Major investors call on petrochemical companies to address plastic pollution
70 investors representing combined assets of $6.8trn have signed Planet Tracker’s petrochemical investor statement to help tackle plastic pollution.
The group, which includes Legal & General Investment Management, Pictet Group, Nordea Asset Management and Achmea Investment Management, are urging petrochemical companies producing plastic polymers to commit to defining transition strategies, addressing toxic polymers and chemicals, developing sustainable feedstock infrastructure, establishing governance frameworks, and supporting international agreements.
According to Planet Tracker, plastic production is on track to triple by 2060, with petrochemical companies becoming the primary driver of oil demand growth. The financial think tank has reported on deceptive practices by the plastic industry, claiming that recycling is the solution to the plastic pollution crisis.
The collective statement illustrates that plastic risk is quickly rising on investors’ agendas and reiterates the need to align best practices with global sustainability goals.
China’s record investment in green energy
China is set to invest over $800 billion in its electricity grid over the next six years to support its transition from coal power to renewable energy sources. In the first four months of this year alone, China invested $17 billion in power grid projects, a 24.9% increase from the previous year.
Data: Rystad energy, Image source: The Financial Times
Despite the massive investment, there are increasing pressures on the distribution and transmission of electricity. Several provinces have suspended new small-scale solar operations from connecting to the grid, and many regions are encouraging the use of battery storage to alleviate the strain.
China’s rapid expansion of its transmission grid, which accounts for more than a third of the global expansion over the past decade, is crucial for meeting President Xi Jinping’s targets of peak carbon emissions by 2030 and carbon neutrality by 2060. As the demand for electricity rises due to the growing use of artificial intelligence, data centres, and electric vehicles, overcoming grid constraints will be essential to achieving these ambitious environmental goals.
Azerbaijan’s $500mn oil-money climate investment
Azerbaijan, the host of COP29, has announced plans to establish a ‘climate investment fund for the future’ to raise at least $500 million for green projects ahead of the summit in November. This initiative will start with a contribution from The State Oil Company of the Republic of Azerbaijan (SOCAR) and aims to attract further investments from other fossil fuel producers.
The fund pales in comparison to the $30 billion fund announced by the United Arab Emirates at COP28, which seeks to mobilise $250 billion in private-sector investment for climate action by 2030.
Despite President Ilham Aliyev’s defence of Azerbaijan’s reliance on its oil and gas reserves, the new fund represents an initial step for fossil fuel companies to contribute to climate finance. Officials suggest this fund will create a mechanism for fossil fuel companies to donate either lump sums or portions of their revenue. However, diplomats and negotiators have expressed concerns about Azerbaijan’s commitment to transitioning away from fossil fuels.
The COP29 official indicated that returns from the fund’s investments would be reinvested, with discussions ongoing about allocating 50% of the capital to developing countries affected by extreme weather.
UN climate talks in Bonn highlighted ongoing tensions between developing and developed nations over climate finance, with calls for countries like China and Saudi Arabia to increase their contributions. The unresolved issues have left negotiators worried about making significant progress on climate targets at COP29.
Pressure mounts as International Seabed Authority negotiates deep sea mining code
The International Seabed Authority (ISA) is considering setting new rules allowing firms to extract minerals from the ocean floor despite concerns about the environmental and economic risks associated with deep-sea mining.
The ISA council will negotiate the latest draft of the mining code to regulate the exploration and extraction of deposits on the ocean floor.
Supporters argue that deep sea mining will boost supplies of raw materials, like cobalt and nickel, needed for the global energy transition. However, critics argue that it could destroy ecosystems and disrupt migratory routes.
At present, 27 countries are calling for a temporary halt of activities. Nine countries, including France and Chile, will call on the ISA’s Assembly to discuss the specific policies needed to safeguard the marine environment if deep sea mining is allowed to start.