News Updates
European leaders ‘outpaced’ by increasing risk from climate change, environment watchdog warns Euronews (summary presentation and video for paying subscribers!)
A new report by the European Environment Agency (EEA) warns that with temperatures rising in Europe at double the global average, policy makers' failure to keep pace with increasing extremes of weather could soon have “catastrophic” consequences the already critical current situation as climate change already leads to increasingly frequent and severe flooding, drought and rising sea levels.
In the report published on March 11th, the EEA has taken a detailed look at the frequency and intensity of drought, heatwaves and other weather phenomena and concluded there is a clear and present threat to life, livelihoods, and the wider economy.
It is pointed out that record-breaking global temperatures have been recorded every month since June 2023. Among areas where action is needed, the EEA mentions building up disaster preparedness for floods and wildfires, and the shoring up of coastal defences as sea levels rise.
US Climate Disclosure Rules: Not Perfect But Still A Victory Forbes
The United States Securities and Exchange Commission adopted the country’s first federal-level rules that will require public companies to disclose information on their climate-related risks and greenhouse gas emissions.
The new rules will impact roughly 2,800 US firms in addition to 540 foreign companies with operations in the US. While this development is limited, especially to the absence of scope 3 emissions disclosures requirements, it still represents a major step forward and a good starting point to build on.
Clear rules for companies and comparable information for investors on climate-related risks components of well-functioning capital markets and the rules adopted by the SEC will improve transparency.
How five crucial elections in 2024 could shape climate action for decades Nature
Around half of the world’s population or some 4 billion people live in places that are holding elections in 2024. These regions include five of the world’s biggest carbon-emitting territories, namely the United States, India, Indonesia, Russia, and the European Union, representing about a third of the world’s population and about the same proportion of human-made carbon emissions.
How the political wind blows from these elections will be crucial in determining whether humanity can correct its current trajectory of dangerous climate warming. Current climate policies are likely to result in warming of about 2.7 °C by 2100, well above the 1.5 °C goal laid out in the 2015 Paris climate accord.
Long-term climate commitments could prevent another 0.6 °C of warming, but those depend on further action by governments, including many whose leaders are up for election in 2024. It could be a pivotal year.
US banks abandon ‘bare minimum’ environmental standards project, alarming climate groups The Guardian
Four of the world’s biggest banks have left the Equator Principles, abandoning the organisation setting minimum industry standards and safeguards for financial institutions to address environmental and social risks related to the financing of fossil fuel and mining projects.
While the Equator Principles are not enforceable, they provide a basic framework of environmental standards that banks agreed would underpin financing deals on pollution-causing extractive projects. This backward step on sustainable practices in the financial system is a part of an alarming trend among banks headquartered in the US of backpedalling on commitments on the climate to vulnerable communities directly affected by the financial industry.
The banks departure from the environmental standards benchmark is the latest example of major financial services companies leaving corporate environmental initiatives since US Republican politicians started suggesting participation could breach antitrust rules.
Global Regulatory Updates
Ten States Sue to Block the SEC’s Emissions Disclosure Rules Bloomberg Law
West Virginia Attorney General Patrick Morrisey and a coalition of Republican leaders from 10 states, including Georgia, Alabama, Alaska, and others, have filed a petition to block the Securities and Exchange Commission's (SEC) new rules mandating carbon emissions disclosure by companies.
Despite the SEC's removal of Scope 3 reporting requirements, Morrisey criticizes the rules as undermining the energy industry and filed a petition for review in the US Court of Appeals for the Eleventh Circuit, citing concerns over the constitutionality and economic impact.
The SEC defends its regulations, emphasizing adherence to legal processes and democratic principles. Meanwhile, potential legal challenges from environmental groups like the Sierra Club and Earthjustice loom, while business groups, relieved by the watered-down regulations, remain vigilant against government intervention in capital markets.
Britain says it will regulate ESG ratings later in 2024 Reuters
Britain's finance ministry announced plans on Wednesday, March 6, 2024, to regulate providers of ESG ratings on companies, aiming to enhance clarity and trust in widely used investment benchmarks. Although no specific timeline was provided, the ministry indicated a forthcoming consultation response and legislative steps later this year.
Currently, the sector responsible for compiling ESG ratings operates without regulation, which includes major providers like MSCI, S&P, and Morningstar. While the European Union recently approved mandatory rules for ESG ratings, Britain's approach, based on guidance from IOSCO, remains voluntary for now.
However, the delay in definitive action has left the industry in a "waiting game," with stakeholders eager for clarification on criteria and scope. Consultants anticipate regulations requiring raters to formalize governance structures and publish methodologies to improve transparency and comparability. The timing of legislation may be influenced by the upcoming general election expected later this year.
Deal on new rules for more sustainable packaging in the EU European Parliament
On Monday, March 4, 2024, the European Parliament and Council reached a provisional agreement on comprehensive measures to address the full life cycle of packaging, aiming to reduce waste, increase safety, and promote the circular economy.
These measures include targets to reduce packaging consumption, restrictions on certain packaging formats, and a ban on "forever chemicals" (PFAS) in food contact packaging.
Key aspects involve setting reduction targets, banning certain single-use plastic packaging formats by 2030, promoting reusable packaging options, and mandating recyclable packaging with minimum recycled content targets.
The agreement emphasizes the importance of industry, EU countries, and consumers collaborating to combat excessive packaging, while also fostering innovation and providing exemptions for micro-enterprises. Formal approval from Parliament and Council is required before the agreement can take effect.
Singapore to roll out mandatory climate reporting from 2025 Pinsent Mason
Singapore has unveiled plans to enforce climate-related disclosures for Singapore Exchange (SGX) listed and certain non-listed companies. Starting from the 2025 financial year, SGX-listed firms, and large non-listed companies (with annual revenues of at least S$1 billion and total assets of at least S$500 million) will be required to report on Scope 1 and 2 emissions in the first year and Scope 3 emissions in the second year, with external assurance mandated two years after reporting initiation.
The government will provide up to 30% funding support for large companies adhering to the International Sustainability Standards Board (ISSB) based framework from 2027. While small and medium enterprises (SMEs) are exempt from the new requirements, financial support is offered for SMEs opting for climate-related reporting.
There's also potential for sustainability reporting to become mandatory for smaller non-listed companies in the future. Singapore's move aligns its sustainability reporting obligations with EU and New Zealand standards, making it a leader in Asia for non-listed company climate disclosures.