Banks backtracking, energy security and an update on shipping
In this issue:
Banks backtracking
Members of the Net-Zero Banking Alliance (NZBA) have just passed a motion to weaken their commitment to addressing climate change. The Alliance was set up in 2021 with the aim of aligning global banking activity with net-zero emissions by 2050 by committing members to setting climate targets aligned with limiting global warming to 1.5C. The vote changes the target to keeping temperature rise “well below 2C, aiming for 1.5C”. While the press release is very upbeat, the commitment change is significant as that half a degree will be crucial.
Decarbonising improves energy security
That’s the conclusion from a study by Stanford researchers who looked at energy security in 236 countries using 1,092 different scenarios for reaching net-zero carbon emissions globally by 2060. Despite the fact 82% of countries would see additional trade risk exposures on certain imported materials such as lithium, nickel and indium, the reduced exposure to risk on imported fossil fuels would mean 70% of countries would have improved energy security overall. The average improvement would be 19%.
An update on shipping
Last week we mentioned the likely introduction of the first global emissions tax system, to be applied in the shipping sector. This week we can confirm after 10 years of discussion agreement was reached. There are two main parts, a fuel standard whereby ships are required to reduce their fuel intensity underpinned by a penalty/rewards system. Those failing to reach the required standards will be penalised and those beating the standard rewarded. The penalty rate is set at US$380 (NZ$640) per tonne of CO2e. The measures are to be formally adopted in October and will come into force in 2027 covering 97% of the world’s shipping fleet by tonnage.
Green stock exchange arriving soon
The first dedicated green stock exchange could soon be live in the US with the SEC this week approving the application of Green Impact Exchange (GIX). Exchanges for green bonds and sustainability funds already exist, notably that operated by the Luxembourg Stock Exchange, but the GIX is expected to be the first trading in equities. Trading is expected to commence in 2026.
Companies lagging on business travel
A survey by Uber tells us nearly half (44%) of UK companies are still not measuring and planning to manage the climate impact of their business travel. However, the picture is changing with 46% of respondents indicating sustainability was now a top three priority in the design of their organisation’s business travel policies.
COP31 could be close to home
Australian Prime Minister Anthony Albanese threw his weight behind Adelaide’s bid to host COP31 this week with a promise of formal support for the bid should Labor (sic) win the pending Australian election. Adelaide announced the bid at the end of last year but the bid has now become an election issue with Labor expressing direct support. It goes without saying, the opposition takes the opposite view and has promised to scrap plans if elected.
Did you know ...................
The emissions for a small party of space tourists will be between 50 and 100 times more than the one to three tonnes per passenger on a long-haul flight?