US doubles climate aid as green gilt gets gold

Written by Lori Campbell on 27th Sep 2021

America is to double the money it gives to help poorer nations respond to climate change, as the UK’s first ever green gilt attracts a record £100 billion in bids from investors. Meanwhile, investors managing £5.1 trillion in assets are pressing the finance industry to boost funding for carbon-removal projects, the UK gets a flurry of low-carbon tech investments, and a TV watchdog is to crack down on ads falsely claiming green credentials. It’s the Good With Money weekly newsbrief.

US to double climate change aid to poorer countries 

The United States will again double the money it gives to help developing nations respond to climate change, President Joe Biden has said.

Mr Biden said in April that America would double its contribution to $5.7 billion (£4.2 billion), but speaking at the United Nations General Assembly on Tuesday he said this would increase again to over $11 billion (£8 billion).

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UK’s first green gilt draws record £100 billion demand

The UK’s first ever ‘green gilt’ has attracted record demand from investors, with £100 billion placed in bids.

Green gilts are bonds where the proceeds are earmarked for environmental spending. The £10 billion raised by the new 12-year green gilt will be spent on projects including flood defences, renewable energy, or carbon capture and storage, in line with the government’s green financing framework.

The UK’s Debt Management Office, the arm of the Treasury that handles bond issuance, plans to sell at least £15 billion of green gilts this year, with a further sale scheduled for next month, as it launches one of the world’s largest green borrowing programmes.

However, sustainable bank Triodos says it will not be investing in the new green gilts because they are “not green enough.”

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Investors managing $7tn call for carbon removal funding

Investors managing a collective $6.6 trillion (£5.1 trillion) in assets are pressing the finance industry to boost funding for carbon-removal projects to help reach net zero.

Cutting the amount of carbon dioxide in the atmosphere should remain the key focus for investors, according to the new United Nations-convened Net-Zero Asset Owner Alliance.

As much as 1.2 billion metric tons of the greenhouse gas must be removed annually by 2025 to meet the goals set by the Paris Agreement. That total needs to reach as much as 10 billion tons per year by 2050, the group says. Globally, about 42 billion tons of CO2 were released in 2020.

Carbon removal has been held up as a solution by the energy industry, though activists argue that focusing too much on that method could distract from the work of immediately reducing emissions.

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Flurry of low carbon investments for UK

Renewable energy firm Ørsted is to spend £12 billion on offshore wind projects in Scotland as chemical giant Ineos plans a £1 billion hydrogen investment.

Danish-based Ørsted has submitted proposals for five renewable energy projects to The Crown Estate Scotland through the ScotWind offshore wind leasing round. If approved, they would collectively have a capacity of around 8.5GW. The UK Government is targeting 40GW of offshore wind capacity by 2030, with the Scottish Government promising to host at least 11GW of this.

Meanwhile, Ineos is to invest a further £1 billion in initiatives to decarbonise its largest industrial facility in Grangemouth, Scotland, with a focus on hydrogen.

The announcements come in the same week that the UK Government has opened bids for a share of a £220 million funding pot designed to help high-carbon industries improve energy efficiency and transition to lower-carbon energy.

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Watchdog to crack down on ads falsely claiming green credentials

The Advertising Standards Authority (ASA) is to look into the environmental advertising claims of companies across a range of sectors – starting with energy, heating and transport – in a drive to support global efforts to reduce carbon emissions and battle the climate crisis.

Next spring the the watchdog will expand its investigation to look at the accuracy of green claims made by companies around waste, such as products being biodegradable, recyclable or a “plastic alternative”.

Later next year the spotlight will turn to meat and food sustainability advertising, such as checking the accuracy of claims around environmental good practice by sellers of beef products, a hugely carbon intensive industry.

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