Good News

The Business Roundtable: The purpose of a corporation is to protect the environment

CEOs from 181 of the world’s largest companies, all belonging to the lobbying group The Business Roundtable (BRT), have now declared that the purpose of a corporation is not just to serve shareholders.  (their official position since 1997), but “to create value for all our stakeholders.” This is a giant broadening of the declaration and the purpose of a corporation now also includes to "protect the environment by embracing sustainable practices across our businesses."

 

Shareholder primacy has been the core operating principle of public companies for about 50 years. The neo-liberal economist Milton Friedman once famously declared that “the social responsibility of business is to increase its profits.” These ideas have been promoted for decades by a very well-funded and wildly successful effor to make the free-market, shareholder-primacy, neoliberal philosophy the dominant global economic model.

 

"Multiple think tanks funded by the Kochs and others have made this case daily. They also have worked to undermine climate science, which is very much related to maintaining the power status quo. The death of David Koch, the same week CEO’s pushed back on narrow, shareholder-only thinking, is symbolic", writes Andrew Winston, Harward Business Review.

 

According to Harvard Business Review modern business leaders are feeling pressure to rethink the role of business in society for a number of reasons:

1.Social norms are changing and expectations from employees, customers, and even investors are rising fast.

2.A growing realization that a focus on one key stakeholder or metric is as flawed as using your cholesterol level as the only measure of your health.

3.Investors now focus more on their purpose and how they contribute to society.

 

The core reason to this change of attitudes is, of course, Climate change, but growing inequality, water and resource scarcity, soil degradation and loss of biodiversity also play key roles.

 

"These issues require systemic efforts, cooperation, and pricing of those “externalities” (like pollution and carbon emissions). The current shareholder-obsessed system is not fit for this purpose. Individual profit-maximizing businesses will not be incentivized to tackle shared global challenges", Andrew Winston, Harward Business Review.

The first fund for investment in circular economy

BlackRock, the world's largest asset manager, has launched its first circular economy fund as part of a new partnership with the Ellen MacArthur Foundation designed to drive investment in the circular economy. The launch marks one of the first moves by a major investor to specifically target the expanding circular economy sector, which works to bolster resource efficiency and introduce new business models that enable circular resource flows.

 

BlackRock said its BGF Circular Economy Fund aims to drive investment in companies contributing to or benefiting from circular economy activities, excluding investments in the coal sector and oil and gas producers. It will include 'adopters', companies which are, for example, designing reusable or repairable products; 'enablers' such as resale platforms; and 'beneficiaries', such as firms which see more demand for their goods as a result of the shift away from single-use products.

Corporate interest in the circular economy is growing as the twin demands for climate action and reductions in plastic waste force firms to consider new businesses models based on reusable products. The Ellen MacArthur Foundation is one of the world's most influential organisations working within this space, bringing together a host of blue chip corporates and environmental campaigners. 

 

The new fund is the latest in a series of moves by BlackRock designed to increase its exposure to green sectors and pressure companies to demonstrate a "purpose" beyond maximising profits. 

 

Rachel Lord, head of EMEA at BlackRock, said companies are becoming more aware of their role in driving circular economy business models.

"To be well-positioned for the future, businesses are acknowledging that their long-term value is increasingly linked to their principles, practices and impact on society," she said. "Our partnership with the Ellen MacArthur Foundation allows us to potentially benefit from their knowledge and expertise to help create a thriving economy."

First cryogenic energy storage to be built in the U.K.

Energy storage company Highview Power has announced its intention to build a cryogenic energy storage facility in the north of England, a first for the U.K. A decommissioned power plant will be converted for the cryostorage, according to Highview Power. After completion, the installation will have a 50 MW/250 MWh capacity without using water, toxic materials, and with no emissions. The energy to be stored, which is roughly as much as 25,000 households use in a day, will be  all from renewable sources.

 

So how does it work?

What the storage will do is to use electricity sourced from renewable sources to compress huge volumes of air and store them in tanks. It’s a ‘cryo’ battery because there is a point, if you compress air enough, where it turns into a (very very cold) liquid; that’s the form it will be stored in. When energy is needed in the grid, the compressed air will be allowed to warm up, decompress, and escape the tanks — all while powering a turbine.

Highview Power said that they pitched the concept to the U.K. government, which is looking for ways to meaningfully reduce the country’s carbon emissions. They further note that the compressed air approach is much cleaner than conventional batteries. The cryobattery doesn’t involve the use of any toxic chemicals, it doesn’t need rare or advanced materials to be built (which means less environmental damage since you don’t need to produce and extract them), and doesn’t produce any emissions. Additionally, it can hold energy for up to several weeks at a time, which is longer than in traditional batteries.

 

Energy storage installations around the world will multiply exponentially, reaching 1,095GW/2,850GWh by 2040. Over the next two decades, $662 billion of investment will be needed for stationary energy storage, according to BloombergNEF (BNEF)

 

“Long-duration, giga-scale energy storage is the necessary foundation to enable baseload renewable energy and will be key to a 100% carbon free future.”, says Highview Power CEO, Javier Cavada

Big investors are shifting towards low-carbon industries

A survey from clean energy investors Octopus finds that nearly half of investors have reconsidered their portfolios in the wake of increased climate change activism in the past year. Demand for these assets had risen by more than one third since October last year, when Octopus first surveyed investors.

The global survey of institutions representing $5.9tr in assets under management asked 100 pension funds, insurance companies, private banks, sovereign wealth funds, endowments, and foundations across the UK, EMEA, Asia, and the US about how quickly they were divesting from fossil fuels and investing in renewables.

The survey shows that investors plan to divest 16 per cent of their portfolios from fossil fuels over the next decade, representing assets worth $920bn. They will also increase investments in renewable energy infrastructure to five per cent over the next 12 months, which will more than double to 11 per cent by 2029, or $643bn, the survey found.

Respondents expressed optimism about their ability to slow global warming, with 71 per cent stating that they believe investment strategies could make a material difference.

They identified a number of barriers to greater investment in renewable energy infrastructure though. Almost half cited energy price uncertainties as a key blocker, followed by a lack of renewable energy investment skills within their own organisation and liquidity issues.

Investors see the need to shift their portfolios away from high carbon industries. They both spot the opportunity heralded by clean energy, and the threat of stranded assets could pose to their activities. But protestors are getting impatient, so finance will become a focus for climate activists in the months to come.

Wise investors should jump before they are pushed.

Global investors choose sustainable farming, clean energy and green cities in Africa

The Global Innovation Lab for Climate Finance, a group of more than 60 major investors, banks, foundations, and governments, has announced the launch of six inter-related climate finance initiatives aimed at raising billions of dollars to support clean energy, sustainable agriculture, and low carbon cities in developing countries. The Lab has mobilised nearly $2bn for climate action and sustainable development since its creation in 2014

The six new financial instruments target four key focus areas relating to climate mitigation and adaptation, marine and coastal restoration for carbon sequestration, sustainable smallholder farming in Africa, renewable energy access in Rwanda, and low carbon cooling and air pollution projects in cities.

The new instruments endorsed by the Lab show great potential to open up new markets and opportunities for effective and ambitious action on climate change.

Supported projects include the Restoration Insurance Service Company, a social enterprise that invests in mangrove restoration and conservation in areas with high-value coastal assets, and the Blockchain Climate Risk Crop Insurance platform to boost climate resilience of crops and farmers in West and Central Africa.

Others such as Cooling as a Service, which aims to decrease energy consumption and greenhouse gas emissions from cooling use in cities through a pay-per-service model for more efficient air conditioning, and Solar Securitization for Rwanda, a tradable security designed to help solar developers increase access to expansion capital, have also been announced.

Power One AB consider hydrogen in Burundi

 

Power One´s concept combines wind, water and sun as sources of energy production. This reduces the need for expensive storage. Power One plans to use electrolyte storage, but will also set aside part of the solar park to operate a hydrogen gas production plant, which can be used, among other things, to operate boats. Since Tanganyika Lake is still clean and crystal clear, the electric propulsion of boats is an obvious complement for preserving it undisturbed. At present, there are a number of vessels operating on oil, which are used but have not so far done too much damage. Hydrogen has the advantage of being considerably cheaper as a fuel then fossil fuel, and is therefore an irresistible substitute from all points of view.

 

Hydrogen can be used for electrically driven transport on both land and water. During manufacture, water is divided into oxygen and hydrogen. The hydrogen gas is collected in tubes and then transformed into electricity via a so-called power cell. With a hydrogen tube, a power cell and an electric motor, many electric vehicles are operated today, ranging from mopeds, cars and trucks to boats. It is a durable and well-proven technology whose only residual product is oxygen and water. Oxygen is used in everything from healthcare to welding and is an import commodity in Burundi. Both oxygen and hydrogen can therefore be sold with good profits for Power One.

 

 

Hydrogen is a well-known and reliable energy storage system that has been used in industry for almost a century. The technique is simple: DC voltage produced during the day from solar panels is used in an electrolyser to separate water (H2O) into hydrogen (H2) and oxygen (O). The non-polluting oxygen is released and the hydrogen is stored under pressure into simple and durable containers. At night, when the sun is on the other side, hydrogen is led into a power cell that melts hydrogen with oxygen from the air back into water. Through this process, energy from daylight is restored back to electricity and used for night consumption.

 

If the solar park produces more energy under daylight than is consumed during the day and at night, the excess can be used to produce hydrogen for other applications, e.g. transport on the lake. In this case, hydrogen is transferred to gas tubes in the boats and then converted back to electricity via a fuel cell. This then provides electricity to the electric motor in the boat.

 

This is a very simple, well tested and durable system. With a simple pressure tank, a fuel cell and an electric motor, hydrogen can be used to operate all transport, including air, and today most of the major car manufacturers have developed hydrogen cars. The conversion of the region's boats to hydrogen operation is quite simple and plans are underway to start a rebuilding yard in Kabonga fishing port for this.

 

- By introducing an environmentally smart and emission-free boat traffic on Lake Tanganyika, Burundi will also market itself in quality tourism and offer an ecological alternative to other countries, says Janvier Nsengiumva, Commercial chief Port of Bujumbura.

Power One invests in smart hydro

Hydropower is a renewable source of electricity, but in traditional form it not only destroys entire valleys for its reservoirs, it also destroys natural biodiversity. But that is how it used to be. Today it is also an ecologically sustainable source. With today's so-called smart hydroelectric plants, no valleys are submerged. Biodiversity is not destroyed by these either. Power One has therefore decided to utilize the hydropower in the small river that flows through Kabonga. It is a small river, but with a constant flow even during the dry season, and is well suited for smart hydropower.

What is the difference between traditional and smart hydropower?

Last century was the century of large scale. At that time, almost all hydropower was built with dams and turbines. The dams were used to even out production during the year. However, these dams have placed large areas of forest land under water, while at the same time they have become obstacles to fish migrations. Not only the forests in the valley above the dam but also the biodiversity of the river were affected. Fish cannot get up or down alive through a turbine, and as many species of fish multiply in special places, to where they must move, entire species have also disappeared from river systems.

The smart hydropower does not use dams. By removing these, the disadvantages of hydropower are avoided, but at the same time, of course, its purpose disappears, to level out the seasonal changes of hydroelectric power. When using smart hydropower instead this has to be compensated by combining power sources that have different seasonal cycles, like wind and solar. In this way, both the costly and environmentally damaging dam plant is avoided. Instead, freedom is gained from using small and inexpensive systems that are also scalable. Instead of a single large plant, the fall height can be utilized in several places. Today thereare plenty of different varieties of smart hydro adapted to different conditions. Power One in Kabonga will therefore use different smart hydro in different parts of the river.An example of a smart hydro that does not affect biodiversity is the Dutch Turbulent. A Turbulent smart hydro costs between $ 80,000 to $ 300,000, but it generates approximately the same revenue in three year under favorable conditions. The water flow in the small river in Kabonga is at least 1 m2 per second, year-round. This is suitable for the smaller turbulent power plants, which are located at about 55 kW. To calculate the power economically, you multiply the installed power by 7500 and by the price per kilowatt. For a 55kW power plant in Kabonga, the calculation is 55 kW x 7,500 x 0.24 USD, which gives an annual revenue of $ 100,000 for an investment of $ 300,000. The fall height of the small river in Kabonga is just over two hundred meters, and since each power plant does not require more than a maximum height of 4 meters, the river can accommodate a large number of these, without negative impact on the river's fish and fauna. However, there are more models of smart hydro that are suitable for different conditions.

 

A design of smart hydropower requires many factors, including flow, altitude, geology and biology. Power One's Peter Rinaldo gives in the following filmed reportage a picture of how the initial design work in Power One goes.

Please turn on subtitles in the browser for English.

Power One will invest in smart wind

Wind power is a renewable source of electricity. Traditionally, it has required steady and steady wind to be effective. The old "propeller spins" with horizontal shaft cannot withstand turbulent winds, although it can contain as much energy. The so-called vertical wind turbines have not previously reached the same efficiency as the propeller-driven, but have now been updated with more shafts and thus a whole new ability to take advantage of turbulent winds. They are also effective on a smaller scale and Power One has now decided to use these instead of the traditional ones.

Traditional propeller-type windmills use the “horizontal axis x propeller type” method, but the horizontal axis is difficult to respond to changes in wind direction, and the propeller type has a risk of runaway velocity due to strong winds. A horizontal axis propeller type windmill can generate power with high efficiency when the wind direction and wind speed are bothstable, but it is difficult to cope with sudden changes in wind speed and direction. The wind direction of the tropics is not stable, and under such circumstances, the vertical axis Magnus wind turbine can achieve stable operation and achieve a higher capacity utilization rate.

The "vertical axis Magnus type" system is compatible with wind in all directions because of the vertical axis, and by using the Magnus type, the rotational speed of the wind turbine can be kept constant according to the wind speed by controlling the rotation of the cylindrical blades. can. By controlling the rotation speed of the windmill, stable power generation is possible without runaway even in sudden strong winds. The wind environment in the tropics is very harsh for windmills that are subject to drastic changes in wind direction and speed and among them, the vertical axis Magnus wind turbine can generate power stably, and it can be expected to dramatically improve the operating rate of the wind turbine. In addition, by using a cylindrical blade instead of a propeller, the manufacturing cost can be greatly reduced, so it is possible to supply inexpensive power using renewable energy. 

Tanganyika is a fantastic lake. It is huge not only to the surface but also to the depth. It is also pure and undisturbed with one of the world's largest biodiversity. Because of its surface, the winds get a smoother flow and do not become as turbulent. Therefore, the shores of the lake are suitable for the traditional propeller-driven wind turbines. However, these are both costly and difficult to maintain. They also have a great aesthetic influence. Since the modern vertical wind turbines do not require proximity to the lake's steady flow, they can be placed a little anywhere, preferably up in the mountains.

Power One will therefore invest in a larger number of these vertical small power plants up in the mountains instead of a large propeller-driven power plant at the lake.

China passes law allowing regions to set resource taxes

SHANGHAI/SINGAPORE - Chinese legislators approved a new law on Monday that will give local governments authority to tax as many as 164 different resources, including fossil fuels, minerals and eventually water, the Ministry of Finance said on Monday. The National People’s Congress, China’s parliament, approved the new resource tax law on Monday and it will go into effect in September next year, the ministry said in a briefing.
Officials insisted it will not raise the overall tax burden on local firms.

 Source: Reuters

Shell closes in on takeover deal for Australian energy supplier ERM Power

Oil giant makes first foray into Australia's competitive power market as it continues drive into consumer energy supply, renewables, and clean technologies. Shell is closing in on its first foray into Australia's competitive electricity sector with a (AUS) $617m takeover bid for ERM Power Ltd, as the oil and gas giant continues its drive into the consumer...

 
 
Source: Business Green
 

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