Daily ESG Briefing: IEA predicts trouble for renewable energy

The latest developments in sustainable finance

Covid-19 is exacerbating financing challenges and policy uncertainty for renewables, according to the International Energy Agency’s Renewable Market Update: Outlook for 2020 and 2021 report, which was released today. The publication said both large- and small-scale projects under development could see cancelled or suspended financing amid emerging macroeconomic uncertainty. Meanwhile, social distancing and lockdown measures have triggered supply chain disruption and delays in project construction, and reduced energy demand has decreased renewables consumption. The report recommends that governments help reassure investors and ensure policy predictability by confirming ambitious energy and climate targets and by making investment in renewables a key part of Coronavirus recovery stimulus packages.

Meanwhile, BloombergNEF's latest annual Long-Term Electric Vehicle Outlook has forecast that sales of electric passenger vehicles will fall 18% this year, to 1.7m worldwide, with the coronavirus crisis interrupting 10 successive years of strong growth. Sales of combustion engine cars are also set to drop by 23%. The long-term electrification of transport is still projected to accelerate in the years ahead with electric models accounting for 58% of new passenger car sales globally, and 31% of the whole car fleet by 2040, the report estimates.

Kommuninvest, the fundraising arm for Swedish local governments, has issued a SEK5bn green bond, its tenth to date and seventh in SEK. Interest in the issuance was high, according to Kommuninvest, with 15 investors participating in the deal. 

BNP Paribas has published its first TCFD report.  BNP Paribas Asset Management is the only institution to have two members on the TCFD – Mark Lewis and Jane Ambachtsheer – and has been aligning with the recommendations since 2017. 

Danish pension fund PFA has become the 23rd member of the UN-convened Net-Zero Asset Owner Alliance, bringing the total assets under management to over US$4.6trn. PFA has committed to transitioning its investment portfolio to net-zero greenhouse gas emissions by 2050, consistent with a maximum temperature rise of 1.5°C, in accordance with the Paris Climate Agreement. 

Danske Bank has joined the Partnership for Carbon Accounting Financials (PCAF) as the first large Nordic bank. The PCAF partnership is a collaboration of more than 60 financial institutions seeking to standardise the measurement and disclosure of greenhouse gas emissions associated with loans and investments. Danske Bank has announced that it aims to align its corporate lending portfolio with the Paris Agreement.

Sustainability reporting standards body the Global Reporting Initiative (GRI) has published a new Waste Standard to give businesses a universally applicable tool for measuring and understanding waste impacts. The report details how companies can switch to circular business practices as well as encouraging companies to prevent waste at source.