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Global 500: GHG emissions on the rise

The curve is still heading in the wrong direction for big business’s greenhouse gas (GHG) emissions. The carbon footprint of the world’s 500 largest companies (Global 500) grew 3.1% from 2010 to 2013, according to research by Thomson Reuters and sustainability consultancy BSD Consulting. This is a troubling trend given that GHG emissions should have seen a 4.2% reduction over the same period if the world is to have a chance of staying within a 2C average increase in global temperatures compared to pre-industrial levels.

Collectively, the Global 500 accounted for 13.8% of world GHG emissions. At 4.96 gigatonnes of CO2 equivalents in 2013, the world’s biggest businesses have a larger carbon footprint than the entire European Union’s 2010 GHG emissions, at 4.66 gigatonnes of CO2 equivalents. The top 20 emitters, meanwhile, produced a combined 2.77 gigatonnes of CO2 equivalents, representing more than half of Global 500 GHG emissions in 2013.

The energy sector is one of the biggest industrial GHG emitters, accounting for 37% of the total Global 500 emissions. Some energy companies are bucking the trend, at least partly. French energy giant Total cut its direct and indirect emissions by 11.8% in 2010 through a combination of reduced gas flaring and less carbon from energy procured for its operations. Regrettably, the company’s overall energy efficiency dropped 2.3% between 2012 and 2013.

Global 500 Greenhouse Gases Performance 2010-2013: 2014 report on trends

Steady growth for global clean tech

Investment in clean technology jumped 16% to $310bn in 2014, representing a bounce-back to near-record levels, new research by Bloomberg New Energy Finance shows. Growth in the solar and wind industries accounts for most of the expansion, with annual investment in the two sectors rising 25% and 11%, respectively.

On a country level, China topped the investment stakes, increasing its spending on clean technology by 32% to a record $89.5bn. The US (up 8% to $51.8bn), Japan (up 12% to $41.3bn), Canada (up 26% at $9bn) and Brazil (up 88% at $7.9bn) also notched up impressive increases in investment.

Notable new investment projects in 2014 include the 250MW Setouchi Mega solar PV project in Japan, estimated at $1.1bn, and the 100MW Xina Solar One solar thermal plant in South Africa, estimated at $1bn. Mega projects entering their final investment cycle, meanwhile, include the $3.8bn, 600MW Gemini wind farm off the coast of the Netherlands and the $2.6bn, 402MW Dudgeon wind project in UK waters. Investment totals showed a downward trend for some technologies, however. Investments in biofuels, biomass and micro-hydro fell 7%, 10% and 17%, respectively in 2014.

Bloomberg New Energy Finance

Energy shortages affect 2 billion

Nearly 2 billion people lack access to reliable and affordable modern energy, equivalent to three in 10 of the world’s population, according to recent research by the Shell Foundation. Of these, 60% live entirely without electricity for cooking, lighting and heating at home, for community services, or for improving the productivity of small businesses and farms. The report cites estimates based on data from the World Bank that indicate power shortages cost Africa 2-4% a year in GDP growth.

Without major changes to the way people access and use energy, almost 1 billion people will still be without electricity in 2030, mostly in rural Africa and Asia, Shell Foundation says. The International Energy Agency estimates that between $700bn and $1tn in additional investment will be needed over the next 15 years to serve this market.

Accelerating Access to Energy, Shell Foundation

Carbon markets stay afloat

After years in the doldrums, prospects for the global carbon markets are finally looking up. Analysts at Thomson Reuters predict the markets will increase 55% in value over the next 12 months, to around €70bn. The upbeat assessment follows a strong performance by the European Emissions Trading Scheme (EU ETS), which hit €7.4 per tonne in December 2014, and a virtual doubling of the volume of trades in North America's Western Climate Initiative. Thanks in large part to the EU ETS, the value of the global carbon market increased 15% in 2014, to €45bn.

Thomson Reuters also sees particular potential in China’s seven fledgling carbon markets, which it forecasts could double in volume the year ahead, potentially handling up to 40m tonnes of carbon at a value of €146m.

Thomson Reuters

Green US consumer survey

More than three-quarters of US consumers believe it is important to buy from socially or environmentally responsible companies, according to research by US marketing consultancy Tiller. Few seem to mind why consumer-facing brands should pursue a responsible agenda, with 72% of the 1,005 respondents saying they “do not care” why businesses go “green” as long as they do so. Interestingly, 43% of those surveyed claim to have declined to buy a product on social or environmental grounds over the past 12 months.

The survey also highlights that more than half of US consumers are more concerned about global warming today than they were a few years ago. Some 53% of women and 42% of men say they feel guilty for not living “greener” lives. At the same time, 11% of US consumers surveyed still don’t believe in global warming at all.

Tiller Green Survey

Institutional Insights

Infant obesity rising

The number of overweight and obese children under the age of five will rise from about 42 million in 2013 to 70 million by 2025, the World Health Organisation predicts. The global prevalence of obesity in under-fives is already 6.3%, up from 5% in 2000, with the biggest increases occurring in Africa and Asia, although obesity rates are on the rise across the world.

World Health Organisation

Green bond boom

The green bonds market grew to a record $36.6bn in 2014, more than triple its size the year before, according to the Climate Bonds Initiative. The investor-focused non-profit organisation estimates that the green bond market, which currently comprises 73 issuers, could hit $100bn this year. Private sector issuers accounted for one third of the market in 2014, with development banks comprising almost all of the rest. The European Investment Bank ranks as the top issuer of green bonds, ending the year with $5.6bn in issued bonds.

German development bank KfW comes second in line, issuing $3.5bn in 2014. The largest corporate deal of the year was registered by GDF Suez, which issued a $3.4bn green bond. The bond was divided between renewable energy and energy efficiency projects.

Climate Bonds Initiative

Boardroom ambivalence

For all the talk of sustainability in the boardroom, governance systems fail to match up. Only one fifth of business executives and managers believe their boards provide “substantial oversight” on sustainability issues, according to a survey conducted in 113 countries by the Boston Consulting Group, MIT Sloan Management Review and the UN Global Compact.

In addition, 58% of respondents do not think that their boards are even “moderately engaged” with their companies’ sustainability agendas despite strong consensus (86%) that board-level executives are essential for driving corporate sustainability internally. CSR rhetoric and reality often diverge, the survey shows, with 90% of respondents recognising sustainability collaboration as important but only 47% saying that they practise it in their companies.

Joining Forces: Collaboration and Leadership for Sustainability, UN Global Compact et al.

Corporate Snapshots

Bacardi shifts from trucks to trains

Drinks company Bacardi has shifted the transportation of two-thirds of its product shipments off the road networks and onto a combination of long-distance rail and short-haul truck journeys, compared to just over one third of shipments in 2009. The company is implementing the more energy efficient “intermodal” approach at its main North American logistics hub in Jacksonville, Florida. The greening of its logistics operations accounts for a significant proportion of the company’s 28% decrease in production-related non-renewable energy use since 2006. Bacardi plans to increase that figure to 50% by 2017.


Thomas Cook advances efficiency of airlines

Thomas Cook Group Airlines has cut down its carbon emissions by 4.7% compared to 2013, the company reports. Per passenger carbon dioxide emissions in the company’s fleet of 88 aircraft stand at 71.5 grams per kilometre, compared with an average of 93.11g/km among Europe’s five largest airlines. It also beats car travel, which comes at 126g/km. Thomas Cook is currently installing lightweight trolleys and seats across its fleet, which save an estimated 250kg and 300kg per flight, respectively. According to the World Tourism Organisation, the travel and tourism industries account for around 5% of global CO2 emissions, with the air sector contributing 40% towards this.

Thomas Cook group Airlines Sustainability Report

Dupont on track for energy target

Chemicals company Dupont helped its customers and their consumers cut carbon emissions by 45.7m tonnes between 2007 and 2013 through the production of more environmentally friendly products, according to the company’s 2014 sustainability progress report. Over this period, Dupont invested an estimated $1bn in research and development of such products, which generate annual revenues of $2.5bn (up from $100m in 2007). In addition, the company has reduced its greenhouse gas emissions 18.7% since 2004 and cut down its non-renewable energy use 4.4% per price adjusted dollar revenue since 2010.The latter puts Dupont on target to achieve its 10% goal by 2020. The company’s performance on air carcinogens is also positive, down 63% since 2004. This builds on a 92% reduction between 1990 and 2004.

Dupont 2014 Sustainability Progress Report

carbon markets  Clean technology  emissions  energy finance  GHG  Global 500  green bonds  Investment  obesity  WHO 

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