May 19, 2023

Your weekly Invert Insights are here:

• Is the greenwashing era over?
• The role of big Wall Street banks in scaling up low-carbon solutions
• Who’s paying for the EV transition?
• Talking carbon finance
• Next week is packed with events

Is the Greenwashing Era Over?

Regulators in London and Brussels are set to impose stricter regulations on companies and their communication with consumers regarding their involvement in the climate change crisis and the loss of nature. Terms such as "carbon neutral," "nature positive," and those related to offsetting will face greater scrutiny by organizations like advertising regulators. While the EU commissioner emphasized firms would face greater scrutiny, he stopped short of supporting a ban, due to the potential of offsets to fund climate crisis mitigation efforts.

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Invert Insights:

When climate-related claims are not adequately disclosed, they are prone to being unclear and misleading to consumers. By increasing scrutiny and utilizing clearer claims, regulators can ensure transparency and accuracy in companies’ claims which leads to positive environmental impacts and creates competitive advantages for genuinely responsible companies.

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The Role of Big Wall Street Banks in Scaling Up Low-Carbon Solutions

During a forum organized by groups across Bloomberg, several insights were shared by industry leaders, including the commitment of major financial institutions to the clean energy transition. Valerie Smith, Chief Sustainability Officer of Citigroup, said that there is a “need to do more” in this matter and recognized the vital role that big Wall Street banks play in scaling up low-carbon solutions. Citigroup has restructured its business units to support this transition, and aims to reduce financing to heavily polluting industries while financing $1 trillion of sustainable projects by 2030 and achieving net-zero emissions by 2050. 

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Invert Insights:

Large financial institutions have the influence to drive the development and scalability of new technologies while incentivizing heavy polluters that are not taking the steps to improve their environmental and social impact. While banks withdrawing funding won’t alone reduce the demand for carbon intensive goods, supporting the production and adoption of more sustainable alternatives will. 

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Who’s Paying for the EV Transition?

The Canadian government has offered $1 billion in subsidies to Stellantis and LG Energy in return for locating its EV battery plant in Windsor. But now, after stopping construction on their joint $5 billion plant in Windsor, the companies have threatened to relocate the factory if the government doesn’t increase its incentives to compete with what’s on offer in the US and the subsequently announced Volkswagen package. The companies claim that Ottawa had committed to matching US incentives, after the Inflation Reduction Act was passed,  but has not yet fulfilled its commitment.

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Invert Insights:

The potential consequences of Stellantis and LG energy abandoning the project, could result in a reduced pace of EV adoption, battery production, supply chain development, and Canada’s position in the global EV market. 

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Talking Carbon Finance

Carbon Finance has emerged as an essential tool in achieving climate targets and reducing greenhouse gas emissions. While some argue that it is merely business and a way for large corporations to avoid taking direct action to reduce emissions, others like Mark Lawson, Head of Carbon Acquisition at Invert, understands that “carbon finance is not just about making profit. It’s about committing yourself to a purpose that can impact future generations over 30 years.”  For him, carbon finance is the true intersection of purpose and profit.

He also advocates using it as an instrument for change across all industries, including heavy-emitters. Mark believes that vilifying such industries is not a sustainable solution. Instead, it is better to work with these industries to help them transition and continue their journey towards net zero. “By all means not working with such industries may mean no funding for an entire climate project. The alternative is continued degradation and deforestation at a very rapid rate.”

When effectively managed, carbon finance emerges as a powerful tool that can actively help mitigate climate change, reduce biodiversity loss, scale sustainable technologies, and generate employment opportunities that support communities.

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Events Next Week

Next week is packed with events dedicated to nature conservation. We will be recognizing the National Endangered Species Day, World Bee Day, and the International Day for Biological Diversity. These occasions offer a chance to raise awareness about the significance of conserving ecosystems and celebrating biodiversity.