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Weekly News | 2nd to 8th April 2022

Codo Advisory keeps an eye for you on the latest events and trends in climate finance and corporate sustainability, in the world and in Japan. Here’s what caught our attention last week.

World | Latest climate science report calls for action: it’s now or never

  • The third and final issue of the landmark IPPC report published this week says the world needs to cut its emissions by 50% by 2030 to ensure livable future. Greenhouse gas emissions must peak by 2025.
  • Major transition in the energy sector with dropping fossil fuel for renewable energy is needed. Coal power must end as early as possible. Industry decarbonization supported by low-to-zero GHG production processes is a must.
  • Two-thirds of the world’s largest banks and asset managers are failing to set concrete climate targets for this decade. Investments into climate mitigation and adaptation need to increase 3 to 6 times by 2030.

World | Banks face new standards on carbon emissions disclosure

  • The newly formed International Sustainability Standards Board (ISSB) published a draft of its proposed standards for corporate disclosures on sustainability-related issues for financial institutions, reports the Financial Times.
  • The standards are intended to provide a benchmark that regulators worldwide can use to impose new disclosure rules on companies.
  • The requirement for banks and institutional investors to disclose emissions linked to their financial assets is a significant element of the proposed standards, ISSB chair Emmanuel Faber (former CEO of Danone) told the Financial Times.
  • ISSB standards were built upon the conceptual framework established by TCFD.

World | ESG rating firms reeling as war exposes Russian blind spot

  • On the eve of the invasion, about $9.5 billion in funds meeting European environmental, social or governance standards were in Russia, reports Bloomberg.
  • Regulators are now calling for urgent work to clarify the myriad standards and practices being used to produce such ratings.
  • There are more than 600 standards and frameworks, data providers, ratings and rankings that are working to measure ESG-related risks, according to the European Banking Federation. Experts say that ratings companies should provide greater transparency on how they reach their conclusions and regularly review their methodology.

Europe | Investors warn European companies over climate accounting

  • Thirty-four investors managing more than $7 trillion in assets have warned 17 of Europe’s largest companies, including BP and Volkswagen, that they could challenge board directors over their accounting of climate risks, reports Reuters.
  • In recent letters, investors told the companies their accounts did not reflect the fallout from climate change on their assets and liabilities. “From next voting season you should increasingly expect to see investors vote against Audit Committee directors’ reappointment, where high-risk companies fail to meet the expectations,” the letters said.
  • Auditors also contacted Air Liquide, Anglo American, Arcelor Mittal, BMW, Daimler, Enel, Equinor, Glencore, Rio Tinto, Saint-Gobain, Shell, Renault, CRH, ThyssenKrupp and TotalEnergies also received letters.

Europe | What the war in Ukraine means for energy and climate

  • Nature Journal comments on the long-term perspectives of the war in Ukraine for the energy transition in Europe: Russia’s invasion has caused a short-term spike in prices but could prompt a long-term shift towards sustainability.
  • Researchers say that the long-term impact on energy policy and greenhouse-gas emissions in Europe could be beneficial. A temporary increase in coal power, for instance, should drive up the price of carbon credits and force emissions reductions elsewhere.
  • Although the war in Ukraine will probably speed up Europe’s move away from fossil fuels, it could slow the clean energy transition — and boost greenhouse-gas emissions — in other parts of the world.

Japan | Top Japan banks join exit from coal mine funding

  • Japan’s three largest banks will stop financing coal excavation for power generation, seeking to fight climate change by withdrawing support for the carbon-intensive fuel, reports Nikkei.
  • Sumitomo Mitsui Financial Group also earmarked 20 billion yen ($160 million) for sustainability investment and has established a sustainability division.
  • MUFG revised its environmental policy to include a pledge not to finance new thermal coal projects. The group had set a goal of bringing outstanding financing for coal power plants to zero by fiscal 2040.

About our weekly news

The above article is a summary of news hand-picked by our team of experts. We monitor a selection of leading international and Japanese sources, including generalist and specialized press, communication from public authorities, publications from recognized non-profit organizations. Expressed opinions are these of the authors of the source materials.

About us

Codo Advisory is a Japan-based consulting agency offering independent advisory services to help Japanese companies define and refine their low-carbon transition strategy, to reduce their risks and reinforce their global competitiveness. Feel free to read more about our services and team, or contact us if you’d like to discuss how we can work together.

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