Sustainable Investment News Briefing: Corporates Increase Their Green Pledges as EVs Pick Up Steam

The United Nations’ Climate Action Summit, held in New York in late September, brought a long list of announcements from corporations about buying renewable power or committing to going carbon neutral, and from institutional investors boosting their own commitments to carbon-free investing.

Meanwhile, there’s been continued acceleration of the development of electric vehicles in the US and around the world, plus many other fundraising news and other developments in the cleantech and sustainable finance world. This news roundup takes a look at some of these many trends.

Among the macro-level commitments announced at the Climate Action Summit:

  • 66 countries are looking to be carbon neutral by 2050.
  • 65 countries will “enhance” their existing climate plans by the end of 2020.
  • 102 cities pledged to reach net-zero emissions by 2050.
  • Another 2000 cities say they’ll put climate risk at the center of their decision-making, planning and investing.
  • 93 corporates, 12 investors and 10 regions say they’ll be carbon neutral by 2050.


Recent Corporate Announcements

Google and Amazon Make Big Renewable Commitments: Google says it will buy 1.6 gigawatts of electricity from renewable projects across the Americas and Europe in what it says is the largest-ever corporate renewable purchase. Google will get the power via 18 solar and wind projects in the U.S., Europe and Chile. The same day as Google’s announcement , Amazon disclosed its own plans to use 100% renewable energy by next year, and to be carbon neutral by 2040.

Big Banks to Work Toward Paris Agreement, SDGs: About 130 banks with a combined $47 trillion in assets have committed to the UN’s new Principles for Responsible Banking, which includes agreeing to align their businesses with the Paris Agreement and the UN’s Sustainable Development Goals. Citigroup was the first American bank to sign on; others include Barclays, BNP Paribas and Deutsche Bank, though only three of the world’s 10 largest banks have signed on so far.

Microsoft, Engie Team Up on Renewables, Software: Microsoft and Engie announced two deals: a long-term PPA that will provide the computer giant with solar and wind energy in the U.S., and the implementation of a new software system. The software, called Darwin, is energy software that Engie developed; it uses Microsoft cloud services to optimize the performance of Engie’s wind and solar projects worldwide.

AT&T Uses Virtual PPAs for Renewables: AT&T says its renewable energy purchases will exceed 1.5 gigawatts of clean energy capacity via new Virtual Power Purchase Agreements with Duke Energy Renewables and Invenergy. The new VPPAs will support the construction of new solar and wind projects. AT&T says it’s now one of the nation’s largest corporate purchasers of renewable energy.

Unilever Goes 100% Renewable: Unilever says its entire operations worldwide — including factories, offices, data centers and warehouses — are now being run on 100% renewable energy. The consumer goods conglomerate has set a goal of being carbon neutral by 2030.

Schneider Electric Accelerates Carbon-Neutral Goals: Schneider Electric says it will “drastically” step up its move toward being carbon neutral. Previously the company said it would be carbon neutral in its “extended ecosystem” by 2030; now, Schneider says it will hit that goal by 2025. It will also reach “net-zero operational emissions by 2030, and work to make its entire supply chain net-zero by 2050.

Developments in the EV Space

Rivian Nets $350M Equity Investment: Electric vehicle startup Rivian received a $350 million equity investment from Cox Automotive, the companies announced. Rivian earlier received $700 million in funding in a round led by Amazon, and $500 million from Ford.

Amazon Places Huge Order with Rivian: Rivian debuted its first vehicles — a pickup truck and an SUV — only last November, but Amazon has already put in an order for 100,000 electric delivery vans from the startup. Amazon expects the vans to start hitting the road by 2021, with the full order fulfilled by 2024.

Volvo Sticks to China for EV Production: Volvo’s electric vehicle brand Polestar will keep to its production plans in China even as EV sales slow in the country as government subsidies are withdrawn. The company opened a factory in the southwestern China city of Chengdu earlier this year as it looks to compete with other international brands like Tesla within China.

Sustainable Financing Models

Goldman Launches Yieldco: Goldman Sachs has launched a new yieldco vehicle, nearly four years after the investment model for renewable energy fell out of favor among investors. Goldman has reportedly raised about $4 billion of equity and debt for the yieldco, which will buy clean power projects and pay investors dividends from the sale of electricity. The firm hopes to take the yieldco public within a few years.

Transition Bonds’ Gain Traction: A handful of companies that can’t meet the requirements that come with issuing a green bond have found a way to attract investors interested in sustainable investments: so-called “transition bonds.” Companies that have issued such bonds so far include Hong Kong’s Castle Peak Power, Italian utility Snam and Brazillian beef producer Marfrig, which was unable to issue a green bond when investors balked at buying one from a company whose cattle are raised on land that was Amazonian rainforest before being clear-cut. Intead, Marfig called the issue a “sustainable transition bond” as a way to signal its efforts to clean up its supply chain. It worked, as the bond was oversubscribed, and bankers say they expect interest in, and issuance of, such bonds to grow substantially.

Institutional Investor Activity

Inst’l Investors Commit to Zero Carbon Portfolios: A group of pensions and other large investors from around the world, with a combined $2.4 trillion in assets, have committed to transitioning their investment portfolios to net-zero greenhouse gas emissions by 2050. Founding members of the UN-organized Net-Zero Asset Owner Alliance include CalPERS, CDPQAllianz, Zurich and Swiss Re.

Danish Pensions to Put $50B+ in Green Investments: Private pension funds in Denmark say they will invest about $52 billion in green bonds, energy infrastructure, energy efficient construction and other green investments over the next decade as Denmark works to reduce its carbon emissions by 70% by 2030. Investments will also include offshore wind farms, PV solar and energy storage.

World’s Biggest Pension Boosts Stewardship Efforts: Japan’s Government Pension Investment Fund, the world’s largest pension, will increase the range of sustainable indices it invests in. The effort is meant to increase pressure on companies to meet ESG goals. GPIF invests the vast majority of its $1.5 trillion in assets passively, and has helped drive a huge increase in sustainable investments in Japan in the past few years.

CleanTech Fundraising

Breakthrough Leads Funding Round for Smart Building Startup: Breakthrough Energy Ventures led a $18 million Series A funding round for 75F, an India- and US-based cleantech startup that creates “smart solutions” to predict, manage and automate buildings’ heating and cooling needs. It’s the first investment by the Oil & Gas Climate Initiative, comprised of 13 oil and gas companies, in the buildings space. The company has raised $25 million to date, and will use the money to scale up its support and operations and invest in research and development.

Strong Demand for ArcTern Fund: ArcTern Ventures increased the size of its second fund from $150 million to $200 million after growing demand from institutional investors and family offices. The second close came after investments from TD Bank, Suncor, the Ivey Foundation and others. Anchor investors in the fund — which invests in cleantech companies around the world — include Equinor (formelry Statoil) and OMERS.

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