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ESG & Climate Services

 

This weekly report covers all aspects of the major changes facing industry, from climate change initiatives through ESG investing, and includes regular work on recycling, renewables, energy transition and hydrogen, and carbon capture and use.  It is included as part of our comprehensive research/consulting subscription, but can also be purchased separately. 

  

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The High Price of Perfect Versus The Lower Price of Good Enough

ESG investing likely to face turbulence as empowered regulators weigh in
Previous ESG darlings may become favorites once more – with significant upside
The dirty side of clean energy lacks attention – limiting options – lifting inflation
Carbon prices encouraging carbon capture – support from the ESG crowd needed
Water is joining the band – expect more news flow and ESG driven initiatives

The Biden Plan: Taking The Harder Path, Limiting Odds Of Success

By our analysis, the Biden emission goals can’t work without a carbon tax/price.
The current plan will get tied up in local and state courts delaying action.
Corporates need (lacking) clarity re economics and policy longevity to invest.
The US could become a global laggard on climate action and weaker as a result.
The ESG investment lobby is currently driving the bus but hasn’t passed the test.

True Blue: Not Green but Likely Good Enough

This report focuses on what may be practical, achievable, and most important, good enough, from a climate change target perspective, versus some of the more “perfect” but likely impractical alternates.
If cumulative greenhouse gas is causing temperatures to rise and damaging the planet, focusing on what can lower emissions as soon as possible, regardless of whether the path is elegant or ugly, should be the most important goal.
With little or no real global coordination, a large collection of separate moves, perhaps promoted by local interests or shareholder/lender pressure, may sum to something unintended such as rapid inflation in renewable power costs.

Temptation: The High Rewards (and Risks) of Greenwashing

While ESG inflows accelerate, definition and accountability remain a challenge, with the rewards of being an ESG darling creating an incentive to stretch claims and selectively interpret data. Regulators need to step in but are moving too slowly.
LyondellBasell introduced an important set of recycling/renewable labels for its polymers this week. The labels indicate the source of polymer production and make packaging decisions easier for consumers – we applaud this first-mover step.
While the US continues its inevitable congressional battle around climate change initiatives, carbon values are rising outside the US, driving investment decisions that could leave the US uncompetitive for some materials.

Unwanted: Chemical Recycling – Necessary Now, Less So Later

While advanced recycling is not advanced, it might look so versus landfills. We do not believe it is the long-term solution, but it is likely integral in any sophisticated recycling operation as there will always be some materials that need it
Methanol is making its claim on the green future and seeking a fuel role based on capturing carbon in the manufacturing process, so “CO2 neutral” when it is used. We see much more value in chemicals, where blue methanol would be much cheaper
We highlight the relentless flows of money into ESG and sustainability funds, which need disclosure oversight and if unchecked could encourage greenwashing