Alvise Armellini reports for Reuters:

Italy’s competition authority (AGCM) imposed a 1 million euro ($1.16 million) fine on China-founded online fast fashion retailer Shein on Monday for misleading customers about the environmental impact of its products.

It is Shein’s second financial sanction by a European competition authority in little more than a month, after France fined the company 40 million euros on July 3 over fake discounts and misleading environmental claims.

If I’m a regulator, I’d slap a million-dollar fine on Shein every time they utter a version of the word “sustainable”. If my decision is challenged in court, my extremely robust, sophisticated and effective legal defence would be “They are Shein, Your Honour.”

AGCM said the environmental sustainability and social responsibility messages on Shein’s website “were sometimes vague, generic, and/or overly emphatic, and in other cases omitted and misleading.”

Shein’s claims on circular system design and product recyclability “were found to be false or at the very least confusing”, and the green credentials of its ‘evoluSHEIN by design’ collection were overstated, the regulator said.

Shein promotes the ‘evoluSHEIN by design’ collection as clothes made using more sustainable and responsible manufacturing.

AGCM said consumers could be misled to think that the collection was made with materials that are fully recyclable, “a fact that, considering the fibres used and currently existing recycling systems, is untrue”.

I’d disagree with AGCM here and argue that Shein’s sustainability claims misled absolutely no one. People who buy Shein aren’t thinking about sustainability and environmental impacts¹ when they make the purchase, so they can’t be misled by false sustainability claims. When you are thinking about sustainability at all, you won’t be buying Shein. Either way, no one is fooled here.

By now, we all know that the AI bubble poses a big challenge for decarbonisation. In a rush to build gigawatt-scale AI data centres, big tech has reversed years of steady progress towards net zero, as Claire Brown recently wrote in the Climate Forward newsletter for the New York Times:

The artificial intelligence boom could pose a serious threat to tech company goals to zero out emissions by the end of the decade, according to a fresh batch of sustainability reports.

Google’s greenhouse gas emissions rose by 11 percent in 2024 from the year before. Amazon’s were up by 6 percent. Microsoft’s fell slightly but remained 10 percent higher than they were in 2021. Meta’s most recent figures have not yet been made public.

You don’t need to squint hard to notice one company, Apple, is conspicuously missing from the familiar list of big tech names here. According to Apple’s 2025 Environment Progress Report published in April, its total gross carbon footprint (scopes 1, 2, and 3) continued to decrease from 2023 to 2024.

In this AI bubble, some of Apple’s standout progress can be attributed to its unique, and very publicly failing AI strategy. Unlike its big tech competitors who rush to build bigger data centres to run larger AI models on the cloud, Apple chose to prioritise “on-device” AI capabilities. On Apple devices, most AI tasks are carried out by smaller, specialised models running on Apple’s advanced proprietary chips. Occasionally, more complex tasks will be kicked up to Apple’s Private Cloud Compute data centres, or farmed out to ChatGPT.

Naturally, with this strategy, Apple needs less cloud infrastructure than its competitors. This means less steel, less concrete, less coolants, and less electricity. Neat.

But! These smaller models running on highly efficient Apple silicon chips in millions of Apple devices still consume energy. Instead of using all the energy to do all the AI in data centres, each Apple Intelligence-enabled device uses a little bit of energy to do a little bit of AI on-device. Does this mean all these devices, collectively, will generate much more emissions because of AI?

Apple’s product environmental reports might provide some clues. iPhone 15 Pro was announced in September 2023, nine months before Apple announced its AI features at WWDC 2024. Three months later, Apple announced its “built-for-Apple-Intelligence” iPhone 16 Pro. These two models, announced one year apart, have the same design and materials, so it’s unsurprising that they also have the same total lifecycle product carbon footprint at 66 kgCO₂e for the 128GB configuration. But for 16 Pro, the product use phase (i.e., charging) contributes 17% of its total product footprint, whereas only 15% of 15 Pro’s footprint comes from product use. That’s a 13% increase from one generation to the next.

I have no reason to think the 16 Pro is somehow 13% less energy efficient than the 15 Pro. My theory is that after announcing its AI features at WWDC 2024, Apple expected customers to do more AI on the iPhone 16s, which would in turn consume more energy in the use phase.

If my theory is right, we will soon see a meaningful increase in Apple’s total scope 3 emissions, especially from the product use phase.¹

Or maybe not? As we now know, Apple still hasn’t shipped many of the AI features it promised in June 2024, and those they shipped aren’t very useful. Maybe Apple’s scope 3 product use emissions won’t increase yet because people are not doing AI on their iPhones yet?

So what does this all mean for Apple’s net zero by 2030 target? For now, it seems like Apple’s on-device AI strategy and inability to ship useful AI features are helping them avoid emission surges that have been inflicted upon others. But if Apple is able to overcome its AI challenges and people start doing more AI on-device, Apple will have a bigger net zero problem than its competitors. After all, it’s probably easier to buy renewables for a few ginormous data centres, than doing the same for hundreds of millions of users charging their iPhones in every corner of the world, at all hours of the day.

I have been saying this privately before I started this site, and now I can start saying it around here: the only fundamental breakthrough in the climate space over the past 20 years was China, through its massive manufacturing scale, drastically reduced the cost of solar, battery, and to a lesser extent, wind. Without these relentless incremental improvements in the manufacturing processes, international political agreements and sustainable finance innovations wouldn’t amount to much.

Today, when good journalists report on China’s incredible progress in manufacturing and deploying these solutions, they feel obliged to point out that (1) China is still building many new coal plants and (2) China is, by far, the world’s largest emitter, and the second-largest historical emitter. They rarely mention the fact that much of these emissions go into making Labubus and other stuff we buy on AliExpress and Shein that will soon end up in landfills.

With clean tech exports, on the other hand, China is solving the problem for the rest of the world, bigly:

The solar panels, batteries, electric vehicles (EVs) and wind turbines exported from China in 2024 are set to cut annual CO₂ emissions in the rest of the world by 1%, some 220m tonnes (MtCO₂).

Manufacturing these products resulted in an estimated 110MtCO₂ within China in 2024, implying that the upfront CO₂ emissions are offset in much less than a year of operation.

Over the expected lifetime of these products, their manufacturing emissions will be offset almost 40-fold, with cumulative CO₂ savings reaching 4.0GtCO₂.

When factoring in China’s plans to build overseas manufacturing plants for clean-energy products, as well as to construct overseas clean-power projects, the avoided CO₂ increases to 350MtCO₂ per year. This is 1.5% of global emissions outside China and almost equal to the annual emissions of Australia.

This analysis by Lauri Myllyvirta for the Carbon Brief also pointed out that China’s dominance in making clean tech leaves plenty of value for the rest of the world:

China’s outsized role in upstream clean-energy manufacturing creates potential supply chain vulnerabilities that many countries will want to address, by diversifying supply sources and strengthening domestic capabilities.

However, China’s dominance is not synonymous with capturing the majority of the economic value in global clean-energy development. Rather, it reflects a strategic advantage in segments that other economies have often neglected, due to low value and profitability.

Of course, China is not heroically carrying the decarbonisation burden for the benefits of the human race. It doesn’t have a grand conspiracy to corner the global clean tech market, either. Chinese entrepreneurs and engineers are just doing what they do best: making millions of widgets and making each one infinitesimally cheaper than the last.

We talked about how UOB, along with other NZBA members, voted to drop the 1.5 degree target back in April. A few weeks later, Eco-Business’s Jeremy Chan wrote a puff piece paid for by UOB trying to justify the bank’s decision. Here is a quote from Melissa Moi, UOB’s head of sustainable business:

The shift reflects an evolution from the more “ideological” commitments made in 2021 to today’s pragmatic reset. We are now focused on transparent attribution for target outcomes, avoiding reputational risks from financial decarbonisation shortcuts, and deepening client engagement. This includes educating clients about physical and transition risks and using portfolio analysis to guide tailored support.

Translation: NZBA and UOB used to care about demanding climate ambitions and policy changes. Now they mostly care about not getting caught for greenwashing (“avoiding reputational risks”), keeping lucrative and polluting clients (“deepening client engagement”), and whatever the fuck “transparent attribution for target outcomes” means.

Also, how callous of her to describe a well-researched and thoroughly-negotiated global consensus to protect millions of people from preventable death and suffering as “ideological commitments”.

Moi continues:

So the goal — the North Star — is always to support decarbonisation, recognising the importance of net zero. This “shift” in net zero banking [could] hopefully open the door for more local banks to enter the fray. It helps them understand, conceptually, the nitty-gritty of how to think about target-setting, how to transform their organisations, how to grasp the context of net zero, how to evaluate their portfolios, and how to start managing credit risk related to climate challenges.

What a load of crap. If NZBA and UOB care so much about “open[ing] the door for more local banks to enter the fray”, why stop at dropping the 1.5 degree? Some bankers will look at the watered-down 2 degree target and say “gee, I’m not sure I can commit to that. Can you get rid of the temperature target entirely so that we can join you to understand the nitty-gritty for good vibes?”

There is no good reason why NZBA has to lower its collective ambition to help local banks understand the “nitty-gritty”. The nitty-gritty is, “conceptually”, the same whether your targets are for 1.5 or 2 degrees. And if local banks want to “enter the fray”, trust me, they can figure out the “nitty-gritty” somehow. The key barrier to entry is a lack of courage, not a lack of knowledge.

If smaller banks in developing Asia are intimidated by the level of technical complexity required of them to set net zero targets and manage climate risks, big banks like UOB only have themselves to blame. As I said before, banks are now so accustomed to talking about technicalities, you can hardly be impressed or disappointed by any of them because their true ambitions have been caveated and complianced into a uniform mediocrity. You can only tell where their heart lies when a clear choice between courage and cop-out is in front of them. UOB chose poorly.

Back in April, I wrote:

Like other cause-based business associations, the value of NZBA to its members are virtue signalling and collective lobbying. We climate people tolerate the virtue signalling part when the collective lobbying part aligns with our climate goals. When they voted to lower their standards, they made it clear that they were not willing to lobby for the level of climate actions we need to see. Now, the rest of us need to make sure they can’t get the same virtue signalling value anymore. It’s a choice they made for their alliance, but the true leaders will go elsewhere.

I guess another value of NZBA is for its members to learn from each other (“understand the nitty-gritty”). Unfortunately, if you join NZBA now, the most salient lessons you will learn from your peers is how quickly some will desert the cause when the political wind shifts, and how readily the rest are willing to give themselves a break. A race to the bottom is well underway.

Back in 2019, F1® announced a goal to be “Net Zero” by 2030. Were they going to eliminate all, or almost all of their emissions? No, of course not. Come on, don’t be ridiculous. What F1® meant by “Net Zero” is to reduce their emissions by half and then offset the rest with carbon credits.

Phew, that makes so much more sense.

Even with this glaring caveat, the target is still ambitious in its scope. Naturally, it covers the most conspicuous emission source in this sport: cars burning almost 40 litres of fuel per 100km (equivalent to 6 mpg) running in circles. But more importantly, the target also covers the less visible emissions from F1® and team factories and facilities, on-site operations on each race weekend, and most significantly, moving hundreds of tonnes of equipment and thousands of employees to and from 24 races across 5 continents.¹

Last month, FI® provided an update on their progress so far:

Formula 1 is firmly on track to achieve its target of becoming Net Zero by 2030, having delivered a 26% reduction in its carbon emissions by the end of 2024 compared to its 2018 baseline.

[…]

At the end of the 2024 season, the carbon footprint for the sport stands at 168,720 tCO₂e (tonnes of carbon dioxide equivalent) – down from 228,793 tCO₂e in 2018.

The press release lists a whole range of changes F1® made to achieve this. After digging into the details in the accompanying report, two trends are clear:

First, the vast majority of the reductions are achieved through boring (and effective) use of renewable electricity in buildings. Factories and facilities emissions were slashed by more than half. It’s cheap, quick, and scalable.

Second, all the efforts F1® put into logistics and travel made very little difference. Remote broadcasting, changing the race schedule to reduce intercontinental trips, and using biofuel trucks and efficient cargo planes reduced the combined travel and logistics emissions by only 4% since 2018. The only reason F1® can claim a more significant reduction in its most significant emission sources is because of sustainable aviation fuel (fancy biofuel) certificates. They paid airlines and logistics companies for the right to say they used the lower-carbon biofuels that were actually used by others. It’s basically fancier carbon credits.

We know decarbonising aviation is hard, even for a business as rich and innovative as F1®. But you can always buy carbon credits for the half of the emissions you promised to reduce, before you had to buy carbon credits for the other half you plan to offset.

Fiona McNally reports for Responsible Investors on the latest anti-ESG attack in the U.S.:

Twenty-one US state officials havewritten to BlackRock and other asset managers calling for them to “reaffirm and operationalise” their commitment to “traditional” fiduciary duty. The officials set out the steps they consider necessary to achieve this, including “abandoning the practice of framing deterministic future outcomes as long-term risks to justify immediate ideological interventions through corporate engagement or proxy voting”. They cited climate change as “a common example of this issue”.

If this doesn’t make much sense to you, that’s because the original letter is a contradictory mess. Quoting from a copy they sent to BlackRock:

Abandoning the practice of framing deterministic future outcomes as long-term risks to justify immediate ideological interventions through corporate engagement or proxy voting. Climate change is a common example of this issue, where potential risks—often uncertain and already accounted for in insurance and financial markets—are framed as certain and catastrophic to justify forcing companies to take immediate actions that may not align with their long-term business interests. Successful long-term investing relies on diversified portfolios rather than speculative predictions presented as guaranteed outcomes.

If climate risks are, as the letter calls it, “uncertain”, how is it an example of asset managers “framing deterministic future outcomes as long-term risks”? And the notion that potential risks are perfectly “accounted for in insurance and financial markets” is just incredibly naïve. If that’s the case, financial markets would never go down at all, would they? I have never heard anyone, ESG investor or climate activist, who frames climate change as “certain and catastrophic”. If climate change is “certain and catastrophic”, we should all give up and go all in on colonising Mars.

McNally continues:

Other asks of managers included committing not to use passive investment vehicles for activist proxy voting or corporate engagement and committing to “abstain from embedding international political agendas, such as net zero climate mandates, natural capital frameworks, or the EU’s Corporate Sustainability Reporting Directive (CSRD), into default investment strategies and corporate engagement”.

The officials also continued recent attacks on proxy voting by US right-wingers, calling for “clear and transparent voting guidelines and stewardship practices that reflect a singular focus on shareholder value”. […]

This is, at its core, a power struggle between big, greedy but rational Wall Street money masters, versus fossil fuel-loving, climate-hostile but democratically elected politicians. I’m not sure whom I want to root for.

The general principles of carbon pricing are well-established: CO₂ and other GHG emissions are what economists call “externalities”. They mess up our planet for centuries, and damage everyone’s health, life and livelihoods for generations to come. But emitters don’t pay for these damages, so they will emit more than the economically efficient amount of GHGs. Carbon pricing, either through a cap-and-trade system like the EU ETS or a carbon tax, forces emitters to internalise these negative externalities of GHGs. Neat!

When carbon emissions went from being a public cost but private freebie to carrying a private cost, emitters will look for ways to reduce this cost. They can cut their emissions, obviously and desirably, but that’s not the only way to reduce their now private carbon cost. Emitters can also lobby the government for exemptions, like oil refiners in Singapore did last year. Or they can outsource their emissions using carbon credits.

Outsourcing is a tried-and-true method companies use to cut cost, but historically, the main factor has been labour. As companies moved jobs and factories from expensive, rich economies to poorer countries, their GHG emissions were, unintentionally, outsourced too. But some jobs and operations are not so easy to outsource, and many rich countries are now trying to expand their manufacturing base, so there are some limits to how much emissions can be physically outsourced. When carbon pricing becomes a significant cost, companies want a way to outsource their carbon tax liabilities without having to make big changes to their physical operations. As it turns out, carbon credits are the perfect instrument for that.

When Singapore raised its carbon tax to a meaningful level of S$25, the government started allowing companies to offset 5% of their taxable emissions with carbon credits from overseas. Last month, the National Climate Change Secretariat published a draft guidance to encourage companies to buy more carbon credits:

In response to this industry feedback, NCCS, MTI and EnterpriseSG have worked with the Singapore Sustainable Finance Association (SSFA) and industry partners across the carbon credit value chain to draft guidance for companies looking to purchase carbon credits. The guidance:

(a) aligns to approaches that governments have agreed to adopt as buyers of carbon credits under Article 6 of the Paris Agreement, where relevant;

(b) emphasises that carbon credits should have high environmental integrity;

(c) enjoins companies to prioritise all feasible abatement efforts before considering the use of credits to address remaining emissions; and

(d) clarifies that corresponding adjustments do not apply to credits purchased by companies looking to meet their voluntary climate commitments as these credits are not counted towards Nationally Determined Contributions.

Other than the last point on corresponding adjustment, this draft guidance is mostly a re-hash of existing, widely accepted principles and practices long established by other gatekeepers. As a government-issued guidance, it doesn’t say anything about how carbon credit buyers can seek refunds or compensation from deceiving brokers and project developers if the credits they bought turns out to be magic beans.

It does, though, use the phrase “high-quality” nine times. Maybe if you say the magic word enough times, carbon credits will suddenly become real.

Kenza Bryan and Emma Dunkley, reporting for the Financial Times:

Asset managers made a “huge mistake” in claiming the investment industry could “save the world”, the departing chair of the UK’s Aberdeen Group said, over-egging their role in environment, social and government issues for marketing purposes.

Sir Douglas Flint, a former HSBC chair, told a City of London conference this week that their “ridiculously extravagant claims” had opened up asset managers to legal risk.

The most grandiose claims by financiers were driven by a mindset of “we’re not really about investing money, we’re just jolly good people and we’re saving the world”, Flint said.

“Our industry then made a kind of huge mistake, it became a marketing thing, let’s tell everyone we’re saving the world, we’re saving the planet.” The overly general statements were “a feast” for US-based lawyers, he said.

You can tell two stories about the rise and fall of ESG investing.

Story one:

1. ESG investors tell fossil fuel companies to reduce their emissions by cutting production.
2. It worked.
3. ESG investors were sued by climate-hostile Republicans for telling fossil fuel companies to cut production.

Story two:

1. ESG investors tell fossil fuel companies to reduce their emissions by cutting production.
2. It didn’t work.
3. But ESG investors pretended that it worked in order to attract client money.
4. They still ended up getting sued by climate-hostile Republicans.
5. To get rid of the lawsuits, they now have to tell judges that ESG doesn’t work.

Story one is how it was supposed to play out, but story two is how it actually played out. You can see why Aberdeen thinks it was a mistake to claim that ESG worked.

Everyone agrees that decarbonising aviation is hard. Other than the illusion of CORSIA, sustainable aviation fuel (SAF) is our only hope.

Most of what qualifies as SAF today is produced from used cooking oil: the viscous, brownish stuff collected from McDonald’s deep fryers or a pisang goreng hawker’s wok. Herein lies one obvious problem with SAF: solutions that rely on voluntary consumer actions are rarely effective or scalable, as we have learned time and again from trying to recycle post-consumer plastics and textiles. The value of recycled materials is rarely worth the efforts to collect, sort, process, and transport the post-consumer waste.

But the situation with SAF is quite different. Flight shaming puts enormous pressure on the aviation industry to decarbonise its kerosene-guzzling planes, and SAF is the only viable solution today. Strong demand for SAF drives up the value of used cooking oil, to the point that used oil can be sold for more than virgin palm oil.

Herein lies an obvious fraud (arbitrage?) opportunity: buy cheap (partially subsidised) virgin cooking oil and sell it as used cooking oil to SAF producers.

Matteo Civillini, Azril Annuar, David Fogarty, Megan Rowling, and Sebastian Rodriguez report for Climate Home after conducting a joint investigation with the Strats Times:

As SAF producers scramble for limited raw materials to meet new blending quotas in Europe and growing demand elsewhere, barely used and virgin palm oil is being passed off as UCO to traders that supply fuel companies, experts and industry operators told us. Palm oil that is not considered waste is not permitted under European Union rules for SAF because of its links to deforestation.

[…]

A source at a leading Malaysian UCO supplier to companies including Repsol told The Straits Times that some UCO collectors and restaurants are committing fraud by providing oil that does not qualify as used, although it is difficult to prove.

In Malaysia, which is among the world’s leading suppliers of both UCO and virgin palm oil, government-subsidised cooking oil is cheaper than UCO – providing a clear incentive for fraud.

In a 2024 report, Brussels-based environmental group Transport & Environment (T&E) cited figures showing that Malaysia already exports aboutthree times as much UCO as it is estimated to collect domestically and import, raising concern about where that oil is coming from – and what it consists of.

The aviation industry’s desperate need for SAF creates a unique situation for palm oil, the widely available (and vilified) commodity, where the value of a used product is higher than the value of a new product. Without any other efforts, just cooking with palm oil adds value to it and transforms it into a different, more desirable, and valuable product. I’m surprised that such frauds are not more widespread.

This ridiculous incentive structure also exposes a more fundamental deception behind the promise of SAF. SAF producers prefer used cooking oil because, according to certification rules, they don’t need to account for the upstream GHG emissions and deforestation when they use “waste” materials as feedstock. The logic is that since cooking oil is intended for cooking, and used cooking oil is wasted anyway, all the upstream environmental and climate impacts are attributed to the kitchens, so SAF producers and airlines get a free ride.

But when the value of used cooking oil is higher than cooking oil, it’s hard to argue that cooking is the primary intended use of this product. When people commit fraud to pass off unused cooking oil as used for profit, used cooking oil becomes the product and can no longer claim environmental and climate immunity accorded to wastes. Fundamentally, palm oil is palm oil whether it’s used for cooking, making SAF, or cooking then SAF.

Sourcing from used cooking oil is an unenforceable, unscalable, and perversive fig leaf for the fundamental tensions in SAF supply. None of this will ever change the reality of aviation emissions and biofuel-driven deforestation. Let’s stop pretending otherwise.

---

UPDATE: The Straits Times published their version of the story. It’s mostly identical to the version published by Climate Home News that I linked to above, but Straits Times also added an interesting tidbit on the price gap between subsidised new cooking oil (RM2.5 per kg), and used cooking oil (RM3 – RM3.7 per kg at collection, and RM3.9 – RM 4.5 per kg for trading).

Ben Elgin, reporting on the current wave of corporate retreat from climate actions:

“I am heartened by the alacrity of the retreat and the ferociousness of it, because I think it uncovers the reality that we all need to understand, which is companies aren’t going to save the planet,” says Ken Pucker, a professor at Tufts University’s Fletcher School of Law & Diplomacy and former chief operating officer at apparel maker Timberland. “The quicker that people understand and integrate that, the better.”

[…]

“I would happily spend the rest of my life changing lightbulbs and retrofitting buildings,” says Auden Schendler, who ran sustainability at Aspen Skiing Co. and its parent company, Aspen One, for 26 years, before recently stepping down. “It’s incredibly gratifying, it saves money, it reduces pollution, it makes buildings run better. But here’s the only problem: It’s not a solution to the climate problem.”

Instead, Schendler and others argue that a company’s political actions are vastly more important than its pollution-trimming efforts. Any environmental bona fides should be measured by whether—and how vocally—the business supports government regulations that require all market participants to go green.

Unfortunately, most companies have talked a big game on climate while working to block or water down the very policies that could drive real progress. […]

[…]

As Schendler, the former Aspen executive, puts it in his new book—Terrible Beauty, which critiques corporate sustainability tactics—it’s long past time for company leaders to get on with the “hard, unpleasant and nasty” work of political activism, including publicly calling out peers who aren’t matching their rhetoric with actions. Anything less, as the recent corporate retreat illustrates, is a dangerous illusion of progress.

Companies take voluntary actions to stave off and undermine calls for mandatory policies. Those who are retreating from voluntary actions will not voluntarily ask for mandatory policies. It’s only going to be a “silver lining” if the rest of us make companies use their political power to advocate for climate policies that cause short-term pain.