Brits yearn for green banking as Drax first to capture carbon: it’s the Good With Money news brief

Written by Lori Campbell on 11th Feb 2019

More than half of UK bank account holders would switch to protect the planet as a groundbreaking carbon capture trial begins in Yorkshire and Investec Bank launches a new UK-focussed sustainable fund. A £1.3 billion tidal lagoon project in Swansea could go ahead despite the government refusing to pay for it, while in the US senators call on mega-money managers to do more to prevent deforestation. Lori Campbell rounds up this week’s top sustainable stories. 

 

Over half of bank customers would switch to help the environment

More than half of UK bank account holders would consider switching because of environmental concerns, according to a new report.

Research by Smart Money People revealed that 52 per cent of customers would swap if their bank was causing significant damage to the environment.

Of the 1,764 customers polled, environmental impact was the third most important ethical consideration, after racial discrimination (58 per cent) and sexual discrimination (54 per cent).

The study showed the main barrier to switching to a greener bank is “excessive hassle” (37 per cent) and the perception that “all banks are equally bad” (23 per cent).

 

Carbon capture project launched

A UK power station has become the first in Europe to capture carbon dioxide (CO2) from wood-burning.

The Drax power station, near Selby in North Yorkshire, burns seven million tonnes of wood chips each year to drive generators to make electricity.

It has now begun a pilot project to capture one tonne a day of C02 from wood combustion. This effectively turns climate change into reverse on a tiny scale.

When a forest grows, trees absorb carbon dioxide from the atmosphere and use it to make wood. If you burn that wood, the process doesn’t emit any extra CO2 into the atmosphere.

By capturing the CO2 from wood burning, Drax can actually reduce the carbon in the atmosphere overall. This technology is known as Bio Energy with Carbon Capture and Storage (BECCS).

However, it doesn’t come without controversy. One estimate suggests that a staggering amount of land would be required to make BECCS feasible under the Paris climate agreement – perhaps as much as three times the area of India.

 

Investec launches sustainable fund

Private bank and fund manager Investec Asset Management has launched a new ethical fund.

The UK Sustainable Equity fund sits across a broad spectrum, from impact investing to more traditional investing that is underpinned by ethical, social and governance (ESG) factors.

The fund invests in a range of companies worth upwards of £500 million. To be included, they must have a good business model (sustainable, growing returns) and typically turn profit into cash.

Valuation and the placement of capital are also important factors. The fund focuses on companies involved in accessible healthcare, sustainable infrastructure, climate change and clean energy, and the efficient use of resources. Sectors avoided include alcohol, gambling, and tobacco, among others.

Investec uses a specialist tool to assess impact, such as waste reduction, training and health and safety.

 

Tidal lagoon energy project to go ahead – without government funding

A £1.3 billion scheme to harness wave energy through a tidal lagoon could go ahead, despite the government having rejected it as “too expensive.”

The Tidal Lagoon Power (TLP) “pathfinder” project, in Swansea, Wales, is believed to be the first in the world of its kind. The aim is for it to lead to a fleet of larger, more powerful lagoons in Cardiff, Newport, Bridgewater Bay, Colwyn Bay and off the coast of Cumbria.

Swansea council leader Rob Stewart said last week that the scheme could still be viable through other ways of funding and from selling the energy.

Meanwhile, a new £67.4 million tidal barrier is being built in Ipswich. The flood defences, to be completed by November, will protect 1,600 homes and 400 businesses over the next century from the increasing impact of climate change.

 

Fund managers taken to task over deforestation

US senators have called on investment firms to help mitigate climate change by using their portfolios to stop tropical deforestation.

In letters to global investment firms that fund some of the fastest-growing companies linked to deforestation, the senators question their environmental, social, and governance (ESG) criteria and call for more transparency on policies related to deforestation activities.

The firms include BlackRock, Vanguard, TIAA, JPMorgan Chase, Dimensional Fund Advisors, Prudential Financial, CalPERS, Fidelity, Northern Cross, Northern Trust and Kopernik Global Investors.

The group of eight senators, led by Sen. Brian Schatz, wrote: “We are concerned that some companies in your portfolio may not be living up to their commitments to address deforestation in their supply chain – if they have made such commitments at all.

“It is our view that addressing risks from deforestation is in line with your fiduciary responsibility. As such, we are interested in learning what due diligence and risk management procedures your firm has put in place to address and mitigate these risks for both active investments and passively managed funds.”

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