DIBAF

• What happened?

Walmart invested more than one billion dollars in renewable energies, sustainable buildings and circular economy.

Walmart announced the release of its first Green Bond Impact Report, indicating that the company has allocated $1.1 billion in green bond proceeds, with top investment areas including renewable energy, sustainable buildings, and waste reduction and circular economy initiatives.

• Whom and where it affects?

Eligible categories for investment under Walmart’s green bond framework include renewable energy, high-performance buildings, sustainable transport, zero waste, and circular economy, water stewardship, and habitat restoration and conservation.

• What sort of public or private institutions are involved?

The only institution that it is involved in this new is Walmart because all the finance  is destined to many different projects around the company.

• Why is it important for Banking and Finance?

Because with this kind of initiatives of green bonds like Walmart’s one, other companies that are not just banking or financial entities could entry in the financial market too offering this kind of sustainable products for investors who wants to be part of sustainable projects including circular economy ones. The better the results of these green bond initiatives, the more companies and banks institutions will begin to market them.

• What do you think will be the consequences in the foreseeable future?

The consequences in the future include achieving zero emissions across operations by 2040 without the use of carbon offsets, powering facilities with 100% renewable energy by 2035, and electrifying and zeroing out emissions from its full vehicle fleet by 2040.

SDG Number (Sustainable Development Goals): 7, affordable and clean energy.

Keywords: sustainable buildings, circular economy, allocate, green bond, framework, stewardship.

Link: Investors grapple with complexities of biodiversity | Financial Times (ft.com)

Date: October 26, 2022

Media: FINANCIAL TIMES.

What happened?

“Irreversible consequences for the environment, humankind, and economic activity, and a permanent destruction of natural capital.” That is how the World Economic Forum characterises biodiversity loss in its 2022 Global Risks Report. The main reason is because humans are growing more crops, using more water and cutting down forests.

Who and where it affects?

It affects the biodiversity of planet earth. This mean that it affects humanity, natural capital, animals, the enviroment, etc. About 1 million animal and plant species are at risk of extinction, according to the UN.

What sort of public or private institution are involved?

In addition to TNFD’s (Taskforce for Nature-related Financial Disclosure) framework, other initiatives are under way to set targets and provide guidance for business and investors. Among them is a global biodiversity framework (GBF) that the UN is developing. Meanwhile, almost 100 investors with collective assets totalling €14tn have signed the Finance for Biodiversity pledge, which was launched in 2020. Signatories commit to five steps: to share knowledge; to engage with companies; to assess impact; to set targets; and to report publicly on the biodiversity impact of their investments.

Why is it important for banking and finances?

It is important for finances because not taking into account the effect of the loss of biodiversity can mean a significant risk in the portfolios, that is, they may not be setting the appropriate prices, which could mean a great loss. In short, it is a possible financial impact that is difficult to quantify. 

What do you think will be the consequences in the foreseeable future?

The consequences are undefined, but as we said in question 4, it could mean a significant risk to portfolios, as they may not be priced appropriately, which could mean a big loss. In addition, if investors and companies engage as set out in the targets, it would help climate change. 

SDG: 14. Underwater life, 15. Terrestrial ecosystem life.

link: https://www.esgtoday.com/mercedes-benz-secures-e11-billion-sustainability-linked-loan-tied-to-climate-goals/

Date: Wed. Oct. 26 2022

Media: ESG Today

What happened?

The German company, Mercedes Benz, secured an 11 billion € sustainability-linked loan for its sustainable strategy “Ambition 2039” (they want to offer carbon neutral cars). 

Whom and where it affects?

The news specifically affects a German car company, Mercedes Benz. But it also affects the rest of the companies that compound the automotive industry. The fact that Mercedes started to use this type of financing loan, shows to the sector how the company’s future moves will continue being and how they have to react to compete in a changing world that is increasingly concerned about climate change and the CO2 emissions.  

What sort of public or private institutions are involved?

Directly is involved Mercedes ( a private company). Banks are also involved since they are the ones who provides the credit.

However, in 2014, the Spanish government also gave Mercedes 27 million dollars for its plant headquartered in Vitoria, allocated to promote sustainable industrial activity, so public institutions were involved in this plan of the company as well.

Why is it important for Banking and Finance?

Because it starts a trend for the automotive industry and how to finance their change to a new type of cars that produces less pollution and CO2 emissions, highlighting it’s not all about creating a cleaner car, but also about the way it is financed.

What do you think will be the consequences in the foreseeable future?

From our point of view, companies will be aware about the profitability of Mercedes, observing if this type of financing it’s not only worth it to climate change, but is also profitable to the company, keeping in mind how investors will react. If the industry concludes that this type of loans are worthwhile, it will result in an increase of sustainability-linked loans in the long term future. 

Keywords: Mercedes Benz, sustainable-linked loans, automotive industry, CO2 emissions

SDG: 9. Industry, innovation and infrastructure: inclusive and sustainable industrialization, 11. Sustainable cities and communities: affordable and sustainable transport systems and 12. Responsible consumption and production: sustainable management and use of natural resources.

Reuters. (2022, 12 October). Spain’s BBVA ups sustainable finance target 50% to 300 bln euros. https://www.reuters.com/markets/europe/spains-bbva-ups-sustainable-finance-target-50-300-bln-euros-2022-10-12/

What happened?

On October 12th, Spain’s BBVA raised its sustainable financial target from 200 billion euros to 300 billion euros for the period between 2018 and 2025. This was announced by the lender’s chairman, Carlos Torres. The aim is to decrease global carbon emissions by 30% by 2030 and also reduce the dependence on fossil fuel industries resulting from the global energy market crisis.

Whom and where it affects?

This announcement affects Spain and its oil and gas clients in its credit portfolio. Also, it has a positive effect on clean energy companies, because they will be able to borrow more money if they need and if the global carbon emissions are reduced it will also benefit the entire Spanish society providing them with clean air.

What sort of public or private institutions are involved?

The main institution involved is BBVA (Banco Bilbao Vizcaya Argentaria) as it ‘s the one leading this proposal. Moreover, all the institutions and companies that operate in the energy sector are involved in one way or another as they will have either positive or negative repercussions.

Why is it important for Banking and Finance?

Sustainable finance plays a key role in the European Green Deal. Sustainable finance is important in achieving international climate and sustainability policy goals. It directs private investment in the transition to a climate-neutral, climate-resilient, resource-efficient and equitable economy. Finance can make an important contribution to ensuring a sustainable recovery after the Covid-19 pandemic, directing investments and redirecting them towards technologies and companies with low environmental impact.

What do you think will be the consequences in the foreseeable future?

There is a need to increase attention and interest in environmental issues such as the exploitation of natural resources, pollution and the loss of biodiversity in the hope that in the future we will not have very serious consequences due to advanced climate pollution. In addition investing in sustainable long-term investments is economically reasonable and does not necessarily lead to a lower return for investors.

Keywords: BBVA, sustainable finance, clean energy, Spain.

SDG: 7. Affordable and clean energy, 12. Responsible consumption and production, and 13. Climate action

Date: THU OCT 20, 2022

Media: REUTERS

What happened?

The increase of gas prices has had the consequence that its more attractive to invest on green or clean hydrogen.

Whom and where it affects?

This incident affects specially almost 25 of European countries that has been affected directly by the Ukrainian War and therefore, nowadays, these countries are investing around $73 billions of public and private funds to the production of green hydrogen.

What sort of public or private institutions are involved?

In this case, the public institutions that are involved are the USA and European Governments.

Why is it important for Banking and Finance?

From the point of view of the Banking and Finance sector it is important because that fact could cause a standstill of the invested on fossil hydrogen and it may ends on a huge lost for the companies that produce this energy.

That could become on a new creation of financial assets of green or clean hydrogen for invested on, replacing to the fossil assets.

What do you think will be the consequences in the foreseeable future?

First, we think that the Banking sector and companies will invest billions of dollars on green assets, replacing assets like oil or gas and that fact will support ecology.

This will do improve an economic growth of the green sector and countries who worked out well on this cause. And for consequence, these countries will not depend only of huge exporting fossil assets and gas countries, like Russia, for example.

Keywords: Green energy, Gas, Oil, Fossil Hydrogen

SDG:

The SDG that are related with this new are:

7. Affordable and clean energy.

11. Sustainable cities and communities.

12. Responsible consumption and production.

13. Climate action.