SEC Climate Disclosure Proposal Comment Period Extended
Yesterday, the SEC indicated it is listening – they extended the public comment period on the climate disclosure proposal until June 17. It seems likely there will be more than 10,000 comments submitted when all is said and done. As of May 6, according to SEC’s website there were 9,079 comments filed and published. Of these, 972 are unique submittals with the remaining 8,107 falling into eight separate form letter types. I don’t know what the record is, but I wouldn’t be surprised if this proposal claims that title.
Our view: Many commenters requested an extension of the comment period due to length of the proposal, its complexity and the number of questions posed in the document. The SEC heeded those calls. They will continue to listen to and consider comments submitted, which could mean we won’t see a final rule until next year.
DOJ OK’s SEPs
Back in the 1980s when I was a Legal Assistant in the Environmental Practice at Vinson & Elkins, I ran across a court decision that made fun of EPA’s world of abbreviations. Even close to 40 years ago, the environmental world was awash in acronyms and abbreviations. While I don’t recall the case itself, I remember one of the opinion section headings that contained no real words. I’m copying that here.
Last week, as this memo from Sidley discusses, the US Department of Justice (DOJ) reversed its 2017 policy about payments to non-governmental parties within Supplemental Environmental Projects (SEPs):
DOJ components — particularly the Environment and Natural Resources Division (ENRD) — will again be able to negotiate with defendants SEPs that benefit the environment and offset civil penalties in order to settle alleged violations of federal environmental laws.
DOJ’s reintroduction of SEPs as a tool for enforcement returns to a decades long practice that was generally seen as a ‘win-win’ by federal agencies and the regulated community for improving the environment and public health. DOJ’s ‘return to normal’ aligns with the current administration’s focus on environmental justice initiatives in communities of color, low-income communities, and tribal communities.
The new policy has limitations and conditions related to non-governmental third-party payments, including:
- it does not apply to state-level actions;
- the settlement must have a “strong connection to the underlying violation or violations of federal law at issue in the enforcement action”;
- the settlement “must be executed before an admission or finding of liability in favor of the United States”; and
- qualifying payments cannot be “solely for general public educational or awareness projects; solely in the form of contributions to generalized research, including at a college or university; or in the form of unrestricted cash donations.”
Our view: My experience with SEPs in the past focused on those intended to strengthen corporate compliance management systems and practices rather than monetary awards, but this move seems aligned with the current administration’s path toward social justice, including environmental justice matters.
Last month, I wrote about a report from Lawrence Berkeley National Laboratory (Berkeley Lab) and the US Department of Energy that was pessimistic about the future of alternative energy projects in the U.S. because of the inability of many of them to ultimately connect to the grid. The Financial Times reports that it isn’t just the US facing these risks. In the UK:
[renewable energy] developers say they are being told that they will have to wait six to 10 years to connect to the regional distribution networks because of constraints on National Grid’s network.
Our view: Companies need to evaluate the risks of delays in Scope 2 emissions reductions that are based on expectations of a greener grid. Just because alternative energy projects get funded and built does not automatically mean they will be able to startup immediately and feed “green electrons” to the grid.