Thomas Kusterer

We welcome the International Energy Agency (IEA) Global Commission for a #justtransition An initiative to examine how to design and implement policies that lead to a more equitable energy system – supporting decision makers around the world as they seek to prioritise affordability and fairness in clean energy transitions. Many thanks to the leadership of Teresa Ribera, Spain’s Deputy Prime Minister and Minister for the Ecological Transition and Demographic Challenged Alexandre Silveira, Brazil’s Minister of Mines and Energy. As Fatih Birol pointed out “Clean energy transitions will only succeed if their advantages are shared with all parts of society – including communities that have historically been at the margins of the energy economy. This starts with fair and equitable policies, which are the focus of this new Global Commission,” BBVA, Ministerio para la Transición Ecológica y el Reto Demográfico, Tim Gould, United Nations Environment Programme Finance Initiative (UNEP FI) https://lnkd.in/dVjD7VK3

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#Governments across the world can't settle with avg renewable technologies just because of pressures of capitalists. Think and save planet Earth first then serve capitalists interest. In discussions with prominent figures in the #renewableenergy sector, it's clear that #Concentratedsolarpower systems, when implemented at scale, hold immense potential as a viable solution for our global emission and energy need challenges. World Economic Forum COP28 UAE and COP29 Azerbaijan - Addressing climate concerns with zero emissions - Ensuring consistent renewable energy production - Facilitating the production of green gases - Enhancing heat storage and exchange capabilities - Offering diverse applications for various industries While the idea of making Mars habitable is intriguing, prioritizing the sustainability of our own planet should be paramount. Let's work together to ensure a habitable Earth for current and future generations. There is nothing like Earth in this universe(assumption). #ClimateAction #Sustainability #GreenEnergy #Concentratedsolarpower #Renewableenergy #solar #emissions #netzero

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Today's publication of the International Energy Agency (IEA) World Energy Outlook 2024 report paints a picture of a rapidly unfolding transition, with a peak in fossil fuel demand finally within sight. But for me the most interesting aspect was the sizable upward revision to forecasts for renewable capacity. The IEA has revised up 2040 capacity projections for wind and solar by a whopping 24% when compared to the WEO 2023. In fact, the IEA is continually too conservative when it comes to renewable projections. The chart below shows global wind and solar capacity (black line) with each thin line representing the IEA’s projections under each WEO back to 2008. When considering the projections for capacity in the year 2040, each WEO upgrades on the previous WEO by an average 22% each year!

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[Shareholder engagement and sustainability 6/6] Can index providers foster greater climate responsibility? The article "The Impact of Climate Engagement: A Field Experiment" by Florian Heeb and Julian Kölbel explores the impact of index provider engagement on corporate climate policies when a credible request is combined with a credible threat of exit. Leveraging a sample of 1227 companies, the authors show that: 👉🏼 21.0% of treated companies committed to setting science-based #climate targets, compared to 15.7% in the control group, showing a significant impact of index provider engagement on climate policies. 👉🏼 The treatment effect is especially significant for larger firms with high absolute emissions and emission intensity. Engagement is effective for firms where corporate climate policies are most likely to have a meaningful effect on aggregate greenhouse gas emissions. 👉🏼 The experiment demonstrates a causal effect of #engagement, ruling out selection bias and other potential confounders by including various covariates. 👉🏼 The EU Benchmark Regulations, by setting requirements for #climate-focused indices, seem to positively affect science-based target commitments. These results suggest funds and indices providers with climate-related tilts and screens may be able to enhance their societal impact by proactively informing companies about their stock selection rules. The authors highlight the need for further research on the causal effect of different kinds of engagement campaigns that may not be fulfilled at a reasonable cost or with a credible threat of exit. ValueCo

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𝑪𝒍𝒊𝒎𝒂𝒕𝒆 𝑭𝒊𝒏𝒂𝒏𝒄𝒆 𝑵𝒆𝒆𝒅𝒔 𝑴𝒐𝒓𝒆 𝑻𝒉𝒂𝒏 𝑱𝒖𝒔𝒕 𝑷𝒓𝒐𝒋𝒆𝒄𝒕𝒔: 𝑮𝒆𝒕𝒕𝒊𝒏𝒈 𝑷𝒐𝒍𝒍𝒖𝒕𝒆𝒓𝒔 𝒕𝒐 𝑷𝒂𝒚 𝒇𝒐𝒓 𝒕𝒉𝒆 𝑪𝒐𝒔𝒕 𝒐𝒇 𝑪𝒂𝒓𝒃𝒐𝒏 Climate action requires significant investment, and climate finance plays a vital role. However, a project-based approach alone can have limitations. Often, these projects address the symptoms - the emissions themselves - without tackling the root cause: the economic factors that make polluting activities attractive. This is where complementary policies come in. By implementing instruments like emissions trading schemes, we can establish a price on carbon. And implementing regulations that internalize the cost that greenhouse gases impose on society is also key. This price signal sends a clear message to the market: polluting activities become more expensive, while cleaner alternatives become more competitive. The result? Businesses and individuals are incentivized to reduce their emissions footprint and invest in sustainable solutions. These market-driven and regulatory approaches, combined with project-based finance, can create a powerful force for a greener future. #climatefinance #carbonpricing #emissionsreduction #sustainability

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What impact does European climate policy have on German foreign direct investment? Read the lastest edition of Bundesbank's Monthly Report to find out that for the time being there is no significant evidence to suggest that German enterprises responded to stricter emissions legislation by increasingly relocating production to countries with less stringent climate policies. However, even before the reforms, enterprises with comparatively high greenhouse gas emissions had a disproportionately large presence in non-European countries (https://lnkd.in/eHpjDDGF)

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📢 **ECB Publishes Second Series of Climate-related Financial Information** 🌍 The European Central Bank (ECB) published its second series of climate-related financial information on Tuesday, June 25. This report provides details on the carbon footprint of its portfolios, their exposure to climate risks, as well as governance, strategy, and climate risk management. ### 🔍 **Key Takeaways:** 1. **Decarbonisation of Eurosystem Portfolios:** - **Reduction of Financed Emissions:** The Eurosystem's tilt framework significantly contributed to reducing financed emissions associated with corporate assets in monetary policy portfolios in 2022 and 2023. - **Coverage of Information:** Disclosures now cover more than 99% of the Eurosystem's monetary policy holdings, improving transparency and supporting efforts to bridge climate data gaps. 2. **Interim Targets:** - **Monitoring Emissions Reductions:** The Governing Council agreed to set interim targets to monitor the trajectory of emissions reductions in corporate asset portfolios, supporting the goals of the Paris Agreement. 3. **Expanding the Scope of Disclosures:** - **Inclusion of Public Sector Assets:** Disclosures now include the Eurosystem's holdings in public sector assets and covered bonds under the APP and PEPP, as well as the ECB's foreign reserves. 4. **Non-Policy Portfolios:** - **ECB Staff Pension Fund:** All corporate sector investments in the ECB staff pension fund now follow the EU's Paris-aligned benchmark indices, reducing associated emissions by approximately 50% in 2023. - **ECB Own Funds Portfolio:** The share of green bonds increased from 13% in 2022 to 20% in 2023, with a target of reaching 25% in 2024. By providing climate-related information on central bank portfolios, the ECB and the Eurosystem aim to lead by example, improve transparency, and support regulators' and other stakeholders' efforts to bridge climate data and reporting gaps. 🌱 **For more information, read the full document:** [Eurosystem and ECB portfolios steadily decarbonising, climate-related disclosures show](https://lnkd.in/ebUGt3Wm) #ECB #Decarbonisation #Climate #SustainableFinance #ParisAgreement #Eurosystem #ClimateTransparency #GreenInvestments

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European utilities’ recent shift of medium-term investment strategies does not fundamentally alter the path of energy transition in the region. Many EMEA utility and generation companies have scaled back plans to boost renewable capacity when giving their investment strategy updates, attributing revisions to a challenging operating environment. They are slowing renewables deployment while increasing the share of expenditure earmarked for regulated networks, energy storage technologies and customer solutions. Utility companies now face electricity prices that are falling to normal levels faster than they previously expected as the energy price shock moderates. At the same time, companies are operating against a backdrop of higher-for-longer interest rates, elevated renewable development costs (mostly for wind turbines) and bureaucratic hurdles. #energytransition #utilities Learn more https://lnkd.in/edETz8QF

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(Resharing this interesting global Carbon Emissions historical data animation.) Nestled between two of the world’s largest CO2 producing countries, Nepal faces unique climate risks and the country's vulnerability necessitates immediate action. Though the broader impact is from global phenomenon; coupled are regional environmental challenges as air pollution and changes in monsoon patterns that can exacerbate climate risks like flooding, landslides, and droughts. Additionally, the Himalayan region, shared with China, is particularly sensitive to climate change with rising temperatures affecting glacial melt and water availability. Thus, it’s crucial for Nepal to consider all three - local, regional and global factors. As prioritized solutions: a) Adaptive strategies needs to be 'urgent country level agenda' with serious commitments to significantly reduce our exposure to climate perils. b) Responsible stakeholders unite in a robust push to garner global support for mitigation efforts through 'Climate Funds, Loss and Damage Funds' and other avenues. (This video looks informative too: https://lnkd.in/ds-ZaiDR)

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📢Shaping transformation together. On the occasion of DEG‘s Supervisory Board meeting yesterday, a workshop on transformation was held together with two long-standing DEG clients. Daniel Calderon, Co-Founder and Managing Partner of Alcazar Energy Partners, and Moritz J. Weig, Managing Partner of German family-owned paper manufacture WEIG-Gruppe demonstrated how investments in transformation strengthen their sustainable business success. ✔️Alcazar Energy has a strong track record in investing in and developing renewable energy projects in the Middle East, Northern Africa and now also in the Western Balkans. Daniel Calderon explained how they carefully design the developing phase of new projects taking the local communities, ESG-topics, the overall situation and the existing energy mix in the country into account. ✔️WEIG-Gruppe produces paper products in Germany and for more than 40 years also in Paraguay in three product lines recycling, board and packaging. Moritz J. Weig illustrated their circular economy production process. ✔️Skilled people are an important success factor for both companies. They showed that investments in empowering local communities and also in continuous learning of their employees across continents are of great value. ✔️Daniel Calderon and Moritz J. Weig are thankful for DEG’s long-term finance and Business Support Solutions of DEG Impulse that enhance a successful sustainable development of their companies over years. ❕Have a look at DEG’s Impact/Climate Commitments ➡️ https://lnkd.in/er9qDMQn Transformation – the support of our clients on their own transformative journeys towards positive impact and more climate resilience - is the third pillar besides our commitments to impact and to combating climate change. #teamdeginvest #fin4dev #ImpactInvesting

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Interesting read

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Cost of climate adaptation could become prohibitive if we don’t speed up deployment of scaled solutions to decarbonize the economy. Expediting the energy transition and sectoral decarbonization requires adoption of a wide range of new climate technologies in various sectors. With many of these technologies remaining in pre-commercialisation stages (e.g. green hydrogen, LDES, SAF, Carbon removal and storage), how can we expedite their at-scale commercial deployment, leveraging the expertise of insurance companies? In this issue of Modern Insurance Magazine, I spoke to Megan Kuczynski about a recent initiative I led at The Geneva Association on what insurance companies can bring to the table. Through their risk engineering and subsequently their underwriting expertise by engaging with climate tech stakeholders, re/insureres can help assess insurability of new climate technologies by engaging early working across projects, co-develop risk mitigation solutions to enhance insurability, expedite development of standards and identify needs for innovative insurance solutions to unlock capital and expedite market readiness. For a short “in-a-nutshell” article (see pages 64-65): https://lnkd.in/e_wrdZiw For a more indepth analysis see our latest report: https://lnkd.in/gNkRQC_D We are working with our partners to make this into a reality.

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#Engie Power company Engie announced that it has pre-ordered 5 million tons of nature-based carbon removals from climate finance company Catona Climate. According to the landmark 2022 Intergovernmental Panel on Climate Change (IPCC) climate change mitigation study, scenarios that limit warming to 1.5°C include carbon dioxide removal methods scaling to billions of tons of removal annually over the coming decades. The report also noted, however, that while there are multiple existing solutions to capture and store CO2, most are early stage and currently limited in scale. https://lnkd.in/dh8Kmx_T

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🎉 Good news for the convergence of frameworks on #Nature & #Biodiversity! 🤝 The Taskforce on Nature-related Financial Disclosures (TNFD) and EFRAG have jointly published a mapping of the correspondence between the European Sustainability Reporting Standards (#ESRS) and the #TNFD’s recommended disclosures and metrics. ✔️ The 14 disclosures recommended by the TNFD and the ESRS requirements are both designed to provide relevant and faithful information on nature-related sustainability matters. 🎯 Same objectives: #TNFD and the #ESRS recommend the need to disclose impacts, risks and opportunities related to nature as well as dependencies on nature to the extent that they generate material risks. 🔁 Double Materiality Assessment (#DMA): the ESRS require disclosures to be based on a dual materiality principle, and the TNFD allows a dual materiality approach to be used. 🧩 #LEAP approach: the ESRSs state that companies can carry out their materiality assessment on pollution, water, biodiversity and ecosystems using the LEAP approach. 👉 Press Release: https://lnkd.in/geweGzjp 👉 TNFD - ESRS Correspondance mapping document: https://lnkd.in/gRKRMfnN #biodiversity #csrd #esrs #nature

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A great report out recently from Clean Energy Associates (CES) that sets out the general move towards 5MWh BESS systems because of suppliers moving to +300Ah cells, in part based on the standardisation of 20-foot BESS based containers.   The economics of current generation BESS systems are still very much focused on deployment of container-based systems, which due to their requirement for land does restrict the ability to sensibly provide large scale energy storage, which also keeps the per KWh price higher than otherwise could be provided. As an example, the current generation of container-based systems traditionally require circa 7.5-10m2 per MWh and if you were to assume 5 MWhs per MW, then the EUs current estimation for 900GWs would require a container-based system of between 50-100KM2, or the size of the German city of Heidelberg by 2050. If BESS systems are truly going to deliver large scale energy storage, then they need to reduce the land required to below 5% of the current requirement of container-based systems, this will then allow true scale to be deployed at grid level. We believe the next generation of BESS systems are better deployed using dedicated large scale buildings, similar to hyper scale data centres, that have the ability to provide GWh capacity, which in itself will drive down the cost per KWh to customers. https://lnkd.in/dAyKrfsg

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What if a Private Equity (PE) player had 30,000x leverage over the environmental impact of its downstream investments? CDP data shows: * Scope 3 can be 20-30x greater than Scope 1 & 2 in a real economy company. * that equivalent multiple can be 1,000+ for financial institutions’ financed emissions. So, as I was invited to Responsible Investor in #Singapore to speak on "Managing complex supply chains in Asian private equity" then 30 x 1,000 is just simple (& scary) math(s). And as my co-panellists observed, if that logic works for carbon & pollution, then the rationale can also be considered for PE players exposure to & power over human rights & social issues. So, PE players have awesome leverage to make a difference. And the first step to take is to ask for measure & #disclosure of #environmental #impacts in your financed portfolios. (Have I mentioned that CDP is the largest primary corporate environmental data gatherer in the world?) Thanks to Lisa Genasci and Matt Watts for the insight (& fun) we had as co-panellists. Thanks to Kyle Flick for his excellent moderation. And thanks to Responsible Investor & Charles Gould for inviting CDP.

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