Welcome back. The war in Ukraine, and the windfall profits that energy companies are reporting partly as a consequence, are putting the spotlight on investors' role in shaping the response to climate change.  

A study published by MSCI this week warned that the scramble to shore up energy supplies as Europe tries to wean itself off Russian crude could push up fossil-fuel consumption and make it harder to limit the damage of global warming. The indexing company said investors "have a key role to play in determining the path forward." It calculated that if oil prices remain $40 higher than where they were before the war, the sector's profits could rise by $200 billion to $300 billion a year—enough to double the recent rate of investment in renewables. 

MSCI said it would make financial sense for energy companies to plow that money into the energy transition, arguing that high oil prices make the economics of wind and solar more compelling and that businesses could be hit by windfall taxes if they don't reinvest voluntarily.

Calling on shareholders to show "collective resolve and action," MSCI suggested that groups such as Climate Action 100+, a coalition of 700 investors with $68 trillion under management, could "play a coordinating function." But the effectiveness of these investor-led efforts is disputed.

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ShareAction, an advocacy group, on Thursday accused CA100+ of enabling signatories to exaggerate their environmental credentials by joining the initiative without actually cutting emissions.

ShareAction said it reviewed the reporting of 60 large CA100+ investor signatories and found that 49 didn't set objectives for their engagement with companies on climate change, or specify escalation steps if those efforts don't work (such as voting against management at shareholder meetings, which oil majors on both sides of the Atlantic will hold in coming weeks). It called on CA100+ to set minimum standards for engagement and require more transparency from its members. 

A CA100+ representative said ShareAction's report didn't reflect the role the group has played in making engagement on climate issues mainstream, but said it intends "to further develop and strengthen the initiative." 

This week: Tech giants' financed emissions; Elon Musk doesn't like ESG; new use for cat litter.

Tech giants urged to push banks on climate. The idea of coaxing suppliers to pollute less isn't a new one for companies under pressure to track and reduce Scope 3 emissions. A new report says the same logic should apply to banking relationships. The argument is that as the cash and other investments sitting on a company’s balance sheets facilitates lending, the company shares responsibility for activities that are financed. 

The advocacy groups making this case—the Climate Safe Lending Network, the Outdoor Policy Outfit and BankFWD—came up with a way of estimating these financed emissions, which they say would be a leading source of pollution for tech companies such as Google, Meta and Microsoft. The researchers proposed tactics cash-rich companies could employ to pressure banks, such as helping to develop new financial products or committing to move business to banks that are phasing out fossil-fuel lending.

Eventually more companies might have to make these calculations if they want to comply with widely used carbon accounting standards.

Pankaj Bhatia, who is overseeing a review of guidelines from the Greenhouse Gas Protocol, a coalition of environmental groups and businesses that sets guidelines for emissions accounting, said they should require all companies whose cash makes a material impact on their carbon footprint to estimate financed emissions. 

Tesla's omission from ranking irks Musk. Tesla was among the companies recently removed by S&P Dow Jones Indices from an index that ranks companies based on environmental, social and governance factors. Elon Musk wasn't pleased. He called ESG “an outrageous scam” that has been "weaponized by phony social justice warriors." He also lamented that Exxon Mobil remained in the index and claimed S&P had “lost their integrity.” S&P said Tesla's omission was tied to its lack of a low-carbon strategy, claims of racial discrimination, poor working conditions at its Fremont, Calif., factory and the handling of an investigation by regulators related to injuries and deaths tied to its vehicles.

Investors protest pay packages. Shareholders are expressing dissatisfaction with levels of executive compensation in nonbinding votes. JPMorgan Chase and Intel investors owning roughly two-thirds of shares didn’t support pay plans at recent annual meetings. while Coca-Cola barely won majority support. In all, 23 S&P 500 companies reported less than 70% support for executive-compensation programs, compared with 21 among the same companies a year ago. 

Keeping the lights on. The European Union set out a $317 billion plan aimed at ending the bloc's dependence on Russian energy within five years. It envisions European countries cooperating in the near term to negotiate gas supply deals from producers in the U.S., the Middle East and Africa while the bloc seeks to accelerate the shift away from fossil fuels. 

⚡ Renewables. The EU now plans to get 45% of its energy from renewable sources by 2030, up from the 40% that was proposed last year. As well as wind and solar, the EU set targets for the expansion of renewable hydrogen and biomethane, a substitute for natural gas. 

☀️ Especially solar. Officials called solar power “the kingpin” of the strategy, proposing to double capacity by 2030 through measures such as faster permitting. 

🏭 Local supply. The EU plans to support manufacturing of solar equipment, which is currently rooted in Asia.

🛢️ Fossil-fuel expansion. The plan also calls for relatively small investments in infrastructure such as liquefied natural gas terminals.

🏘️ Energy efficiency. The rules would introduce tighter requirements for new buildings, among other measures.

The United Nations secretary general urged rich countries to share intellectual property for energy technologies that can accelerate the transition away from fossil fuels. (Bloomberg) 

Solar-panel maker Auxin Solar relied on research by clean-energy analysis firm BloombergNEF when it pushed for a tariff circumvention inquiry that has shaken the U.S. solar industry. Now the authors say Auxin misinterpreted their work. (Canary) 

U.S. chemicals companies are pushing technology that breaks down plastics into their molecular building blocs for reuse, often to make fuel. Environmentalists question whether that counts as recycling. (Chemical and Engineering News) 

A browser extension called Finch shows Amazon shoppers environmental and social ratings for popular products. (Sourcing Journal) 

A 3-D-printing company, Re:3D, has developed portable shipping containers equipped with everything needed to turn people's old plastic junk into new products. (Wired) 

A Pennsylvania company has been mining bitcoin using gas from wells that haven't even been connected to pipelines. (Bulletin of the Atomic Scientists)

Seventeen Republican attorneys general sued the Environmental Protection Agency for letting California set its own vehicle emission standards. (Axios) 

Of the 12 leading auto makers, just Tesla and Mercedes-Benz plan to make enough electric vehicles by 2030 to keep pace with Paris Agreement goals, a new report found. (Euractiv) 

Al Gore's Generation Investment Management is deepening its focus on Europe with its fourth sustainability-focused fund. (Sifted)