasters</a> over a 20-year period from 1996 to 2015 occurred in low- and middle-income countries. Further, people in lower-income countries are <a href="https://www.oecd.org/env/cc/2502872.pdf" target="_blank">more likely to depend on nature</a> for their livelihoods, leaving them more vulnerable as ecosystems degrade. 

Even in developed countries, <a href="https://www.cstsonline.org/assets/media/documents/CSTS_FS_Disasters_and_Poverty_Natural_Disasters_Disproportionally_Affect_the_Worlds_low_income.pdf" target="_blank">lower-income people are most affected</a> by disasters and natural resource depletion: As a reminder, the mostly Black city of Jackson, Mississippi, still does not have access to reliable clean water, with poorer neighborhoods <a href="https://www.theguardian.com/us-news/2023/jan/07/jackson-mississippi-water-outage-neighbors-helping" target="_blank">facing the worst of the ongoing crisis</a>.

It's factors like these that drove the formation of the Earth Commission and the push from researchers in favor of environmental justice targets. “Planetary stability is not possible without a justice approach,” Gupta, a professor of environment and development at the University of Amsterdam, <a href="https://www.theguardian.com/environment/2023/jan/18/environmental-justice-targets-needed-to-cut-global-inequality-say-researchers" target="_blank">told the Guardian</a>. 

The so-called Earth System Boundaries defined in the research seek to maintain a stable environment while setting minimum levels of access to resources like food, water and energy that ensure a "dignified life" for all.  

"The initial papers are expected to launch a debate about the fairest as well as the safest way to use the planet’s remaining space for development," observed Jonathan Watts, global environment editor of the Guardian. "Or in the cases where boundaries have already been crossed, to minimize impacts."

The researchers underscore that establishing environmental justice targets is not a form of charity from rich to poor. Rather, environmental justice targets are critical to protect people all over the world — and future generations. 

"This breakthrough science, which moves beyond climate, can be operationalized by everyone," Rockström and Gupta wrote. "If we do nothing, or the bare minimum at this pivotal moment, we and our children — even if they are wealthy — will live in a danger zone." 

Image credit: <a href="https://unsplash.com/photos/wtk4VH8EU20" target="_blank">Annie Spratt</a>/Unsplash

Scientists Take a Stand for Environmental Justice Targets 

23 New Plant-Based Foods Coming to Market in 2023

A key decarbonization asset in the U.S. gathered rust during the Donald Trump administration, and after two years of hard work, it is finally fit for duty again. That is the Department of Energy's Loan Programs Office, the small but highly influential <a href="https://www.energy.gov/lpo/loan-programs-office" target="_blank">government financial resource</a> that counts an early loan to Tesla Motors among its success stories.

<h2>The facts behind the Loan Programs Office</h2>

The Loan Programs Office was established by the federal Energy Policy Act of 2005 during the administration of former President George W. Bush. It was tasked with providing loans and loan guarantees to innovative companies in the areas of fuel efficiency and clean energy.

The goal was to help bridge the gap between new, commercial-ready technology and the mass market. Its best-known success story is Tesla Motors, a company that seemed destined to languish in the luxury niche market when it first launched in 2006. Tesla only produced a total of 2,500 units of its first vehicle, the two-seat Roadster sports car, which it introduced in 2008 with a price tag that easily topped $100,000.

The picture was quite a bit different after 2010, when Tesla received a $456 million loan from the Loan Programs Office. By 2012, the company stopped production of the Roadster and was ready to produce the now-familiar Model S.

“Tesla's first vehicle, the Lotus-inspired Roadster, was first produced in 2008. This limited production model only sold 2,500 units. At that time, Tesla was a sleepy EV company – and it wasn't until 2012 with the Model S that the company was a household name. In the first year of production, Tesla sold 3,000 Model S units,” U.S. News and World Report noted last November in a <a href="http://cars.usnews.com/cars-trucks/features/how-many-cars-has-tesla-sold" target="_blank">recap of the company’s sales to date</a>.

That particular article failed to mention the $456 million loan that launched the Model S, but it did note that Tesla jumped production up to 22,477 in 2014, and went on to produce millions. 

Despite the <a href="https://www.triplepundit.com/story/2022/crisis-management-electric-vehicle/736987" target="_blank">reputational chaos</a> surrounding Tesla <a href="https://www.triplepundit.com/story/2022/boycotts-advertisers-twitter/760176" target="_blank">CEO Elon Musk</a> in <a href="https://www.triplepundit.com/story/2020/electric-vehicles-brand-reputation-not-sure-thing/120316" target="_blank">recent years</a>, the company’s success is widely credited with setting the stage for other startups and legacy automakers to produce electric vehicles for the mass market, along with a growing ecosystem of battery innovators, charging station manufacturers and related stakeholders.

Although the Loan Programs Office focuses on startups, it also provides loans to legacy firms that are innovating in new areas. One notable success story in that area is Ford Motor Co. Ford refused federal Recovery Act funding after the economy crashed in 2008, but it did take a $5.6 billion loan from the Loan Programs Office for factory upgrades in 2009.

Ford went on to <a href="https://www.triplepundit.com/story/2018/ford-brushes-doubts-about-electric-vehicles-11-billion-pledge/13661" target="_blank">ramp up its electrification plans</a> in 2015 and 2018, and it was the first mass market automaker to carve a path <a href="https://www.triplepundit.com/story/2022/ford-ev-battery-pickup/736526" target="_blank">from electric sedans to light-duty trucks</a> when it introduced the all-electric Lightening F-150 in 2021 to widespread acclaim. 

<h2>What happened to the Loan Programs Office?</h2>

The Loan Programs Office was launched under a Republican president, which should have sheltered it from partisan attacks. The financial success of the program creates more foundation for bipartisan support: Overall, interest on loans has more than offset losses from other recipients that went bankrupt.

In 2019, the Bipartisan Policy Center noted that “<a href="https://bipartisanpolicy.org/blog/financing-novel-energy-technologies-how-the-loan-programs-office-advances-american-competitiveness/" target="_blank">LPO projects have transformed</a> American energy infrastructure and accelerated growth in clean energy and electric vehicle markets,” creating or saving thousands of jobs, with projects generating a total investment of more than $50 billion. 

“Further, LPO projects have prevented 34.7 million metric tons of carbon dioxide emissions and saved 1.7 billion gallons of gasoline and counting,” they added. 

That gasoline-cutting achievement explains why the office became a target for fossil energy stakeholders and their allies in Congress after President Barack Obama took office in 2009. 

The Republican party took control of the House of Representatives in the 2010 midterm elections, and promptly tried to withdraw funding from the program. They also ginned up public opinion against the program by flogging the bankruptcy of the <a href="https://www.triplepundit.com/story/2011/us-chinese-trade-war-solar-panels-killed-solyndra/70551" target="_blank">solar panel manufacturer</a> Solyndra in public hearings.

To the surprise of no one, the Loan Programs Office was practically mothballed after Obama left office in 2016. Upon entering the White House, former President Trump repeatedly announced his intention to defund the program. The sole exception was a multibillion-dollar bailout for the <a href="https://www.triplepundit.com/story/2017/trump-admin-pours-12-billion-dying-nuclear-energy-project-georgia/15091" target="_blank">Vogtle nuclear power plant</a>, which continues to suffer from <a href="https://www.utilitydive.com/news/vogtle-nuclear-vibrations-cooling-georgia-power-southern-company/640391/" target="_blank">delays and cost overruns</a>.

<h2>$350 billion more for clean energy projects</h2>

Someone in the Loan Programs Office was looking forward to a new administration, though. In December of 2020, just a few weeks after Trump lost his re-election bid, the Loan Programs Office publicized new guidance on loan applications, with a <a href="https://www.energy.gov/articles/doe-issues-notice-guidance-potential-loan-applicants-involving-critical-minerals" target="_blank">focus on critical materials</a> needed for electric vehicles, solar cells, wind turbines and other clean tech.

In March of 2021, shortly after President Joe Biden took office, the office issued a solicitation for companies to proposed projects for achieving Biden’s goal of 30 gigawatts in <a href="https://www.triplepundit.com/story/2021/government-office-tesla/720441" target="_blank">new offshore wind capacity</a>.

Restoring trust in the office has been slow going, though. Last week, Bloomberg noted that the office has <a href="https://www.bloomberg.com/news/articles/2023-01-17/billions-in-green-energy-funds-aim-to-scale-up-cleantech-solutions" target="_blank">received more than 100 applications</a> over the past two years but has made only four conditional loans or loan guarantees.

The head of the office, Jigar Shah, is seeking to raise awareness about the power of the program to vault innovators into the mass market. He has gotten a big assist from the Democratic members of Congress who voted for the 2022 Inflation Reduction Act, which passed into law with the support of exactly zero members of the Republican party.

As described by Bloomberg, the Inflation Reduction Act added another $350 billion to the office’s previous loan authority of $44 billion, for a total of $394 billon. In terms of success stories, that’s the equivalent of scores more Teslas, Fords and other innovators funneling new decarbonization technology into the U.S. economy.

Of particular note is a provision in the Inflation Reduction Act that removes a cap on the total amount of loans for auto manufacturing, under an existing division of the office called the Advanced Technology Vehicles Manufacturing Loan Program.

Aside from benefitting car makers, <a href="https://www.energy.gov/lpo/inflation-reduction-act-2022" target="_blank">removal of the cap</a> sets the wheels in motion for a previously unfunded provision in the <a href="https://www.whitehouse.gov/bipartisan-infrastructure-law/" target="_blank">Bipartisan Infrastructure Law</a> to take effect. That provision expanded the Vehicles Manufacturing Loan Program to include medium- and heavy-duty vehicles, locomotives, maritime vessels including offshore wind vessels, aviation and hyperloop.

The Inflation Reduction Act also added funding for an entirely new program in the Loan Programs Office. The newly formed Energy Infrastructure Reinvestment Program aims to help “retool, repower, repurpose, or replace energy infrastructure that has ceased operations or to improve the efficiency of infrastructure that is currently operating.”

Some examples of qualifying projects could include <a href="https://www.triplepundit.com/story/2022/coal-west-virginia-solar-power/741456" target="_blank">converting fossil energy sites </a>to clean technology, <a href="https://cleantechnica.com/2019/08/19/old-wind-farm-has-a-secret-weapon-up-its-turbine-towers/" target="_blank">retrofitting older wind farms</a> with more efficient turbines, and replacing conventional solar arrays with <a href="https://www.triplepundit.com/story/2023/five-signs-agrivoltaics-revolution/763716" target="_blank">agrivoltaic systems</a>.

The Loan Programs Office is poised for a rush of new business under the Biden administration. As for what happens after Election Day 2024, that’s partly up to those in the business community who lend financial support to candidates for office.

The run-up to the 2024 presidential election cycle is already looming into view. The choice of which candidates to support should be clear to every business that seeks to court the <a href="https://www.triplepundit.com/story/2023/anti-woke-legislation/764301" target="_blank">up-and-coming generation of consumers</a>, clients and voters.

Image credit: Tesla (press use only)

U.S. Energy Dept. Revives the Loan Programs Office, a Tesla-Scale Decarbonization Tool

The climate crisis is changing how some Americans think about their own futures, <a href="https://www.veolianorthamerica.com/barometer-ecological-transformation" target="_blank">according to a new survey</a> — with 1 out of 4 worried they may have to give up long-term goals like starting a family. It’s no wonder then that half of U.S. respondents said they're willing to abide by the vast majority of changes needed to restore our planet. Yet billionaires like Bill Gates have been shamelessly using their platforms to blame the state of the climate <a href="https://www.triplepundit.com/story/2022/bill-gates-degrowth/757006" target="_blank">on the masses</a>.

Gates reasserted his belief that it will be up to technology to save us from ourselves on his annual <a href="https://www.reddit.com/r/IAmA/comments/109eze3/im_bill_gates_and_im_back_for_my_11th_ama_ask_me/" target="_blank">Ask Me Anything</a> Reddit thread this month, hinting at his earlier statements that regular people just aren’t willing to abandon their extravagant lifestyles in order to limit rising global temperatures.

While the <a href="https://www.forbes.com/forbes-400/" target="_blank">third richest man in America</a> is clearly out of touch with the rest of us, he continues to tell on himself by emphasizing products that consumers can buy instead of encouraging everyone to scale down. Gates’ response to one Redditor’s question — “What’s the biggest way an individual can contribute to the climate solution?” — failed to address any tangible lifestyle choices that people can make to significantly lower their carbon footprints. Even worse, the solution he offered would actually lead to increased emissions and environmental destruction if everyone took his advice. 

“You are a voter, a consumer, a giver and a worker. In every one of those roles you can help,” Gates wrote on Reddit, without offering any significant options for doing so beyond “buying an electric car helps” and “there will be options to pay a bit extra to offset your travel emissions coming soon."

But buying an electric vehicle (EV) prematurely — when the ICE (internal combustion engine) vehicle in the driveway is still running just fine — <a href="https://www.triplepundit.com/story/2022/evs-fewer-cars/760736" target="_blank">does not lead to a net reduction</a> in carbon emissions. Truly, if it were even possible for every American to ditch their ICE vehicle for an EV right now, meeting that demand would create a dramatic rise in global emissions and cause substantial environmental damage from mineral extraction.

Such flip suggestions miss the entire point of transitioning to cleaner energy and transportation, seemingly demonstrating Gates’ interest in keeping mass consumption rolling. He continued by mentioning that he already pays to offset his family’s travel — once again giving away the same “let them eat cake” mentality he has previously exhibited in regards to overshooting the targeted cap on global temperature rise at 1.5 degrees Celsius.

In fact, as we learned last year, Gates <a href="https://www.cnbc.com/2022/09/29/bill-gates-youll-never-solve-climate-change-with-degrowth.html" target="_blank">spends $9 million annually</a> on carbon offsets to make up for his own lifestyle — an astronomical amount that begs two questions. Just how lavishly does he live? And does he do anything at all to limit his own carbon footprint? (It’s hard to imagine to what extent he does, considering <a href="https://www.therichest.com/rich-powerful/an-aerial-arsenal-inside-bill-gates-aircraft-collection/" target="_blank">the sheer number of private jets he owns</a>.) The billionaire was clearly speaking about himself when he <a href="https://podcasts.apple.com/us/podcast/a-big-climate-bill-for-a-new-era-of-climate/id1621556928?i=1000580986614" target="_blank">told Bloomberg’s “Zero” podcast</a> that the people of Earth would be unwilling to give up their lifestyles to lessen the effects of the climate crisis.

Of course, as the recent survey — conducted by researchers from Elabe on behalf of the private resource management firm Veolia — demonstrated, he’s wrong. Half of U.S. respondents across age groups, genders and geographies said they're willing to make sacrifices to fight climate change — and 55 percent recognize that <a href="https://thehill.com/changing-america/sustainability/climate-change/3816741-one-in-four-americans-considering-putting-off-major-life-decisions-out-of-fear-of-climate-change-survey/" target="_blank">technological advances will not be enough</a>. We have to change how we live, a concept that Gates and his peers choose not to comprehend.

Likewise, concerns from the financial elite about slowing population growth feel rather ironic when faced with the quarter of Americans surveyed who fear they may have to forego major life events like having children because the planet is on its way to becoming unlivable. What’s more, 52 percent of U.S. respondents want to see more conversations about climate change and its solutions, agreeing that it’s difficult to imagine “ecological transformation” without them. But that’s not surprising with billionaires like Bill dominating the dialogue. 

Image credit: <a href="https://unsplash.com/photos/jXPQY1em3Ew" target="_blank">Mika Baumeister</a>/Unsplash

Survey Shows Americans Are Willing to Change Their Lifestyles for the Climate. Bill Gates Disagrees.

Under the guise of protecting state pension funds from something called “woke capitalism,” a number of states have recently imposed sanctions on financial institutions that invest in clean energy. However, their actions already appear to be ineffectual. West Virginia is a case in point. If all goes according to plan, the state’s new venture with the iron-air battery startup Form Energy will help accelerate the pace of clean energy investment across the U.S., woke or no woke.

<h2>West Virginia vs. woke capitalism</h2>

<a href="https://www.triplepundit.com/story/2023/anti-woke-legislation/764301" target="_blank">The “anti-woke” argument</a> has slipped into the national conversation with the help of high-profile governors like Greg Abbott of Texas and Ron DeSantis of Florida, who seek to disparage renewable energy as part of their crusade against <a href="https://www.triplepundit.com/story/2022/texas-blackrock-fossil-energy/754656" target="_blank">ESG (environment, social, governance) investing</a>.

West Virginia has cut a lower profile on the national scene, but it’s not for lack of trying. <a href="https://www.theintelligencer.net/news/top-headlines/2021/11/west-virginia-treasurer-puts-banks-on-notice-for-woke-capitalism/" target="_blank">West Virginia State Treasurer Riley Moore</a> made sure that his home state was in the mix when financial officials in 16 states released an open letter in 2021, warning banks against boycotting fossil energy industries.

The goal of the 16-state coalition, as described by Moore, is to “protect our states’ economies, jobs, and energy independence from these unwarranted attacks on our critical industries.”

<h2>West Virginia didn't get its own memo</h2>

Despite the forcefulness of the letter, Moore apparently forgot to include Gov. Jim Justice and the West Virginia Development Authority in the plan to thwart renewable energy investment.

In December, Gov. Justice announced that the West Virginia Economic Development Authority has <a href="https://governor.wv.gov/News/press-releases/2022/Pages/Gov.-Justice-announces-Form-Energy-will-site-first-American-battery-manufacturing-plant-in-Weirton.aspx" target="_blank">invested $75 million</a> to acquire 55 acres of property in the industrial city of Weirton, under a partnership with Form Energy.

Form was attracted in part by the opportunity to set up shop along the Ohio River. Another attraction was the financial package offered by West Virginia.

“We structured a unique financial incentive package worth up to $290 million in asset-based, performance financing to support their decision to locate in Weirton,” Justice said. The governor also cited at least 750 new jobs and a total investment of up to $760 million in the state’s economy.

“The funds put toward this project are guaranteed, secured, and collateralized through ownership of all land and buildings by the state,” Justice emphasized, adding that his office plans to work with state and federal agencies to nail down the other $215 million in assistance needed to complete the package.

In addition to the Economic Development Authority, other backers of the plan cited by Form Energy are West Virginia Secretary Mitch Carmichael, Speaker of the House of Delegates Roger Hanshaw, Senate President Craig Blair and officials in Weirton’s home county of Hancock.

U.S. Sens. Joe Manchin and Shelley Moore Capito also put their seals of approval on the venture.
<figure role="group"><img alt="Weirton West Virginia to be home to new iron-air battery factory" data-entity-type="file" data-entity-uuid="f23c2836-2a3c-4f1b-b5d7-29cf45d9a38f" src="/sites/default/files/inline-images/Weirton%20West%20Virginia%20to%20be%20home%20to%20new%20iron-air%20battery%20factory.jpg" width="1500" height="1000" loading="lazy" /><figcaption>Three Ohio River bridges link Steubenville, Ohio, and Weirton, West Virginia, the planned home of Form Energy's new iron-air battery factory.</figcaption></figure><h2>The significance of long-duration energy storage</h2>

Form has focused its new iron-air battery on long-duration energy storage capability. The company says its technology can store electricity for 100 hours.

That is a significant break with conventional lithium-ion batteries. Though lithium-ion battery systems are commonly used for storing excess wind and solar energy, they only last for a few hours.

Overcoming the long-duration barrier means that energy storage facilities can provide electricity to the grid for days on end, just like a conventional fossil energy power plant. Long-duration energy storage is the key that will <a href="https://cleantechnica.com/2018/12/02/what-long-duration-energy-storage-is-why-it-kills-coal/" target="_blank">ramp up the pace and reach</a> of wind and solar development, squeezing fossil energy out of the power generation sector.

At the present time, hydropower is practically the only form of long-duration energy storage available on a large scale in the U.S. The introduction of new technologies will enable long-duration storage to expand into new territory, independent of hydrological and geological features that are needed for hydropower.

<h2>West Virginia to lead the long-duration energy storage revolution with iron-air battery</h2>

Form Energy plans to begin construction on its new iron-air battery factory in Weirton this year, with product delivery expected in 2024. The short timeline is made possible in part by <a href="https://formenergy.com/technology/battery-technology/" target="_blank">supply chain efficiencies</a> that derive from the iron-air platform.

“The active components of our iron-air battery system are some of the safest, cheapest, and most abundant materials on the planet — low-cost iron, water and air,” Form explains.

“Iron-air batteries are the best solution to balance the multi-day variability of renewable energy due to their extremely low cost, safety, durability and global scalability,” they add.

Form also emphasizes that costs for its 100-hour iron-air battery system are competitive with legacy power plants. 
As described by Form, the first iron-air batteries to roll off the Weirton assembly line will be followed by other iterations.

“This product is our first step to tackling the biggest barrier to deep decarbonization: making renewable energy available when and where it’s needed, even during multiple days of extreme weather, grid outages or periods of low renewable generation,” the company said. 

That certainly sounds like West Virginia will soon export fossil energy-killing technology all around the country, regardless of Moore and the anti-ESG movement. 

As for Moore, in December he <a href="https://wvrecord.com/stories/635758122-moore-criticizes-new-biden-esg-rule-for-retirement-plans" target="_blank">criticized</a> a new Joe Biden administration rule that widens the discretion of pension managers to <a href="https://www.triplepundit.com/story/2022/dol-rule-esg-investing/761151" target="_blank">consider ESG principles</a>, in addition to speculation that he is preparing to run for a seat in the U.S. House of Representatives.

Image credit: <a href="https://flickr.com/photos/pthread/3287079094/in/photolist" target="_blank">Jim Kelly</a> and <a href="https://flickr.com/photos/cmhpictures/6773742079/in/photolist" target="_blank">cmh2315fl</a> via Flickr

West Virginia Invests in Iron-Air Battery to Lead the Clean Energy Revolution

Around the world, there is a growing realization that companies, not consumers, are key to the rapid reductions in greenhouse gas emissions needed to mitigate the worst impacts of climate change. 

Here’s the challenge: Most corporate emissions fall into the category of <a href="https://www.esgthereport.com/what-are-scope-3-emissions-and-why-do-they-matter/" target="_blank">Scope 3 emissions</a>, the business term for emissions that occur within a company’s value chain but outside of its direct control. Examples of Scope 3 emissions include those tied to the manufacture of raw materials or those produced when a consumer uses a product. In most business sectors, they <a href="https://www.wri.org/update/trends-show-companies-are-ready-scope-3-reporting-us-climate-disclosure-rule" target="_blank">represent over 80 percent of emissions</a>. 

Reducing these upstream and downstream impacts is where companies can make the biggest difference. But addressing Scope 3 emissions requires better technologies — including methodology and GHG Protocol guidance on end-to-end value chain transparency and openly sharing of actual and verified emissions data, which not based on estimates or averages, that are ideally accounted for down to the individual product and supplier level. This puts technology innovators like the software company <a href="https://www.sap.com/index.html" target="_blank">SAP</a> in a prime position to drive change.

“We are working on technologies, which can enable our Intelligent Enterprise customers to have a true carbon picture across their value chain,” Anita Varshney, global vice president for strategy at SAP Sustainability Engineering, told TriplePundit.  

<h2>Enabling action to reduce Scope 3 emissions </h2>

The increasing focus on Scope 3 emissions means it’s no longer enough for companies to be carbon neutral in their direct operations. <a href="https://www.nature.org/en-us/what-we-do/our-insights/perspectives/buy-renewables-right-3-things-companies-can-do/" target="_blank">Sourcing 100 percent clean energy</a>, a common press release headline, sounds significant, but it’s often a drop in the bucket when looking at the entire footprint of a company’s broader impact. 

Even forward-looking companies, however, face numerous barriers to even get accurate accounting for their Scope 3 emissions, let alone devise plans to act on it. One reason is that, until recently, the methods for accounting and measuring value chain emissions were slow and cumbersome.

“Traditionally, Scope 3 data has never been collected in a systematic way because sustainability wasn’t a core business priority in the past,” Varshney said. “[Companies] were getting it from different sources, from Excel sheets, from averages, and it was never easy, as the data was not within their company. Companies have to reach out to their suppliers, to the different facilities and the people who are operating them.”

Varshney’s team found themselves working with companies that had many years of data trapped in spreadsheets. This data was not well managed and difficult to analyze and act upon, much less share with others who likely use different calculations, methods and technologies. 

The <a href="https://ghgprotocol.org/about-us" target="_blank">GHG Protocol</a>, a standardize framework for GHG measurement launched by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) in 2001, also hasn’t been revised in many years. With upcoming mandatory disclosure requirements from the <a href="https://www.sec.gov/news/press-release/2022-46" target="_blank">U.S. Securities and Exchange Commission</a> and <a href="https://www.ifrs.org/news-and-events/news/2022/11/issb-confirms-requirement-use-climate-related-scenario-analysis/" target="_blank">International Sustainability Standards Board (ISSB)</a>, sustainability leaders “need a much better definition of each of the Scope 1, 2 and 3 categories,” Varshney said. WRI and WBCSD are accepting stakeholder feedback on proposed changes to the GHG Protocol <a href="https://ghgprotocol.org/survey-need-ghg-protocol-corporate-standards-and-guidance-updates" target="_blank">until Feb. 28</a>.

It’s clear that a combination of both better technology and accounting standards could empower better action by companies on Scope 3 emissions. SAP knows this well, having embarked on its own journey to measure and address its own Scope 3 emissions through <a href="https://news.sap.com/2022/06/sap-cloud-strategy-focuses-on-green-data-centers/" target="_blank">green cloud data centers</a>, <a href="https://news.sap.com/2021/03/sap-carbon-neutrality-goal-2023/" target="_blank">carbon offset mechanisms</a> and more.

While this is meaningful, Varshney said the potential for real impact is in partnership with the customers SAP serves. “SAP is a technology company. Our footprint is minuscule compared to the heavy emitters of the world, most of which are our customers.” 

<h2>Industry-wide carbon data networks are growing</h2>

As a technology solutions provider, SAP is working with companies to use data to measure both the scale of emissions and how to address them. And on that front, the company and its customers aren’t alone. Growing cross-sectoral and multi-company efforts are looking to scale up the measurement, assessment and reduction of Scope 3 emissions through innovative carbon data <a href="https://www.weforum.org/agenda/2022/09/industry-networks-sharing-emissions-data-tackle-climate-change/" target="_blank">networks</a>.

One such initiative is the <a href="https://www.wbcsd.org/Programs/Climate-and-Energy/Climate/SOS-1.5/News/Partnership-for-Carbon-Transparency-PACT-leads-first-exchange-of-emissions-data-across-different-tech-solutions" target="_blank">Partnership for Carbon Transparency (PACT)</a>, led by the well-respected <a href="https://www.wbcsd.org/" target="_blank">World Business Council for Sustainable Development (WBCSD)</a> that convenes organizations across industries to tackle the Scope 3 emissions data challenge.

“We want to have a consistent methodology that everybody follows and agrees on the way of calculating, reporting and exchanging data in an auditable way,” Varshney explained.  

To achieve this, PACT created the <a href="https://www.carbon-transparency.com/our-approach/pathfinder-network" target="_blank">Pathfinder Network</a>, an open network that allows companies to connect different technology solutions and support peer-to-peer data sharing across value chains and industries. SAP is one of the network’s technology partners, along with CircularTree, IBM and Siemens. 

Creating interoperability might sound like a small change, but it is actually huge, says Gunther Walden, CEO and founder of CircularTree. 

“Decarboniz[ing] supply chains...needs an ecosystem of interoperable solutions to easily exchange product carbon footprint information,” Walden said <a href="https://www.wbcsd.org/Programs/Climate-and-Energy/Climate/SOS-1.5/News/Partnership-for-Carbon-Transparency-PACT-leads-first-exchange-of-emissions-data-across-different-tech-solutions" target="_blank">in a statement</a>. “We are excited to be part of this ecosystem and to support companies in achieving their sustainability targets.”

Since its launch, PACT has set standards for emissions data exchange, conducted a successful pilot with member companies, and is looking to bring more technology solutions on board, including from Amazon, Microsoft, iPoint and Sage Group. The Framework is already in version 2.0, which will be launched <a href="https://wbcsd.secure.force.com/GuestEventPageV2?aId=a5s5p000001UJQl" target="_blank">later this week</a>.

The challenge now is one familiar to anyone working in the corporate decarbonization space: We need to speed up, and scale up, quickly. And that won’t be easy.

“There is progress, but it’s early days in the context and the scale of the problem that we are looking at. But we must continue on our momentum on achieving this radical transparency.” Varshney said.

<h2>Expanding the scope of carbon data networks to tackle Scope 3 </h2>

So, what’s the path forward for carbon data networks like PACT to increase their impact? Quite simply, more companies need to come on board. 

Several corporate partners are already working with PACT, including major global companies like Solvay, Aptar, Unilever and P&amp;G, and they are optimistic that these new data-sharing tools will make a difference.

“The PACT initiative is actively removing barriers and making it easier for suppliers to share their product-level footprint,” said Reginaldo Ecclissato, chief supply chain officer at Unilever, <a href="https://www.wbcsd.org/Programs/Climate-and-Energy/Climate/SOS-1.5/News/Partnership-for-Carbon-Transparency-PACT-advances-emissions-transparency-with-breakthrough-in-value-chain-data-exchange" target="_blank">in a statement</a>. “It’s a move that will be replicated by companies across sectors and geographies, unlocking faster climate action as we all work toward a net-zero future.”

While this work is meaningful, Varshney is quick to point out that the only way to get the emissions reductions we need is if everyone works together. If these larger companies, through carbon data networks, could also support and empower their mid-small sized suppliers to also act, it would unlock even greater potential for decarbonization. 

“Value chain collaboration will heavily depend upon how these big companies are coming forward to push the data transparency together with their suppliers,” Varshney explained. “They have to work together with the smaller companies that need more budget and resources.”

SAP hopes to play a central role in this. Beyond its contribution to PACT, the company is collaborating with its strategic customers to build industry innovations <a href="https://news.sap.com/2022/07/sap-industry-network-for-automotive-greentoken-product-carbon-footprint/" target="_blank">like Catena-X for SAP Industry Network for Automotive</a>.

“With partners like <a href="https://newsroom.accenture.com/news/companies-can-improve-sustainability-by-finding-carbon-emissions-hot-spots-across-their-supply-chains-accenture-report-shows.htm" target="_blank">Accenture</a>, we are already leading several global conversations about driving sustainability transformation with carbon intelligence at the core,” Varshney said. “Regionally, there is growing focus as well. In Australia, we teamed up with the <a href="https://www.linkedin.com/company/australian-climate-leaders-coalition/" target="_blank">Australian Climate Leaders Coalition</a> to launch the <a href="https://www.climateleaders.org.au/publications/scope-3-roadmap" target="_blank">Scope 3 Roadmap: Practical Steps to Address Scope 3 Emissions</a>." This roadmap is underpinned by five proofs of concept and provides a practical, step-by-step plan that gives business leaders the tools to tackle Scope 3, create 1.5C value chains, and understand and capitalize on the opportunities the transition presents through new business models, partnerships and growth markets.  

“Companies must accelerate their decarbonization actions, deriving actionable insights from true data and scale it across their value chains with their partners, quickly,” Varshney told us. "When it comes to climate change, we need to execute on our ambitions, faster than ever before.”

This article series is sponsored by SAP and produced by the TriplePundit editorial team.

Image credit: william william/Unsplash

The Secret to Accurate Scope 3 Accounting Is Sharing Trusted, Auditable Carbon Data Across Networks

The United Nations Environment Program (UNEP) and S&amp;P Global announced the Nature Risk Profile, <a href="https://www.spglobal.com/esg/solutions/nature-risk-profile-methodology.pdf" target="_blank">a methodology</a> to analyze companies’ impacts and dependencies on nature, at the World Economic Forum annual meeting in Davos, Switzerland, on Tuesday. It comes on the heels of <a href="https://www.cbd.int/article/cop15-cbd-press-release-final-19dec2022" target="_blank">the agreement</a> made in December at the U.N. Biodiversity Conference (COP15) held in Montreal. 

The idea behind the movement to include nature or biodiversity risk in financial disclosures is largely due to the fact that roughly <a href="https://www.weforum.org/press/2020/01/half-of-world-s-gdp-moderately-or-highly-dependent-on-nature-says-new-report/" target="_blank">half of the world’s GDP</a> is either highly or moderately dependent on nature. Should we see significant biodiversity loss in the near future, <a href="https://www.oecd.org/env/indicators-modelling-outlooks/biodiversitychapteroftheoecdenvironmentaloutlookto2050theconsequencesofinaction.htm" target="_blank">as has been projected</a>, that puts a lot of businesses and investments at risk. Having companies disclose their nature-related risk is not just a measure to promote environmental responsibility, but also to ensure investors and asset managers that all financial risks are accounted for.

<h2>What is nature-related risk?</h2>

Business is highly dependent on nature. A lumber company relies heavily on the trees it cuts down to generate revenue. Generally, these companies aren’t sourcing trees from natural forests, but managed plots where they grow and harvest their trees. Still, a drought, flood, fire or significant soil degradation would be harmful to their activities. That is a nature-related risk.

Likewise, a mining company is heavily reliant on access to a water source for mineral processing and cooling the temperature of cutting instruments. If all of a sudden a company's water source dried up or was blocked somewhere upstream, it would be detrimental — another nature-related risk.

These risks also apply to companies that source their materials or products from suppliers with significant nature-related risks. An electronics company, for example, is reliant on the raw materials that mining companies produce. That water-related mining risk would also affect companies like Samsung, Apple and Tesla.

<h2>When will nature-related risk reporting come into effect?</h2>

It’s unlikely that we'll see any obligations for companies to report on their nature-related risk coming out this year. Even if the U.S. Securities and Exchange Commission (SEC) decided to fast track this component of financial disclosure, we are still likely a couple years down the road from mandatory disclosures. 

The concept of nature-based reporting is not entirely new. Launched in 2021, the <a href="https://tnfd.global/" target="_blank">Taskforce on Nature-related Financial Disclosures (TNFD)</a> provides reporting frameworks for businesses to evaluate their nature-related risk. In fact, this framework is expected to have a strong influence on the Nature Risk Profile in development. Businesses that want to get a head start on the matter should explore the TNFD to familiarize themselves with potential reporting requirements.

<h2>Will this affect small businesses as well?</h2>

Small businesses that don’t have significant public investment will unlikely be legally required to disclose their nature-related risk, but that doesn’t mean they won’t be affected by it. Large companies that have to report will require specific information from their suppliers related to nature risk, and if small businesses are suppliers to any of these larger companies, they will need to have that information on hand. 

If we think about it similarly to the way that <a href="https://www.epa.gov/climateleadership/scope-3-inventory-guidance" target="_blank">Scope 3 emissions</a> are calculated, where a company has to calculate the emissions created by its entire supply chain, suppliers with fewer nature-related risk factors will be much more attractive to large companies that want to minimize their risk. Avoiding potential supply chain disruptions, as well as being a more appealing option for environmentally-conscious investors, will steer large companies to suppliers with low nature-related risk.

<h2>What are some of the challenges to nature-related risk reporting?</h2>

In terms of developing regulations to require nature-related risk disclosure, it’s important that the terminology is clear. Various reporting standards, all requiring slightly altered versions of the same thing, would only create confusion — much like the <a href="https://www.triplepundit.com/story/2022/criticism-esg-reporting/750296" target="_blank">criticism</a> that the <a href="https://www.triplepundit.com/story/2022/transparent-reporting-esg-funds/752416" target="_blank">ESG movement</a> has seen.

As well, a cohesive accountability mechanism needs to be developed to <a href="https://www.triplepundit.com/story/2022/greenwashing-EVs-colors/741026" target="_blank">avoid greenwashing</a>. That could come in the form of external auditors to confirm corporate claims or strong financial penalties that eliminate the incentive to greenwash. 

It’s encouraging to see the way that the business world is moving as we acknowledge the severity of the climate crisis and the urgency to change the way we do business. Slowly but surely, the sustainability movement is entering the mainstream financial sector.

Image credit: <a href="https://www.pexels.com/photo/green-tree-near-green-plants-142497/" target="_blank">Pexels</a>/mali maeder and <a href="https://unsplash.com/photos/60tataLkJ0U" target="_blank">Unsplash</a>/Boudhayan Bardhan

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We report the business case for sustainability.

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