Science Based Targets initiative approves Danfoss’ climate targets

NORDBORG, Denmark, 23 June 2022: Danfoss said its science-based target has been approved by the Science Based Targets initiative (SBTi). Elaborating, Danfoss said the Science Based Targets initiative (SBTi) has validated that the corporate greenhouse gas (GHG) emissions reduction targets submitted by Danfoss A/S are in conformance with the SBTi Criteria and Recommendations (version 4.2).

According to Danfoss, the science-based target provides a clearly defined pathway for companies to reduce GHG emissions in line with the goals of the Paris Agreement and to help prevent the worst impacts of climate change.

The SBTi’s Target Validation Team has determined that Danfoss’ scope 1 and 2 target ambition is in line with limiting warming to 1.5 degrees C. As part of the science-based target, Danfoss said, it will reduce absolute scope 1 and 2 GHG emissions by at least 46.2% by 2030 from a 2019 base year. In addition, Danfoss has committed to being carbon neutral in scope 1 and 2 emissions by 2030. Danfoss said it will reduce absolute scope 3 GHG emissions by 15% in the same time frame.

Kim Fausing, President & CEO, said: “We have built a strong foundation to achieve our science-based target, an important pillar of Danfoss’ new 2030 ESG ambition. Our science-based target expands our GHG emissions reduction goals beyond our own business, across the entire value chain. It reflects our continued dedication to taking action on climate change and becoming the preferred decarbonization partner to our suppliers and customers.”

Danfoss announced in March 2022 that it had reached its 2030 target of doubling the energy productivity in its factories globally – nine years ahead of time. Energy productivity improved by 104% in 2021 from the baseline year 2007, and energy intensity was halved between 2007 and 2021, Danfoss said, adding that it produced twice the output in 2021 as in 2007, with the same energy consumption. Subsequently, Danfoss had said it would put sustainability at the centre of its Core & Clear 2025 strategy and has the ambition to take leading positions in decarbonisation, circularity, diversity and inclusion.

Martin Rossen, SVP, Head of Group Communication & Sustainability, Danfoss, credited by the company as responsible for developing Danfoss’ ESG strategy and setting the ambition for reducing emissions across the business, said: “The validation of our science-based target confirms that Danfoss’ climate ambitions are in line with science and the goals of the Paris Agreement. But it’s more than order in our own house. Customers, employees, and the public increasingly demand transparency and reward action on ESG. For good reasons. Companies can’t simply get away with saying that they act, they need to document it. The science-based target provides a level playing field. It gives a competitive edge to the companies that truly care and take action. United Nations Secretary-General Kofi Annan once said, ‘Who cares wins’, and we believe that companies that care will win.”

Danfoss said it is on track to making its 250,000 m2 headquarters in Nordborg, near the city of Sønderborg, carbon neutral in scope 1 and 2 in 2022 by implementing available energy efficiency solutions and sourcing renewable electricity and heating.

The Danfoss headquarters campus was one of the field trips taken by ministers during the International Energy Agency’s 7th Annual Global Conference on Energy Efficiency in the City of Sønderborg, Denmark, which ran from June 7 to 9. Dubbed “The Global Capital of Energy Efficiency” by Dr Fatih Birol, Executive Director, IEA, Sønderborg acted as a global showcase of energy-efficient solutions when more than 300 leading politicians, government officials and business leaders joined the conference on energy efficiency.

European Investment Bank, Solas in energy efficiency initiative

LUXEMBOURG, 22 February 2022: The Solas Sustainable Energy Fund ICAV, a new EU-focused fund targeting energy efficiency investments, has reached its first close with €140 million. Making the announcement through a Press release, the European Investment Bank (EIB) said it has committed a €30 million cornerstone investment to SSEF, backed by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe. EIB said that as one of the largest providers of climate finance, it supports projects that promote the priorities and objectives of the European Union.

According to EIB, the SSEF also signed an agreement with the Private Finance for Energy Efficiency (PF4EE) support scheme, a joint initiative launched by the European Commission via the LIFE programme and the EIB.

One of the goals of PF4EE is to encourage private institutional investors, such as insurers and pension funds, to invest in European energy efficiency infrastructure, particularly in the small- and medium-sized (SME) sector. Further cornerstone investors of SSEF are the Ireland Strategic Investment Fund (ISIF), IDEAL insurance as well as MEAG, the asset manager of the Munich Re group.

EIB said that by virtue of being a specialist investment advisor in the energy efficiency sector, Solas Capital will advise the fund. EIB said Solas Capital partners with a wide variety of leading energy service companies, project developers, equipment manufacturers, and public-sector bodies across the European Union to help facilitate their access to tailor-made financing and enable new investment in energy efficiency.  

According to EIB, SSEF will offer funding for energy-saving business models focusing on the renovation of existing infrastructure, particularly buildings, using established and reliable energy-efficient technologies, such as modern heating and cooling systems, combined heat and power units, solar rooftops, building fabric, LED lighting, etc. Projects in both the public and private sectors will be supported, including the SME sector, which faces more challenges in securing finance, EIB said.

According to EIB, the project would entail an initial investment into a project portfolio of energy efficiency measures in buildings. It added that buildings are responsible for 40% of the European Union’s energy consumption, and 36% of its CO₂ emissions.

To achieve near zero emissions in buildings, crowding-in private institutional capital will be essential, as public funding is not sufficient. SSEF, EIB said, is offering the market a unique financing solution and is closing the gap between energy efficiency funding needs and institutional investor requirements.

Kadri Simson, The Commissioner for Energy, said: “Investing into energy efficiency, renewable energy generation and building renovation is at the core of the European Green Deal and key to bringing down energy bills. The Solas Sustainable Energy Fund will combine the financial support from EFSI and PF4EE to mobilise affordable private financing for investments in the energy performance of buildings, including onsite renewable energy production.

The PF4EE guarantee will set the gold standard for equity investment fund initiatives and engage institutional investors in green assets. This will bring us one step closer to achieving the EU’s Green Deal ambition of becoming climate neutral by 2050.”

Thomas Östros, Vice-President, European Investment Bank, who is responsible for energy financing, said: “As Europe’s climate bank, the EIB is proud to be a cornerstone investor in the Solas Sustainable Energy Fund, which will help bridge the major financing gap for energy efficiency projects. Reducing the energy use in buildings is crucial to achieving a carbon-neutral economy in Europe by 2050. We believe that our commitment in this fund will catalyse further investments to meet the immense building renovation challenge.”

VC funds, Hollywood stars invest heavily in climate change innovation

CHICAGO, Illinois, 18 May 2021: The year 2021 has already seen multiple climate-focused fund launches. London-based One Planet Capital launched a fund for green tech, fintech and sustainability-based B2C businesses, while Hollywood ‘Iron Man’ actor, Robert Downey Jr has founded FootPrint Coalition Ventures to invest in high-growth, sustainability-focused companies.

The financial world used to think environmental issues couldn’t generate viable rewards, but another climate-focused fund, Congruent Ventures, believes a tipping point has been passed. 

Congruent raises investment specifically for Climate Change solution start-ups and, with USD 300 million under management after closing its second fund at USD 175 million, Managing Partner and Co-Founder, Abe Yokell, said: “If you brought up the word ‘cleantech’ to any institutional investor allocating to venture 10 years ago, they would do their best to avoid the meeting, but now, there’s a fundamental belief there will be significant financial returns investing broadly in climate tech over time.”

Congruent’s portfolio includes electric vehicle-charging provider, Amply, which raised USD 13.2 million last year from investors, including Soros Fund Management and Siemens. Digitally controllable electrical panel company, Span raised USD 20 million in January through Congruent, with investors including Munich Re Ventures’ HSB Fund and Amazon’s Alexa Fund.

And Congruent itself is well-founded, with investors including UC Investments, the Microsoft Climate Innovation Fund, Three Cairns Group, Jeremy and Hannelore Grantham Environmental Trust and Surdna Foundation, among other institutions, foundations and family offices.

Regulation A+ crowdfunding companies are also seeing investment, such as digital twins company, Cityzenith, who recently launched their international ‘Clean Cities, Clean Future’ campaign as part of the Race to Zero movement.

Cities worldwide generate 70% of the world’s carbon emissions, but Cityzenith’s AI Digital Twin platform technology can help property asset management groups, city planners and developers reduce emissions and move to carbon neutrality in the next 10 years. 

Michael Jansen, CEO, Cityzenith, said at the launch of the ‘Clean Cities – Clean Future’ initiative: “We have to help the most polluted urban centers become carbon neutral, and we plan to do this by donating the company’s Digital Twin platform, SmartWorldOS to key cities, one at a time, after every USD 1 million we raise. We’re able to do this because of the recent surge of investment we’ve had as part of our USD 15m raise.”

Cityzenith is already benefiting from the funding shift, reportedly attracting USD 2.5 million in investment since late 2020 through Regulation A+ crowdfunding and a surge in shares from USD 0.575 to USD 1.50 in just five months. The US company has raised USD 10 million to date.

Jansen said: “In the past decade, investors struggled to justify backing Climate Change solutions, but global demand for net-zero carbon by 2050 and a sustainable future means a tipping point has been passed.

“Products, such as our own SmartWorldOS™, which monitors and collects data on future and existing building assets, so construction and maintenance can occur at optimal efficiency, will be essential to reducing carbon emissions and energy waste. We must invest in climate solutions now so that we can protect our planet sooner and more effectively.

“We’ve seen a significant amount of interest in our current USD 15m raise from accredited investors in recent months, as there are tangible, financial upsides in the built-environment to going climate-friendly, and carbon credits are going to become an enormous part of this in the next few years.”

European-based fund 2150 also launched this year, investing €200m (USD 240 million) into start-ups developing sustainable technologies to lower carbon emissions in Europe’s cities.

Co-founder Christian Hernandez has seen a shift in perceptions, too. He said: “There are enough proof points now that those two (profitable investments and investing in climate solutions) can coexist.”