Today’s ESG Updates
- EU Countries Demand Further Cuts to Deforestation Rules: The rules set to be implemented in December face further backlash amidst claims from producers that they can not be expected to meet its terms.
- EU Will Develop Rules for ‘Nature Credits’: These credits will be implemented to fill the green funding gap.
- UK’s Finance Minister Announces Investment in Carbon Capture: The £28.6M investment by the National Wealth Fund that could create jobs in central and northern England.
- BRICS Demand Wealthy Nations Fund Global Green Transition: The organisation of the world’s largest emerging economies demand that wealthy nations step up to mitigate greenhouse emissions.
EU countries demand further cuts to deforestation rules
Most EU countries have demanded more changes to the trailblazing anti-deforestation law set to be implemented in December. This isn’t the first time that this legislation has faced pushback from the bloc’s member states, as eleven member states had previously asked that the law be weakened. Some of the EU’s producers argue that they cannot be expected to meet the legislation’s terms and will face a competitive disadvantage. Under the new law, operators are required to provide proof that their products including soy, beef and palm oil entering the EU market did not cause deforestation. Felling CO2 storing forests is a significant driver of climate change but political will to impose policies that will cut emissions has decreased as financial concerns come into play. Given that the deforestation law also applies to EU exports, 18 countries have voiced concern that European producers would relocate abroad to avoid the additional cost of compliance. In its current form, the EU deforestation policy aims to end 10% of global deforestation linked to EU consumption of imported goods.
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Further reading: EU countries seek more cuts to deforestation rules, letter shows
EU will develop rules for ‘Nature Credits’
The European Union will develop a system of “nature credits” that pay farmers and foresters to look after ecosystems. There are hopes that this will make this kind of work more economically beneficial. Under the Common Agricultural Policy, the EU pays huge subsidies to farmers which is contributing to an estimated €37B annual shortfall in funding needed for the protection of biodiversity. The EU Commission will form an expert group this year, formed of farmers, local communities and scientists, who will work on developing solutions for “nature credits”. As of now, these “nature credits” would be bought by companies or countries, issued by farmers, foresters or other land managers protecting nature by planting trees, restoring degenerated natural spaces or shifting to regenerative types of agriculture. Inspiration may have been drawn by the more developed market of “carbon credits” where projects that reduce CO2 emissions sell credits to companies seeking to support efforts addressing climate change. Clearly a positive initiative, however it will not come without its challenges as demonstrated by the carbon capture credits initiative.
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Further reading: EU looks to ‘nature credits’ to fill green funding gap
UK’s finance minister announces investment in carbon capture
Rachel Reeves, the British finance minister, will announce a £28.6M investment by the National Wealth Fund in a carbon capture project. The project could generate jobs across central and northern England. Britain has a climate target to reach net zero emissions by 2050 and has noted that carbon capture will be necessary to curb emissions from energy intensive industrial sectors. Reeves announced that, “The National Wealth Fund is a force for growth, investing 3 billion pounds into the British economy and securing 12,500 jobs“. The British government is keen to showcase new positive projects following a series of U-turns and instability in the Labour party.
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Further reading: UK’s Reeves announces National Wealth Fund investment in carbon capture
BRICS demand wealthy nations fund global green transition
Leaders of BRICS, the organisation formed of emerging global economies, addressed the shared challenges of climate change, demanding that wealthy nations contribute to the global mitigation of greenhouse emissions. This green push coexists with the general consensus amongst BRICS nations that fossil fuels are instrumental to the growth of emerging economies. As noted by Brazil’s Environment Minister Marina Silva, “We live in a moment of many contradictions in the whole world. The important thing is that we are willing to overcome these contradictions”. BRICS leaders released a joint statement, emphasising that climate finance “is a responsibility of developed countries towards developing countries” which is a common stance for developing nations.
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Further reading: BRICS demand wealthy nations fund global climate transition
Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit: roya ann miller
