A handful of snippets for the sustainable investor.
Joe Biden and Kamala Harris were sworn in as the next one-two in the White House. Biden quickly got to work signing executive orders, some of which reversed Trump policies. On the environmental front, Biden signed the US back up to the Paris Climate Accords, which commit party nations to aim to limit global warming to 1.5°, amongst other things. Biden also cancelled the fourth phase of the US-Canada ‘Keystone’ pipeline, known as Keystone XL.
While signing up to the Paris Accords is only a symbolic move thus far, it does pave the way for the US to return to its familiar position on global issues – as a leader. Global action on climate change is being led by Europe, and that’ll probably continue, but having the US as a committed partner is helpful for the global effort. The real action is, however, yet to come.
On the topic of European leadership, the Banque de France – France’s central bank – said that it will divest its investment portfolio from non-renewable fuels by 2024. The bank’s investment portfolio is separate from its monetary policy activity, including its asset purchases. Although the size of the Banque de France in its role as an investor is small relative to commercially owned investment managers such as Blackrock, public pension schemes such as the New York State Common Retirement Fund, and sovereign wealth funds such as Norway’s ‘Oil Fund’, we think the symbolic commitment sets a strong example.
Meanwhile in Germany, the city of Hamburg announced that it would enlist Shell, Mitsubishi, and Swedish-owned energy company Vattenfall to develop the latter’s decommissioned coal-fired power plant into a green hydrogen plant. The hydrogen generated would be ‘green’ because it would be produced by electrolysis (splitting water into hydrogen and oxygen) using electricity generated by solar and wind (as opposed to non-renewable means). The plant is already connected to the grid, so electricity that it generates can be used by energy consumers. But more importantly, the hydrogen it produces can be used by industrial businesses in the local area which are ‘hard-to-abate’ carbon emitters, something we discussed in last week’s sustainability digest.
Sustainability digest is a weekly newsletter highlighting a handful of interesting issues facing the sustainable investor.
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