Weekly Roundup January 13

Invert is focused on providing clients and subscribers up-to-date news on net-zero developments, carbon markets, and how many sectors are evolving to meet climate change goals and ESG requirements.

Special Announcement

FTSE 350 Firms Up Spending on 'Carbon Offsets' in Race to Net Zero

Almost half of UK FTSE 350 companies have increased their spending on carbon offsetting schemes and a further 42% intend to do so over the next 24 months, according to research from carbon market start-up Kana Earth. The study also revealed that 96% of FTSE 350 firms have increased their expenditure on carbon credits over the past two years, as the UK's top companies seek to compensate for their greenhouse gas emissions in line with the country's goal of becoming carbon neutral by 2050.

Invert Insights: The complementary usage of carbon offsets alongside an emissions reductions strategy is gaining traction as a means for corporations to make a tangible and verifiable contribution to global emissions reductions efforts in addition to their internal climate efforts. 

ESG Issues to Increase Credit Risk in 2023: Moody’s

The credit quality of companies and governments will be impacted by increased ESG risks in 2023 due to greater scrutiny of climate-related plans and growing regulatory and political pressures, according to a report by Moody's. The report identified four key ESG-related trends that are expected to affect credit, including greater scrutiny of corporate decarbonization plans, elevated social risks, greater refinancing risk for lower-rated issuers with governance challenges, and an increasingly complex ESG regulatory and political landscape.

Invert Insights: The risk of climate inaction continues to grow as companies with high exposures to carbon transition risks are likely to face increased cost of capital if their transition risks go unaddressed. 

Biden Administration Unveils Strategy to Decarbonize Transportation Sector

The Biden Administration has released the National Blueprint for Transportation Decarbonization, a multi-department set of strategies and actions aimed at eliminating nearly all emissions from the U.S. transportation sector by 2050. Developed by the Department of Energy, Transportation, Housing, and Urban Development, and the Environmental Protection Agency, the plan focuses on transitioning new light duty vehicle sales to zero-emission vehicles by mid-2030s and replacing existing fossil-based vehicles with zero-emission vehicles, while also implementing policies and regulations to expand the market share and use of electric vehicles and investing in charging infrastructure, research and innovation to improve battery performance and replacing heavy-duty fossil fuel vehicle. 

Invert Insights: The global transportation sector accounts for approximately one-fifth of global CO2 emissions, with the majority of those emissions due to road travel, and thus its decarbonization is an integral part of meeting global emissions reductions targets. The blueprint outlined focuses on multiple solutions as means to decarbonize the sector, including battery electric vehicles, hydrogen, and drop-in sustainable development fuels, which should help accelerate decarbonization pathways across the economy.

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