We hope you're enjoying a great summer. We've put together the latest developments and transformative initiatives shaping the sustainability landscape. Dive in for a rather hot July update.
Curated by our Sustainability Specialist, Kenza Akallal.
■ Hottest month in 120,000 years
July has broken global temperature records, with the world's hottest day being broken three times in the first week of the month. Many scientists agree this indicates climate change is reaching uncharted territory.
The scorching heatwaves have affected numerous countries, including China, France, Spain, Germany, Poland, India, Iran, Canada, and Mexico, while Africa experienced its hottest night ever across the continent, with temperatures staying above 39.6C in Adrar, Algeria.
■ Investors ramp up engagement on nature loss
The focus on biodiversity has shifted beyond traditional concerns like deforestation towards safeguarding nature. NBIM has been engaging mining companies on how they approach operations in sensitive areas, as well as how they incorporate indigenous rights and engage communities. BNPP AM's dialogue with pharmaceutical companies aims to encourage the replacement of horseshoe crab with synthetic alternatives. Scottish Widows wants to hear about both successful and unsuccessful examples of engagement and how asset managers plan to escalate.
Collaborative investor initiatives are also taking shape, including the development of Nature Action 100. While progress is being made, data challenges remain, and biodiversity resolutions at AGMs are still limited.
■ Another one bites the dust
The Task Force on Climate-Related Financial Disclosures (TCFD) is officially being merged into the International Sustainability Standards Board (ISSB) standards, IFRS S-1and IFRS S-2.
The ISSB will take over the monitoring of companies’ progress on climate-related disclosures from 2024 onwards. Disclosure scheme CDP will also integrate its questionnaires to companies with ISSB from 2024. But challenges remain compared to existing national or regional legislations, notably compared to the Corporate Sustainability Reporting Directive (CSRD) requiring companies to report according to the European Sustainability Reporting Standards (ESRS).
■ Updated guidelines on responsible business conduct
The OECD has released updated Guidelines for Multinational Enterprises on Responsible Business Conduct. Companies operating in OECD countries will now be expected to align their operations with climate and biodiversity goals.
Notably, the framework emphasizes prioritizing cutting down emissions over offsets, considering them only as a last resort. The updated framework is billed as the first international agreement to define climate responsibility of companies.
■ While we are waiting for an "IPCC for Food Systems"
Since the flagship report on sustainable food systems by the EAT–Lancet Commission, so much has changed, with global volatile supplies and costs of food, fuel, and fertilizers contributing to inflation and social instability.
In a new article, the EAT-Lancet 2.0 explains why a second commission is necessary, focusing on defining a healthy reference diet, assessing diets' impact on meeting health targets, and ensuring accessibility to healthy food for all while staying within planetary boundaries.
■ Regulatory round-up
The EU Nature Restoration law has survived a dramatic vote in the European Parliament but only by a razor-thin margin. The regulation establishes binding targets in seven fields of action, such as farmlands, peatlands, pollinators and seabed, with the goal of reversing the environmental damage caused by human activity and climate change.
In other news, France approved the Say on Climate amendment. France is the first country to propose a national requirement for listed companies to present their climate strategies to shareholders to vote on, every three years.
Additionally, there will be an annual vote on the implementation of the strategies each year. Last but not least, the European Commission has just adopted the final version of the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD). This is subject to final adoption by the European Parliament.
■ The ocean’s color is changing
A NASA-supported study recently revealed a significant change in the color of the world's oceans occurring in over 56 percent of ocean areas. That is larger than the total land area on Earth.
The ocean's color is a visual indicator of what lies within its upper layers, with deep blue waters reflecting little life and greener waters indicating the presence of ecosystems, mainly phytoplankton.
It turns out phytoplankton, which contains the green pigment chlorophyll, plays a crucial role in capturing carbon dioxide from the atmosphere. Understanding these changes is vital in addressing the effects of climate change on marine life and the planet.
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