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Walmart steps in to tackle supply chain emissions

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Former US Vice President Al Gore never avoided criticizing political leaders and businesses he believed contributed to climate change.When he talked to me recently FT Investing For Good But at the summit, his view had another goal. It is a multilateral development bank (MDB) such as the powerful World Bank.

“The World Bank lacks operational action [from the climate fight]”He lamented. “”[It] There are great staff, but the guy appointed by the former US President to do that doesn’t seem to care about the climate at all. .. .. I need new leadership. ”

David Malpass will speak in Washington, DC after former US President Donald Trump announces a candidate to lead the World Bank in 2019 © AFP / Getty Images

This “man”, the economist David Malpass, nominated by Donald Trump as President of the World Bank, will undoubtedly oppose it. He welcomed the Green Initiative when he was interviewed at the plenary stage of the COP26 Climate Change Conference last month.However, moral money has been sold by banks in the past year. Slow development of green blended finance It can even explain the carbon dioxide emissions of the tool, or itself. Following COP26, this criticism is intensifying. Private banks are looking for ways to invest in green projects for developing countries. MDB does not provide any further support.

Is this carping unfair? Is the World Bank worse than other MDBs?I would like to hear your opinion moralmoneyreply@ft.com..

Meanwhile, this week we’ll write about one tactic Wal-Mart is using to avoid a shortage of investment capital to reduce emissions. It is currently funding its supplier network. It highlights an interesting lesson from Australia on the impact of carbon prices, along with the latest battle over the definition of green bonds. fun. — — Gillian Tett

Wal-Mart pays attention to supplier emissions

Wal-Mart, a major US retailer, saidProject gigatonIn 2017, it was a powerful symbol of Wider corporate shift. Wal-Mart not only worried about its carbon emissions, but also tracked its suppliers’ carbon dioxide emissions and promised to reduce emissions from this network by one gigaton by 2030.

Wal-Mart today announced that it has added a new twist to Project Gigaton. It announced a new financial platform linked to science-based goals to help suppliers raise funds for green reform.

Retail giants use HSBC’s finance lines to provide suppliers with credit lines, early payment of invoices, and other benefits. The juicy offers are assigned to companies that reduce greenhouse gas emissions according to the goals set by the Carbon Disclosure Project. (CDP is a widely respected entity and has a validation process that requires companies to use third-party services to ensure sustainability claims.)

It is unclear exactly how Wal-Mart’s plans will actually be implemented and how many of its more than 10,000 supplier networks will register. But this move is impressive for at least two reasons.

First, large global companies measure so-called “Scope 3” emissions, or emissions from the entire supplier and customer network, rather than focusing solely on their activities (“Scope 1”). It emphasizes the pressure to work on it. “Scope 2” footprint for using green jargon. ) Next, we show the logistical challenges associated with our supply chain emissions efforts.

Many large Western companies source their products from a dense network of small businesses in emerging market countries, and these groups can struggle to raise funds for investment. Wal-Mart executives seem to want to be able to provide a partial solution by stepping into this void.

This move will force retail giants to make the changes they want to see in their supply chains and ensure an increase in overall transparency levels.

To date, approximately 3,100 suppliers have enrolled in the program, according to Wal-Mart.The business wants to target small and medium-sized suppliers that are lacking in-house. Climate expertiseWal-Mart executives acknowledge that primarily major suppliers have entered the market to reach their sustainability goals.

This includes groups such as Bestway, a leisure product supplier that exports goods from China to locations in North America. It told Moral Money that funding reduced the company’s reliance on credit lines, which in turn lowered the prices of end-users.

Wal-Mart says other suppliers are “strongly encouraged” to sign up. Jane Ewing, Wal-Mart’s Sustainability Leader, said: “Our Scope 3 emissions are where most of our carbon emissions come from.”

There is no doubt that Wal-Mart’s rivals are watching carefully. Jason Blake, PepsiCo’s Chief Sustainability Officer, said last month that the relationship with the supplier could be “very business” but was commercial to help “achieve the sustainability goals.” He said he is increasingly seeking to form relationships. (Kristen Talman and Gillian Tett)

The debate on EU green bond standards gets hot

© Reuters

Excitement for green bonds is gaining momentum in Europe after a massive oversubscription with EU record breaking Issuance of 12 billion euros During October. But so is the controversy over the standards of this fast-growing market.

The EU plans to issue € 250 billion by 2026, aiming to become the world’s largest seller of green bonds. We also hope to pave the way for setting standards in this class through the proposed European Green Bond Standards, which have the potential to become global benchmarks. ..

However, some people involved in legislation are worried that it could prove too loose. The amendment, drafted by European Parliamentarian Dutchman Mark Tang, calls for stricter action. This includes the requirement that companies issuing green bonds need to have a credible plan to achieve net zero emissions by 2050. “Battle in Congress,” Tan told Moral Money.

Mr. Tang said the promotion of stricter standards was opposed by other politicians across Europe who sought to protect the interests of domestic industry. He is an “unholy alliance” between French politicians he seeks to strengthen the country’s large nuclear sector and others in Eastern Europe who are keen to protect the gas industry. I criticized what I called. Projects in both sectors should be severely excluded from green bond financing, Tan said.

Tang also wants the green bond market to take into account social impacts. His amendments will prohibit “human rights abusers” such as Russia, Belarus and Saudi Arabia from issuing securities in the European green bond market. Companies, on the other hand, are banned from issuing green bonds if they find that they have avoided taxes through certain “non-cooperative jurisdictions.”

Tang’s amendments reflect widespread concerns about companies raising green bonds associated with low-carbon projects while continuing to invest in highly polluted projects. Some of the most controversial issuances are from the Spanish energy company Repsol, which raised green bonds to invest in renewable energy while continuing to invest in oil and gas exploration.Check out for more information on the issue This report The Bank for International Settlements warns: “Overall, there is no strong evidence that green bond issuance is associated with a decline in carbon strength over time at the enterprise level.”

The debate over EU green bond standards is intensifying, but there is still plenty of room. Mr. Tang said he did not expect the standard for parliamentary voting to come out by the second half of next year. In the meantime, more discussion will be held on the details. “This is a big battle and we need to win this battle to make Europe’s efforts credible,” he said. (Simon Mondy)

Advice from Tamami

Nikkei’s Shimizu Tamami helps keep stories that you may have missed in the Eastern Hemisphere up to date.

COP26 had the following new consensus: Carbon price It will be an indispensable tool for leading businesses and consumers to a low carbon economy. However, there is little consensus among world leaders, green financers and climate change activists on how to set the right prices.

The “polluter pays” model means that companies bear the burden of preventing and mitigating pollution. However, keeping track of all costs is not an easy task.

Rabindra Nepal, a senior lecturer at the University of Wollongong, Australia, argued that there was one important factor missing in the calculations. It’s asset value.

Nepal and two other scholars have said that fossil fuel-fueled plants Negative impact On the value of assets in the vicinity of New South Wales, Australia, due to growing concerns about health and community amenity risks.

Coal-fired power plants, in particular, have caused asset value declines of up to 30% within a radius of 30 km. Gas-fired power plants also had a negative impact on asset value, but the impact was only observed within a 20km radius.

Nepal recommends that Australian (and worldwide) policy makers should take this decline in asset value into account when setting carbon prices.

“Overall, the costs of climate change mitigation and adaptation should be internalized through carbon prices and imposed on polluters,” Nepal said.

Australia, like most countries in Asia, relies heavily on fossil fuels for power generation and does not impose specific carbon prices. If so, Nepal argued that it would be a good example for the continent.

Today’s chart

Corporate investment period v Mixed capital source

latest Annual report There was an interesting reversal of long-term trends in investor behavior at research group FCLT Global. Over the last decade, financial investors have extended their “investment period” and held debt and equity assets longer. However, last year the holding period decreased significantly. One factor, according to the report, is the growing focus on ESG investments. The authors appear that the increase in asset portfolio churn rates partially reflects the shift towards sustainable strategies. “There may be periods that look like current short-term actions driven by portfolio restructuring, which in fact enhances the incorporation of a true long-term perspective. “They write.

Smart lead

  • Investors who view gas as a “transitional fuel” are off the mark. Claim Julian Popov from the European Climate Foundation in the Euractiv article. He argues that the economic case of gas is disappearing rapidly as the costs of solar and wind continue to fall. Former Bulgaria’s Minister of the Environment Popov has accused the European Commission of erroneously “promoting countries to build unnecessary gas capacities” through policies that support the sector.

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