Carbon Neutral Investments
The goal of becoming carbon neutral is becoming a reality for many companies and institutions. Some have committed to achieving this goal in their operations, while others have voluntarily pledged to do so. In this article, we'll discuss the progress being made by Wellcome, which has pledged to be carbon neutral by 2050. Also, learn about the plans of South Korea, which is investing heavily in low-carbon infrastructure. Finally, we'll examine the future of investing, not just today, but into the future.
Wellcome pledges to make its investment portfolio carbon neutral by 2050
In a bold move, PS29bn endowment foundation Wellcome has promised to be carbon neutral by 2050. While it oversees a vast portfolio of assets, the foundation will work with fund managers and the companies it invests in to develop a standard measurement of their carbon footprint across all assets. There are a number of challenges that Wellcome will face, including limited data on the performance of hedge funds and private equity fund managers.
The company's commitment is laudable, but is not enough to meet its target. More ambitious plans are needed to achieve net zero emissions. Every country, city, and company should commit to reducing global emissions by 45 per cent by 2030, as pledged in the Paris Agreement. And Wellcome has promised to take a leadership role in the effort to achieve this goal. It's time for the rest of the world to follow suit, and the company is committed to taking action.
With $130 trillion in assets, financial institutions must do their part. Net Zero Asset Managers aims to work with their clients to achieve net zero alignment by 2050 while setting interim goals for 2030. The initiative also requires investors to disclose climate-related financial risk in their investment portfolios. This must become mandatory and the goal of carbon neutrality must be woven into economic decision-making. Banks and asset owners must align their lending with the net-zero goal and decarbonize their portfolios. This is a breakthrough for green investing.
This ambitious goal is not achievable overnight. While it's possible to achieve net zero emissions by 2050, the goal must be met gradually. By 2050, ten billion people are expected to fly. That means a net zero commitment would require abating 21.2 gigatonnes of carbon over the next ten years. Wellcome will reach that goal by 2050. The global emissions of FY21 have been cut significantly by the COVID-19 pandemic. The company has implemented a carbon action plan in response to this situation.
While many companies are making good progress in reducing their emissions, some countries are lagging behind. Japan, for instance, is committed to achieving net zero emissions by 2050. In May, it adopted a law enshrining its goal. Australia, a small island nation with severe climate impacts, has pledged to be carbon neutral by 2050. If these goals are met, it will become the first country to become net zero by 2050.
Bank of America achieves carbon neutrality in its operations
After a decade of reducing energy consumption and embracing new technologies, Bank of America has reached carbon neutrality in its operations. Since 2010, the company has cut its emissions from its facilities by nearly half. It has also installed on-site solar power at numerous locations, including its ATMs. It also completed multiple long-term renewable agreements. This achievement demonstrates how banks can contribute to a more sustainable future and reduce greenhouse gas emissions.
In addition to cutting its energy use, the bank expanded its environmental operations and purchased renewable energy certificates to cover its anticipated electricity usage for the entire year. The company has also pledged to install solar panels across its U.S. locations and to purchase renewable energy certificates from a Minnesota hybrid power project. This progress has been achieved by purchasing 100% renewable electricity and offsetting the rest of its emissions. And if all this wasn't enough, the bank is planning to install charging stations for electric cars.
The company's sustainability commitment is extensive, spanning its operations worldwide. In addition to its efforts to reduce greenhouse gas emissions, Bank of America purchases carbon offsets from high-impact carbon projects. For instance, Citibank is funding the largest reforestation project in North America, GreenTrees, in which 500 community members plant 42 million trees on more than 120,000 acres of land. The bank is also supporting the restoration of 380,000 acres of peatland in Indonesia, a process that sequesters carbon. And it supports development in Kenya and Peru.
Fifth Third Bank has also published its first ESG report, which details its environmental sustainability efforts. In addition to carbon neutrality, Fifth Third's ESG reports will also contain other environmental disclosures. In 2020, the bank will have reached carbon neutrality in its operations after reducing its energy consumption by 20%. This commitment is consistent with the Bank's five-year goal to become carbon neutral in its operations.
The bank's offsets for 2020 amounted to 210 million metric tons of carbon dioxide emissions, equivalent to 0.4% of the total global emissions. While this is a significant accomplishment, it does not indicate the end of the fight against climate change. Many companies have voluntarily set their own emission goals, which will drive more demand for carbon offsets. The price of carbon offsets has dropped significantly in recent years, making it a cost-effective way to decarbonize operations.
South Pole invests in low-carbon infrastructure
To meet the increasing demand for clean energy, the global community is working on establishing a new mechanism for carbon credits to help finance clean infrastructure projects. The South Pole Carbon Asset Management is one such platform, and has recently signed a collaboration agreement with Mitsubishi Corporation. The two companies will work on a project that would generate and sell carbon credits. The project would help cities and countries in developing regions develop clean energy infrastructure.
The current world infrastructure sector accounts for 60 percent of the greenhouse gas emissions, which are primarily generated by transportation systems, energy systems, buildings, industry, and land-related activities. According to the World Bank, the infrastructure sector needs $90 trillion a year to keep up with energy consumption and pollution levels. But how will the private sector contribute to such an important global cause? The first step in ensuring this level of investment is to create a standard definition of low-carbon infrastructure and define its benefits and risks.
The valuation of non-market benefits of low-carbon investments is vital for convincing policymakers to fund the projects. Not only does it help ensure that public money goes to the right projects, but it also provides convincing grounds for mitigation goals in urban planning. There are many other ways to fund low-carbon infrastructure. Here are some ways to finance your project. Once you've created a plan, you can begin the project construction phase.
By recognizing the co-benefits of climate resilient low-carbon infrastructure, you'll help local governments finance low-carbon projects. Not only will this help them save money, but it will also help them boost their creditworthiness - which will help them tap into other financing opportunities and obtain debt at desirable interest rates. Lack of creditworthiness is the major barrier to low-cost finance and access to the capital market.
The lack of a carbon price and fossil fuel subsidies effectively subsidize investments in carbon-intensive infrastructure, which exacerbates the social costs of these projects. LCR infrastructure projects have a variety of risks throughout their lifecycle. Early project preparation involves difficulties in obtaining permits and complex infrastructure plans. Once construction has started, construction risks increase due to business and macroeconomic uncertainties. The cash flow of these projects begins to decrease once the project is operational.
South Korea plans to invest in clean mobility
The transportation sector is a major contributor to global greenhouse gas emissions and energy demand. Consequently, South Korea has set out to change its transportation sector to one that is more sustainable. This new plan, known as the Green New Deal, involves investment in advanced technology initiatives to create new jobs and lower energy costs. The plan is designed to help the country tackle the COVID-19-related recession and create 1.9 million new jobs by 2025.
The Korean government has outlined an ambitious plan to achieve carbon neutrality by 2050. It's the third country in northeast Asia to commit to a net-zero target by 2050, after China and Japan. This ambitious goal builds on the existing 2030 target to cut greenhouse gas emissions by 24.4% from 2017 levels. It also includes investments in microgrid communities, which are communities of renewable energy systems that are powered by decentralised low-carbon energy sources.
Several companies are already making substantial investments in hydrogen-based fuel cell technology. Hyundai Motors is a major player in the sector and has spun off a fuel cell division. Doosan is planning to complete construction of South Korea's first liquid hydrogen plant in 2021. The company's Mobility Division has also developed a hydrogen fuel cell drone for deliveries in areas with poor infrastructure. Meanwhile, Hyundai Energy recently completed the world's first by-product hydrogen power plant, using fuel cells from Doosan.
The government's ambitious goals for hydrogen-powered vehicles include a hydrogen roadmap and a green industrial sector. The roadmap targets the production of 6.2 million FCEVs and the construction of at least 1,200 hydrogen refuelling units by 2025. The green New Deal also outlines an ambitious plan to transition to a carbon-neutral society by 2050. The plan is designed to make transportation more sustainable for people, including reducing energy consumption and changing lifestyles.
While hydrogen is a fuel, hydrogen is also an explosive substance that can cause severe injuries and death. Hydrogen is not only dangerous to the environment, but is also explosive, causing a recent explosion in South Korea's hydrogen storage tanks. By the end of the decade, South Korea hopes to convert 30% of its cities to hydrogen fuel cells. So, what are the next steps? The government is launching a hydrogen roadmap to make it easier to switch to clean mobility.
Related PostsCarbon Dioxide Vs Carbon Monoxide
Carbon Neutrality and Biomass Energy
What is Carbon Neutral Shipping?
Types of Carbon Dioxide Sensors
Carbon Neutral Housing
How to Test a Carbon Monoxide Detector