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Japan’s Government Pension Investment Fund to Support ADB’s Green Projects

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The Asian Development Bank (ADB) and Japan’s Government Pension Investment Fund (GPIF) recently formed a partnership to support green project financing through investments in ADB’s green bonds.

“We are pleased to collaborate with GPIF on this important initiative that promotes environment-related investments in Asia and the Pacific and is closely aligned with ADB’s development mandate,” ADB President Mr. Takehiko Nakao said.

ADB issues green bonds to finance projects in the Asia and Pacific region that help its developing member countries mitigate greenhouse gas emissions and adapt to the consequences of climate change. ADB issued its first green bond in 2015. It has since issued more than $6 billion equivalent green bonds in various currencies. ADB green bonds provide opportunities for institutional investors, including pension funds and asset managers, to achieve their green mandate.

The green bond investment will help GPIF fulfill its stewardship responsibilities for environment, social, and governance (ESG) investments. GPIF, the largest pension fund in the world in terms of assets under management, can support ADB’s green bond program in a substantial way.

“GPIF requires all asset managers to integrate ESG into their investment analysis and decision-making. We regard the purchase of Green, Social, and Sustainability Bonds as one of the direct methods of ESG integration in the fixed income investment. GPIF is committed to promote ESG integration through our investment chain in order to ensure the sustainable performance of the pension reserve fund for all generations,” GPIF Executive Managing Director and Chief Investment Officer Mr. Hiro Mizuno said.

Global CO2 emissions have been increasing since 2018; and Asia produces about 40% of global emissions. “Driven by continuous economic growth, accelerating urbanization, and expanding middle classes, Asia accounts for the majority of rising energy needs worldwide. It is, therefore, essential that the region plays a proactive part in global efforts to reduce emissions from houses and offices, industry, and transport,” ADB Vice-President for Finance and Risk Management Ms. Ingrid van Wees said.

ADB will scale up its support for climate change adaptation and maintain its assistance for mitigation through clean energy and energy efficiency projects and sustainable transport. Under Strategy 2030, ADB will ensure that 75% of the number of its committed operations will be supporting climate change mitigation and adaptation by 2030. Climate finance from ADB’s own resources will reach $80 billion for 2019–2030.

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Can financial institutions invest in ocean health?

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New, pivotal guidance published today by the UN Environment Programme Finance Initiative (UNEP FI) provides a market-first, practical toolkit for financial institutions to take immediate action on their lending, investment and underwriting activities which negatively impact ocean health.

The ocean covers 70% of the earth’s surface, holding 97% of all water and 80% of all life forms. Major ocean sectors such as tourism, shipping, fishing, aquaculture and marine renewable energy collectively contribute to a ‘blue’ economy, estimated at a global gross value added of USD 1.5trn in 2010. This is projected to double in size to USD 3trn by 2030, with some ocean industries set to grow faster than the global economy (OECD, 2016).

However, ocean health is under existential threat. Faced with the triple crises of pollution, nature loss and climate change, two-thirds of our oceans have been negatively altered by human activity; leaving industries, businesses and livelihoods exposed. With existing financing still largely directed towards unsustainable sectors and activities, it is critical that all sectors of the blue economy are rapidly transitioned towards sustainable pathways.

Banks, insurers and investors have a major role to play in financing this transition to a sustainable blue economy, helping to rebuild ocean prosperity and restore biodiversity to the ocean. Through their activities, and client relationships, financial institutions have a major impact on ocean health and hold the power to accelerate and mainstream the sustainable transformation of ocean-linked industries. They thereby play essential roles in wider ocean governance, engaging in public-private partnerships, and propelling local-to-global actions for sustainability.  

“Momentum is building as more banks, insurers and investors wake up to the realisation that their financial activities can have a sizeable impact on ocean health, creating a negative feedback loop for key ocean industries such as shipping, fishing, tourism and marine renewables” said Eric Usher, Head of UN Environment Programme Finance Initiative (UNEP FI).

“A new sustainable pathway for the blue economy is thus both an environmental and economic necessity. This critical new guidance provides a practical toolkit for financial institutions to understand their impact and discover how a new sustainable finance approach can help them identify key risks and opportunities in ocean-linked sectors” he added.

Leveraging best practice based on input from more than 50 pioneering institutions and experts, this guidance sets out pathways to sustainable growth across five key ocean sectors, chosen for their established connection to private finance. It presents a detailed breakdown of which activities to seek out as best practice, which activities to challenge, and which activities to avoid financing completely due to their damaging nature.

“Decades of unsustainable consumption and production is leading to environmental risks and losses in natural capital, eroding the ocean’s resource base. Without engagement by financial institutions, we will not be able to change the course to sustain a healthy ocean and unlock its enormous potential. 1$ of sustainable ocean investments can yield 5x higher global benefits” said Leticia Carvalho, Head of the Marine and Freshwater Branch, UN Environment Programme.

“This new guidance can help financial institutions invest in good ocean governance at local, regional and global levels. In a nutshell, making sustainable blue economy opportunities too hard to resist” she added.

This guidance provides decision-makers across banking, insurance and investment with a science-based and actionable toolkit, giving easy-to-follow recommendations on how to approach financial activity related to:

  • Seafood, including both fisheries and aquaculture as well as their supply chains;
  • Ports;
  • Maritime transportation;
  • Marine renewable energy, notably offshore wind; and
  • Coastal and marine tourism, including cruising.

It builds on the foundation of the Sustainable Blue Economy Finance Principles – a keystone for financing activities in the blue economy, supported by a community of over 50 institutions worldwide with a collective total asset size of over USD 6trn.

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Duck conservation takes flight in Jamaica

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On January 20, 2021, the day of the inauguration of American president Joe Biden, two ducks named “Joe” and “Kamala” took flight from a remote wetland near Negril, Jamaica. And, like their namesakes, the fowl will be the focus of international attention.

That’s because Joe and Kamala are West Indian whistling ducks, the rarest duck species in the Americas, with fewer than 20,000 remaining, found only in the northern Caribbean. Conservationists released the pair, which were outfitted with GPS trackers, into the wild on 20 January, kicking off a study to learn more about their species and, researchers hope, ensure their survival.

BirdsCaribbean is a partner of the United Nations Environment Programme (UNEP). The whistling duck study is supported by UNEP’s Integrating Water, Land and Ecosystems Management in Caribbean Small Island Developing States (IWEco) project.

With one million species are at risk of extinction, biodiversity is a key priority of the UN Environment Programme (UNEP).  Ecosystems are fundamental to human health and prosperity, availing food and water, regulating temperature, stimulating economic growth, putting roofs over heads and clothing on backs. As ecosystems degrade, so do human lives.

As the world faces the stark reality that none of the Aichi targets were met and prepares for a new, ambitious post-2020 framework, the issue is more urgent than ever.  In fact, biodiversity loss and ecosystem collapse are ranked among the top five threats to humanity in the coming decade.

Whistling ducks’ long-term survival has been threatened by the destruction of their wetland habitats, as well as climate change, pollution, poaching and predators. Little is known about the large waterbird that is between the size of a large duck and a goose, has a long neck, and is mostly brown in colour, but may have black-and-white patches on its neck and flanks. The duck’s characteristic features is its distinctive whistling call.

“We are thrilled with the launch of this exciting project,” said Lisa Sorenson, the Executive Director of BirdsCaribbean. “I expect it will lead to major improvements in our knowledge of the ducks’ movements and habitat use.”

The trackers attached to Joe and Kamala  are expected to plot their positions every hour to within a few metres and will help the scientists to know about the species, their migration patterns, nesting sites, feeding zones and roosting locales. Researchers are aiming to use the information gathered through the initiative to plan for the species’ recovery.

Led by UNEP with the backing of the Global Environment Facility, IWEco is helping 10 Caribbean countries manage their water and land resources while safeguarding biodiversity. A key part of the project has been the protection and monitoring of endemic species, like West Indian whistling ducks.

As one of the three founding Global Environment Facility partners, UNEP has been working on conservation projects supported by the facility for almost 30 years.

“Together, UNEP and the Global Environment Facility have successfully worked to address global transboundary issues since 1992, and we look forward to further strengthening and implementing actions for nature,” said Sinikinesh Beyene Jimma head of UNEP’s GEF International Waters Unit.

And while biodiversity targets have not been met, evidence indicates that efforts have produced results. Where action was taken, habitat loss was controlled and decades of degradation were reversed.

UN Environment

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After steep drop in 2020, global carbon dioxide emissions have rebounded strongly

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The Covid-19 crisis in 2020 triggered the largest annual drop in global energy-related carbon dioxide emissions since the Second World War, according to IEA data released today, but the overall decline of about 6% masks wide variations depending on the region and the time of year.

After hitting a low in April, global emissions rebounded strongly and rose above 2019 levels in December. The latest data show that global emissions were 2%, or 60 million tonnes, higher in December 2020 than they were in the same month a year earlier. Major economies led the resurgence as a pick-up in economic activity pushed energy demand higher and significant policies measures to boost clean energy were lacking. Many economies are now seeing emissions climbing above pre-crisis levels.

“The rebound in global carbon emissions toward the end of last year is a stark warning that not enough is being done to accelerate clean energy transitions worldwide. If governments don’t move quickly with the right energy policies, this could put at risk the world’s historic opportunity to make 2019 the definitive peak in global emissions,” said Dr Fatih Birol, the IEA Executive Director. “In March 2020, the IEA urged governments to put clean energy at the heart of their economic stimulus plans to ensure a sustainable recovery. But our numbers show we are returning to carbon-intensive business-as-usual. This year is pivotal for international climate action – and it began with high hopes – but these latest numbers are a sharp reminder of the immense challenge we face in rapidly transforming the global energy system.”

The 2020 trends underscore the challenge of curbing emissions while ensuring economic growth and energy security. Amid a growing number of pledges by countries and companies to reach net-zero emissions by mid-century, the rebound in emissions shows what is likely to happen if those ambitions are not met with rapid and tangible action.

Emissions in China for the whole of 2020 increased by 0.8%, or 75 million tonnes, from 2019 levels driven by China’s economic recovery over the course of the year. China was the first major economy to emerge from the pandemic and lift restrictions, prompting its economic activity and emissions to rebound from April onward. China was the only major economy that grew in 2020.

In India, emissions rose above 2019 levels from September as economic activity improved and restrictions were relaxed. In Brazil, the rebound of road transport activity after the April low drove a recovery in oil demand, while increases in gas demand in the later months of 2020 pushed emissions above 2019 levels throughout the final quarter.

Emissions in the United States fell by 10% in 2020. But on a monthly basis, after hitting their lowest levels in the spring, they started to bounce back. In December, US emissions were approaching the level seen in the same month in 2019. This was the result of accelerating economic activity as well as the combination of higher natural gas prices and colder weather favouring an increase in coal use.

“If current expectations for a global economic rebound this year are confirmed – and in the absence of major policy changes in the world’s largest economies – global emissions are likely to increase in 2021,” Dr Birol said. “Nonetheless, there are still reasons for optimism. China has set an ambitious carbon-neutrality target; the new US administration has rejoined the Paris Agreement and is putting climate at the heart of its policy-making; the European Union is pushing ahead with its Green Deal and sustainable recovery plans; India’s stunning success with renewables could transform its energy future; and the United Kingdom is building global momentum toward stronger climate action at COP26 in November.”

Global emissions plunged by almost 2 billion tonnes in 2020, the largest absolute decline in history. Most of this – around 1 billion tonnes, which is more than the annual emissions of Japan – was due to lower use of oil for road transport and aviation. As travel and economic activities pick up around the world, oil consumption and its emissions are rising again. The record increase in sales of electric vehicles is insufficient to offset the growth in emissions caused by the uptick in road traffic around the world.

Global emissions from the electricity sector dropped by 450 million tonnes in 2020. This resulted partly from lower electricity demand but also from increases in electricity generation by solar PV and wind. For the world to achieve the climate goals of the Paris Agreement, notably of limiting global warming to well below 2 °C, a decline in electricity sector emissions of around 500 million tonnes would need to occur every single year. Even greater annual drops in emissions from electricity generation would be required to put the world on a path in line with warming of 1.5 °C.

In order to show a sustainable path forward, the IEA will publish on 18 May the world’s first comprehensive roadmap for the energy sector to reach net-zero emissions by 2050. As part of its focus on leading clean energy transitions worldwide, the IEA is working with the United Kingdom’s COP26 Presidency to bring together heads of government and ministers at the IEA-COP26 Net Zero Summit on 31 March to step up international efforts to turn net zero pledges into concrete energy policies and actions.

In April, the IEA will release its Global Energy Review 2021, which will examine this year’s emerging trends in global energy demand and CO2 emissions.

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