A new report by fintech consultancy Juniper Research has found that renewable energy technologies could remove more than 2.4 gigatonnes (Gt) of CO2 globally by 2029, representing a 25% jump from current levels. The firm also forecast an increase from 9,603.3 terawatt hours (TWh) of total renewable energy in 2024 to 11,980.6 TWh in 2029, which would see 7% of electricity capacity attributable to renewables. According to Juniper, international treaties such as the Paris Agreement have been driving a growth in global renewable energy capacity and binding countries to spend more on renewable energy technologies and commit to the clean energy transition. The research contains insights on market dynamics – including on challenges within the renewable energy market such as with offshore wind projects – key takeaways as well as strategic recommendation and industry benchmark forecasts. Juniper also found that advancements in solar power from initiatives like the US Inflation Reduction Act have helped to accelerate private investment in solar capacity, suggesting that CO2 savings could “grow exponentially”. The study projected that total CO2 saved thanks to solar power would grow by 58% between 2024 and 2029 – removing 0.61 Gt by 2029.

A group of NGOs and investor bodies including ShareAction, Pensions for Purpose, Make My Money Matter and Carbon Tracker has written to HM Treasury to expedite the regulation of investment consultants. Citing pension schemes’ heavy reliance on investment consultants to advise on matters such as fiduciary duty and climate change, the letter highlighted that the advice provided by consultants remains largely unsupervised. “The unregulated activities of investment consultants can […] significantly influence the decisions taken by UK pension schemes,” the letter read. “The line between regulated and unregulated activities is blurred, [even] when investment consultants state that they are not providing advice, the asset owner will often still rely on this and make investment decisions accordingly, even when such information or advice lies outside of the Financial Conduct Authority’s regulated perimeter.” The signatories pointed to issues with consultants’ use of economic scenario models that significantly underestimate both the scale of future climate-related damages and associated near-term risks, largely due to a failure to include tipping points. Other concerns relate to the overall structure and competitive dynamic of the investment consultancy market – including potential conflicts of interest and misaligned incentives.

Asia-based non-profit the Mekong Club has released a report offering five recommendations to help financial institutions (FIs) detect and mitigate the risks of modern slavery. The organisation collaborates with the private sector to tackle modern slavery and related issues, including human trafficking and forced labour. The five recommendations and best practice suggestions included addressing modern slavery in daily operations, staff training, and dialogue with regulators. The Mekong Club underlined that regulatory frameworks often lacked sufficient emphasis on addressing modern slavery, with anti-money laundering requirements being “generic and insufficient”. According to the report, modern slavery remains a “highly lucrative crime” with legitimate FIs being utilised to launder the proceeds. The International Labour Organization estimates profits from related activities at US$150 billion annually. There are, however, a number of ways in which FIs can address modern slavery, including by analysing industries, business types, and locations that pose high risks. In addition, the report called for more funds to be allocated globally to eradicate forced labour and modern slavery. So far, major foreign aid donors worldwide have contributed approximately US$350 million to anti-human trafficking programmes, which represents just 0.2% percent of the resources amassed by traffickers. The Mekong Club also suggested FIs should participate in initiatives aimed at raising industry awareness globally, share success stories and challenges to facilitate collective learning, and encourage senior management and employees to volunteer in NGO, governmental, and social-activist initiatives that address modern slavery.

Mekong Club published a new report offering recommendations, typologies and indicators to help FIs address modern slavery risks.https://t.co/HlVxw5oDGF

— Regulation Asia (@RegulationAsia) August 13, 2024

New analysis by the World Resources Institute (WRI) has revealed that major banks globally are not on course to meet their climate-related targets, and that their pledges are often less ambitious than they seem at face value. The WRI assessed progress among 25 banks across ten countries on climate-related commitments – including the US ‘big four’: JPMorgan Chase, Wells Fargo, Citibank and Bank of America. Their targets were ranked against 17 indicators. While 16 out of 25 have committed to coal financing phase-out by 2040 or earlier, they are not all taking the necessary steps to get there. All banks have some restriction on finance for new thermal coal capacity, but only seven have completely stopped supporting it. In addition, only four of the assessed banks have a long-term commitment to phase out or down oil and gas financing. In addition, the banks have significant “blind spots”, the WRI said. For example, 18 of them do not have an overarching commitment to deforestation, and the automotive sector is covered in only 15 banks’ climate commitments. Their commitments also vary in their terms, which makes it difficult for investors and other stakeholders to compare or understand their progress. Overall, the current level of ambition displayed by the banks is not high enough, the report argued – noting that high-emitting sectors like shipping and real estate are also barely covered in existing targets.

Wildfires are posing a medium or high risk to around 2.6 million homes in the US, with 1.2 million facing elevated exposure, according to a new report from CoreLogic. California is by the far the state most at risk, with 1.26 million homes exposed to wildfires – the largest portion of which are in Los Angeles. California is followed by Colorado, Texas, Oregon and Arizona as the worst-affected states. As of July 15, more than 24,000 wildfires had burned across the US in 2024. The report highlighted the growing financial risk of owning property in areas impacted by wildfires, which are increasing in frequency and intensity as a result of climate change. It examined the problem of how to insure homes in danger areas, and listed measures property owners could take to reduce risk. “Wildfires continue to pose a threat to property and livelihoods across the US,” CoreLogic said. “The events of last year and activity to date highlight the importance of insurance and risk management in safeguarding communities against such catastrophic events.” The report coincides with a study by the World Resources Institute (WRI), which found wildfires are becoming more widespread and burning at least twice as much tree cover today as they did two decades ago. “Climate change is one of the major drivers behind increasing fire activity,” the WRI said. “Extreme heat waves are already five times more likely today than they were 150 years ago, and are expected to become even more frequent as the planet continues to warm.”

It almost “goes without saying” that a Democratic victory in the upcoming US presidential election would be “seen as a positive” for clean technology, according to global asset management firm Franklin Templeton. Conversely, a second Trump administration – especially if backed by a Republican-controlled Congress – could lead to legislative changes that would significantly hinder clean energy initiatives, much of which would centre on implications for the Inflation Reduction Act (IRA). In a paper assessing the potential impact of the election on the US energy transition, the asset manager assessed which sections of the IRA that would be at risk under a Republican administration. Although wind, solar and electric vehicles (EV) are at moderate risk, other “more speculative areas” – such as hydrogen and carbon capture – would be more vulnerable, Franklin Templeton argued. “We expect energy companies to keep pushing for less aggressive subsidies in this area, and we view this as a low-jobs, high-subsidy part of the IRA that remains at risk,” the paper read. “From an investment standpoint, we do not see this industry as likely to achieve profitable growth. Thus, we expect to continue to avoid investing in hydrogen companies until we see more evidence of sustainable profitability.” While Democrats are generally expected to continue their support for decarbonisation through limits on new oil and gas expansions, incentives for consumers to switch to EVs, and measures under the IRA, Republican candidate Donald Trump has suggested he would strive to reverse these effort and likely support oil and gas at the expense of cleaner sources of generation. “On balance, a Republican victory in the US election would not be supportive for global action on climate change but may have less direct impact on key areas that are already cost-competitive, such as solar or wind,” said Craig Cameron, Portfolio Manager of the Templeton Global Equity Group. “We expect renewable energy and EVs would continue to grow under a Trump presidency, but at a slower rate than under a Democratic president. In many cases, state-level mandates, corporate commitments and economics are the primary driving factors behind the energy transition, rather than solely federal policy.”

Nuveen Infrastructure has announced a £1.1 billion (US$1.4 billion) significant risk transfer (SRT) in debt related to UK energy transition projects. The SRT, held with UK bank NatWest, covers loans to more than 35 projects including solar and wind farms, energy from waste, bioenergy, hydro and smart meters. The projects are located across eight European countries. SRTs allow banks to offload a portion of their loan book to third parties, enabling the former to meet capital adequacy requirements. Nuveen’s SRT, held through the Energy Transition Enhanced Credit II strategy (ETEC II), is the fourth of its kind for the £33.5 billion infrastructure investment specialist – and its third linked to energy transition loans.  “Our investors will now benefit from over 200 loans across a broad range of European energy transition infrastructure projects,” said Claudio Vescovo, Managing Director and Head of European Energy Transition Credit Funds at Nuveen Infrastructure. “We believe now is a strong opportunity for investing in energy transition credit. The strategy benefits from the current interest rate environment as well, as the first-mover advantage we have built on certain investment tools like SRTs.”