The European Investment Bank (EIB) will provide €65 million to EDP Renováveis S.A. (EDPR) to finance the construction and operation of two onshore wind farms in the Portuguese districts of Coimbra and Guarda. The EIB contribution is backed by a guarantee provided by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe. The wind farms are expected to have a total capacity of 125 MW and create approximately 560 jobs during the project's construction phase.
Once operational, the wind farms will contribute to Portugal meeting its energy and climate plan targets as well as the Commission's binding target of having at least 32% of final energy consumption coming from renewable sources by 2030.
Economy Commissioner Paolo Gentiloni said: “This agreement between the EIB and EDP Renováveis, supported by the Investment Plan for Europe, is a winner for both the climate and the economy. The financing, backed by the European Fund for Strategic Investments, will fund new onshore wind farms in the west and north of Portugal, helping the country to reach its ambitious energy and climate plan targets and creating new jobs in the process.”
CAP: New report on fraud, corruption and misuse of EU agricultural funds must be wake up call
MEPs working on protection of the EU's budget from the Greens/EFA group have just released a new report: "Where does the EU money go?", which looks at the misuse of European agricultural funds in Central and Eastern Europe. The report looks at systemic weakness in EU agricultural funds and maps out in clear terms, how EU funds contribute to fraud and corruption and undermining the rule of law in five EU countries: Bulgaria, Czechia, Hungary, Slovakia and Romania.
The report outlines up to date cases, including: Fraudulent claims and payments of EU agricultural subsidies Slovakia; the conflicts of interest around Czech Prime Minister's Agrofert company in Czechia; and state interference by the Fidesz government in Hungary. This report comes out as the EU institutions are in the process of negotiating the Common Agricultural Policy for the years 2021-27.
Viola von Cramon MEP, Greens/EFA member of the Budgetary Control Committee, comments: "The evidence shows that EU agricultural funds are fuelling fraud, corruption and the rise of rich businessmen. Despite numerous investigations, scandals and protests, the Commission seems to be turning a blind eye to the rampant abuse of taxpayer's money and member states are doing little to address systematic issues. The Common Agricultural Policy simply isn't working. It provides the wrong incentives for how land is used, which damages the environment and harms local communities. The massive accumulation of land at the expense of the common good is not a sustainable model and it certainly shouldn't be financed from the EU's budget.
"We cannot continue to allow a situation where EU funds are causing such harm in so many countries. The Commission needs to act, it cannot bury its head in the sand. We need transparency on how and where EU money ends up, the disclosure of the ultimate owners of large agricultural companies and an end to conflicts of interest. The CAP must be reformed just so it works for people and the planet and is ultimately accountable to EU citizens. In the negotiations around the new CAP, the Parliament team must stand firm behind mandatory capping and transparency."
Mikuláš Peksa, Pirate Party MEP and Greens/EFA Member of the Budgetary Control Committee said: “We have seen in my own country how EU agricultural funds are enriching an entire class of people all the way up to the Prime Minister. There is a systemic lack of transparency in the CAP, both during and after the distribution process. National paying agencies in CEE fail to use clear and objective criteria when selecting beneficiaries and are not publishing all the relevant information on where the money goes. When some data is disclosed, it is often deleted after the mandatory period of two years, making it almost impossible to control.
“Transparency, accountability and proper scrutiny are essential to building an agricultural system that works for all, instead of enriching a select few. Unfortunately, data on subsidy recipients are scattered over hundreds of registers, which are mostly not interoperable with the Commission’s fraud detection tools. Not only is it almost impossible for the Commission to identify corruption cases, but it is often unaware of who the final beneficiaries are and how much money they receive. In the ongoing negotiations for the new CAP period, we cannot allow the Member States to continue operating with this lack of transparency and EU oversight."
The report is available online here.
Building a Climate-Resilient Future - A new EU Strategy on Adaptation to Climate Change
The European Commission has adopted a new EU Strategy on Adaptation to Climate Change, setting out the pathway to prepare for the unavoidable impacts of climate change. While the EU does everything within its power to mitigate climate change, domestically and internationally, we must also get ready to face its unavoidable consequences. From deadly heatwaves and devastating droughts, to decimated forests and coastlines eroded by rising sea levels, climate change is already taking its toll in Europe and worldwide. Building on the 2013 Climate Change Adaptation Strategy, the aim of today's proposals is to shift the focus from understanding the problem to developing solutions, and to move from planning to implementation.
European Green Deal Executive Vice President Frans Timmermans said: “The COVID-19 pandemic has been a stark reminder that insufficient preparation can have dire consequences. There is no vaccine against the climate crisis, but we can still fight it and prepare for its unavoidable effects. The impacts of climate change are already felt both inside and outside the European Union. The new climate adaptation strategy equips us to speed up and deepen preparations. If we get ready today, we can still build a climate-resilient tomorrow.”
Economic losses from more frequent climate-related extreme weather are increasing. In the EU, these losses alone already average over €12 billion per year. Conservative estimates show that exposing today's EU economy to global warming of 3°C above pre-industrial levels would result in an annual loss of at least €170 billion. Climate change affects not only the economy, but also the health and well-being of Europeans, who increasingly suffer from heat waves; the deadliest natural disaster of 2019 worldwide was the European heatwave, with 2500 deaths.
Our action on climate change adaptation must involve all parts of society and all levels of governance, inside and outside the EU. We will work to build a climate resilient society by improving knowledge of climate impacts and adaptation solutions; by stepping up adaptation planning and climate risk assessments; by accelerating adaptation action; and by helping to strengthen climate resilience globally.
Smarter, swifter, and more systemic adaptation
Adaptation actions must be informed by robust data and risk assessment tools that are available to all - from families buying, building and renovating homes to businesses in coastal regions or farmers planning their crops. To achieve this, the strategy proposes actions that push the frontiers of knowledge on adaptation so that we can gather more and better data on climate-related risks and losses, making them available to all. Climate-ADAPT, the European platform for adaptation knowledge, will be enhanced and expanded, and a dedicated health observatory will be added to better track, analyse and prevent health impacts of climate change.
Climate change has impacts at all levels of society and across all sectors of the economy, so adaptation actions must be systemic. The Commission will continue to incorporate climate resilience considerations in all relevant policy fields. It will support the further development and implementation of adaptation strategies and plans with three cross cutting priorities: integrating adaptation into macro-fiscal policy, nature-based solutions for adaptation, and local adaptation action.
Stepping up international action
Our climate change adaptation policies must match our global leadership in climate change mitigation. The Paris Agreement established a global goal on adaptation and highlighted adaptation as a key contributor to sustainable development. The EU will promote sub-national, national and regional approaches to adaptation, with a specific focus on adaptation in Africa and Small Island Developing States. We will increase support for international climate resilience and preparedness through the provision of resources, by prioritizing action and increasing effectiveness, through the scaling up of international finance and through stronger global engagement and exchanges on adaptation. We will also work with international partners to close the gap in international climate finance.
Climate change is happening today, so we have to build a more resilient tomorrow. The world has just concluded the hottest decade on record during which the title for the hottest year was beaten eight times. The frequency and severity of climate and weather extremes is increasing. These extremes range from unprecedented forest fires and heatwaves right above the Arctic Circle to devastating droughts in the Mediterranean region, and from hurricanes ravaging EU outermost regions to forests decimated by unprecedented bark beetle outbreaks in Central and Eastern Europe. Slow onset events, such as desertification, loss of biodiversity, land and ecosystem degradation, ocean acidification or sea level rise are equally destructive over the long term.
The European Commission announced this new, more ambitious EU Strategy on Adaptation to Climate Change in the Communication on the European Green Deal, following a 2018 evaluation of the 2013 Strategy and an open public consultation between May and August 2020. The European Climate Law proposal provides the foundation for increased ambition and policy coherence on adaptation. It integrates the global goal on adaptation in Article 7 of the Paris Agreement and Sustainable Development Goal 13 action into EU law. The proposal commits the EU and Member States to make continuous progress to boost adaptive capacity, strengthen resilience and reduce vulnerability to climate change. The new adaptation strategy will help make this progress a reality.
Show us the plan: Investors push companies to come clean on climate
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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