This week's run time is 37:52.WEEK IN REVIEW (3:30) FEATURES Industrial origami (19:10) A chat with Tue Beijer, founder and CTO of STILFOLD, which is bending recycled and green steel into products such as an e-scooter. It's a localized approach to manufacturing that could dramatically cut emissions, according to Beijer. *Music in this episode: Lee Rosevere: "And So Then," "More On That Later," "Start the Day," "Southside." STAY CONNECTED To make sure you don't miss the newest episode of GreenBiz 350, subscribe on iTunes or Spotify. Have a question or suggestion for a future segment? E-mail us at [email protected]. Adblock test (Why?)

Hej, from Denmark! I’ve long romanticized Danish culture. Denmark has cracked the code to many social problems that seem intractable in the United States, from free health care to free college. It’s figured out how to ritualize the art of being cozy. It’s home to the happiest city on earth. The politics are so ideal, Denmark was a talking point during Bernie Sanders’ 2016 campaign as a role model for the U.S. — an idea that resonated with a generation of young liberals and led to a Bernie-fueled tourist bump in Denmark. When it comes to climate, Denmark is just as admirable. Denmark is one of the few countries with a legally binding goal to reduce emissions, which it set as 70 percent by 2030 and reach carbon neutrality by 2050. (The United States, by contrast, is aiming for a 50 percent reduction by 2030.) Denmark is nimble. In 1965, Denmark got practically no energy from renewable sources. Today, 30 percent of its energy is renewable, ranking 9th in the world. This quickly transitioned away from coal in the last two decades, and today gets 30 percent of its energy from renewables. This progress g itself this year’s top performing spot in the Climate Change Performance Index.  As communities and companies across the world are crystalizing decarbonization strategies, what could be emulated from the Danish example? Sonderborg is Denmark’s Denmark If the world looks to Denmark for clues on effective policies, Denmark could look to Sonderborg, a municipality in the south of the country, for its own inspiration.  Sonderborg has an aggressive plan of action to decarbonize its entire energy system by 2029, and is 55 percent of the way to meeting that goal.  While net-zero is a common guiding principle today, Sonderborg was one of the first — if not the first — to set its sights on carbon neutrality. It announced the goal in 2007 — eight years before the Paris Accord, and two years before Copenhagen made a similar commitment. (If you know of a city that did this earlier, I want to know about it.) Leading this effort is ProjectZero, a public-private partnership between the city, local companies, and members of the community. (Project Zero, together with Danfoss, a engineering and technology company, footed the bill for this reporting trip.)  Impressively, the ProjectZero area aims to achieve this goal using all-local resources, fitting together specific strategies and engaging local stakeholders to completely decarbonize energy — without importing energy resources or using offsets. Let’s pause to reflect on how ambitious that challenge is. This is a country with long, dark winters — meaning demands for light and warmth are high. There are months on end with very little sun for solar. And Sonderborg is small, with about 100,000 people in the region, so creating a plan to meet all energy needs requires a careful integration of resources. Core to its strategy is cross-sectoral projects, integration of resources, and buy-in from the community at a city-scale. That collaborative spirit is the secret sauce to a transformational shift, according to ProjectZero. “The challenge today is to decarbonize cities,” said Brian Seeberg, CEO of ProjectZero. “Things are moving away from components to overall solutions. So we are both demonstrating how to lead and manage and engage people around climate goals in an urban context.” Their recipe has three steps: Use only energy needed through deep efficiency, reuse energy already produced, source the rest from renewable energy sources.  Step 1: Reduce energy use Energy efficiency is ProjectZero’s true north. The organization sees efficiency as an impact multiplier, making all other initiatives more effective, powerful and affordable. According to its research, efficiency can reduce the costs of reaching net zero by almost 50 percent.  Sonderborg has demonstrated this potential well in the residential sector. One housing development, Linde Haven, utilizes advanced efficiency technologies to drive down the energy demands. The 140-unit complex includes smart technologies, such as predictive control systems that can reduce heating consumption by 11 percent, electronic thermostatic radiators to retain specific room temperature, and a system that balances hot and cold water in the heating system, which can save 10 percent of final energy with a payback of one year. It’s so efficient, it is able to run on low-temperature district heat, which can reduce distribution heat loss by almost a third, according to estimates.  If done well, efficiency could avert the need for costly new renewable power plants, offering deeper savings to communities making decarbonization more possible and feasible. “It really makes sense to think energy efficiency first,” explained Seeland. “Energy efficiency is, to some extent, boring to talk about.  But you're wasting a lot of energy today, and green transition is expensive.” Yet despite these technologies existing with attractive payback periods, the world has struggled to keep pace with energy efficiency targets. According to the International Energy Agency (IEA), to reach net zero emissions by 2050 we’d need 4 percent annual improvements in energy intensity — yet we’ve averaged just 1.3 percent globally over the last five years.  Sonderborg’s strategy to increase efficiency globally: Inspire by example, and invite journalists (hi!) and leaders to see demonstration projects. This plan is why ProjectZero invited the IEA to hold its annual energy efficiency conference in Sonderborg this June, and why IEA’s executive director, Fatih Birol, dubbed the city the “Global Capital of Energy Efficiency” after seeing its efforts.   Step 2: Reuse energy through connecting projects Key to decarbonizing energy systems is integrating projects and strategies across the region. ProjectZero did this by breaking down challenges and opportunities into 15 focus areas in buildings, transportation, industry and energy, and finding local stakeholders to drive project management. While ProjectZero’s master plan is specific to Sonderborg’s resources, the process is replicable for other locales. The insight is the power of considering the unique mix of small solutions in a community that, in aggregate, amplify positive outcomes. This requires ongoing and meaningful cooperation across sectors. “If you start working across silos, you really start getting to the point,” said Lars Tveen, chairman of ProjectZero. “And you can only do that if you're able to really convert ‘what is in it for me’ down to citizens, down to the different parts of a society.” An excellent example is Sonderborg District Heating. The network connects homes and businesses across the municipality into a single system, allowing them to share heat resources for air and water heating. The system reaches more than 80 percent of the homes in the region, reducing their energy demands for space and water heating by 73 percent.  Businesses and industries that generate excess heat can capture that and sell it to the district system, both reducing the amount of energy needed for space and water heating for neighbors and creating a new source of revenue.  One business leveraging this scheme is the supermarket SuperBrugsen. The store installed a recovery unit to capture heat waste from its refrigeration system. That is then reused to heat the store and create hot water — reducing SuperBrugsen’s demands for energy to heat by 78 percent. This is a logical evolution of the standard HVAC model, where heat exhaust from refrigeration is released outside, then a different, energy-demanding system works to get the indoor temperature just right.  The cherry on top: When the supermarket creates more heat than it needs, it sells it into the district heat system to benefit neighboring buildings — while making a little money.  Step 3: Replace energy resources with clean energy  Once energy is reduced and repurposed, the last step is to transition what’s left to clean energy. If the first steps are done correctly, this will be a much smaller lift.  The region already has wind, solar, a biogas facility that uses waste from local farms, a trash incinerator used for heat (which is not considered renewable in Denmark), and a carbon-negative, energy-generating water treatment plant.  Two of these resources — biogas and the trash incinerator — I found particularly intriguing. Both are controversial in the climate community in the United States, and I found Sonderborg’s approach to both refreshing.  Sonderborg see biogas as a valuable tool to transition from natural gas — which it values both for its climate benefit and its desire to break dependency on Russia, which provides most of Denmark’s gas. So far it’s working: during a particularly warm day recently, biogas made upwards of 98 percent of the gas in the infrastructure — an incredible feat.  In the US, biogas (dubbed renewable natural gas by the natural gas industry) is locked in a battle where gas companies aim to use it to slow efforts to electrify, and climate advocates are wholly suspicious of it in response. This dynamic means biogas isn’t being used where it could be valuable, and the general public is confused. Denmark’s clarity here is refreshing.  The garbage incinerator was a sight to behold. In the US, this is controversial, as dirty facilities are linked to environmental racism and pollution. The facility in Sonderborg is designed to capture the heat for the district heating system, and a series of flumes capture pollution and toxins to sequester emissions and functionally eliminate impacts to air quality, according to leadership at the facility.  Sonderborg’s next step: continue to build out its solar and wind capacity (including an offshore wind farm that is scheduled to go online in 2027) and create a green hydrogen facility to use excess generation from wind resources. That hydrogen could be used as energy storage or with methane from the biogas plant to create a variety of fuels for sectors where electrification isn’t possible, such as shipping, aviation and plastics.  A note from the author I would be remiss to not mention Danfoss, a engineering company that makes components for a variety of technologies like HVAC systems and hydraulics. Danfoss is headquartered in Sonderborg and its family foundation is one of the funders of ProjectZero, as well as a sponsor of my trip to Denmark.  Danfoss has a dog in this fight. Part of its motivation to promote energy efficiency is because it manufactures many of the components in leading energy efficiency technologies. The company openly recognizes that energy efficiency will help its bottom line, as well as its desire for other localities to follow the example it has set in Sonderborg to grow its business.  After spending four days with people from ProjectZero and Danfoss, this double incentive does not give me pause. I agree with Danfoss that there is a wealth of opportunity in climate solutions, and I don’t think Danfoss’ desire to grow its efficiency business is at odds with climate efforts.  Adblock test (Why?)

As I am sure you’ve read on every website that ever existed, President Joe Biden signed the Inflation Reduction Act (IRA) into law Tuesday afternoon. How does that affect the future of food production in the United States? Let’s break it down a bit.First, this graphic from the U.S. Environmental Protection Agency does a fantastic job of visualizing the multiple inputs necessary for each stage of the food industry. I will be unpacking the impact the IRA will have on greenhouse gas emissions in the primary production phase — the highest GHG-emitting step in the food supply chain. Almost $6 billion is designated by the IRA to confront decades of systemic discrimination and provide relief for underserved farmers (defined as those living in high poverty areas, veterans, limited resource producers and newly established farmers and ranchers). You would think that the necessity of sustenance for survival would ensure farming as an economically secure career path, but the United States’ food system has other ideas. Farming requires so much financial overhead, most producers barely scrape by season to season, entirely dependent upon the success of each crop cycle. Exacerbated weather events due to climate change, such as drought or flooding, can decimate a season’s worth of crops and thus an entire farm’s income. Luckily, the IRA dedicates $3.1 billion overall in debt relief to at-risk farmers and ranchers, lifting some of that financial burden.   Additionally, a total of $2.2 billion is going towards farmers, ranchers and forest landowners who have experienced discrimination, with an additional $10 million for equity commissions to address racial equity issues at the U.S. Department of Agriculture. Lastly, a total of $625 million will be set aside to address a host of discrepancies, including providing technical assistance and improving land access to underserved producers, and increasing agricultural research and education at historically Black, tribal and Hispanic colleges.   A total of $20 billion, to be distributed in intervals beginning in FY2023, is reserved for existing conservation programs within the USDA. What does that look like? One main conservation program supported by the USDA is the Conservation Stewardship Program (CSP). Farmers can apply for funds to implement conservation practices, such as cover cropping expenditures, soil erosion barriers and capital to implement and maintain hedgerows that separate crops while simultaneously providing natural habitat for indigenous species. CSP annually receives around a $1.8 billion budget, but with the IRA, that number will practically double to $3.5 billion annually. And girl, is that necessary, given the massive drought plaguing the southwest U.S., the rampant flooding drowning the Eastern seaboard and agriculture’s massive annual release of 11 percent of the U.S.’s total GHG emissions. Let’s talk about the sirloin-shaped-elephant in the room.  Vox’s Future Perfect explained the IRA’s food-centered shortcomings well. The crux of the issue boils down to the law’s failure to address the dirtiest parts of the food sector; meat and dairy production. Many allocated funds directly affect smaller — but still important — areas such as indigenous habitat protection, reducing water pollution and improving soil health. While definitely necessary to address, the actual practices that make dairy and meat production so environmentally atrocious remain unaddressed. Instead, the IRA focuses on subsidies and tax breaks for biofuels and biogas infrastructure. Biofuels are made of corn and soybeans and “compete with food production for land and water [and also] increase fertilizer and pesticide use, water pollution and GHG emissions,” according to NGO Friends of the Earth. Biofuels are also generated at concentrated animal feed operations, a widely condemned industrial agricultural process that feeds livestock en masse and releases dangerous levels of GHG emissions and animal waste.   These examples represent only part of the impact the IRA will have on the environment and economy moving forward. But any forward progression to curb the climate crisis has to be seen as a win or we run the risk of taking two steps forward and one step back. For now, I’m content to munch on some carrots and continue the work we need to do. Adblock test (Why?)

While all 15 investor-backed resolutions raised during Amazon’s recent shareholder meeting died on the vine, there was a glimmer of hope with at least one. Almost half of the shareholders voted in favor of calling on the company to address its growing plastic packaging problem — the highest level of support among the resolutions considered and among all Amazon shareholder resolutions voted on to date. Shareholders are rightfully demanding more from Amazon’s leaders when it comes to sustainability — and their fight must continue. The resolution comes in the wake of an eye-opening report from Oceana, which found that Amazon produced 599 million pounds of plastic packaging waste in 2020, a 29 percent increase since 2019. This plastic packaging waste, in the form of air pillows, would circle our planet more than 600 times. Amazon’s shoppers are worried about such trends, with close to 90 percent of customers concerned about plastic pollution.   Amazon’s deleterious environmental impact extends beyond waste generated from packaging. Last year, 600 Amazon employees signed a statement calling on the company to address pollution that is concentrated in communities of color. The retailer’s sweeping warehouse empire tends to extend in ZIP codes that have a higher percentage of people of color — unlike its corporate offices, situated in suburban oases such as Palo Alto, California, and Arlington, Virginia. The company has still yet to fully come clean, requesting that its Carbon Disclosure Project report not be shared publicly. Amazon has no problem touting certain numbers surrounding its sustainability commitments — especially if those numbers are tweaked in a way to portray the company in a positive light. For instance, Amazon will only take responsibility for the full climate impact of products with an Amazon brand label — amounting to a mere 1 percent of its online sales. That means the full environmental consequences — the life-cycle of use and disposal — of many products purchased on its vast third-party marketplace are left unaccounted.  Only after being shamed by obtaining the F grade it clearly deserved did Amazon begin to disclose its footprints to the Carbon Disclosure Project, a global sustainability initiative. The company has still yet to fully come clean, requesting that its report not be shared publicly, unlike the majority of companies facing heat from investors for environmentally unsound practices. Even Amazon’s latest sustainability report tucked the disappointing information about its growing carbon footprint — an 18 percent increase from last year —  behind almost 100 pages of glossy tidbits about their sustainability efforts. Although some Amazon shareholders may feel a sense of hopelessness following the recent sustainability proposal’s failure, they are on the right track. As one commentator noted after the event, even a proposal that hits just 20 percent or 30 percent approval sends a clear message to the board that an issue must be addressed. A growing number of shareholders care about ESG and so do analysts who may downgrade stocks due to the risks that investors’ proposals will expose.  Perhaps without the financial presence of Amazon’s former CEO, Jeff Bezos, the plastics reporting resolution may have had a shot at passing. Bezos, the company’s largest shareholder, owns at least 10 percent of the company’s shares, giving him the ability to shape the company long after his departure from active corporate leadership.  However, there is no indication that Bezos’s influence will be any less significant in the near term. That makes the fight from Amazon shareholders even more necessary and confirms why they must continue to ensure the company’s sustainability commitments are not just empty promises.   There is an ongoing and necessary sea change in how Americans are viewing Amazon — especially around ESG — and the company’s shareholders have an indispensable role to play in this shift.    Adblock test (Why?)

ESG, sustainability, impact, climate — whichever focus suits you — the Inflation Reduction Act probably felt like a big win. But sustainability wins tend to produce short-lived celebrations. Two minutes into the party this week, the first "yeah, but" calls amid the cheers reminded us (rightfully so) that we’re dancing on the brink of a mass extinction. One of the more powerful "yeah, buts" in private sector sustainability is the mismatch between the story an organization tells its stakeholders and the one its lobbyists and trade groups tell elected officials.  Take Big Tech, now captured by the awkward MAMAA moniker. These companies get positioned as ESG darlings in public discourse and investment fund holdings alike. Running data centers on carbon-free energy 24/7 by 2030 is ambitious, good for the climate and good for business — an archetypal sustainability win. But consider Big Tech’s meager 4 percent annual spend on federal climate policy lobbying, and the aura of ambition dims.  The same applies to finance, and maybe even more so. "Engagement" is touted by the investment industry as a — if not the — key strategy to get to net zero. Take, for example, BlackRock CEO Larry Fink’s 2022 Letter to CEOs, where he focused explicitly on the firm’s growing Investment Stewardship team.  But while sustainability-minded investors such as Green Century, Trillium and Walden have been tenacious and consistent in pushing portfolio companies on ESG performance, the majority of the larger firms "say they engage, but it’s just a nice conversation, because they don’t have an escalation path," as As You Sow CEO Andrew Behar told me.  Much attention has been given to institutional investors’ engagement with portfolio companies on ESG issues. But in such a dynamic regulatory and policy environment for sustainable finance, surprisingly less has focused on investors’ own policy engagement. There will be increasing attention paid to what is being said out of both sides of the mouth by financial services companies about ESG progress in portfolios and in policy.  Climate change think tank InfluenceMap has developed the "most comprehensive analysis on how the financial sector is influencing climate-related financial policy." I took a look into the organization’s Sustainable Finance Policy Engagement platform to get a better sense of how the largest financial institutions are influencing the passage of global sustainable finance policies.  The world is not so black and white, but dividing leaders from laggards can be a helpful heuristic. Here are a few takeaways on what best and worst practices look like.  Leaders Multinational insurance firm Aviva took the top spot on the InfluenceMap list, with a grade of B. Aviva Investors, the asset management arm of the firm, led much of the firm’s policy engagement. A financial firm that can trace its roots back to the 17th century doesn’t seem the most likely candidate to be calling for major systems reform. But Aviva, as InfluenceMap points out, is nearly alone in its assertion that the "way money flows through capital markets today is a product of evolution — not design … Were we to create the markets from scratch today, we would create a very different system." On engagement toward Paris Agreement-aligned climate policy, Aviva checks the boxes you’d hope to see from a sustainable finance leader.  The firm has pushed for integration of the Task Force on Climate-related Financial Disclosures recommendations into European Union policy and supported the mandatory implementation of TCFD by the G7. It has also pushed governments to require companies to disclose their action plans in aligning their business strategies and climate goals, and was early in vocalizing its support for the EU taxonomy, pushing further for the taxonomy to include environmentally damaging business activities in addition to sustainable ones.  The list of supported activities is too long to enumerate in its entirety, but Steve Waygood, Aviva Investors’ chief responsible investment officer, summed up its position well: "The financial services industry is failing. It is clearly influential; we need to use that influence for macro-stewardship, not just micro-stewardship with individual companies." A good example of macro-stewardship is Aviva’s advocacy to mandate net-zero targets for central banks. Of particular note, too, Aviva has been an active supporter of a fundamental change that many in the institutional investor universe have been less keen to touch: The fiduciary duty to act in the best financial interest of clients should include ESG issues. Laggards The lowest grade — a D — was awarded to Ameriprise Financial, which demonstrated limited and, when exercised, mixed engagement. While the firm acknowledges the risk climate change poses to the financial system, it hasn’t demonstrated interest in or support for reform. Columbia Threadneedle, the asset management arm of Ameriprise, opposed the EU's sustainable finance action plan, emphasizing that policy of this nature should deal with operations in the real economy and not focus on finance, and that such a taxonomy would create more confusion than solutions. That said, Columbia Threadneedle did voice support last year for the Biden administration’s focus on sustainable finance, saying, "It’s time for the U.S. to play catch up" on ESG policy.  Something all the D and D-plus grade recipients shared was a lack of detail about engagement strategy with policymakers and, importantly, a lack of disclosed memberships to influential trade associations (especially those known to consistently lobby against climate legislation). Or, when the memberships are identified, few details are given about the type of indirect influence on governance these roles have. The key takeaway on both ends of the leader-laggard spectrum is — as with so much in the sustainability transition — about increased stakeholder awareness and expectation. The role of finance in realizing the transition to a clean economy is becoming clearer to stakeholders such as customers and employees, and increasing attention will be paid to what is being said out of both sides of the mouth by financial services companies about ESG progress in portfolios and in policy.  Not every industry has an advocacy group such as ClimateVoice, but as the last few years have seen, amid an increase in ambition from policymakers to enact climate-related financial policy, the contributions or opposition to progress on that front by investors and lenders will come more closely under the microscope. The perception that finance is pumping out greenwash is already heightened, and increased scrutiny by organizations such as InfluenceMap will only raise them. Adblock test (Why?)

How’s your green finance IQ? Are you up with crypto, down with green bonds? What’s the difference between sustainable finance, ESG investing and impact investing? And how is your Web3, blockchain and AI savvy?Pass the above tests? Then what about DeFi, NFTs, DAOs, khaki bonds, double materiality, green shorting, impact insurance, stablecoins and smart contracts? You can look up the definitions of these and other terms making up the lingo of green finance — and you had better do so quickly, if you haven’t already. As I heard more than once at GreenBiz’s recent GreenFin 22 conference, this lexicon refers to practices, products and strategies that are in play today — "FutureFi" is happening right now, not at some far-off date. The main driver is cryptocurrency, digital currency that uses cryptography such as blockchain to manage transactions. "Crypto is money built for the internet," was the speakers’ mantra at "The Future of Finance" panel I attended. "It’s the new baseline for the transformation of value," asserted moderator David Bennell, chief sustainability officer of Hyphen Global AG. This is the next generation of value to manage assets, whether stored or transferred: a digital token economy. The premise is that digitalization makes investment more efficient — more available to more people, with more transparency via blockchain accounting. Just as the rewiring of the internet, a transformation called Web3, is aimed at decentralizing monopoly controls by Big Tech, so it goes with digital finance. This results in decentralized finance, or DeFi, an umbrella term for financial products and practices developed for use with the blockchain, including many for green finance investing. They include items such as tokenized carbon credits, non-fungible tokens (NFTs) and stablecoins. DeFi also produces decentralized autonomous organizations (DAOs), which guide allocations through smart contracts executed by artificial intelligence algorithms. One example given by Jamie Chapman, principal of ESG for Superlunar, was that of Big Green, a nonprofit that was originally a school garden project but, under COVID restrictions, converted into a DAO that democratizes their grant giving, thereby disrupting traditional philanthropy. Big Green claims to be the first nonprofit-led, philanthropic DAO. The main argument underlying the logic of DeFi is for resiliency through a widely distributed system. Put another way, it takes advantage of the wisdom of crowds rather than guidance from a small, concentrated group of traditional financial professionals (such as those who brought us the global financial crisis in 2008-09). The qualities of enhanced transparency and data-driven digitalization should especially amp up the ability of green investors to manage risk and volatility while maximizing potential benefits. This paradigm-shifting investment disruption is well under way.   Sounds great — but there are issues that throw some shade on the bright picture of this futuristic finance landscape. For example, digitalization depends on data — and to judge by the current concerns about the inconsistency, incompleteness and non-comparability of ESG data, this is a major challenge. The biggest issue may be crypto itself. Created as a way to handle money outside of traditional banking systems, it has its own transparency and accuracy problems. Recent headlines about crypto are rife with bankruptcies, fines, hacks, fraud, insider trading and opaque practices within crypto world. The crypto crash has resulted in a drop of $2 trillion in valuation across the sector since January. Crypto companies have loaned to other crypto platforms, leveraging bullish buys with insufficient collateral. Some apparently paid early investors with incoming revenue from new inflows, a model resembling a classic Ponzi scheme. This is an industry ripe for regulation, and it appears that is imminent, with the U.S. Securities and Exchange Commission levying criminal charges against fraudulent crypto practices. DeFi — decentralized finance — gets a large portion of the blame for the current meltdown. Forced selling by retail depositors of crypto who invested for yield are the culprits, Martin Green, CEO of quant trading firm Cambrian Asset Management, told CNBC. "2020 onwards saw a huge build out of yield-based DeFi and crypto ‘shadow banks.' There was a lot of unsecured or undercollateralized lending as credit risks and counterparty risks were not assessed with vigilance. When market prices declined in Q2 of this year, funds, lenders and others became forced sellers because of margins calls." There are also external issues: Inflation, bearish market conditions and a looming possible recession are macro-economic dampers on innovative products and practices. Then there’s soaring energy prices, and the fact that crypto mining is an energy hog of huge proportions. The tens of thousands of specialized computing machines that create cryptocurrency and manage trades run 24/7. Bitcoin, the world’s largest, uses an estimated 150 terrawatts of electricity annually — more than Argentina, a country of 45 million. And that energy production is also emissions-heavy, putting out 65 megatons of carbon dioxide, comparable to the emissions of Greece. In Texas alone, crypto miners may increase energy demand by mid-next year by 6 gigawatts, the equivalent of adding another Houston to the grid. It’s important to remember this brave new world is a work in progress, and it is early days. Many of the above issues — transparency, volatility, data accuracy and regulation (or the lack thereof) — also bedevil traditional finance as a matter of doing any investment business. And efforts are well underway for solutions to the above problems. For example, the ongoing consolidation and harmonization of ESG data by the Values Reporting Foundation aims to answer questions about the data that is needed for digitized investing to work properly. DevvESG, a company represented on the panel, was defined as "a verifiable source of truth for ESG data and tokens" by Belem Tamayo, director of international partnerships for parent company, Devvio. Its approach, called the AIR methodology, offers ESG "better" in baseline analysis, guidance, tools and data through an open platform, according to the company’s marketing materials. Credible data, open platforms, democratization — these are qualities that lend themselves particularly to green finance values across its various products and goals. If crypto is to serve as the foundational currency of FutureFi, then its issues must be addressed so that these aspects can effectively drive innovation, allowing the many varieties of green investment products and services based on crypto to flourish to their full potential. Here's the thing: This paradigm-shifting investment disruption is well under way. The enthusiasm, smarts and drive to push it forward by a young generation of financial professionals that I saw at GreenFin 22 gave a big clue as to what will drive its eventual success. I don’t doubt the speed bumps in its developmental phase will be flattened out. Prep yourself for a learning curve while catching up with FutureFi, now in progress. Adblock test (Why?)

This edition of Transport Weekly strikes at the core of a labeling issue that the automobile industry is currently facing. I want to preface that this piece is strictly my opinion, so I welcome any thoughts. Let us focus on two phrases and their respective acronyms: electric vehicles, also known as EVs, and zero-emission vehicles, also known as ZEVs. Generally speaking, an EV is a vehicle that uses a battery and an electric motor either fully or partially to move instead of relying on a traditional combustion engine. Thus, an EV has reduced, or in some cases, zero-tailpipe emissions. There are plug-in hybrid EVs and hybrid EVs, which still use a traditional combustion engine partially or fully, and all-battery EVs, which use only a battery and electric motor and thus have zero-tailpipe emissions. On the other hand, a ZEV is a vehicle that has no traditional internal combustion engine and thus produces zero-tailpipe emissions.  For categorization purposes, an all-battery EV is a ZEV, but a plug-in hybrid or hybrid EV is not. Other types of ZEVs include hydrogen fuel cell vehicles. Are you still with me? I promise I am getting to my point. The distinction between EV and ZEV is critical and yet obvious if you work in the transport industry and focus on electrification. It might also be obvious to some in the general public who are early EV and ZEV adopters. However, many governments, organizations, press releases and media coverage use EV and ZEV interchangeably, which can potentially confuse the general public. Here is one example of what I mean: In August 2021, President Joe Biden signed an executive order “setting a goal that 50 percent of all new passenger cars and light trucks sold in 2030 be zero-emission vehicles, including battery electric vehicles, plug-in hybrid electric, or fuel cell electric vehicles.” On its own, that sentence pulled directly from the executive order is partially confusing because it ties non-ZEV vehicles (plug-in hybrid electric) with “zero-emission vehicles.” After that executive order signing, dozens of news outlets published headlines and stories, continuing this conflation between EVs and ZEVs.  But that isn’t an isolated example. There are countless examples of publications, reports and studies like this recent article by Axios about which states are driving U.S. EV adoption. (Sidenote: I am not trying to single out any publication — even GreenBiz Group hasn’t always made the distinction between EVs and ZEVs clear.) Why does this matter? It honestly may not — I may be pointing to something that will settle itself over time as the transition toward EVs and ZEVs continues and consumer knowledge grows. However, what I do know is that the world needs to transition as quickly as possible to 100 percent ZEVs for passenger vehicles, not plug-in hybrid EVs because the latter still burns fossil fuels and emits harmful tailpipe emissions. Using EV and ZEV interchangeably possibly exacerbates and fuels some people’s hesitancy to go electric by adding confusion about how the automotive industry is transitioning, what is an EV or ZEV and why one is better or worse than the other.  A recent survey by Consumer Reports surveying consumer knowledge and desire to purchase an EV and ZEV showed that of the 8,000 people surveyed, 60 percent were either “not at all familiar” or “not too familiar” with electric-only vehicles (i.e., all-battery EVs). Furthermore, what I’m about to share is not sustained by research and is based on my observations: I continuously run across people in the general public who say – “So many car companies are going all-electric and will only sell EVs like Tesla” — and then those same individuals will point to plug-in hybrid EVs as examples … public confusion!  Using EV and ZEV interchangeably possibly exacerbates and fuels some people’s hesitancy to go electric by adding confusion about how the automotive industry is transitioning, what is an EV or ZEV and why one is better or worse than the other. So what is the solution? One option may be that EVs could only be used to refer to plug-in hybrid and hybrid vehicles. The phrase "zero-emission EV" could then be used for 100 percent battery electric EVs. Another option could be to do away with lumping plug-in hybrid and hybrid vehicles in with all-battery EVs, leaving the phrase EV for only 100 percent battery EVs. I am interested to hear what others think could be a solution.  At the end of the day, we are only hurting ourselves by continuing this naming debacle. Come 2030 or 2035, if we have not made meaningful progress in transitioning toward true ZEVs, then we will have much bigger issues to deal with than correcting how we advertise and explain EV, ZEV or whatever new acronym we choose.  [Want more great analysis of electric and sustainable transport? Sign up for Transport Weekly, our free email newsletter.] Adblock test (Why?)

To a significant degree, the future of renewable energy is tied to lithium, and the race is on to secure abundant and reliable resources of this metal.A low-carbon future requires lithium-ion rechargeable batteries for electric vehicles and the storage of power from renewable sources, such as solar and wind energy. Indeed, the market for lithium-ion batteries is projected by the industry to grow from $30 billion in 2017 to $100 billion in 2025. An emerging source for high-value lithium is in geothermal brine — "a hot and concentrated saline solution enriched with minerals, such as lithium, boron and potassium." Despite the relatively low concentrations that can be encountered (a few hundred parts per million) present in these brines, the very large volume of brine processed in a geothermal power plant (hundreds of cubic meters per hour) makes brine a valuable potential resource. However, the current approach to extracting lithium from brine involves evaporation ponds, which is complex and inefficient. As a consequence, only about 30 percent of the lithium in the original brine reaches the marketplace. The opportunity for increasing lithium production from geothermal brines was outlined in a 2020 report prepared by the California Energy Commission. The analysis outlined the opportunity to extract lithium from geothermal brines in California and discussed an expected benefit of improving the economics of geothermal energy production by generating revenue from the production and sale of lithium carbonate. The increasing demand for lithium has also created an opportunity for the development of innovative treatment technologies to extract lithium from brines. For example, the primary author of the California Energy Commission report, research institute SRI International, demonstrated a new process for the extraction of lithium from geothermal brines based on "new high-capacity selective sorbents (material used to absorb or adsorb liquids or gases) and a new sorbent regeneration process." The demand for lithium is certain to inspire ventures, attract investors and fuel innovation in other new geographies as countries scramble to be lithium-independent. Compared to traditional methods of recovering lithium from brines, "SRI International’s sorbents and regeneration processes are expected to reduce the cost of lithium production by allowing online separation with higher recovery efficiency and using smaller volumes of sorbent, minimizing processing time. The project team demonstrated extraction of lithium with efficiency as high as 90 percent and detected no significant loss in capacity after repeated lithium adsorption-desorption cycles." Other examples of innovative treatment technologies come from companies including Evove, based in the U.K., and EnergyX | Energy Exploration Technologies, based in the U.S. Advances in membrane technology have been a major area of focus in the water sector, driven by the need to turn brackish or saline water into fresh water for consumption. Evolve is an example of how innovative water technologies are being applied to the extraction of lithium from brines. Based on company information, Evolve has achieved a greater than 90 percent recovery of battery-grade lithium (with a greater than 99.5 percent purity) with geothermal brines in its laboratories. The company is starting pilots that will lead to full-scale commercial harvesting in 2023. Elsewhere, EnergyX | Energy Exploration, is using a polymer membrane developed by chemical engineering professor Benny Freeman of the University of Texas at Austin. According to the company, EnergyX | Energy Exploration intends to filter lithium directly from brine. Freeman told the Economist that the company’s pilot plant, which will be able to fit into a standard shipping container, should be able to handle millions of liters of brine a day. Once the process is perfected, the company believes it can extract at least 90 percent of the lithium within a brine. The race for new sources of lithium and new technologies to extract lithium from brines (either as part of geothermal energy production or other sources) has launched a "gold rush" in regions with access to geothermal resources. In the U.S., investors and companies have focused on opportunities within the Salton Sea in California. Three companies, Controlled Thermal Resources, EnergySource and Berkshire Hathaway Renewables, are testing or scaling up pilot technologies there and chasing billions of dollars in private and public funding for the construction of up to half a dozen facilities in the next decade. California Gov. Gavin Newsom has referred to the Salton Sea as "the Saudi Arabia of lithium." The sea is likely one of the world's largest lithium deposits, but it will be at least two years before major production volumes are achieved. Activity is also centered on deriving lithium out of the geothermal waters found in Cornwall, U.K., where companies such as mining concern Cornish Lithium have established operations. The demand for lithium is certain to inspire ventures, attract investors and fuel innovation in other new geographies as countries scramble to be lithium-independent. Adblock test (Why?)

Entrepreneurs of green startups are especially excited when we reach the point where we can grow. It demonstrates that our initial idea has been well-received, our team is working together dynamically, and the company is receiving positive feedback from the media and the entrepreneurial community. These signals confirm you can start looking for capital or other financing and transform your startup into a company with exponential growth.The hunt for venture capital, however, is no mean feat in today’s economic climate. This year, the markets experienced a slowdown of 20 percent. Unfortunately, the current investment winter is hitting startups advancing green and environmentally friendly practices as well.  With most deals going to high-emission companies, it’s time for green startups to think more strategically when building their investor relationships. I myself spent months looking for the best investment partner for my food tech startup — and it wasn’t easy. So, to help others strengthen their funding journey, I’ve put together three tips that can help green entrepreneurs attract venture capital. 1. Understand the difference between climate vs. value-based investors Most green startups will think of climate investors when they want to scale their businesses. These investors seek to generate both a financial return and a positive, measurable environmental impact through their investments. Their funds have very prominently supported startups such as Global Thermostat and promote climate change mitigation and adaptation. Looking at the fine print, you’ll quickly notice that it might not always be smart to put all your eggs into the baskets of those specialized investors. During my journey, I experienced little interest from climate investors and all the more excitement from conventional investors. Why? Because climate investors have pre-defined metrics and strict investment theses that don’t fit all companies and industries. Most of these investors meticulously measure carbon emissions, pollution, carbon reductions and overall impact on climate, thereby hunting for energy and renewable resource solutions first and foremost. As a result, many startups with a great green vision, but less of a climate focus, might seem marginal to them. Climate investors might also have little interest in consumer industries such as food, commerce or logistics. If you're keen on connecting with conventional investors, remember their main criteria is profitability. Your climate impact is a nice-to-have and crucial for investment decision-making, but without showing convincing business metrics — including go-to-market strategy, revenue predictability and marketing forecasts — you won’t draw conventional investor attention. 2. Diligently collect evidence that you can scale  Investors aren't interested in keeping a business afloat. Their goal is to grow their capital by investing in your industry. So before turning to investors, collect enough evidence showing you can survive without investments. If that's the case, you're at the point where you can scale. Present yourself to investors with a concrete business plan on how to achieve this growth in a short time, and they will welcome you with open arms. Before meeting investors, you need to put together all material, current market statistics, potential market outlooks and predictions. The more insights you have into your drivers of growth (for example, which area you need to scale to achieve desired outcomes), the better. Let’s say your goal is to expand your product portfolio geographically and enter a neighboring country’s consumer market. You’ll need to clearly define how many local experts you will hire, whether your technology is apt for an exponential sales increase or requires new engineering, and know about costs of market entry, as well as sales distribution abroad. It might not always be smart to put all your eggs into the baskets of specialized investors. I also advise you to not only learn about your business metrics but also to study and understand what investors are looking for when making an investment decision. Talk to their portfolio companies before meeting them and ask about their personalities, visions and how they’ve managed funding before. This will allow you to empathize with their goals and present the right arguments and numbers when pitching your startup. Finally, regardless of whether an investor has an impact mandate: They’ll invest if it's profitable. Remember, if your impact isn't scalable, you not only won't find investors, you also won’t have the impact you envisioned. 3. Explore the art of valuable networking in a hybrid world Networking has always been key to connecting with investors but due to the pandemic, building personal connections isn’t as easy anymore. As much as the internet allows us to collect a broader range of contacts, these connections are often much looser when compared with personal ones. As a result, you need to be strategic. Start with building an active LinkedIn community. This helps expand your network, receive advice on funding opportunities from other entrepreneurs, and strengthen your messaging about your purpose and business. In addition, because LinkedIn is a community network, I advise you to contribute to conversations, share and discuss opinions, and also start a conversation about important topics (both entrepreneurial and "green" topics). Many LinkedIn groups focus on green startups, innovation and sustainability, and your presence in those spaces will open new doors to funding opportunities. When reaching out, building entrepreneurial contacts comes first. This allows you to learn from their business and funding paths, and follow them closely with their help. For example, when we received our initial funding, we had networked with all our investors through companies they had already been in contact with, and we already understood what the investors were looking for ahead of our first pitching session.  To do so, be upfront and ask your contacts: "Who is the next person you can introduce me to?" or "Who would be interested in hearing my story?" People love to build a network. They just need a little nudge in the right direction. Now, even if you know 1,000 people, the key to winning them over as ambassadors is the quality of your relationship. Almost 100 percent of professionals believe that face-to-face meetings build stronger long-term relationships. So you need to try building a similar personal connection to face-to-face in a hybrid world. How? I've watched many people build purely transactional relationships. Still, in my experience, the emotional aspects of networking — adding value with advice, interactions, information exchange, support to what they are doing, and engagement on multiple levels (professional, personal) — are essential to building lasting relationships. Show that profit and purpose go hand in hand  The hunt for capital has undoubtedly become more complex. This doesn’t mean giving up, but instead multiplying your efforts. It will be much easier for green startups to look more broadly across the investor landscape. As more traditional investors seek to have an impact and expand their profit, green startups can take advantage of this opportunity. I can’t emphasize this enough: If you want to have a big impact on the world, the key is scaling your business. And this is where you must create synergies with traditional investors on the profitability of purpose. [Want to learn more about entrepreneurs with innovative technologies, products and services across the climate tech landscape? Check out the VERGE 22 Startup Program, taking place in San Jose, CA, Oct. 25-27.] Adblock test (Why?)

Recently proposed regulations from the U.S. Securities and Exchange Commission and Department of Labor highlight the potential impact of ESG factors on corporate financial performance. Corporations, in turn, face heightened public scrutiny on their handling of employee matters related to health, climate and social justice.As companies increase their focus on ESG-related impact, many have begun to align their executive incentive-pay structure with corporate ESG goals. This shift toward tying an increased portion of executive pay to corporate performance on ESG-related goals was evidenced in the 2022 proxy season, which saw many prominent public companies disclose new or enhanced ESG metrics in their pay structures. As attorneys in the nation’s preeminent executive compensation and employee benefits practice, we have assisted many executives and corporate boards in navigating these new ESG waters. This article shares advice and perspective based on our experience counseling executives and corporate boards on understanding and negotiating compensation structures. Regulatory context It should come as no surprise that companies are increasing their focus on ESG metrics just as the SEC and DOL are issuing strict regulations surrounding ESG-related corporate disclosures. In March, the SEC released a proposed rule that, if adopted in its current form, would require public companies to disclose a broad range of ESG-related information. These mandatory disclosures relate to governance of climate-related risks and relevant risk-management processes; how climate-related risks have had or are likely to have a material impact on business operations; and how these risks have affected or are likely to affect strategy, business models and outlook. In a similarly climate-conscious vein, the DOL recently released two pieces of guidance related to ESG and retirement-plan investing. The first, a proposed rule published in October, would make it easier for retirement-plan fiduciaries to consider ESG factors when making decisions related to the plan in question. The second, a request for information released in February, seeks input from industry stakeholders on whether there is more the DOL can do to address the potential risks climate change poses to retirement-plan savings. The actions of the SEC and the DOL are part of a larger political and social trend pushing corporations to focus on ESG matters. ESG focus takes hold in executive pay As companies face stricter regulations and scrutiny surrounding ESG disclosure and impact, it is understandable that public company compensation committees will turn to linking executive pay to performance in these areas. Performance-based pay has long been accepted as an effective means of motivating executives to act in the best interest of their shareholders. In our legal practice, we have witnessed firsthand the general trend of companies tying executive pay to corporate ESG goals. Of the $6.96 billion in compensation paid to S&P 500 CEOs in 2021, 8.6 percent of that, or $600 million, was tied to corporate ESG performance. This correlates with the broader, steady increase in corporate focus on ESG-type performance metrics in the area of executive compensation. In 2019, 16 percent of U.S. companies included ESG considerations in their executive incentive plans; that figure rose to 21 percent in 2020 and 25 percent in 2021. Certain performance-based ESG pay metrics are more popular Based on our experience with executive-compensation structures, successful performance-based pay plans closely align executive performance metrics with overall corporate purpose and strategy. As such, the ESG metrics included in incentive-pay programs should (and do) differ based on industry and company culture. A specific company’s degree of involvement in environmentally or socially sensitive and labor-intensive industries influences the degree to which the overall corporate strategy weighs such ESG concerns. As a whole, however, the ESG metrics most commonly selected by boards and compensation committees include those related to diversity and human capital management. These areas are more quantifiable than some other ESG metrics, which makes them easier to track for incentive-based pay purposes. They are also increasingly important to investors and other stakeholders due to their correlation with liability risk. While it is still relatively common for companies to include generic or subjective references to 'ESG-related' goals in their performance-based incentive plans, some are introducing more specific and measurable targets ... We have seen numerous diversity- and other workforce-related goals in recent publicly filed incentive plans. For example, a large financial institution included "increasing diversity representation" as one of the individual performance criteria in its performance-based incentive-compensation plan effective Jan. 1, 2021, and an insurance company tied a percentage of executive annual incentive pay for 2022 to corporate achievement of the goal to increase employee use of a company-sponsored wellness plan. Shift from subjective to objective measurements Over the last couple of years, as public and regulatory pressure have mounted on companies to improve their disclosure and performance in ESG-related areas, we saw a shift in ESG-related performance goals from more general or subjective goals to more clearly disclosed objective and measurable goals. While some companies still use generic language when referencing ESG goals as performance metrics, many are making it more measurable and objective. As an example of the more generic or subjective style of ESG performance goals, a large transportation company phrased a short-term incentive-plan performance goal for 2021 as follows: "Implement and document good faith efforts designed to ensure inclusion of female and minorities in the pool of qualified applicants for open positions and promotional opportunities and otherwise promote … commitment to diversity, equity, tolerance and inclusion in the workplace." Similarly, a retail company included "goals relating to environmental, social and governance criteria" at the end of a laundry list of other financial metrics to be listed as performance metrics in its 2020 stock incentive plan. We refer to these types of ESG goals as "generic," as they include subjective standards such as "good-faith effort" and, as such, are not quantifiable. While it is still relatively common for companies to include generic or subjective references to "ESG-related" goals in their performance-based incentive plans, some are introducing more specific and measurable targets in response to increased regulatory and social pressure to broaden corporate sustainability efforts. For example, an industrial machinery company decided to include in its 2022 short-term incentive plan a multiplier to the payout opportunity directly tied to measurable corporate progress toward achieving two longer-term goals: "a 50 percent reduction in Scope 1 and Scope 2 greenhouse gas emissions for 2030 and progress toward achieving gender parity among our executive leadership by 2030." In other words, the short-term incentive-payout factor would increase or decrease by a multiplier of 1.1 to 0.9 based on measured achievement toward those specific and measurable long-term goals. Similarly, an aerospace company’s compensation committee factored its 6.2 percent decrease in greenhouse gas emissions (as compared to 2020) into determining payout under its short-term cash-incentive program. There are other cases in which oil companies, for example, have considered emissions in determining payout under short-term compensation programs. Elsewhere, a financial-services company recently tied annual incentive pay for executives to corporate performance on very specific and measurable ESG goals. This company disclosed in its 2021 proxy statement that executive payouts could increase or decrease by 10 percent overall, depending on two factors: corporate performance toward the goal of net-zero greenhouse gas emissions by 2040; and closing its gender pay gap. Some companies have also moved toward disclosing the specific percentage of executive pay to be tied to progress on ESG goals. For example, a multinational food company disclosed in its 2022 proxy statement that 10 percent of the CEO’s performance score is directly tied to corporate progress on global ESG goals (related to healthy living and community support, environmental stewardship and responsible sourcing). As regulatory and social factors continue to place pressure on companies to be more transparent with respect to their global impact and sustainability efforts, we expect an increasing number will tie executive pay to corporate ESG performance. We predict companies will shift toward more specific and measurable ESG-related goals in an effort to incentivize executives to focus more heavily on these areas. We also predict companies will continue to disclose their ESG-related pay structures as a public display of corporate commitment to and focus on ESG. Adblock test (Why?)