First major UK soil credit deal, major SAF announcement with Air-France-KLM, another VCM launched, Robeco Asset management launches dedicated bio diversity fund and investment strategy

Respira International announce UK’s first major soil carbon credit deal

The first major carbon credit deal in the UK, covering an initial area of around 230 hectares, was announced this week. The UK is following the US, Australia and other European countries and firms in financing fathers to use regenerative agricultural techniques that also capture carbon in soil. For a view of the potential of the soil carbon credit (or “Carbon Farming”) market see our Carbon Farming Grows Up article published earlier in the week.

Air France KLM announce major SAF programme

The Air France-KLM SAF (Sustainable Aviation Fuel) announcement with SAF providers Neste and DG fuels, for a total volume of 1.6 million tonnes, is one of the largest SAF deals globally to date. SAF is typically made from waste oils, waste products and forest residues and whilst today it is more expensive that traditional aviation fuel, it reduces overall CO2 emissions over the full lifecycle of the fuel. The first deliveries are expected in 2023 and the group has estimated emissions reduction of 4.7 million tonnes of CO2. The aviation industry estimates the SAF market could be worth $15B by the end of the decade. Other leading providers include World Energy, Alder Fuels, SkyNG as well as BP and Shell.

Hong Kong Exchange announces new Voluntary Carbon Market

Following recent announcements at the LSE and the Saudi Stock Exchange, HKEX announced the launched of ‘Core Climate’, a voluntary Carbon Market supporting projects and clients in Hong Kong, mainland China and across Asia. The exchange did not publish much detail on how the exchange would operate, other than saying it will ensure that all carbon credits generated by projects listed on Core Climate are issued under international standards, such as Verified Carbon Standard under VERRA.

Coca-cola (COP27 sponsor) increases plastic use, despite recycling efforts

Ahead of COP27, research and data from the Ellen MacArthur foundation has claimed that despite recycling efforts, Coca-cola has increased the use of new produced plastic by 3.5% since 2019. They claim that Pepsico and Walmart also increased primary plastic use in 2021. Earlier in March this year, 175 nations signed up to the UN resolution to end plastic pollution and create a legally binding agreement by the end of 2024.

Robeco launches RobecoSAM Biodiversity Equity Investments Strategy

Robeco announced the launch of a new Biodiversity Equities investment strategy. This is designed to invest in companies that support the sustainable use of natural resources and ecosystem services, as well as technologies, products and services that help to reduce biodiversity threats or restore natural habitats. The fund is specifically targeting nature positive investments, a rapidly growing investment theme.

British Volt secures short term funding, reduces staff pay in financial crunch

The UK based battery company backed by Glencore, Ashtead and to some extent the UK Government is still yet to build it’s planned giga factory on the site in Blythe. The company has this week said it continues to seek new investors whilst securing short term funding (from Glencore) and implement cost savings, including an agreement with staff to reduce wages.

Regulatory, Market and Government Updates

TNFD launches V0.3 BETA ahead of COP 27

The Taskforce on Nature-related Financial Risks issued it’s 3rd iterative release this week. This version includes:

  • expansion of the disclosures to include impacts and dependencies, supply chain traceability, societal considerations and climate / nature metrics alignment

  • risk and opportunity assessment and associated metrics (full disclosure due in March)

  • outline of the adaptive approach to ensure the framework can be applied by companies in different regulatory jurisdictions and different sizes, maturity

  • discussion papers on scenarios and societal dimensions of nature risk management

There are now over 100 pilots underway and membership of the TNFD has exceeded 700 companies, financial institutions, civil society, science bodies and NGOs. The final production release of the TNFD framework is due in September 2023.

ECB demands banks include nature-related risks on their balance sheets

The European Central Bank published new requirements on environmental factors this week and included not just climate change but include the nature-related risks and environmental degradation that could impact banks’ balance sheets. The NGFS (Network for greening the financial system), which includes over 50 central banks, is also leading development of nature / climate scenarios

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