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Governments Under Pressure to Update Climate Pledges
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Welcome back. Pressure is mounting on countries to submit revised emissions-reduction plans ahead of the United Nations' COP26 climate change summit in Glasgow. Countries are supposed to update these plans every five years (though the pandemic gave them an extra year), and U.N. climate forecasts suggest they need to be more ambitious to limit climate change in line with the Paris agreement. Key emitters that are crucial to progress in Glasgow, including India and China, have yet to update their plans, and the U.K.'s climate envoy warned that reaching an agreement will be challenging.
New long-term energy scenarios published by the International Energy Agency highlighted the scale of the challenge. The energy watchdog said investment in clean energy projects and infrastructure must more than triple over the next decade to give the world a shot of achieving net-zero emissions by 2050. For diplomats trying to keep that possibility alive, a meeting of the Group of 20 industrialized countries in Rome at the end of the month will be an opportunity for negotiations before leaders head to Scotland. Links require WSJ subscription. đ
Also this week: Watershed co-founder on net-zero pledges; âcarbon-neutralâ oil and gas; Brazil's drought.
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COP26 Perspectives: Taylor Francis
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In the runup to the COP26 conference in Glasgow, we're publishing interviews with people who can shed light on a key aspect of the climate agenda. This week: the co-founder of an emissions-tracking startup.
As global leaders descend on Scotland, so will the corporate brass to talk about their own climate pledges. For some companies, the occasion may provide an opportunity for greenwashing.
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Taylor Francis co-founded Watershed, a startup that aims to help companies decarbonize with the help of a software platform for calculating their carbon footprints, especially supply-chain-spanning Scope 3 emissions.
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Mr. Francis spoke with WSJ Pro Sustainable Business about distinguishing real action from marketing and why he believes executives should be held accountable if companies miss their climate targets.
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âIs the person whoâs in the job today feeling like itâs their job on the line on whether or not they make progress?â
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â Watershed co-founder Taylor Francis
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Royal Dutch Shell started selling what it calls carbon-neutral liquefied natural gas in 2019. An LNG plant operated by Shellâs QGC unit in Gladstone, Australia.
PHOTO: PATRICK HAMILTON/BLOOMBERG NEWS
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A âcarbon-neutralâ makeover for fossil fuels. Some energy companies are selling liquefied natural gas or oil bundled with carbon offsets and marketing the products as carbon neutral. Shell has been selling what it calls carbon-neutral liquefied natural gas for a number of years, while Total sold its first shipment last year. Scandinavian offshore driller Lundin Energy says most of the oil it sells is now âcarbon neutrally produced.â In the U.S., Occidental Petroleum is venturing into the market. Advocates of decarbonization say the offerings risk exaggerating the climate benefits. The companies acknowledge
that offsetsâguarantees that a certain amount of carbon emissions will be averted or removed from the atmosphere, often via forestryâalone arenât enough to stop climate change.
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6% to 9%
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The "green premium" paid for liquefied natural gas bundled with carbon offsets, according to Columbia Universityâs Center on Global Energy Policy.
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Wall Street investor hunts for $500 million worth of forests. Oak Hill Advisors, which manages $52 billion and is best known as a big debt investor, is teaming up with Bluesource, a firm that creates and sells carbon credits, on a plan to buy roughly one million acres of North American woodlands. They will manage the land to generate forest offsetsâa business that is booming as companies look for ways to meet their emission-reduction targets.đ
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Drought is squeezing Brazilâs water-dependent power grid. Low water levels at a hydroelectric power plant in Caconde, SĂŁo Paulo state, in August. PHOTO: JONNE RORIZ/BLOOMBERG NEWS
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Drought threatens Brazil's grid. Most of Brazil's electricity is renewable power generated by hydroelectric plants. Fossil-fuel plants are turned on during the dry season, when water levels dip. That effect has been extreme this year as a severe drought has depleted reservoirs, raising the prospect of power shortages. Brazil has been a hot spot for wind and solar investment in recent years, and project developers hope that the drought could spur further growth. But policy makers are also moving to ensure the continued use of coal to shore up power supplies.
Actis raises $6 billion. Among those that see profit in Brazil's wind and sunshine is emerging-markets investor Actis, which has just raised a new fund for energy-infrastructure deals.đ
Investor shift from fossil fuels creates opportunities for some. Some oil-and-gas investment firms have closed shop in recent years due to years of bad returns and investors' environmental, social and governance concerns. The means fewer and smaller firms are around to now to take advantage of soaring prices for oil and natural gas.đ
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âď¸ Feedback on this newsletter? We would love to hear from you, so please get in touch.
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âââPaper for production of Charmin toilet paper at a facility in Albany, Ga.
PHOTO: P&G/REUTERS
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P&G pressured over environmental stance. Procter & Gamble shareholders elected the companyâs 12 director nominees to the board, including the head of the boardâs governance and public responsibility committee, Angela Braly, whom environmental groups had sought to remove over the companyâs handling of climate issues. Unseating Ms. Braly was part of a campaign that environmentalists have been waging against P&G to adopt more climate-friendly policies, including sourcing raw materials in ways they say are less harmful to the environment. P&G says its practices are sustainable and that it takes steps to ensure forests arenât destroyed in the sourcing of its
products.
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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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LG's Product Quality and Safety Is in the Spotlight After GM Battery Recall
LG Electronics will reimburse General Motors $1.9 billion for manufacturing defects in battery modules supplied to GM's electric vehicles that resulted in a recall due to the risk of fires. Under the reimbursement agreement, LG will cover almost all of the $2 billion in costs of the recall affecting 142,000 Chevrolet Bolt electric models. The reimbursement may carry negative social implications for LG as it affects the company's product quality and safety performance. The reimbursement costs are also significant to LG as they represent almost 10% of the company's market capitalization.
This is a sample of exclusive analysis of sustainability news from the Journalâs 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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China has started work on the 100-gigawatt first phase of an enormous wind-and-solar project. (Bloomberg)
A finance industry initiative led by Mark Carney that is pushing for climate action has struggled to convince leading banks to agree to stop financing new oil, gas and coal exploration projects this year. (Financial Times)
The capacity of all carbon capture and storage facilities under development stands at 73 million metric tons of carbon dioxide a year, an increase of nearly 50% year over year, a new survey found. (Global CCS Institute)
Ten European Union countries, led by France, called on the bloc's executive arm to recognize nuclear power as a low-carbon energy source that should be part of the transition away from fossil fuels. (Euronews)
Glossy fashion magazines are increasingly focused on sustainable clothing. (The Guardian)
The business of laying undersea cable is booming amid a proliferation of projects aimed at connecting up the world's power grids to allow the expansion of renewable energy. (The Economist)
An investor group published a list of companies believed to be highly exposed to the physical impacts of climate change, and introduced guidance for publishing risk and opportunity disclosures. (Institutional Investors Group on Climate Change)
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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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