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By Sharon Kimathi, Energy and ESG Editor, Reuters Digital

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Today we look at how climate campaigners including Greenpeace, ClientEarth and WWF are taking the European Commission to court over its green investment label for natural gas and nuclear energy. And check out our ESG Spotlight on a scientific discovery of abundant marine life off Ecuador’s Galapagos Islands.

Greenpeace and other campaign groups are set to take the European Commission to court, seeking to overturn European Union rules that class nuclear energy and natural gas as climate-friendly investments.

The groups are targeting the EU’s “taxonomy” – a list of investments that can be labeled and marketed as sustainable in Europe. The complex scheme aims to guide investors towards projects that support the EU’s climate change goals.

The Commission decided last year to add some gas and nuclear plants to the list – a proposal that became mired in controversy and was repeatedly delayed amid lobbying from governments who disagree on the fuels’ green credentials.

Greenpeace activists take part in a protest against nuclear power as Germany shuts down its last three nuclear power plants in Berlin, Germany, April 15, 2023. REUTERS/Nadja Wohlleben

In its lawsuit, Greenpeace asks the EU General Court – part of the EU’s Court of Justice – to exclude gas and nuclear from the rules. It argues the EU has violated its own climate laws, citing the CO2 emissions produced by gas power plants, and said the rules risk diverting investments away from renewable energy.

A separate lawsuit, also due to be filed, from four campaign groups including ClientEarth and WWF, seeks to overturn the rules on gas on similar grounds.

“Fossil gas is not clean, not cheap and not a secure source of energy,” a spokesperson for the four groups said.

The Commission is also facing a legal challenge from the Austrian government, seeking to reject the green label for gas and nuclear power.

A European Commission spokesperson said the EU executive took note of the legal action but declined to comment further. The Commission has previously said gas and nuclear plants must meet “strict conditions” to win the EU green label, including an emissions limit for gas plants.

Speaking of cutting emissions in the EU, the European Parliament voted to approve sweeping reforms to the European Union’s carbon market, which are expected to hike the cost of polluting in Europe in the coming years and cut CO2 emissions faster.

Europe’s carbon market forces power plants and factories to buy CO2 permits when they pollute. It has slashed those sectors’ emissions by 43% since 2005 but is facing a revamp to hit more ambitious EU climate change targets.

The price of EU carbon permits has soared in recent years, boosted by anticipation of the reforms. Carbon market revenues are returned to EU country governments to invest in climate measures.

 Oil goes into a tailings pond at an oil sands operation near Fort McMurray, Alberta, September 17, 2014./File Photo

Ken LaRoe, CEO and founder of U.S.-based Climate First Bank, shares his thoughts on the growing anti-ESG sentiment in the United States, with an anti-ESG bill expected to pass through Florida Governor Rick DeSantis’ desk this week:

“This week, Gov. DeSantis’ anti-ESG bill HB-003 is expected to be heard on the Florida Senate floor. The bill’s goal is to weaponize ESG or Environmental, Social and Governance into something that it is not.

“ESG is a set of principles that companies can practice to become a well-rounded organization that is appealing to socially conscious investors as well as consumers. 

“Yet, the bill would ‘block the use of ESG in all investment decisions’ and issue sanctions against values-based financial institutions for upholding their ESG practices – unjustly labeling them as unfair, deceptive and unsound. 

“With consumers today demanding that companies act responsibly, many banks have adopted ESG priorities because it makes financial sense and is the right thing to do. 

“By barring ESG, this bill is punishing banks for doing good and conducting business in a responsible way that aligns with their values. I urge Floridians to contact their local state senators and tell them to vote no on this bill.”

The world is failing to cut carbon emissions fast enough to avoid disastrous climate change, a dawning truth that is giving life to a technology that for years has been marginal – pulling carbon dioxide from the air.

Leading the charge, the U.S. government has offered $3.5 billion in grants to build the factories that will capture and permanently store the gas – the largest such effort globally to help halt climate change through Direct Air Capture (DAC) and expanded a tax credit to $180/tonne to bolster the burgeoning technology.

An ancient and pristine coral reef in the depths of the Galapagos Islands, in Ecuador, photo obtained by Reuters on April 17, 2023. UBristol/WHOI/UEssex/UBoise/NERC/NSF/National Park Galapagos/Handout via REUTERS

A scientific expedition has discovered a previously unknown coral reef with abundant marine life off Ecuador’s Galapagos Islands, the country’s environment ministry said. Meanwhile, California state’s plan to phase out heavy-duty diesel trucks that haul containers to ships and warehouses by 2035, has led investors to eye up Californian ports for future green opportunities.

“A deepwater scientific expedition has found the first totally pristine coral reef, approximately two kilometers (1.2 miles) long, at 400 meters (deep), on the summit of a submarine mountain,” Environment Minister Jose Davalos said on Twitter. “Galapagos surprises us again!”

Scientists had believed that the only Galapagos reef to survive El Nino weather in 1982 and 1983 was one called the Wellington reef, along the coast of Darwin Island, but the new discovery shows other coral has persisted, the ministry said in a statement.The reef has more than 50% living coral.

“This is very important at a global level because many deepwater systems are degraded,” said Stuart Banks, senior marine researcher at the Charles Darwin Foundation, who participated in the expedition. The coral is several thousand years old at least, he added.

Hight Logistics President Rudy Diaz in front of a hay bailer that made his electric truck charging project possible, in Long Beach, California, U.S., April 12, 2023. REUTERS/Lisa Baertlein

California’s bustling seaports, dominated by massive container vessels and soaring cranes, may seem an unlikely setting for investors seeking to capitalize on the “green” revolution.

But thanks to the state’s plan to phase out by 2035 heavy-duty diesel trucks that haul containers to ships and warehouses, the ports have become ground zero for forward-looking investors who are lining up to build charging stations for the electric semis that will eventually serve those trade gateways.

Among the companies pouring in money are real estate firm CBRE Group, warehouse giant Prologis and investment manager BlackRock, who are eying a payday when replacement trucks are in wider use.

“ ESG has to start with a company’s strategy and be embedded in its business model, support functions, data, and even in your talent proposition. And if companies aren’t doing that, embedding that from top to bottom, you end up with some wacky things.”

Julie Linn Teigland, EMEIA area managing partner at multinational professional services firm EY

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