UK & EU Climate News

• Glen Earrach Energy (GEE) has submitted a planning application for a £3 billion, 2GW pumped storage hydro (PHS) project located near Loch Ness in Scotland. If built, it will account for almost three-quarters of the total PSH storage planned for Loch Ness, and two-thirds of its generating capacity, while using only half the water. The total capacity would be equivalent to the output of around 800 onshore wind turbines in the Scottish Highlands. The project would also deliver a 10% reduction in the grid’s carbon footprint.

• The UK government has announced they will invest £300m to build domestic supply chains for offshore wind, creating new manufacturing jobs and reducing the UK’s reliance on imports. The funding comes atop other initiatives designed to grow domestic supply chains for renewable energy. The UK Government is aiming for the nation’s electricity mix to be dominated by renewables and nuclear by 2030. By 2030, gas-fired generation should account for no more than 5% of the generation mix. Labour’s General Election Manifesto included a pledge to quadruple offshore wind capacity to around 60GW.

• New data from the EU’s Copernicus Climate Change Service (C3S) shows that last month was Europe’s warmest March since records began. Reuters reports globally, last month was the planet’s second-warmest March on record – reaching 1.6C higher than pre-industrial temperatures and exceeded only by March in 2024.

• Carbon dioxide emissions form European airlines are set to exceed their pre-pandemic levels this year, underlining the aviation industry’s struggle to decarbonise. European airlines have collectively committed to achieving Net Zero by 2050 through a mix of new technologies, notably alternative fuels, as well as carbon-trading schemes and more efficient aircraft, engines and air traffic management. However, airline carriers complain that sustainable aviation fuel (SAF) is too expensive and not enough is made and has urged the EU to soften some of its environmental rules.

Global Climate News

• In its journey to become carbon-neutral by 2030, Apple has announced in its latest Environmental Progress Report that it has reduced its greenhouse gas (GHG) emissions by 60% against a 2015 baseline. Meanwhile, company revenue increased by more than 65%, therefore Apple has successfully decoupled its emissions from its financial growth. The news comes as many other tech companies such as Microsoft and Google struggle to meet emissions targets due to the enhanced use of AI.

• According to a new report, around $5.4bn of investment is needed to scale the UK’s data storage operations to meet the demands of the AI industry, in a way that manages environmental impacts. This estimated cost for the UK includes investment in energy efficient IT systems, renewable energy, infrastructure upgrades and sustainability tracking tools. Bloomberg’s recent New Energy Outlook 2025 publication indicates that surging demand for AI will cause data centre power demand almost double from 4.5% in 2035 to 8.7% in 2050. According to the International Energy Agency (IEA), data centre energy consumption is expected to double in the next five years.

• Leading Wall Street financial institutions are predicting that the world is heading towards dangerous levels of global warming, but note that this could bring major financial gains for air conditioning companies, according to the Guardian. Analysis from Morgan Stanley, JPMorgan Chase, and the Institute of International Finance suggests that the Paris Agreement’s goal of limiting global temperature rises is now seen as unattainable by much of the finance sector, with investors being advised to prepare for this reality. Morgan Stanley now anticipates a future with around 3°C of warming, which would trigger severe heatwaves, flooding, economic turmoil, and other crises. At the same time, the company projects a significant boost for the air conditioning industry, forecasting 41% market growth and a value of $331 billion by 2030.

• China’s installed capacity of solar and wind power reached 1,482 GW by the end of March, surpassing thermal power for the first time in China’s history. Electricity generated from wind and solar in the first quarter accounted for 22.5% of the country’s total electricity consumption.

• In a study covered by O Globo, Habitat loss due to climate change will affect more than 90% of Brazil’s biodiversity by 2100. Published by researchers at the Federal University of Rio de Janeiro, the study highlights that if climate change continues at the current rate, 25% of the country’s species will be at risk of extinction, with the most affected regions being the Amazon and the Atlantic Forest.

United States continues significant rollback of environmental protection and climate initiatives

A series of policies by the Trump Administration has significantly rolled back environmental regulation and climate initiatives. Some actions through April 2025 include:

Executive Order targeting State and local climate policies: President Trump signed the "Protecting American Energy from State Overreach" executive order, directing the Department of Justice to identify and challenge state and local climate laws deemed to overstep constitutional or statutory authority. The order specifically targets policies affecting fossil fuels and other energy sectors, citing examples from states like New York, Vermont, and California.

Emergency waiver for E15 Gasoline Sales: The Environmental Protection Agency issued an emergency waiver allowing the nationwide sale of E15 gasoline—a blend containing 15% ethanol—during the summer months. Traditionally restricted due to smog concerns, this move aims to bolster fuel supplies, reduce gasoline prices, and support domestic agriculture.

Proposed Changes to the Endangered Species Act: The administration proposed redefining "harm" under the Endangered Species Act to exclude habitat destruction, focusing solely on direct injury or killing of animals. This change could remove habitat-based protections for endangered species

Support for Deep-Sea Mining: The administration issued an executive order supporting deep-sea mineral exploration under domestic laws, potentially bypassing international oversight by the International Seabed Authority. This move has raised environmental and geopolitical concerns, particularly regarding areas like the Clarion-Clipperton Zone.

Reinvigoration of the Coal Industry: President Trump signed an executive order titled "Reinvigorating America's Beautiful Clean Coal Industry," aiming to boost coal production by relaxing emissions regulations and permitting coal mining on federal lands.

Budget Cuts to Environmental and Science Agencies: Budget planning documents indicated the administration's intention to significantly reduce funding for various science agencies in Fiscal Year 2026. Notably, the National Oceanic and Atmospheric Administration (NOAA) faced a proposed 26% cut, including the elimination of the Office of Oceanic and Atmospheric Research, which plays a crucial role in climate research.

Investors pulled $8.6bn from sustainable funds in Q1

According to Morningstar Sustainalytics, global sustainable investment funds faced record losses in early 2025, with $8.6 billion in net outflows, largely due to the Trump Administration's anti-ESG policies.This marks the biggest quarterly withdrawal on record for sustainable open-end and exchange-traded funds (ETFs), following strong $18.1 billion inflows in late 2024. The decline was mainly driven by continued outflows in the US, a sharp reversal in Europe, and regional downturns across Asia, including Japan. Political pressure, regulatory uncertainty, and waning faith in ESG’s long-term prospects were cited as key factors.

The US recorded its 10th straight quarter of outflows, losing $6.1 billion, while Europe saw its first-ever net outflows ($1.2 billion) since Morningstar began tracking in 2018. Asia also posted losses, though smaller, with Japan’s outflows falling slightly under $900 million. Only Canada, Australia, and New Zealand saw modest inflows of about $300 million each.

Sustainable funds’ organic growth turned negative (-0.27%) compared to a 0.90% rise for global funds overall. Morningstar’s Hortense Bioy noted a broader shift in sentiment towards sustainable strategies, with increasing consolidation, rebranding, and cautious fund development amid growing ESG resistance, especially in the US.

Europe, traditionally a stronghold for ESG investing, also showed signs of retreat. Active sustainable funds lost $5 billion, while passive ESG funds added just $3.7 billion—an all-time low. Trump's renewed presidency and attacks on diversity and climate policies have dampened ESG enthusiasm globally, with European investors growing more cautious amid tightening regulations like the EU’s ‘Omnibus’ package.

Rebranding efforts surged, with over 180 European funds dropping terms like "ESG" and "sustainable" from their names in Q1 2025. Newer terms such as "transition," "screened," and "climate" are being used to appeal to ESG-conscious investors without overt political associations. In the UK, the new Sustainability Disclosure Requirements (SDR) have added complexity: just 94 funds adopted official sustainability labels, while hundreds preferred disclosures without formal labelling, often still using softer ESG-related terms.

Climate backslide among oil and gas giants

Political shifts, notably Donald Trump's re-election and the Ukraine war-driven energy crisis, have accelerated a retreat among major oil and gas companies from global climate targets, according to a new Carbon Tracker report. The study assessed 30 leading upstream producers across six criteria, including emissions targets and investment strategies, grading them from A to H. No company scored above a 'D', and none performed strongly across multiple categories.

Despite global commitments like the pledge to triple renewable energy by 2030, many top producers are expanding fossil fuel operations and backing projects misaligned with the Paris Agreement, with momentum increasing since Trump's inauguration. Carbon Tracker’s Rich Collett-White warned that most companies are ignoring forecasts of peaking demand, urging investors to reconsider support for risky, short-term fossil fuel expansion.

European firms generally outperformed their US and national counterparts. Spain’s Repsol ranked highest, with the UK’s Harbour close behind. However, even major European players like BP, Shell, and TotalEnergies saw their grades fall due to Paris-incompatible production targets, with BP’s score dropping sharply after it abandoned its 2030 reduction plans. Meanwhile, US oil majors ExxonMobil and ConocoPhillips, along with several national oil companies, received the lowest 'H' grade.

The report also highlighted the increasing reliance on LNG projects, which many companies promote as a transitional fuel, despite their misalignment with net-zero goals. While there has been some improvement on methane emissions, many firms, including CNOOC and Coterra, continue to struggle with major leaks. Regulatory rollbacks in the US have further undermined methane control efforts.

For investors and financial institutions, the report sounds a warning: firms clinging to high-carbon strategies could expose themselves to serious long-term risks. Studies suggest the UK economy is particularly vulnerable to a fossil fuel-driven financial crisis, with potential bank bailouts and pension losses looming if fossil assets become stranded amid a global shift toward net zero.

Climate risks of $38trn by 2050 in a 2.5C warming scenario

Investors in the food and drink sector have been urged to strengthen their climate risk strategies, with potential damages estimated to reach $38 trillion by 2050 under a likely 2.5C warming scenario. The UN previously warned that, even if current Paris Agreement pledges are fully met, global temperatures would still rise by around 2.6C–2.8C by 2100 — a forecast made before Donald Trump's second withdrawal of the US from the Agreement.

The First Sentier MUFG Sustainable Investment Institute emphasised that food systems are highly exposed to climate-related risks and that investors must act now to enhance resilience. A new briefing highlights that global food demand is set to grow faster than population rates over the next decade, while extreme weather events will increasingly threaten food production through floods, droughts, storms, and temperature extremes.

Although investors tend to support downstream sectors like food processing and retail, the Institute stressed that supply chain vulnerabilities leave them significantly exposed to climate risks. Institute director Sudip Harza warned that agricultural systems face mounting threats as the world approaches critical climate tipping points, urging investors to embed climate adaptation into their decision-making to protect food security and investment returns.

The briefing provides practical advice, recommending that investors integrate climate risk into due diligence, support innovative finance models for climate-resilient food systems, and engage companies for deeper disclosures. Specifically, investors should request:

• Value chain maps identifying key partners and regions
• Long-term climate and input price risk scenarios
• Trends in nutrient density across core products
• Impacts on natural resources like land use and water
• ESG-related tax exposure and operational transition plans

Frameworks such as TCFD, TNFD, and ESRS can guide companies in making these disclosures.

Separately, an anonymous letter from food industry insiders warned investors that many companies underplay climate risks in disclosures, treating reporting as a compliance formality rather than a call to action.

Meanwhile, rising cocoa prices — up 400% — provide a real-world glimpse into these growing challenges. Research by Christian Aid shows that climate change, through more frequent extreme heat and erratic rainfall, is devastating cacao-growing regions like Côte d’Ivoire and Ghana, endangering farmer livelihoods and pushing up chocolate prices.

Climate change reshaping the spread of infectious diseases

As global temperatures rise, the spread of infectious diseases is rapidly evolving in unexpected ways. In an article published on The Inside Climate News, Dr Angelle Disiree LaBeaud, a physician-scientist and epidemiologist at Stanford University provides insights into how rising temperatures and environmental changes are affecting disease dynamics. These include:

Respiratory Diseases: Climate change alters the seasonality and distribution of respiratory illnesses, such as influenza, by influencing temperature and humidity patterns.

Waterborne and Foodborne Diseases: Warmer temperatures create favourable conditions for pathogens to thrive in water and food sources, increasing the risk of diseases like cholera and salmonella.

Vector-Borne Diseases: Changes in climate are expanding the habitats of disease-carrying vectors like mosquitoes and ticks, leading to the spread of diseases such as malaria, dengue, and Lyme disease into new regions.

Health Equity Concerns: The convergence of climate change with other crises, such as pollution, disproportionately affects vulnerable populations, exacerbating existing health disparities.

The article underscores the urgency of integrating climate change considerations into public health strategies to mitigate the growing threat of climate-sensitive infectious diseases.

New Research

• New research published in Nature Geoscience shows that delayed warming in the Southern Ocean — which absorbs human-induced heat quickly but releases it only after several decades to a century — plays a role in boosting rainfall in East Asia and the western United States. By using climate models, scientists uncovered a “global teleconnection,” where the lagged warming of the Southern Ocean drives widespread tropical ocean warming in a pattern similar to El Niño, intensifying summer rainfall in East Asia and winter precipitation in the western US. The researchers note that this discovery has important real-world implications: even if carbon dioxide levels are reduced through climate action, the delayed warming of the Southern Ocean will continue to drive wetter conditions in these regions for many decades, or even centuries.

• New research shows that climate change has caused marine heatwaves to last three times longer and become about 1C hotter since the 1940s. By comparing observed global sea surface temperatures with a modelled scenario without human-driven climate change, the study quantifies the impact of warming on these extreme events. The researchers conclude that global warming is responsible for nearly half of all marine heatwaves and has, on average, tripled the number of days each year that the oceans endure extreme surface heat.

• A new study in the journal Nature finds that the world’s biggest corporations have caused $28tn in climate damage. The Associated Press says the study “came up with the estimated pollution caused by 111 companies, with more than half of the total dollar figure coming from 10 fossil fuel providers: Saudi Aramco, Gazprom, Chevron, ExxonMobil, BP, Shell, National Iranian Oil Co, Pemex, Coal India and the British Coal Corporation”. Oil and gas companies are facing hundreds of lawsuits around the world testing whether they can be held responsible for their role in causing climate change.