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New in Sustainable Finance

Sustainability runs capital. During the last 10 years the capital in sustainable indexes has doubled. During the last year sustainability indexes that concentrate on environmental (E), social (S) and governance (G) have had higher returns than their non-sustainable competitors both on the European and North American market. As there are several indexes it can be difficult for investors to understand what they contain and how to compare them. The European Union strives to make the indexes more comparable and transparent by creating new directives and therefor creating a stronger and cleaner economy.

EU leads capital towards sustainability

The new laws concerning sustainable finance by the European Union leads towards sustainable investing by a creation of clearer definition of tools and obligations of sustainability reporting and -valuation. To support this, the European Union has published the EU Taxonomy Regulation for sustainable development. The Taxonomy Regulation contains harmonic criteria that define whether the economic activity is sustainable from the nature’s perspective. The classification contains e.g., climate change, water resources, and circular economy. The creation of the taxonomy regulation unites sustainable reporting which makes it easier for investors and other financial actors to make their investment decisions. The classification is new for companies and it is profitable to start preparing for them already now.

Additionally, the European Commission will approve a directive in June 2021 that specifies the reporting among non-financial information. The directive defines how and how widely companies must report according to the above-mentioned Taxonomy Regulation.

The first company- and investment reports in accordance with the new Taxonomy Regulation must be published in the beginning of 2022 about the financial information from 2021.

You might be interested in our webinar recording“New in Sustainable Finance: How to apply EU’s taxonomy regulation and reporting requirements” 

Are you interested in sustainable finance? Are you familiar with the new classifications and reporting requirements in sustainability by EU? Have you wondered how you should prepare to meet the obligations?

Welcome to hear more about sustainable finance, the new obligations and how one should prepare to develop the reports. Our expert will go through EU’s Taxonomy Regulation in our webinar recording.

Read more and watch the webinar here!


Text: Sanna Perkiö

Photo: Shutterstock

Sources:

Kauppalehti 5.1.2021. ”Vastuullisuus sai vauhtia koronasta”

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/eu-taxonomy-sustainable-activities_en

COVID-19 impacts on Climate Change

covid19 air pollution facemask

How are Climate change and COVID-19 linked? Can the measures taken to battle COVID-19 have a positive effect on the climate? 

On a certain level, parallels can be drawn between the COVID-19 pandemic and other contemporary crises that we are facing today, such as climate change. These kind of global crises all require a global-to-local response, long-term thinking, new research and innovations and a political will to make fundamental changes. (Weforum, Climate Foresight)

The COVID-19 virus that started in 2019 in a small wet market in Wuhan, China, has become a global pandemic over the period of a few months and has already had a seemingly big effect on our daily lives.

A topic that has been discussed over the internet and in numerous articles in the media concerns how governments are able to respond so fast to COVID-19, even with the risk of a collapsing economy, while the battle against climate change seems to be too hard and sensitive to tackle. Keeping in mind that the expected deaths per year due to climate change are estimated to be over 10 times higher than those from COVID-19, this is an important question. The answer remains deeper and more versatile than this, but some of the reasons are simple: COVID-19 is happening right now, it is visible and fast moving and it has an immediate and direct effect on everyone and anyone. The measures are also more straightforward. Governments have been given priority lists of compelling their citizens to wash more, stop touching, reduce travel and go into some degree of isolation. In contrast, the variety of solutions to fight climate change are perplexingly complex. And the solutions affect nearly all aspects of modern life. (Ecowatch)

COVID-19 effects on the climate

There has been numerous speculations about whether COVID-19 could stop the rapid increase of temperatures. Across continents, flights are being cancelled, factories closed down, those whose work isn’t critical for the society are holed up at home and as a consequence pollution and greenhouse gas emissions have fallen as countries try to contain the spread.

The New York Times published an article discussing NASA’s satellite imagery showing remarkable reductions in pollutions in China and Italy when the outbreak first started. Furthermore, The Guardian stated that the pandemic could lead to a significant fall in global CO2 emissions.

In China, emissions fell 25% at the start of the year and coal use fell by 40% at China’s six largest power plants since the last quarter of 2019. Similarly, levels of pollution in New York have reduced by nearly 50% compared with this time last year. This is however not the first time an epidemic or global crisis has led to lower emissions. During the financial crash in 2008 the global emissions dropped significantly for a year. (BBC) Global CO2 emissions from fossil fuel combustion and cement production decreased by 1.4 percent, only to rise by 5.9 percent in 2010. (Human Rights Watch)

The flip side of the coin

Some experts are concerned, that the effects of COVID-19 are only going to be short termed. One of the side effects of the virus include delayed or cancelled events and projects. Climate meetings and summits are no exception. Among these is the UN’s annual climate summit 2020, where 196 countries were expected to introduce revamped plans to meet the emission reduction goals, which was postponed to 2021. Furthermore, countries all over the world are postponing green investments and instead directing the money to fight COVID-19. Like so, companies struggling to keep their business running are not likely to make long term green investments in the near future. To act against climate change has never been more urgent. However, the inability to collect world leaders and to direct finances towards green investments might be a hinder to do so.

In the U.S., Environmental Protection Agency announced a rollback on car emissions rules.  The rules were a central piece of the country´s efforts to reduce greenhouse gas emissions. Furthermore, it announced that it will not penalize companies that fail to comply with federal monitoring or environmental reporting requirements. Similarly, China has extended deadlines for companies to meet environmental standards and Brazil has announced it is taking back enforcement duties for protecting the Amazon from accelerating deforestation, which could lead to the release of massive amounts of greenhouse gases. (BBC, Human Rights Watch, Climate Foresight)

What is certain, is that “There is a strong link between economic activity and global carbon dioxide emissions, due to the dominance of fossil fuel sources of energy.” This  means we might be in for an positive surprise due to the coronavirus pandemic: a slowdown of carbon dioxide emissions due to reduced energy consumption. (Centre for International Climate Research)

In summary

  • We’ve seen that governments can act, and people can change their behavior, in a very short amount of time.
  • COVID-19 can have a positive effect on climate change. If this leads to a long-term shift in behavior and a change in our mindset and priorities.
  • The pandemic may lead to a deeper understanding of the ties that bind us globally.
  • Well-resourced healthcare systems are essential to protect us from global crises.
  • Economic activities and global emission rates are strongly linked.

Need help with managing the impacts that COVID-19 or climate change has on your workplace? Our Environmental and Chemical experts are here to help!

Contact us:

info@ecobio.fi

+358 (0) 207 569 450

 

You might also be interested in:

Insights into Covid-19 future effects on energy consumption and cleantech: Future Proof blog by Futures Platform


Text: Caisa Lindblom, Ecobio Oy, caisa.lindblom@ecobio.fi

Picture: Shutterstock

What you need to know about the UN Climate Action Summit 2019

un climat change summit 2019

To tackle the issue of climate change UN organizes the UN Climate Action Summit today (23.9.2019) in New York.

“The Summit will bring together governments, the private sector, civil society, local authorities and other international organizations to develop ambitious solutions in six areas: a global transition to renewable energy; sustainable and resilient infrastructures and cities; sustainable agriculture and management of forests and oceans; resilience and adaptation to climate impacts; and alignment of public and private finance with a net zero economy.” (UN 2019)

Why this is important

Climate change is one of the biggest challenges of our time, having remarkable effects on the nature and all societies, businesses, animals and humans. There is still time to slow down the pace of climate change, making it possible for us and the nature to adapt. This will, however, require unprecedented effort from all sectors of society. One important step in this direction is the Paris Agreement on climate change. To boost ambition and strengthen actions related to the Paris Agreement UN Secretary-General´s special envoy António Guterres will host the 2019 Climate Action Summit in New York 23.9.2019. Climate solutions are important for both business and nature. Climate solutions strengthen our economies and create jobs, bring cleaner air, preserves natural habitats and biodiversity, and protects our environment. (UNFCCC 2019, UN 2019)

What is being discussed

The Summit addresses the issues of climate change and how to tackle it. The Secretary-General has prioritized six action portfolios, recognized to have a high potential to curb greenhouse gas emissions and increase global action on adaptation and resilience. These portfolios are: 1. mobilizing sources of finance to drive decarbonization, 2.energy transition away from fossil fuels and becoming energy efficient, 3.industry transition, 4.nature-based solutions such as reducing emissions, biodiversity conservation and leveraging supply chains and technology, 5.cities and local action advancing mitigation and resilience at urban and local levels and 6.resilience and adaption advancing efforts to manage and address the impact of climate change particularly in those communities and nations most vulnerable. (UN 2019)

More news


Caisa Lindblom