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ESG Monthly (July 2021)
A brief commentary on environmental, social, governance news and developments globally and in key Asian markets in July 2021:
Globally…
- The European Commission announced a series of initiatives, including a new Sustainable Finance Strategy and sustainability reporting specifications under the EU Taxonomy, to promote a more sustainable financial system. (European Commission, July 2021)
- The European Commission launched a ‘Fit For 55’ legislative package that set out a roadmap to achieve its 55% emissions reduction target by 2030, and also plans to increase the amount of carbon emissions stored to 310 million tonnes by 2030. (European Commission, July 2021; Euractiv, July 2021)
The EU’s 13 ‘Fit for 55’ legislative packages
Source: European Commission, BofA Global Research, July 2021
- The United States put in place an executive order to enforce anticompetitive practices throughout the economy, with specific focus on healthcare, transportation, agriculture, technology and banks. (The White House, July 2021)
- G20 finance leaders recognized carbon pricing as a tool for carbon reduction to manage the impacts of climate change for the first time in an official communique. (Reuters, July 2021)
- The United Nations drafted a set of 21 proposals on biodiversity and conservation protection targets to be voted at the U.N. Convention on Biodiversity due to meet in October. (Reuters, July 2021)
- A group of global banks launched a pilot carbon exchange, Project Carbon, to provide liquidity, price discovery and transparency for carbon credit projects. (The Asset, July 2021)
- A recent report from the International Energy Agency (IEA) highlighted that 2021 is on course for the second-largest yearly increase in history, with global carbon emission in 2023 likely to surge to a new record with “no clear peak in sight”. (IEA , July 2021) In addition, only 2% (US$380bn) of global fiscal support, directed to rebuilding economies amid and post the pandemic, went towards clean energy. (IEA , July 2021)
Energy-related carbon emissions under different trajectories up to 2023 (Mt CO2)
Source: IEA, July 2021
In key Asian markets…
- In China, the national carbon training market was launched, covering more than 2,200 domestic Chinese power companies, responsible for around 40% of the carbon emissions. (UBS, July 2021) The carbon price closed on the first day at 51.23 RMB (USD7.92) per tonne. (UBS, July 2021)
Emissions trading prices at global emissions trading schemes (ETS)
Source: The World Bank, Morgan Stanley Research, July 2021 - In China, companies that contain personal information of more than 1 million users are subject to cybersecurity reviews by the Office of Cybersecurity Review before the firm is listed abroad. (Cyberspace Administration of China, July 2021)
- In South Korea, the government considers to resume operations of three nuclear power plants to ensure stable electricity supply during recent heat wave. (The Korea Times, July 2021) Efforts to limit power consumption included advising government ministries and other public institutions to refrain from using air conditioners in the afternoon. (The Korea Times, July 2021)
- A Carbon Tracker report finds China, India, Indonesia and Vietnam plan to build 600 new coal plants, which could account for 80% of the world’s planned new coal plants and 75% of existing coal capacity. (Carbon Tracker, July 2021)
Total Power from New Coal Project Planned
Source: Carbon Tracker, Mirae Asset analysis, July 2021
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