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Dec 19 2024 #climate, #compliance, #diversity, #environment, #equity, #esg, #human-rights, #investors, #social, #supply-chain
EY Survey Shows Weakening Investor Attitude on ESG
[Ed. note: Today’s’ blogs are the final ones for 2024. We will return January 2. Have a Happy and safe Holiday.] Investors remain a top priority for corporate ESG/sustainability efforts and disclosures, but is it really worthwhile? I’ve long advocated...
Dec 19 2024 #climate, #compliance, #environment, #esg, #supply-chain
Coal – Climate-Related Stranded Asset or Black Gold?
[Ed. note: Today’s’ blogs are the final ones for 2024. We will return January 2. Have a Happy and safe Holiday.] If you end up with coal in your stocking this year, that might be a good thing… Conflicting information...
Dec 19 2024 #climate, #compliance, #environment, #esg, #investors, #supply-chain
New This Week on PracticalESG.com
This week’s notable additions to PracticalESG.com are below. Our next summary blog will be January 2. Happy Holidays! New Q&A: Here is a tough one on which to end the year. Members can add their thoughts and views. Are Carbon...
Dec 18 2024 #climate, #compliance, #environment, #esg, #supply-chain
More from California: CARB Asks for Help in Interpreting Climate Disclosure Laws
Looks like we are going to end the year on a decidedly California note… A few days after state lawmakers pressed California Air Resources Board (CARB) about delays in implementing SB 253 (the Climate Corporate Data Accountability Act) and SB...
Dec 18 2024 #climate, #compliance, #environment, #esg, #supply-chain
Software Company Workday Gas Well Capping Offsets Real, but Still Risky
I’m a pretty outspoken cynic with regard to carbon offsets, but here’s a project that looks like it is for real. According to Trellis, “Enterprise software company Workday is … buying emissions offsets that will be generated by projects to...
Dec 18 2024 #climate, #environment, #esg, #investors, #social, #supply-chain
Rooftop Solar Creates Cyber Risk for Entirety of Europe’s Grid
The growth of technology and the interconnectedness of essentially everything (even my vacuum cleaner has bluetooth!??) has created more cyber security risks than we probably realize. I’ve cautioned for years that breaches in cybersecurity for power generation, manufacturing processes and...
Dec 17 2024 #climate, #compliance, #environment, #esg, #supply-chain
California to Take Light Enforcement Touch for First Year of GHG Reporting
California recently issued an Enforcement Notice about the Climate Corporate Data Accountability Act (SB 253), which requires reporting in 2026 on data from 2025. Ropes & Gray’s Michael Littenberg, Marc Rotter and Peter Witschi published a short memo on the...
Dec 17 2024 #climate, #compliance, #environment, #esg, #supply-chain
California Legislators Press CARB on Climate Disclosure Delays
There is more to the story about CARB’s December 5, 2024 Enforcement Notice (see this Ropes & Gray memo)… Looks like the California legislative sponsors of SB 253 (the Climate Corporate Data Accountability Act) reached their boiling point with the...
Dec 17 2024 #climate, #compliance, #environment, #esg, #investors
Your 10-K Item 1A Risk Disclosures on Climate Could Trigger Investor Suits
We’ll soon publish our compendium of SEC 10-K Item 1A risk factor disclosures relating to ESG/sustainability matters from the Fortune 25, and here is timely news about those disclosures. Matt Levine reported that retailer Target was sued last year for...
Dec 12 2024 #assurance, #climate, #compliance, #diversity, #environment, #equity, #esg, #human-rights, #investors, #social, #supply-chain
PCAOB 2025 Inspections Push into Sustainability Matters
For those who may not be familiar, the Public Company Accounting Oversight Board (PCAOB) oversees audits of public companies to ensure auditors produce informative, accurate, and independent audit reports. Basically, they audit the auditors each year. Their 2025 inspection priorities...
Dec 12 2024 #compliance, #environment, #esg, #investors
Initial Response to UK ESG Fund Labeling Mandate Lower Than Expected
Responsible Investor wrote about the response by UK investors to the country’s new Sustainability Disclosure Requirements (SDR) that mandates sustainability disclosures and labels for investment products. By December 2, funds using the words “impact” or “sustainable” in their names had...
Dec 12 2024 #climate, #compliance, #environment, #esg, #investors, #supply-chain
New This Week on PracticalESG.com
This week’s notable additions to PracticalESG.com: Blog of the Week: “Is the EU’s Omnibus Simplification Package Just Weeks Away?“ New Member Resource: Podcast- What You Really Need to Know About Double Materiality with FTI Consulting’s Miriam Wrobel and Alanna Fishman....
Dec 11 2024 #climate, #compliance, #esg, #investors
ESG Disclosure: Avoiding “an Avalanche of Trivial Information”
It is winter, so a snow analogy is timely. Last week, John pointed me to some language in the seminal US Supreme Court decision on financial materiality TSC Industries v. Northway, Inc. This is the ruling that introduced the concept...
Dec 11 2024 #compliance, #diversity, #equity, #esg, #investors, #social
How Much ESG/Sustainability Sway Do Investors Really Have?
Staying with an investor theme… This could get interesting. According to Financial Times, a new investment fund has started specifically to “punish ‘woke’ companies”: “The actively managed fund, which Azoria Partners expects to launch early next year, will exclude S&P...
Dec 11 2024 #climate, #environment, #esg, #investors
Private Equity: Sustainability Investments Must Produce Returns
And on to private equity investors… Last week, I wrote about JPMorgan taking a hard line business view of transition economy investments to ensure they stay within “fundamentals of financial logic”. Perhaps unsurprisingly, private equity firms are in the same...
Dec 10 2024 #assurance, #climate, #compliance, #environment, #esg, #investors, #social, #supply-chain
Is the EU’s Omnibus Simplification Package Just Weeks Away?
A month ago, Zach wrote about the political pressure in the EU to reduce corporate reporting burdens and simplify the CSRD through the use of something called the Omnibus Simplification Package targeting the EU Taxonomy for Sustainable Activities, CSRD and...
Dec 10 2024 #assurance, #climate, #compliance, #environment, #esg, #supply-chain
Carbon Removal Accounting & Assumptions “Concealing Another 0.5C Rise”
Sometimes it is easy to miss the forest for the trees – probably the most apropos analogy in the carbon offset world. To my point, a new scientific analysis questions one cornerstone of offsets – how nature-based removals actually relate...
Dec 10 2024 #climate, #environment, #esg, #social, #supply-chain
The Danger of Landman’s Windmill Monologue
If you aren’t already sucked into the new TV drama Landman on Paramount+, you should check it out – although fair warning, it is definitely for an adult audience. The show revolves around Tommy Norris (played by Billy Bob Thornton),...
Dec 5 2024 #climate, #environment, #esg, #supply-chain
‘Splain This to Me Like I’m a Three-Year Old…
I am at a loss with this one… Volato Group, Inc., a company providing software and innovation solutions for the private aviation industry, announced a new business offering that claims to support aviation company sustainability programs by “repurposing underutilized aircraft...
Dec 5 2024 #climate, #compliance, #environment, #esg, #human-rights, #investors, #social, #supply-chain
New This Week on PracticalESG.com
This week’s notable additions to PracticalESG.com: New Q&A: How should a company respond to ESG information requests right before the company’s annual meeting? Blog of the week: States’ Climate-Based Antitrust Suit Threatens Other Sustainability Efforts New Member Resource: The ABCs...
Dec 5 2024 #assurance, #climate, #compliance, #diversity, #environment, #equity, #esg, #human-rights, #investors, #social, #supply-chain
The Number One Question We Get
So here it is, the number one question we get is – “What can PracticalESG.com do for me?” The answer? Our site provides practical, actionable guidance for professionals needing ESG/sustainability information that is immediately usable in their job. We emphasize...
Dec 4 2024 #assurance, #climate, #compliance, #environment, #esg
EU’s New Carbon Removal Certification Regulation
Early last month, the European Parliament approved a regulation for a certification framework for permanent carbon removals, carbon farming and carbon storage in products. The regulation provides key definitions and a framework for how EU states are to develop a...
Dec 4 2024 #climate, #compliance, #diversity, #environment, #equity, #esg, #guest-post, #human-rights, #investors, #social, #supply-chain
Guest Post: Driving Sustainability With “Emotional Bank Accounts”
[Ed. Note: This blog was written by Andrea Viera, Senior Sustainability Analyst at hospitality investment and management firm Highgate. Her perspective is that of someone new to the sustainability profession.] In my first week as a sustainability professional, I uncovered...
Dec 4 2024 #climate, #diversity, #environment, #equity, #esg, #human-rights, #investors, #social, #supply-chain
JPMorgan Moves From Transition Economy To “Fundamentals of Financial Logic”
File this one under “Yes, Virginia – business fundamentals matter.” Bloomberg reported that JPMorgan isn’t interested in pursuing transition finance: “Linda French, JPMorgan’s global head of sustainability policy and regulation, says it’s far from clear that calling something a transition...
Dec 3 2024 #climate, #compliance, #environment, #esg, #investors
States’ Climate-Based Antitrust Suit Threatens Other Sustainability Efforts
The day before Thanksgiving, eleven states’ Attorneys General filed suit against BlackRock, Vanguard and State Street, claiming the firms violated antitrust laws through climate activism that reduced coal production and drove up energy prices. According to the press release from...
Dec 3 2024 #climate, #compliance, #environment, #esg, #investors, #supply-chain
It’s Getting Real – AI Growth Puts Power Supply Chain Climate Goals at Risk
Still talking about coal-based power generation … Last Spring, we warned that the growth of AI imperiled Scope 2 climate goals for pretty much everyone. Bloomberg wrote about it just before Thanksgiving – with more urgency: “… the surprising growth...
Dec 3 2024 #climate, #compliance, #environment, #esg, #investors, #supply-chain
The Murky Future of Coal Power in the G7
This isn’t particularly new news but I thought it was worth looking back to given my other blogs of the day. Even though Texas coal-based power generation has experienced a downturn, the same doesn’t hold true elsewhere. In April, the...
Nov 27 2024 #assurance, #climate, #compliance, #diversity, #environment, #equity, #esg, #human-rights, #investors, #social, #supply-chain
Here’s a Turkey of a Blog
It’s a bit of a tradition at CCRcorp to post lighthearted blogs immediately before a holiday (Thanksgiving in the US). John, Meredith, Julie and I had quite the conversation last week about John’s spatchcock turkey recipe. I’m not much in...
Nov 26 2024 #climate, #environment, #esg, #supply-chain
Two Things in One Study: Carbon Offsets Don’t Deliver & A Method for Offset Due Diligence
A new scientific study published in Nature Communications earlier this month covering “almost 1 billion tons of CO2e” largely discredits carbon crediting mechanisms. While the term “credit” is used throughout, the study is actually limited to “voluntary, project-based activities that...
Nov 26 2024 #climate, #diversity, #environment, #equity, #esg, #human-rights, #investors, #social, #supply-chain
Hidden Reasons For Diminished Executive Support of ESG/Sustainability
A few years ago, “ESG” was shiniest new object that captured the attention of business leaders. Today, AI sparkles above all else and ESG/sustainability seem to be tarnishing. The change should have been expected as a normal cycle of business...
Nov 21 2024 #climate, #compliance, #diversity, #environment, #equity, #esg, #human-rights, #investors, #social, #supply-chain
Do Double Materiality Assessments Violate SEC Regulations?
Last month, an interesting question was posed on our Q&A Forum of importance to anyone conducting double materiality assessments (DMAs). DMAs involve communicating with stakeholders on their views of the importance of myriad ESG topics. Shareholders/investors are, of course, one...
Nov 21 2024 #climate, #diversity, #environment, #equity, #esg, #human-rights, #investors, #social, #supply-chain
McKinsey’s CEO Checklist Gives Context to ESG/Sustainability
Much of the success of corporate ESG/sustainability programs and achievements hinges on how those connect with the company strategy – and the CEO’s vision and goals. I write a good deal about this, and PracticalESG.com’s content emphasizes that as well....
Nov 21 2024 #climate, #compliance, #environment, #esg, #human-rights, #investors, #social, #supply-chain
New This Week on PracticalESG.com
This week’s notable additions and new resources for members: New Q&A: Shareholder proposal for a Board Committee on Decarbonization – is this a thing? Document of the week: The new ISO Framework for implementing environmental, social and governance (ESG) principles...
Nov 20 2024 #climate, #compliance, #environment, #esg, #investors
The New Future of Greenwashing Enforcement
The question of where the SEC stands on ESG has been difficult to answer. Back in September, the SEC quietly dissolved their ESG taskforce, leaving many to wonder if ESG enforcement was no longer a priority at the agency. Despite...
Nov 20 2024 #climate, #environment, #esg, #investors, #social
Ford Drives B2B Sustainability Gains
Cue the automotive and EV puns… Last month, I wrote about differences between sustainability value propositions for B2B and B2C relationships. Trellis (formerly GreenBiz) recently provided an example of these differences and pivoting strategies. According to the article: “In September,...
Nov 20 2024 #assurance, #climate, #compliance, #environment, #esg, #investors, #social, #supply-chain
It Was a Big Week for Climate Disclosure News
Last week saw several important reports published about climate disclosures, most likely timed for COP29: The 2024 EY Global Climate Action Barometer. Among its key findings – “While most of the companies are aware of the physical risks they face...
Nov 19 2024 #climate, #compliance, #diversity, #environment, #equity, #esg, #human-rights, #investors, #social, #supply-chain
Accidental Disclosure: A Real Risk for ESG/Sustainability
Last week, Matt Levine told a story about how far some investors will go (legally) to find hidden information about a company and what is behind numbers companies publish. Investors, he said, seek “that sweet spot of information that is...
Nov 19 2024 #climate, #compliance, #environment, #esg, #investors, #social, #supply-chain
Don’t Say You Aren’t Doing ESG But Don’t Say You Are. Are We Clear?
As long as we’re on Matt Levine’s commentary on disclosures… I feel like we are getting into multiples of double negatives which isn’t helpful. Last week, Levine also offered up a view on how the SEC’s Invesco enforcement case could...
Nov 19 2024 #climate, #compliance, #environment, #esg, #investors, #supply-chain
Seminal Dutch Shell Case Overturned
In 2021, a landmark case was decided in the Netherlands holding that Shell plc (formerly Royal Dutch Shell plc) owed a duty of care under Dutch tort law to reduce its CO2 emissions by 45% by 2030 compared to 2019...
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Featured Q&A Members Only
Are Carbon Emissions Reductions “Additional” If They Are Subject To Existing Regulations?
Here is a question I posed in a blog.
The situation – Emissions offsets are created and sold by plugging abandoned natural gas wells. In at least some states, existing regulations require well owners to plug wells once they are no longer in use. However, it is not uncommon for well owners to ignore the mandate, and sometimes regulators can’t enforce the regulations because surface or mineral rights owners can’t be located. There are state and federally-funded programs to plug these “orphan wells” and bring them into compliance.
The question – Are emissions reductions “additional” if there is an existing legal obligation to eliminate them and the owner simply has chosen not to comply? Do applicable state laws and regulations mean that emissions reductions should have occurred anyway because they are legally mandated regardless of financial incentives provided by the carbon offset market?
Food for thought – Preventing deforestation to create additionality in nature-based offsets relies on legal mechanisms – regulations, contracts, etc. If legal mechanisms are a basis for establishing additionality, do they also prevent additionality if mandates to prevent emissions are on the books but not acted on?
12/18/2024, Question #25934
Hyperlinking website ESG materials in Form 10-K
Wanted to get your view on cross-references in a Form 10-K to a company’s website ESG materials. While we have advised clients of the importance of consistency between the 10-K and website ESG materials and inclusion of material ESG information appearing on their websites in the 10-K, specifically referring to the website ESG materials and providing a hyperlink doesn’t seem to be a good idea. At least some of the website information was not produced or vetted with the idea that it would be part of the company’s SEC filings disclosure (given that, whether it’s even appropriate to include on the website may also be an issue).
12/17/2024, Question #25869
Answering Questions about Shareholder Proposal Topic
If an institutional shareholder calls the company a few days before the annual meeting to ask questions about climate change policy and political spending (both the subject to shareholder proposals), and the company agrees to talk with them, can the company say more than is in the proxy statement (seems like the answer should be yes, or why have the conversation) and can the company direct the shareholder to publicly available information (e.g., sustainability report already on company website) w/o filing the information as additional soliciting material? Rule 14a-6(f) seems to support a conclusion that all of this should be permissible w/o any additional filing. If it matters, the company isn’t going to provide any material nonpublic information, they just want to be responsive.
12/2/2024, Question #25597