Sustainable Finance Roundup: Billions in Climate Commitments, Investments Made at San Francisco Climate Summit

The Global Climate Action Summit, held in San Francisco in mid-September, brought together thousands of policy makers, investors and industry leaders, all looking to, in the words of the Summit’s motto, “Take Ambition to the Next Level” when it comes to tackling climate change.

 Just before the gathering, California Gov. Jerry Brown signed legislation setting a goal of the state using 100% clean energy by 2045, making California the only state besides Hawaii to commit to 100% renewable energy. Brown also issued an executive order targeting carbon neutrality by the same date.

Here’s a quick look at the major announcements that were made at the Summit around investments, climate commitments and other items related to sustainable finance.

Large institutional investors extend their climate pledges and investments

  • The $195 billion New York City Employees’ Retirement System announced plans to invest $4 billion in climate-change solutions like renewable energy, energy efficiency and clean water over the next three years, more than doubling its current investments. Earlier this year, the pension announced plans to divest its funds from fossil fuel investments.
  • Also, 29 foundations from the U.S. and around the globe committed $4 billion over the next five years to investing in low carbon solutions to combat climate change. Among the foundations making the pledge are Bloomberg Philanthropies, the Children’s Investment Fund Foundation, the Educational Foundation of America, the IKEA Foundation, the Kresge Foundation, the David and Lucile Packard Foundation and the Rockefeller Brothers Fund.
  • And almost 400 investors, with a combined $32 trillion in assets, announced a new initiative called The Investor Agenda, which is intended to help investors accelerate and increase actions that will help meet the goals of the Paris Agreement. Organizations taking part include the Asia Investor Group on Climate Change, CDP, Ceres, the Institutional Investors Group on Climate Change, Principles for Responsible Investment and the UNEP Finance Initiative. The agenda has four key focus areas: investment, corporate engagement, investor disclosure and policy advocacy.

 

Many other major investors made announcements during the Summit. Those included:

  • Dutch bank ING said it will adopt science-based targets to move its €500 billion ($580 billion) lending portfolio towards a low-carbon future.
  • Danish pension fund Pensionskassernes Administration (PKA) will increase its investments in renewable energy to 10% of its portfolio value by 2020.
  • CDPQ, Canada’s second-largest pension fund, says it will increase its low-carbon investments by 50% by 2020 and reduce its portfolio’s carbon intensity by 25% by 2025. The moves will mean more than $6.2 billion in new investment
  • APG, the Dutch pension fund manager, announced it will no longer invest in any coal-related infrastructure.

 

Numerous companies and governments made new commitments to electrify their fleets:

  • More than 60 state, regional and city governments and multinational businesses have agreed to the Climate Group’s ZEV Challenge, committing to 100% zero-emission targets for their fleets.
  • Also making the commitment are 12 regional governments — including Washington State, Scotland and Catalonia — that represent more than 80 million people say their public fleets will be 100% zero emission by Twenty-six cities worldwide, with 140 million people, have made the same pledge.
  • IKEA Group is targeting a zero-emissions fleet for its home deliveries by 2020 in five cities — New York, Los Angeles, Paris, Amsterdam and Shanghai.

 

Related developments in the EV space:

  • Electric bus manufacturer Proterra announced it has raised $155 million in new venture funding from Daimler, Tao Capital Partners and G2VP, a cleantech VC firm spun out of Kleiner Perkins Caufield & Byers. BMW and General Motors are prior investors in the startup. Proterra is also working with Daimler to develop heavy-duty commercial vehicles including electric school buses.
  • EV charging startup ChargePoint says it intends to deploy 2.5 million charging points by 2025, a fifty-fold increase from its network of 53,000 today. The company has raised a total of $292 million in funding, including most recently a $43 million Series G venture funding from Siemens in June 2017. Other corporate investors in ChargePoint include BMW, Daimler, Siemens, Statoil and Constellation Energy.

 

And 27 Cities Have Reached Peak Carbon, New Research Says

  • 27 of the world’s greatest cities, representing 54 million urban citizens and $6 trillion in GDP have peaked their greenhouse gas emissions, according to a report released at the Summit. New analysis reveals that the cities have seen emissions fall over a 5 year period, and are now at least 10% lower than their peak. These 27 cities have continued to decrease emissions by an average of 2% per year since their peak, while populations grew by 1.4% per year, and their economies by 3% per year on average.
  • The cities include: Barcelona, Basel, Berlin, Boston, Chicago, Copenhagen, Heidelberg, London, Los Angeles, Madrid, Melbourne, Milan, Montréal, New Orleans, New York City, Oslo, Paris, Philadelphia, Portland, Rome, San Francisco, Stockholm, Sydney, Toronto, Vancouver, Warsaw, Washington D.C.

 

Solar Data Firm kWh Analytics Receives Financial Innovation Award

  • kWh Analytics, which provides solar asset data and portfolio analytics, received the 2018 Finance Innovation Award at the Summit for its development of the Solar Revenue Put,a credit enhancement for financial investors that is intended to drive down investment risk and reduce the cost of solar.
  • In August, kWh announced that it structured a Solar Revenue Put with GCL New Energy and PNC Bank for four projects totaling 50 megawatts of capacity. The use of the put helped to protect the project’s cash flows, the company says

 

Several New Green Bond Initiatives Announced

  • Numerous organizations got together to form the Global Green Bond Partnership. which will work to help city, state and regional governments, as well as corporations, to issue more green bonds. Backers include the World Bank, International Finance Corporation, Amundi, the European Investment Bank and Ceres.
  • The Green Bond Pledge, an initiative launched earlier this year that is aimed at getting cities, governments and companies to use green bonds for infrastructure projects, said Mexico City has become the latest signatory. The Mexican capital joins other signatories including the state treasurers of California, New Mexico and Rhode Island; the city of San Francisco; and King County, Washington. Pledge supporters want to see a total of $1 trillion worth of green bonds issued by 2020.

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