UN Passes Motion to Vote for the Phase-Out of Fossil Fuels

Today’s ESG Updates

• UN Council to Vote on Fossil Fuel Phase-Out: July 9 vote will test global ESG resolve, with major producers pushing back.
• Monzo Fined £21M: FCA says Monzo onboarded 34K+ high-risk customers despite bans.
• Texas Floods Expose FEMA Collapse: 100+ dead amid extreme weather and Trump-era cuts to key emergency agencies.
• Amazon Carbon Credits Tied to Deforesters: 24 of 36 projects linked to illegal logging; $15M in credits under scrutiny.

UN vote to phase out fossil fuels at Human Rights Council

On July 9, the UN Human Rights Council is set to vote on a resolution calling for the phase-out of fossil fuels. Countries like Australia, Britain, and Germany support the motion. At the same time, large fossil fuel producers such as Saudi Arabia and Kuwait oppose this direction, citing multiple pathways to emissions reduction as a more effective strategy. Although the council’s resolutions are not legally binding, they significantly shape global trends and serve as a key indicator of the commitment to ESG solutions from nations. 

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Further reading: UN vote to phase out fossil fuels tests climate commitments

Monzo Bank fined £21 million for failed anti-financial crime procedures

The FCA fined Monzo Bank £21 million for failing to maintain adequate anti-financial crime systems and controls between October 2018 and August 2020. The FCA cited weaknesses in customer onboarding, risk assessment, and transaction monitoring. Monzo illegally onboarded over 34,000 high-risk customers between August 2020 and June 2022 despite regulatory restrictions. Suspicion grew among the FCA when Monzo’s customer base grew nearly tenfold to over 5.8 million by 2022, with a distinct lack of scaled internal systems. Further investigation revealed that implausible customer information, including addresses of London landmarks, contributed to the rise in Monzo’s customer base. 

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Further reading: FCA fines Monzo £21m for failings in financial crime controls

The Trump administration’s actions are blamed for the Texas flood tragedy

Over 100 people are dead after flash floods hit Texas Hill County citing the Trump administration as a key player in the poor preparation for the flooding. Experts say the atmosphere is 7% wetter and 1.5℃ hotter, leading to intensified extreme weather events. The tragedy has put the spotlight on Trump and his allies, as the administration has gutted FEMA and the National Weather Service by firing over 600 staff members and slashing $150 million from NOAA. Trump’s actions weakened warning systems and left the preparatory systems vulnerable to insufficient operation. Since Trump’s intervention, FEMA is no longer fit for purpose, with its capabilities collapsing precisely when they are needed most. 

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Further reading: Deadly floods could be new normal as Trump guts federal agencies, experts warn

Carbon credit projects linked to illegal logging in Brazil

A Reuters investigation found that 24 of 36 carbon credit projects in the Brazilian Amazon involved backers who had been fined by Brazil’s environmental agency, Ibama, for illegal deforestation and timber fraud. Five cases occurred within the project boundaries, highlighting the unspoken black market behind carbon credits. Such schemes have been on the rise, with prominent carbon credit entrepreneur Ricardo Stroppe Junior being arrested for selling an estimated $15 million in carbon credits through illegal logging practices in certified Verra projects. The tainting of carbon credits risks undermining the credibility of a regulated national market in Brazil and puts companies like Boeing under pressure for purchasing carbon credits that may be associated with illegal logging practices. ESG practices provide crucial frameworks to mitigate the tainting of practices branded as sustainable. 

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Further reading: Illegal loggers profit from Brazil’s carbon credit projects

Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit: Eelco Böhtlingk