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Tuesday, 24 May 2022

SEC to crack down on funds that claim to be ESG or sustainable + The plastics industry could be net-zero by 2050

Green funds are about to get a lot more transparent as the US Securities and Exchange Commission (SEC) prepares to crack down on investment funds that claim to be “ESG,” “sustainable,” or “low-carbon,” the Financial Times writes, citing people familiar with the matter. This comes as sustainable funds continue to ride a high, which pushed their assets to a combined USD 2.77 tn over the last quarter, up 177% from 2019. “There is currently a wide range of what asset managers might mean by certain terms and what criteria they might use,” SEC chair Gary Gensler previously said. Yesterday the SEC announced a USD 1.5 mn settlement against BNY Mellon’s investment adviser division over allegations of misstatements and omissions about ESG considerations.

The plastics industry could be net-zero by 2050 — but not without significant investments: Some USD 795 bn is needed in order for the plastics industry to reach net-zero emissions by 2050, a report from Bloomberg NEF — Bloomberg’s clean energy research arm — shows. Decarbonizing the industry will require massive investments because it takes addressing the emissions of both its chemical feedstocks — like petrochemicals — and its actual production to reach net zero. That involves the electrification of plants that break down natural gas into small molecules needed to make plastics, building out carbon capture and storage facilities, the shift to biofuel, and research and development.

These investments need to begin before the end of the decade if the industry plans to hit the target by 2050, according to the report. This comes as plastic production is forecast to grow at 3% every year, as the oil industry puts its money on the industry amid the decline of most traditional uses of fossil fuels.

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