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Reaching the goals of the Paris Agreement

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“To drive systemic change towards true circularity, regulation and action must be based on science and facts. Reaching the goals of the Paris Agreement and achieving carbon neutrality by 2050 calls for a revision in the way we use energy and natural resources and how we are able to create a circular economy today – as businesses, as governments, as individuals,” writes Finnish food packaging producer Huhtamaki President and CEO Charles Héaulmé.

“This will not happen on its own. Innovation, investment and political commitment are key for making circular economy a reality. We must also foster a new culture of cooperation, where the best solutions lead the way.

Charles Héaulmé, President and CEO of the Finnish food packaging producer Huhtamaki

Charles Héaulmé, President and CEO of the Finnish food packaging producer Huhtamaki

For industry, designing for circularity remains a serious challenge, especially where structural gaps – such as the lack of common infrastructures – exist. This is particularly true for the packaging sector and dealing with these gaps must begin with an acknowledgment of the need for a systemic transition from a linear to a circular approach, where products are not just recyclable but they are actually recycled. As this paradigm shift affects all sectors and policy domains, we must join forces to develop and provide the most effective solutions together – in Europe, and on a global level.

This is no easy task. To succeed, we must ensure that what we do is based on science and facts. A good example is the issue of plastic waste, which is a serious environmental problem worldwide. Plastic is crucial for so many essential products and applications, such as in medicine, but its longevity brings about challenges at the waste disposal stage. As a result, we are seeing many governments tackle the situation by implementing rapid bans for certain single-use products that contain plastic.

But in reality, plastic is crucial to our world when used in the right way: what we are dealing with are the very visible failures in the end-of-life management of products made from plastic. These would be better handled through a combined effort of material innovation and efficient end-of-life management. So instead of concentrating on the life span of a product, we should be paying closer attention to what these products are made of – and how the materials themselves can be recycled and then reused. We should also not be afraid to recognize that what works in one country or region of the world might not immediately work in another. There are differences between nations reflecting size, population density, actual infrastructures and levels of economic development.

This focus on materials is, we firmly believe, a crucial part of the equation for systemic change. For businesses, innovation is the key to unlocking the competitive sustainable solutions needed to create a circular economy for the materials used to make packaging, reduce our carbon footprint and ensure resource efficiency.

While we must be bold in our vision and set clear goals on where we want to go, we must also remember that much innovation is incremental and disruptive innovation often requires significant time and investment. When seeking the most environmentally ambitious and viable solutions, we must take into account the entire life cycle of products and create circular business models that ensure the optimal use of our global resources while maintaining a high level of customer satisfaction.

At the outset, we see four key elements to driving the necessary change:

An infrastructure revolution
We need to understand where gaps exist in each country’s current infrastructure related to circularity – such as waste labelling and collection, and end-of-life management – then introduce policies and mechanisms to bridge these gaps and provide waste management and recycling systems that meet the needs of the 21st  century. Material charges can prove to be good incentives, but we should also look at enhanced producer responsibility and new forms of ownership of materials.

Empowering transformative innovation

We must ensure that policies support continued innovation and competitive sustainability by creating a framework which provides incentives for innovation that will help us to deliver the Green Deal. Instead of picking the winners, policymakers should set clear directions to drive efficiencies and lower carbon. By using Life Cycle Thinking to assess the true impact of regulatory and legislative proposals, policymakers can also help embed outcome-focused policy design.

Incentivizing consumers to change

Circular business models should incentivize consumers to reuse, repair and recycle – for example, by ensuring that doing so offers them better quality products and services. In addition, education and inspiration are powerful tools that policymakers and business alike should use to end littering and pollution.

Science-led policy making

By ensuring facts and evidence are the foundation for consumer-behaviour, decision-making and regulation, we are far more likely to deliver the best environmental outcomes. We firmly believe we need enabling regulation founded on scientific evidence and facts, which supports and stimulates innovation

If we are to succeed, we need to be pragmatic and work together, agnostic of technology, material or sector. No one organization can do this alone. We must work with one another across the value chain and look at what actions are required in each region or country to enable efficient material use and to ensure that end-of-life solutions are not only attainable but more importantly, sustainable. We should create general conditions for circular businesses to flourish so that looking at each industry individually and creating rules per sector – whether for packaging, car parts or electronics, for example – becomes unnecessary.

The issue is not about single- or multi-use, but about raw materials. To deliver a truly systemic shift, we need to keep our eyes on the big picture. We need to base ourselves on the science and the expertise of those that, working together, can make a difference.

Now is the time for change. Industry and policymakers must come together to build the platforms that enable both value-chain and cross-value-chain working; and which are themselves linked to the organizations and mechanisms which policymakers have established. By using science, innovation and investment in a public-private partnership we can deliver the best solutions for people and the planet, starting today.

Charles Héaulmé
President and CEO
Huhtamaki

Climate change

Show us the plan: Investors push companies to come clean on climate

Reuters

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In the past, shareholder votes on the environment were rare and easily brushed aside. Things could look different in the annual meeting season starting next month, when companies are set to face the most investor resolutions tied to climate change in years, write Simon Jessop, Matthew Green and Ross Kerber.

Those votes are likely to win more support than in previous years from large asset managers seeking clarity on how executives plan to adapt and prosper in a low-carbon world, according to Reuters interviews with more than a dozen activist investors and fund managers.

In the United States, shareholders have filed 79 climate-related resolutions so far, compared with 72 for all of last year and 67 in 2019, according to data compiled by the Sustainable Investments Institute and shared with Reuters. The institute estimated the count could reach 90 this year.

Topics to be put to a vote at annual general meetings (AGMs) include calls for emissions limits, pollution reports and “climate audits” that show the financial impact of climate change on their businesses.

A broad theme is to press corporations across sectors, from oil and transport to food and drink, to detail how they plan to reduce their carbon footprints in coming years, in line with government pledges to cut emissions to net zero by 2050.

“Net-zero targets for 2050 without a credible plan including short-term targets is greenwashing, and shareholders must hold them to account,” said billionaire British hedge fund manager Chris Hohn, who is pushing companies worldwide to hold a recurring shareholder vote on their climate plans.

Many companies say they already provide plenty of information about climate issues. Yet some activists say they see signs more executives are in a dealmaking mood this year.

Royal Dutch Shell said on Feb. 11 it would become the first oil and gas major to offer such a vote, following similar announcements from Spanish airports operator Aena, UK consumer goods company Unilever and U.S. rating agency Moody’s.

While most resolutions are non-binding, they often spur changes with even 30% or more support as executives look to satisfy as many investors as possible.

“The demands for increased disclosure and target-setting are much more pointed than they were in 2020,” said Daniele Vitale, the London-based head of governance for Georgeson, which advises corporations on shareholder views.

While more and more companies are issuing net-zero targets for 2050, in line with goals set out in the 2015 Paris climate accord, few have published interim targets. A study here from sustainability consultancy South Pole showed just 10% of 120 firms it polled, from varied sectors, had done so.

“There’s too much ambiguity and lack of clarity on the exact journey and route that companies are going to take, and how quickly we can actually expect movement,” said Mirza Baig, head of investment stewardship at Aviva Investors.

Data analysis from Swiss bank J Safra Sarasin, shared with Reuters, shows the scale of the collective challenge.

Sarasin studied the emissions of the roughly 1,500 firms in the MSCI World Index, a broad proxy for the world’s listed companies. It calculated that if companies globally did not curb their emissions rate, they would raise global temperatures by more than 3 degrees Celsius by 2050.

That is well short of the Paris accord goal of limiting warming to “well below” 2C, preferably 1.5.

At an industry level, there are large differences, the study found: If every company emitted at the same level as the energy sector, for example, the temperature rise would be 5.8C, with the materials sector - including metals and mining - on course for 5.5C and consumer staples - including food and drink - 4.7C.

The calculations are mostly based on companies’ reported emissions levels in 2019, the latest full year analysed, and cover Scope 1 and 2 emissions - those caused directly by a company, plus the production of the electricity it buys and uses.

Sectors with high carbon emissions are likely to face the most investor pressure for clarity.

In January, for example, ExxonMobil - long an energy industry laggard in setting climate goals - disclosed its Scope 3 emissions, those connected to use of its products.

This prompted the California Public Employees’ Retirement System (Calpers) to withdraw a shareholder resolution seeking the information.

Calpers’ Simiso Nzima, head of corporate governance for the $444 billion pension fund, said he saw 2021 as a promising year for climate concerns, with a higher likelihood of other companies also reaching agreements with activist investors.

“You’re seeing a tailwind in terms of climate change.”

However, Exxon has asked the U.S. Securities and Exchange Commission for permission to skip votes on four other shareholder proposals, three related to climate matters, according to filings to the SEC. They cite reasons such as the company having already “substantially implemented” reforms.

An Exxon spokesman said it had ongoing discussions with its stakeholders, which led to the emissions disclosure. He declined to comment on the requests to skip votes, as did the SEC, which had not yet ruled on Exxon’s requests as of late Tuesday (23 February).

Given the influence of large shareholders, activists are hoping for more from BlackRock, the world’s biggest investor with $8.7 trillion under management, which has promised a tougher approach to climate issues.

Last week, BlackRock called for boards to come up with a climate plan, release emissions data and make robust short-term reduction targets, or risk seeing directors voted down at the AGM.

It backed a resolution at Procter & Gamble’s AGM, unusually held in October, which asked the company to report on efforts to eliminate deforestation in its supply chains, helping it pass with 68% support.

“It’s a crumb but we hope it’s a sign of things to come” from BlackRock, said Kyle Kempf, spokesman for resolution sponsor Green Century Capital Management in Boston.

Asked for more details about its 2021 plans, such as if it might support Hohn’s resolutions, a BlackRock spokesman referred to prior guidance that it would “follow a case-by-case approach in assessing each proposal on its merits”.

Europe’s biggest asset manager, Amundi, said last week it, too, would back more resolutions.

Vanguard, the world’s second-biggest investor with $7.1 trillion under management, seemed less certain, though.

Lisa Harlow, Vanguard’s stewardship leader for Europe, the Middle East and Africa, called it “really difficult to say” whether its support for climate resolutions this year would be higher than its traditional rate of backing one in ten.

Britain’s Hohn, founder of $30 billion hedge fund TCI, aims to establish a regular mechanism to judge climate progress via annual shareholder votes.

In a “Say on Climate” resolution, investors ask a company to provide a detailed net zero plan, including short-term targets, and put it to an annual non-binding vote. If investors aren’t satisfied, they will then be in a stronger position to justify voting down directors, the plan holds.

Early signs suggest the drive is gaining momentum.

Hohn has already filed at least seven resolutions through TCI. The Children’s Investment Fund Foundation, which Hohn founded, is working with campaign groups and asset managers to file more than 100 resolutions over the next two AGM seasons in the United States, Europe, Canada, Japan and Australia.

“Of course, not all companies will support the Say on Climate,” Hohn told pension funds and insurance companies in November. “There will be fights, but we can win the votes.”

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Environment

Urban Waste Water: Commission decides to refer SLOVENIA to the European Court of Justice over waste water treatment

EU Reporter Correspondent

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The European Commission has decided today to refer Slovenia to the European Court of Justice for failure to comply with the requirements of the Urban Waste Water Treatment Directive (Directive 91/271/EEC). The Directive requires Member States to ensure that urban agglomerations (towns, cities, settlements) properly collect and treat their waste waters, thus eliminating or reducing all their undesirable effects.

The European Green Deal steers the EU towards a Zero Pollution ambition. Full implementation of the standards enshrined in EU legislation is important to effectively protect human health and safeguard the natural environment.

Slovenia should have been fully compliant with the Urban Waste Water Treatment Directive requirements since 2016, according to its agreements under the Accession Treaty. However, four agglomerations with a population of over 10 000 (Ljubljana, Trbovlje, Kočevje, and Loka) do not comply with such requirements because urban waste water entering collecting systems is not subject to the appropriate level of treatment before being discharged.

In addition, the agglomerations Kočevje, Trbovlje, and Loka fail to meet additional requirements of the Directive related to sensitive areas, as urban waste water entering collecting systems is not subject to more stringent treatment before being discharged into those areas.

The Commission sent a letter of formal notice to the Slovenian authorities in February 2017, followed by a reasoned opinion in 2019. Although the Slovenian authorities have shared monitoring data aimed to show compliance with the requirements of the Directive, the deficiencies and gaps therein identified lead the Commission to conclude that the authorities have failed to prove compliance for the above-mentioned agglomerations.

Therefore, the Commission is referring Slovenia to the Court of Justice of the European Union.

Background

The Urban Waste Water Treatment Directive requires member states to ensure that their towns, cities and settlements properly collect and treat waste water. Untreated waste water can be contaminated with harmful chemicals, bacteria and viruses and thus presents a risk to human health. It also contains nutrients such as nitrogen and phosphorous which can damage freshwaters and the marine environment, by promoting excessive growth of algae that chokes other life, a process known as eutrophication.

The Commission published in September 2020 the 10th report on the implementation of the Directive that showed an overall improvement in collection and treatment of waste water in Europe's cities and towns, but pointed to different success levels between the member states.

More information

Urban Waste Water Treatment Directive - Overview

EU Infringement procedure

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Environment

Copernicus: Scientists monitor smog over south Asia affecting over 400 million people

EU Reporter Correspondent

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Scientists from the Copernicus Atmosphere Monitoring Service (CAMS), who are closely monitoring widespread haze and pollution across south Asia have revealed that the event affecting hundreds of millions of people may not disappear until March when temperatures rise.

CAMS, which is implemented by the European Centre for Medium-Range Weather Forecasts on behalf of the European Commission, says northern India in particular has been experiencing degraded air quality since October. The main areas affected are along the Indus River and Indo-Gangetic Plane with high levels of fine particulate matter known as PM2.5 impacting cities like New Delhi/India, Lahore/Pakistan, Dhaka/Bangladesh as well as Kathmandu/Nepal. The air quality in India’s capital city New Delhi has remained in the ‘poor’ category since early January, exacerbated by cold temperatures, with the degraded air quality affecting a population of over 400 million.

CAMS Senior Scientist Mark Parrington explained: “Degraded air quality is common across northern India in winter, especially throughout the Indo-Gangetic Plain, due in part to emissions from anthropogenic activities such as traffic, cooking, heating and crop stubble burning which are able to accumulate over the region due to topography and cold stagnant conditions. We have been monitoring this prolonged and widespread incident, which has potential health impacts for hundreds of millions of people.

“This winter haze could potentially continue until the spring when increased temperature and changes in the weather will help to dissipate the pollution”, he adds.

CAMS provides continuous information on air pollution such as fine particulate matter (PM2.5), nitrogen dioxide, sulphur dioxide, carbon monoxide and ozone, amongst other pollutants. By combining information obtained from satellite and ground-based observations with detailed computer models of the atmosphere, CAMS scientists can provide air quality forecasts of the entire globe up to five days ahead, which includes this badly affected region.

The widespread haze has been clearly observed in satellite visible imagery and the CAMS global forecasts of aerosol optical depth (AOD) show the main contributions to the haze are from sulphate and organic matter. Analyses show that the concentration has remained high for a sustained period, peaking on 16th January and 1st February.

Comparisons with data from ground-based measurements shows PM2.5 levels remaining high throughout January (above) and February (below) with some fluctuations. Source: Copernicus Atmosphere Monitoring Service/ECMWF

Research has shown that chronic exposure to harmful gases and small particles such as PM2.5 can have adverse health effects, reducing life expectancy by more than eight months on average and by two years in the most polluted cities and regions.

CAMS’ daily analyses and forecasts of long-range transport of atmospheric pollutants across the globe as well as background air quality for the European domain, have multiple uses. By monitoring, forecasting and reporting on air quality, CAMS reaches millions of users through downstream services and apps such as Windy.com to provide crucial information on air quality.

Copernicus is the European Union’s flagship Earth observation programme which operates through six thematic services: Atmosphere, Marine, Land, Climate Change, Security and Emergency. It delivers freely accessible operational data and services providing users with reliable and up-to-date information related to our planet and its environment. The programme is coordinated and managed by the European Commission and implemented in partnership with the member states, the European Space Agency (ESA), the European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT), the European Centre for Medium-Range Weather Forecasts (ECMWF), EU agencies and Mercator Océan, among others.

ECMWF operates two services from the EU’s Copernicus Earth observation programme: the Copernicus Atmosphere Monitoring Service (CAMS) and the Copernicus Climate Change Service (C3S). They also contribute to the Copernicus Emergency Management Service (CEMS). The European Centre for Medium-Range Weather Forecasts (ECMWF) is an independent intergovernmental organisation supported by 34 states. It is both a research institute and a 24/7 operational service, producing and disseminating numerical weather predictions to its member states. This data is fully available to the national meteorological services in the member states. The supercomputer facility (and associated data archive) at ECMWF is one of the largest of its type in Europe and member states can use 25% of its capacity for their own purposes.

ECMWF is expanding its location across its member states for some activities. In addition to an HQ in the UK and Computing Centre in Italy, new offices with a focus on activities conducted in partnership with the EU, such as Copernicus, will be located in Bonn, Germany from Summer 2021.

The Copernicus Atmosphere Monitoring Service website can be found here.

The Copernicus Climate Change Service website can be found here.

More information on Copernicus.

The ECMWF website can be found here.

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