Catalysing carbon emission cuts at UNGA

Greetings from New York, where I am writing from the Javits Center, which was Manhattan’s big Covid-19 vaccination centre and now, happily, is back to being a big conference venue for the city. I am here for the UN private sector forum and to interview chief executives. There is actually a string quartet playing behind me as people mingle over drinks — not a bad way to start Climate Week.

But to start today’s newsletter, I wanted to bring your attention to big news from the other side of the world. Gillian and I just got off a call with Andrew Forrest, chair of Fortescue Metals, which has just announced a $6.2bn investment plan to eliminate fossil fuel use at its operations by 2030.

Forrest, the Australian billionaire mining mogul, founded Fortescue Metals and controls the company through a 36.7 per cent stake. This new big-dollar investment drive will eliminate Fortescue’s fossil fuel risk profile while also cutting operating costs by $818mn a year, according to the company. It is a bold pledge that sets a new standard for carbon-cutting targets in the mining sector.

Today, please see my interview with the head of Novozymes, who spoke here at today’s UN event. And Simon has news on some important developments for green policy in the EU. Please read on and keep in touch with us during the UN General Assembly. You can reach us at moralmoneyreply@ft.com, or just reply to this email. (Patrick Temple-West)

UNGA in brief

• The clock is ticking for UN goals to end poverty — and it doesn’t look promising. National Public Radio analysed the state of the UN’s sustainable development goals in an interview with Masood Ahmed, president of the Center for Global Development, a Washington-based think-tank.

• China’s treatment of the Uyghur Muslim ethnic group can no longer go “unpunished,” said Fernand de Varennes, the UN’s special rapporteur on minority rights at an event in New York yesterday. “Inaction is no longer possible,” he said. “If we allow this to go unpunished, what kind of message is being propagated?” Read the full story from the AP here.

Can the humble enzyme cut carbon?

Without Googling it, do you know how enzymes work?

I will admit that I had to do an FT story search on enzymes to get up to speed. But these tiny protein tinkerers also offer tools to help cut carbon emissions, Ester Baiget, chief executive of Novozymes, told Moral Money ahead of a UN private sector forum on Monday.

Denmark-based Novozymes is the global leader for making industrial enzymes. With her company’s enzymes already in laundry detergents and ethanol fuel production, Baiget talked about opportunities for growth in the months ahead.

For example, Novozymes has partnered with French technology company Carbios that uses an enzyme to break down PET, the plastic commonly found in soda bottles and some apparel.

“It is through biology,” Baiget said, that “you can recycle in infinite loops without creating distress or degradation of the molecules.” 

Carbon capture and storage is another area of growth, she said. Already, Novozymes partners with Milan-listed Saipem to develop a carbon-capture process that requires less energy than traditional methods. US climate legislation adopted in August is likely to fund additional carbon-capture opportunities, she said.

And — amid the accelerating energy crisis in Europe —Novozymes has insulated itself from natural gas prices. The company’s European energy needs are powered with renewable energy, she told the UN gathering.

“Doing the right thing is also the right thing for the business,” Baiget said about ridding the company of natural gas needs.

Banks and other investors have an unmet opportunity to take seriously the market potential for biological tools to attack global warming. Novozymes’s products seem to be offering a market-based solution, which — with encouragement from governments and investors — could take a bite out of the climate crisis. (Patrick Temple-West)

Quote of the day

“Fossil fuels becoming fashionable again.”

In an interview yesterday, UN secretary-general António Guterres said he was “extremely worried because with the war in Ukraine and several other events, climate change seems to have moved out of the priorities for many decision makers . . . This is suicide,” he said.

Elsewhere in ESG: EU institutions under pressure to up their climate game

Yesterday brought some noteworthy developments on two of the most important running ESG stories that we’ve been tracking in Europe.

One came from the European Central Bank, which in July announced that it would “tilt” its €386bn corporate bond portfolio away from highly polluting businesses. The ECB has now given details of how this will work. It will assess companies’ current and targeted carbon emissions, as well as their quality of disclosure, to give each a “climate score”. That score will affect their weighting in the benchmark the ECB uses when reinvesting the proceeds of maturing bonds — about €30bn a year.

With this move, the ECB continues its recent record of being far more proactive on climate issues than most other central banks. Yet it won’t be enough to satisfy green campaigners who have been pushing the ECB to exclude the worst-polluting corporate issuers altogether, and to start selling down their bonds before they mature. And green groups have been piling on the pressure on the EU’s executive body too, over its decision to include gas and nuclear energy — under certain conditions — in its sustainable investment taxonomy.

Lawsuits against the European Commission have just been announced by groups including ClientEarth (against the inclusion of gas) and by Greenpeace (against the inclusion of nuclear). You can get the lowdown on that from our Brussels-based colleague Alice Hancock, who says that yet another lawsuit on this issue — this time brought by the governments of Austria and Luxembourg — is likely to follow in October.

This comes as the Platform on Sustainable Finance — an independent advisory group to the commission — has been hit by a co-ordinated walkout by five of its several dozen members, in protest at what they consider the undermining of its work by political pressure. They’ve written a damning farewell letter, which complains that the EU’s green taxonomy project “has been transformed from a gold standard into an instrument of institutional greenwashing”. (Simon Mundy)

Smart read

The European Investment Bank will not fund gas projects, its head has told the FT — a move that could aggravate the displeasure of some developing nation governments that are seeking to use gas as a transition fuel from coal. EIB president Werner Hoyer said the EIB did not want to make investments “that one day will be seen as stranded assets”.