Green Markets #10
Financial news in environmental markets.
Green Markets is a weekly series dedicated to highlighting events of interest or developing trends within environmental markets. The emphasis is on news that could impact investable opportunities in public stock markets.
Notable Events
The Biden administration recently released its Voluntary Carbon Markets Joint Policy Statement and Principles, a set of guidelines for engaging with credible carbon credits and their associated projects. This policy statement was co-signed by senior administration officials including Treasury Secretary Janet Yellen, Agriculture Secretary Tom Vilsack, Energy Secretary Jennifer Granholm, Senior Advisor for International Climate Policy John Podesta, National Economic Advisor Lael Brainard, and National Climate Advisor Ali Zaidi.
The European Union (EU) just granted final approval to the Net-Zero Industry Act, a bill designed to prioritize permitting and funding for technologies deemed necessary to make the EU climate-neutral by 2050. The legislation accelerates permitting efforts and allows for easier access to funding for these initiatives.
In addition, the European Union just approved new regulations making carbon tracking mandatory for companies selling products in the EU. After being signed, the regulation will be published in the Official Journal of the European Union and will enter into force on the 20th day following that of its publication. It will go into effect two years after that date.
239 companies have been marked as “commitment removed” by the Science Based Targets initiative (SBTi) due to insufficient progress in their climate goals. While SBTi tracks thousands of companies, this news signals an emerging trend of companies skimping on their net-zero climate goals.
Saudi Aramco is exploring LNG deals in the United States as part of its plan to expand its global LNG business. Developers' talks with Aramco are centered on Sempra's Port Arthur LNG terminal and NextDecade's Rio Grande LNG terminal, both located in Texas.
According to Robeco, an international asset manager, a recent survey of 300 global institutional and wholesale investors representing a collective $29T in AUM found that:
62% of investors reported that climate change is a central or significant part of their investment policies; this figure declined from 71% last year. This downturn was primarily accounting for North American investors.
48% of respondents reported that they are currently allocating to funds that invest in climate solutions, with another 25% planning to do so over the next two years.
Green Funding Initiatives
Mizuho Financial Group has set an ambitious goal of providing $13B in financing for hydrogen production and other low-carbon technologies by 2030. This is part of a larger initiative to provide $350B in funding for environmental and climate-related projects.
Energy Capital Partners, an investment firm focused on energy transition, electrification, and decarbonization infrastructure assets, recently completed a $6.7B fundraiser for its fifth fund “ECP V.”
Clean Energy Ventures, an early-stage climate investment firm, just closed its second fund on $305M in funding.
Woodside Energy received a $1B loan from the Japan Bank for International Cooperation (JBIC) to fund its Scarborough gas field development project. The project is expected to generate an additional 5M tonnes of LNG by 2026.
The UNDP and Global Environmental Facility (GEF) announced the Blue and Green Islands Integrated Program to scale up nature-based solutions development in 15 Small Island Developing Stages (SIDS). This program provides $135M in funding to combat environmental degradation, among other positive effects.
Lightrock, a sustainability-focused private equity investment firm has launched its Lightrock Global Small-Cap strategy with €400M in funding. The new strategy focuses on the company’s proprietary ESG and Impact frameworks while investing in listed, global, small-cap companies.