Weekly News | 6th to 12th September 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 | Cost to attain U.N. sustainability goals surges by 25% to $176 trillion 

• The total estimated cost to reach the goals of the 2030 Agenda set by the U.N. in 2015 has increased to $176 trillion, a 25% increase compared to previous estimates. With around $40 trillion allocated to SDG-aligned efforts, the funding shortage now reaches $135 trillion. 
• While the world’s liquid wealth excess was identified as $450 trillion by the Force for Good Initiative (FFGI) association, the majority was not invested in sustainable development due to growing inflation and most businesses and institutions not associating SDGs with direct income or results.  
• Ketan Patel, founder of the FFGI, identifies the need of pushing investors to see the opportunities of such funding by insisting on the benefits to serve millions of under-developed customers as the key part to fight under-funding regarding SDGs. 
• Read more about this story: Reuters 

Comment from Codo: These new figures are the sad confirmation of an expected reality: the more we wait to invest into transformation to a sustainable society, the higher the costs become, as problems keep growing while they are waiting for their solutions. 

World | G7 companies on a 2.7°C global warming pathway, with the US, Japan and Canada lagging behind Europe 

• The decarbonization plans of some of the world’s largest firms from the G7 countries put the planet on track to warm by a potentially disastrous 2.7°C, well exceeding the Paris Agreement limitation goal of 1.5°C. 
• According to the analysis by CDP that looked at the climate plans of more than 4,000 firms across the world’s seven largest economies, continental Europe was the best performer but not aligned with the Paris Agreement yet, with firms climate plans leading to a 2.2 or 2.3°C global warming.  
• Businesses in the US, Japan and Canada were the poorest performers in terms of decarbonization plans. American and Japanese companies are on a 2.8°C pathway. In Canada, corporates are headed to 3.1°C, and 88% of reported emissions are not covered by any disclosed net zero plans. 

• Read more about this story: France24, CDP 

Comment from Codo: This study confirms the advance taken by companies of the EU on the journey to decarbonization. They must now accelerate and enhance their plans, to fully align with the Paris Agreement goals. Other countries such as Japan can use the advance taken by Europe to save time, by importing methodologies and tools used by European companies to improve their climate plans, and regulations established by European policymakers to drive investments in the right direction. 

World | Major oil and gas companies fall short of their green investments promises 

• According to climate finance thinktank Influence Map’s researchers, BP, Chevron, ExxonMobil, Shell and TotalEnergies spend $750 million a year to advertise their environmental work, while only 12% of their investments goes into low carbon development. 
• Moreover, most of these firms’ websites only briefly mention their connection with fossil fuels, an attempt to separate from their oil and gas history and attach themselves to climatic discourse. 

• Shell, ExxonMobil and TotalEnergies contested those affirmations, arguing about miscalculations from the researchers or reclaiming their initiatives to transition the energy mix while supplying the energy resources people still vastly rely on. 
• Read more about this story: The Guardian 

Comment from Codo: Heavy-emitting companies may be tempted to over-emphasize their green efforts in an attempt to buy time, postponing their low-carbon transition and keeping their carbon-intensive assets in operation as long as they can. But as pressure against greenwashing is growing worldwide, with attacks from consumers, NGOs and climate-risk sensitive shareholders, and new regulations such as the EU Green Taxonomy, such a strategy is becoming more and more dangerous. 

Europe, China | EU and China in disagreement over failed G20 climate talks 

• Following the failure of G20 climate talks, the European Union and China are doubting each other’s commitment to combating climate change. 

• The EU’s climate change chief accused “the biggest emitter on the planet,” referring to China, of wanting to withdraw from the Glasgow Climate Pact. China is responsible for about 30% of annual emissions, making it the world’s biggest emitter today while the United States is the biggest emitter historically. 
• G20 major economies meeting for climate talks in Bali have been unable to agree a joint communique, amid objections over language used on climate targets and the war in Ukraine. 
• Read more about this story: Reuters, UK Daily News 

Europe | New hydrogen targets still not enough to reach 2015 Paris goals 

• With the launch of REPowerEU in May, EU policy makers have signaled their determination to end the bloc‘s dependence on Russian gas and to accelerate the transition to clean energy. 

• One energy vector that is receiving more attention in the REPowerEU plan is hydrogen produced from renewable sources, along with its derivatives, such as ammonia and methanol. While the “Fit for 55” policy package sets a 2030 renewable hydrogen production goal of 5.6 million tons, the new REPowerEU strategy raises it to 20 million tons, with the goal of replacing 50 bcm of Russian gas – which amounts to 13% of the current consumption of gas in Europe. 
• Yet, the enhanced REPowerEU target of 20 million tons is only one-nineteenth of the required 565 Mt/year of low-carbon hydrogen and derivatives required to meet the Paris Agreement targets, a BCG study finds.  
• Read more about this story: EnergyPost, BCG 

Comment from Codo: Even though the new European goal is still far from the requirement according to BCG, Europe remains the most advanced region when it comes to linking hydrogen and renewables. In comparison, Japan has set in its 2030 energy mix a goal of 1% of hydrogen/ammonia, but does not indicate what sources will be used to produce it – keeping all options opened, including a production from fossil sources.  

Japan | Toyota, Honda, Nissan ranked at the bottom of a new Greenpeace study on global automakers’ decarbonization efforts 

• The three Japanese firms, showing little to no progress in zero-emission vehicle sales since last year, as explained by low efforts in supply chain decarbonization, fell at 8^th, 9^th and 10^th place in Greenpeace’s annual study on the car industry.  
• Green investors and environmental groups commented Toyota should move faster to marketing fully electric vehicles, pressing car firms to invest more in developing such technologies.  
• Honda’s lack of a clear roadmap to achieve decarbonization targets pulls it down in the ranking from 6^th place. A spokesperson said it will work towards carbon neutrality by 2050, aligning with the Japanese government’s goal of CO2 emissions reduction in the following years.  

Read more about this story: Reuters, EnergyWorld