Fund Factsheet

October 2021 commentary

Environmental

• PepsiCo’s fruit juice business in South Africa, Ceres, has made the point that the small plastic straws that come with juice cartons are too lightweight to make it through mechanical recycling sorters, making them very difficult to recycle. As a solution, Ceres has removed the plastic straws altogether and is replacing them with an eco-friendly equivalent.

• An article in Nature has looked at Microsoft’s efforts to remove carbon from the environment. Microsoft is the largest contributor to the Fund’s weighted average greenhouse gas emissions due to the size of the company and its large position. However:

  • Microsoft have set up a $1bn fund to invest in carbon reduction and removal technologies. The company’s aim is to be carbon negative by 2030 and, by 2050, to remove all of its emissions since it was founded in 1975.

  • Microsoft has asked for proposals for carbon removal technologies and received 189 submissions. Roughly one-fifth of proposals focused on avoiding new emissions and not withdrawing CO₂ from the atmosphere as requested and most of the removal proposals were for nature-based carbon storage such as planting trees, which store carbon only until the tree dies and starts to rot or is released by a forest fire.

  • One proposal in which Microsoft did invest was from Swiss firm Climeworks. The company proposed operating a machine in Iceland that pulls CO₂ from the air and injects it into the ground, where it is mineralised. The amount of CO₂ to be removed by the Climeworks project per year is equivalent to about 11% of the annual emissions from Microsoft’s supply chain.

  • Microsoft is developing technology for measuring soil carbon in agricultural fields and software to count trees via satellite imagery.

  • Microsoft has committed to cut the water used in its thirsty data centres by 95% before 2024. A typical data centre uses 3-5m gallons of water a day, as much as a city of 30,000 people.

• Novo Nordisk is going to open a CO₂ research centre at the University of Aarhus later this year focusing on ways to capture, store and recycle CO₂. The foundation says research will centre on using microbes and electrochemistry to turn the greenhouse gas into components for fuel and plastic.

• Colgate, PepsiCo and L’Oréal were all top performers in Bloomberg’s circular economy rankings (how effective these companies are at recycling and reusing materials and products) with scores of over 70%. Unilever and Procter & Gamble also scored well, with results above 60%. The average company score was 48%.

Social

• The Anti-Defamation League and L’Oréal USA are collaborating on an education initiative designed to raise awareness and understanding of the Holocaust among thousands of students in American classrooms.
  
  
• In Canada, Home Depot has launched TradeWorx with an initial CAD$1m grant going towards training and helping 100 young people who have experienced homelessness. Since 2017, Home Depot has committed more than $45m to organisations working to improve social equality.
  
  
• Following requests from employees and shareholders, Microsoft has commissioned a law firm to “identify, understand, assess and address actual or potential adverse human rights impacts of the company’s products and services and business relationships with regard to law enforcement, immigration enforcement and other government contracts”.

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