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Scaling up SAF; Greener Happy Meals
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Welcome back. The introduction to this week's newsletter is by Olivia Bugault, who covered low-carbon jet fuel for WSJ Pro Sustainable Business this week.
Biofuels, which make most of the so-called sustainable aviation fuel today, are playing a big part in the industry’s plans to decarbonize, but they aren’t all judged equally green. That could pose a test for jet-fuel makers such as Shell, which has announced a plan to make its own sustainable aviation fuel, or SAF.
In a recent proposal still awaiting final approval, the European Union said it plans to require airlines to run planes partly on sustainable fuel, a “blending mandate” that will gradually ratchet up. But the EU said biofuels produced directly from crops “shouldn’t be supported” in the program, due to concerns about encouraging deforestation and the use of land for fuel rather than food production.
While sustainable aircraft fuel can be made from other raw materials and waste products, supplies are limited. Shell plans to move toward making SAF from 100% “advanced feedstocks” and waste such as tallow and used cooking oil at its biofuel plant in Rotterdam, Netherlands, but how quickly that happens will depend on the availability of these resources, a Shell spokesman said.
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“Until such a time that sufficient sustainable waste feedstocks are available, Shell will need to utilize some sustainable vegetable oils in the feedstock mix,” he said. “These will mainly be rapeseed and sunflower oils.” He added that Shell uses vegetable oils that are certified sustainable by industry organizations.
A spokesperson for the European Commission, the EU's executive arm, said the EU supports the production of jet biofuels that have high sustainability and scalability potential and don’t compete with the food and feed sectors, but didn’t comment on companies starting or expanding production of crop-based biofuels.
This week: Happy Meals; sustainability-linked loans; a new corporate-governance framework.
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Demand for sustainable jet fuel is rising, but the emissions are hard to verify.
PHOTO: DAVID YOUNG/ZUMA PRESS
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Google project aims to track SAF data. Meeting demand for sustainable jet fuel is a challenge, and not only because there currently isn't nearly enough to go around. It's also difficult for suppliers to quantify the fuel's climate benefits for airlines and their customers. Biofuels have to be blended with conventional aviation fuel, so you have to track how much of each kind went into each tank. And fuels from different biological feedstocks have different carbon footprints, depending on the way they were produced and shipped. A trial by Google, Chevron and Delta Airlines will test a new process for collecting traceable, verified emissions data on a batch of fuel made from soybean oil
at a Chevron refinery. They hope it could become a model for the industry.
Oil giant to start making SAF. Royal Dutch Shell became the first oil major to set targets for low-emission jet-fuel output and sales. It said it plans to produce 2 million metric tons by 2025, up from none today, and wants SAF to account for at least 10% of its jet fuel sales by 2030. Anna Mascolo, Shell’s president of global aviation, said she expects demand for SAF from air cargo operators and corporate travelers to hasten adoption and bring down costs. Shell has struck deals with Amazon's air network and DHL to supply SAF for cargo planes and is working with American Express Global Business Travel to encourage corporate clients to use the fuel.
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1
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The number of sentences Chinese President Xi Jinping devoted to his promise that China would stop building coal power plants overseas. He didn’t say when the moratorium would take place or whether it will affect plants already on the drawing board.
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Burger King said it is readying a pilot program that will offer customers in some markets products in reusable packaging. PHOTO: LOOP/BURGER KING
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Restaurant chains sign up to Loop. McDonald’s, Burger King and Tim Hortons said they would test whether customers would be willing to help reduce waste by returning sturdier, reusable packaging to stores. The eatery chains all formed partnerships with recycling company TerraCycle's Loop program, which collects, cleans and redistributes reusable packaging. Expanding the model, which relies on customers paying refundable deposits for packaging, presents somewhat of a catch-22 for Loop. It will work best when many companies participate, but many companies won't participate unless they see the system can work.
Happy Meals to get a sustainable makeover. McDonald's buys around a billion toys a year to be sold with its Happy Meals. Starting in January in the U.S., some of them will be made of plant-based materials instead of plastics made from fossil fuels, and the company will replace some figures with books and cards. The shift will take until 2025, McDonald's said.
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“It’s for the greater good.”
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— Peyton Mink, a mother of four and McDonald's regular in Harrodsburg, Ky., on the Happy Meals plan. At the same time, she said she hopes the new materials won’t affect the toys her family loves.
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ESG loans take off. More companies are taking out sustainability-linked loans, which carry interest rates that vary depending on whether the borrower meets a certain environmental, social or governance target. U.S. companies took out $83.8 billion in such loans through Sept. 16, up from $2.5 billion in the year-earlier period, according to data provider Dealogic. Total corporate loan volume was $1.7 trillion.
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Standards-setter enters debate. The rise of ESG investing has spawned various metrics for measuring corporate sustainability, largely focusing on environmental and social measures. Experts say less attention has been paid on what constitutes good governance or how to measure it. The International Organization for Standardization, a Geneva-based group that has laid out common requirements for everything from how food is harvested to what symbols should be on a car’s dashboard, last week released its first framework for good governance. The ISO defines governance as a system by which an organization is held accountable for achieving a defined purpose in an ethical and responsible manner, and
lays out guidelines for internal controls.
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✍️ Feedback on this newsletter? We would love to hear from you, so please get in touch.
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On Nov. 17 WSJ Pro will be hosting the first Sustainable Business Forum, looking at the critical issues facing business professionals as they incorporate sustainability into their strategy and operations. Discussion topics will include innovation, reporting, governance, green finance, supply chain and risk models. Register to attend here.
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SEC Is Investigating Activision Blizzard Over Workplace Practices, Disclosures
Activision Blizzard continues to face regulatory scrutiny linked to its workplace practices. In July, the California Department of Fair Employment sued the company, alleging that it paid women less than their male counterparts and provided fewer opportunities to advance. Now, the U.S. Securities and Exchange Commission is investigating how the company and several senior executives handled employees' allegations of sexual misconduct and workplace discrimination. The SEC is investigating whether the company disclosed information about harassment and gender-pay issue claims to investors in a timely fashion. The probe raises employee-engagement and governance concerns. Activision said it continues to work with
regulators on addressing workplace complaints.
This is a sample of exclusive analysis of sustainability news from the Journal’s environment, social and governance (ESG) research analysts, whose work is primarily published by Dow Jones Newswires to help institutional investors and wealth managers integrate ESG factors into portfolio models, risk management programs and financial advice. The commentary by our research analysts is independent of the news coverage by reporters at the Journal. For more information about Dow Jones Newswires, click here.
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The Securities and Exchange Commission has sent letters to dozens of public companies asking them to provide more information to investors about how climate change might affect their financial earnings or business operations. (WSJ)
Because the computer equipment used to mine bitcoin quickly becomes obsolete, the industry produces roughly as much electronic waste every year as the Netherlands. (BBC)
Ford is working with battery recycling company Redwood Materials to lay the groundwork for a closed-loop supply chain for vehicle batteries. (Axios)
Soaring gas prices in the European Union could prompt leaders to prioritize cheap energy over the green agenda, experts said. (CNBC)
ConocoPhillips’s $9.5 billion deal to buy shale assets from Shell will boost the amount of carbon the company emits, but the company says the deal will bring down its average emissions per barrel. (Bloomberg)
China's promise to stop funding coal overseas could wipe out $50 billion of investment, analysts said. (Reuters)
Nonprofit groups that advocate sustainable fishing are working to map out the onshore networks that fund and benefit from illegal fishing vessels around the world. (Mongabay)
Musicians such as Billie Eilish are starting to acknowledge the environmental impact of their tours. (Quartz)
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We would like to hear your tips, suggestions and feedback.
This newsletter was written by Ed Ballard.
Contact the WSJ ESG research team at ESGresearch@wsj.com
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