Renewable energy is getting a long-awaited boost from the world’s heavy hitters.
The Group of Seven industrial nations, plus Denmark and Norway, have agreed to help Vietnam transition away from coal and secure a “resilient and prosperous” future for its people, the British foreign office revealed on Wednesday.
The Just Energy Transition Partnership (JETP), which follows similar deals with South Africa last year and Indonesia last month, will mobilize an initial $15.5 billion of public and private finance over the next three to five years to support the Southeast Asian nation’s ambition of becoming net zero by 2050.
Half of the sum will come from the Asian Development Bank, the International Finance Corporation and the so-called International Partners Group, which includes Canada, the European Union, France, Germany, Italy, the United Kingdom, the United States and Japan. The rest of it is being matched by a group of private financial institutions coordinated by the Glasgow Financial Alliance for Net Zero, including Bank of America, Citi, Deutsche Bank, HSBC and Standard Chartered.
“The JETP model is a game changer in the fight against climate change—using international aid to unlock billions of dollars of private finance,” said British Prime Minister Rishi Sunak. “Vietnam is a dynamic, emerging economy at the heart of South East Asia. The investment we are making today means the country can cut its emissions while simultaneously creating new jobs and growth.”
The deal will help Vietnam peak its greenhouse gas emissions in 2030 rather than 2035, limit its maximum coal capacity to 30.2 gigawatts instead of the initial estimate of 37 gigawatts, and generate 47 percent of its electricity from renewable sources by 2030 rather than the earlier tipped 36 percent.
Related Stories
Delivering on these targets will help Vietnam, one of the world’s top coal users, to save roughly 500 megatons of emissions by 2035, the British foreign office said. The goal of the Vietnam JETP, which builds on the U.K.-launched G7 Partnership for Global Infrastructure and Investment, is to demonstrate that it’s possible to decouple rapid economic growth from fossil fuel energy consumption, it added.
The move will also be a boon for brands such as H&M Group and Nike, which have been pushing the government of Vietnam, the world’s third-largest garment exporter after China and Bangladesh, for greener energy.
“Today, Vietnam has demonstrated leadership in charting an ambitious clean energy transition that will deliver long-term energy security,” U.S. President Joe Biden said. “The United States is proud to be a partner in this effort. Vietnam’s historic commitment will catalyze investment and economic growth and create tremendous opportunity for the Vietnamese people while advancing the fight against the global climate crisis.”
H&M’s power up
H&M Group, which has installed rooftop solar at supplier factories in Cambodia and India, is taking a more direct approach at home as well. On Tuesday, the Swedish retailer signed a power purchase agreement (PPA) for a new solar park in the northeast municipality of Hultsfred that will provide it with local renewable energy of guaranteed origin.
Developed and owned by French renewable energy producer Neoen and Nordic solar developer Alight, the project will have a total capacity of at least 90 megawatts-peak, or enough to power more than 16,000 homes for a year. It’s the largest solar PPW in Sweden to date, said the fast-fashion chain, which aims to reduce its absolute Scope 1 to 3 emissions by 56 percent by 2030 from a 2019 baseline.
Construction of the park, which will include installing photovoltaic panels around the Hultsfred airport runway, is set to begin in the second half of 2023, with commissioning to follow in 2025. PPAs play a “very important” role in H&M Group’s climate efforts, the Cos and Monki owner said. The Hultsfield project will bring the company closer to powering its supply chain with 100 percent renewable electricity by 2030 while adding clean energy to the Swedish grid.
“We are very excited to see Hultsfred’s solar park becoming a reality in the near future,” said Ulrika Leverenz, head of green investment of H&M Group, which previously pledged to shell out an annual 3 billion Swedish kroner ($295 million) to decarbonize its operations. “Renewable energy plays a crucial role in our climate roadmap to reduce emissions and achieve net zero by 2040. Business and countries must show leadership to limit global warming to 1.5 degrees Celsius according to what the climate science urges us to do.”
The A List
CDP, previously known as the Carbon Disclosure Project, recognized the importance of environmental leadership on Tuesday by rating more than 10,000 companies for its annual A List.
Lenzing Group and LVMH Moët Hennessy Louis Vuitton were among just 12 firms that received a triple-A rating for transparency and performance on climate change, deforestation and water security.
Antoine Arnault, LVMH’s head of image and environment, said the French luxury conglomerate couldn’t have made its strides without its suppliers and scientific partners.
“Measuring and communicating environmental impact across the LVMH value chain on climate, water and biodiversity—including forests—have proved to be powerful tools for fostering actions,” Arnault said. “Given our deep dependency on biodiversity, LVMH is particularly committed to scaling up regenerative practices within its supply chain that bridge the preservation of biodiversity and the fight against climate change.”
Lenzing’s win, its second in a row, shows that the Austrian fiber manufacturer is on a “very good path” with its sustainability strategy, said CEO Stephan Sielaff.
“We are working hard to make our industries even more sustainable and to drive the transformation of the textile business model from linear to circular,” he added. “Further efforts from the entire industry are needed for this transformation to take place.”
Uniqlo owner Fast Retailing earned two As for its work in climate and water security for the first time, which CEO Yihiro Nitta said he was very pleased by.
“Everyone at Fast Retailing is committed to demonstrating an entirely new type of apparel industry to the world, where our business and our range of LifeWear products naturally prioritize sustainability,” he said. “Making the 2022 A List an important milestone.”
Other companies that earned As included Gap, which snagged the top grade for water security, as well as Burberry, Kering, Puma, Superdry, The North Face parent VF Corp. and Zara owner Inditex, which did the same for climate.
Dexter Galvin, global director of corporations and supply chains at CDP, said that it was essential that the planet decarbonize half of its greenhouse gas emissions, eliminate deforestation and achieve water security by 2030 because “there is no route to 1.5 degrees Celsius without nature.”
“In a year of ever-increasing environmental concerns around the world—from extreme weather to unprecedented losses to nature—the need for transformational, urgent, and collaborative change is more critical than ever,” Galvin said. “As CDP continues to raise the bar on what qualifies as climate, forests, and water leadership, we hope to see the ambitions and actions of companies on the A List—and those wanting a place on it—do the same.”