Category: Finance

Navigating the financial industry’s blurred lines between climate commitments and greenwash

Read the full story from RMI.

As climate commitments among large financial institutions have rapidly become the new normal, so has the criticism of those targets. A Reclaim Finance report in January that revealed members of the Glasgow Financial Alliance for Net Zero (GFANZ) have continued financing fossil fuel expansion echoes a common refrain from the NGO and activist community: target setting is still disconnected from real-world financing and the ambition required to reach 1.5°C scenarios. Below, we share our latest insights on the state of play in climate targets among the world’s largest financial institutions, noting the ongoing tension between meaningful progress and persistent gaps in ambition and action.

Property-assessed clean energy programs are popular for local decarbonization financing: report

Read the full story at Utility Dive.

Local governments often use property-assessed clean energy programs to help fund climate efforts, a recent Brookings Institution report found. Taxes and emerging strategies like local financing authorities and funding partnerships are less common, it states.

Thirty-nine states allow local governments to create PACE programs to encourage building efficiency upgrades. Such programs help property owners finance all the upfront costs of energy efficiency projects like new heat and cooling systems or insulation by allowing them to repay those costs over a long period, often up to 20 years, through property taxes.

“Funding and financing are often the biggest barriers to local decarbonization efforts,” the report says. “With larger cities requiring billions of dollars to retrofit their building stock, construct new transit lines, or modernize local electricity distribution systems, being realistic about how to fund all these investments is an essential step to decarbonization.”

Solar companies offer reassurance after renewables financier Silicon Valley Bank collapses

Read the full story at Utility Dive.

The shutdown of Silicon Valley Bank by California regulators over the weekend has led to logistical questions about the fate of the renewables startups and projects it financed – particularly residential and community solar.

The federal government acted to fully protect the bank’s depositors and provide access to their funds by Monday, but SVB’s collapse means that companies that used the bank to finance projects will have to secure funding elsewhere.

Several solar companies said that they either had little exposure to SVB or were satisfied by the government’s promises to make them whole, but CEO Kiran Bhatraju of Arcadia – the largest domestic manager of community solar – said the bank’s collapse will “have an impact on the broader industry.”

Filling the hole Silicon Valley Bank left in the climate tech ecosystem

Read the full story from The Hill.

The Silicon Valley Bank (SVB) played a critical role in the climate tech industry, particularly for early-stage companies. The bank’s recent collapse will be felt even though its depositors will get their money back, as announced by Treasury Secretary Janet Yellen. Still, one can expect some project investments to be delayed and the financial costs to startups to rise as a new risk appetite emerges. An important silver lining should be that more banks may eventually get more comfortable with supporting climate tech, which can help grow this funding “ecosystem” considerably and eventually lead to more investment.

Webinar: Comparison of Three Hydrogen Production Methods

Mar 16, 2023, 11 am CDT
Register here.

With the new $4.00 per kg federal incentive from the Inflation Reduction Act (IRA) for green hydrogen, this technology now deserves serious attention. Hydrogen production and use as a fuel will be a growing component of our industry’s clean energy transition. This presentation explains and compares three options to produce hydrogen with zero, or near zero, CO 2 emissions. We will look at and compare:

  • Green Hydrogen from solar PV electrical hydrolysis of water
  • Blue Hydrogen using steam methane reforming of natural gas (with carbon capture)
  • Turquoise Hydrogen, or methane pyrolysis, which produces solid carbon and no CO 2 gas

CAPEX, OPEX, and carbon balance will also be covered, including the potential tax credit implications under the IRA.

Silicon Valley Bank collapse threatens climate start-ups

Read the full story in the New York Times.

As the fallout of the collapse of Silicon Valley Bank continued to spread over the weekend, it became clear that some of the worst casualties were companies developing solutions for the climate crisis.

The bank, the largest to fail since 2008, worked with more than 1,550 technology firms that are creating solar, hydrogen and battery storage projects. According to its website, the bank issued them billions in loans…

Community solar projects appear to be especially hard hit. Silicon Valley Bank said that it led or participated in 62 percent of financing deals for community solar projects, which are smaller-scale solar projects that often serve lower-income residential areas.

U.S. Congress votes to block ESG investing, Biden veto expected

Read the full story from Reuters.

A Republican bill to prevent pension fund managers from basing investment decisions on factors like climate change cleared Congress on Wednesday, setting up a confrontation with President Joe Biden, who is expected to veto the measure.

The U.S. Senate voted 50-46 to adopt a resolution to overturn a Labor Department rule making it easier for fund managers to consider environmental, social and corporate governance, or ESG, issues for investments and shareholder rights decisions, such as through proxy voting.

Five ways to finance early coal phaseout

Read the full story from RMI.

Financial institutions can accelerate the early closure of coal power plants while funding clean energy projects for the affected communities.

Biden gets chance to redefine World Bank role

Read the full story at Politico.

The Biden administration is about to undertake one of its most complicated international initiatives, installing a new leader at the World Bank who can steer the organization toward a sweeping climate change agenda.

Bank President David Malpass’s abrupt announcement that he will step down from his post a year early opens the way for President Joe Biden to choose someone who embraces the new goal of fundamentally overhauling the bank’s work to focus more on climate and other global challenges.

The Federal Reserve is starting a climate experiment

Read the full story at Vox.

The US Federal Reserve is running its very first climate change experiment.

The central bank this month announced details about how it will conduct a “pilot climate scenario analysis exercise” involving the six largest US banks: Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo.

The Fed basically wants major banks to game out how they’ll handle climate change-related shocks. For example, what would happen to their real estate holdings in the northeastern United States under a future hurricane when sea levels are higher? These scenarios are grouped together in the exercise as “physical risks.”

Then there are “transition risks”: How will financial institutions cope with a wholesale shift away from fossil fuels toward cleaner energy? What will happen to their investments in coal mines or gas plants? How will loans fare when customers turn away from businesses with a large impact on the climate?

These are immensely consequential questions, not just for the banks, but for everyone. How banks manage, or fail to manage, climate risks will affect things like home loans, business lending, retirement accounts, and insurance — things that will touch every sector of the economy. The Fed has set a deadline to receive these reports from banks by the beginning of August.