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Fifth Circuit Court Stays SEC Climate Rule – But (Maybe) So What?
Things really are moving fast in the litigation of SEC’s new climate disclosure rule. The rule hasn’t been published in the Federal Register and isn’t even technically effective, but as Zach wrote last week, a battery of lawsuits was filed...
The CS3D Lives! (For Now)
The lawmaking process surrounding the EU’s Corporate Sustainability Due Diligence Directive (CS3D) has been a rollercoaster. In December, the EU reached a provisional agreement, which normally signals that the passage of a law is imminent. However, when it came time...
Academics Reverse View of ESG Link to Stock Price
Decades ago, sustainability professionals were grasping at straws to prove the economic value of our efforts, activities and costs. As one of those people serving the Kool-Aid back then, I can throw stones. One particular study in 1997 claimed a...
EU Parliament Moves Green Claims Directive Forward
The EU Green Claims Directive passed another major milestone recently as Parliament adopted its position on the legislation. While Parliament adopted its first reading position, the legislation still has some development to go and will have to be picked up...
States Not Finding Consensus on Colorado River Conservation
States using water from the Colorado River were expected by Monday to submit a “consensus plan” for long term water sharing and conservation plans. However, according to The Hill, “the river system’s two main contingents — the Upper and Lower...
France Pursues Validation of Climate Transition Plans
In the EU, The Ethos Foundation announced that they have “teamed up with the French institution ADEME, the French association FIR and the WBA to assess the credibility and relevance of European companies’ climate plans submitted to their shareholders for approval this year. Detailed analysis...
Why We Don’t Know Much About Climate Rule Litigation
Just as we expected, there are already pending lawsuits against the SEC Climate-related Disclosures Rule. With at least five lawsuits in total, three come from collections of ten states, nine states, and three states, and the others from the Texas...
A Bitter Pill: SEC is Right About ISSB Disclosure Standards
There is much momentum behind the ISSB sustainability disclosure standards, but that doesn’t guarantee governments are falling over each other to adopt the framework. In the US, the SEC’s final climate disclosure rules bluntly addressed ISSB standards in footnote 147:...
Audit Committees: Wherefore Art Thou, ESG?
The Center for Audit Quality (CAQ) released a new report, Audit Committee Practices Report: Common Threads Across Audit Committees, showing interesting year-over-year changes in how Audit Committees address ESG matters. Generally speaking, ESG dropped down the priority ladder for many...
DC Appellate Court Rules Against DRC Cobalt Miners
Last week, the US Court of Appeals for the District of Columbia ruled in favor of Apple, Alphabet, Dell Technologies, Microsoft, and Tesla in a lawsuit brought against the companies on behalf of cobalt miners in the Democratic Republic of Congo....
EU Passes Environmental Crimes Legislation
A while back, we wrote about the EU’s provisional agreement on environmental crimes legislation. The legislation gained approval from both the European Council and Parliament, finalizing its text and preparing it for publication in the Official Journal of the EU....
Tips for Dealing With Conflicting ESG/Climate Information
We’ve all seen it – one article or report that touts progress, value or benefits on a particular sustainability issue, followed by equally compelling information directly contradicting that. I wrote about conflicting survey results back in 2022 and not much...
Is AI Creating a Scope 2 Emissions Crisis for All?
Many people herald AI as the greatest thing since sliced bread or ice cream. Some say it will be a major factor in solving climate issues (quick nod to Jeremy Clarkson there…) But increasingly, concerns are rising over how much...
Wyoming Governor Pumps the Brakes on Anti-ESG
ESG investing laws are a favorite tactic of the anti-ESG movement. Those laws generally require state pension funds and other state government investments to ignore ESG factors in investing and base their investments strictly on financial returns. Sometimes they go...
More Banks Depart From Another ESG Organization
Big news in Net Zero recently was of course the number of banks withdrawing from ClimateAction 100+. However, Reuters reports that JPMorgan, Citi, Bank of America and Wells Fargo “… are no longer signatories to the Equator Principles, an industry benchmark...
EU’s CS3D: The Buzzards Are Circling
We previously wrote about how negotiations surrounding the EU’s Corporate Sustainability Due Diligence Directive (CS3D) fell apart at the 11th hour, plunging the Directive’s future into uncertainty. Last week, lawmakers attempted to salvage the agreement and reach a compromise with...
This Women’s History Month, Track Gender Gains and Hurdles
American women have seen significant shifts in job opportunities over the past half-century, with gains in labor force participation, wages, and representation in high-paying jobs. However, progress has slowed recently, leaving large gender gaps in top government and business leadership...
Takeaways from German Retailer’s “Total Cost” Experiment
Last year, German food retailer Penny conducted a bold sustainability experiment by testing how consumers respond to an attempt at incorporating externalities into product pricing. I blogged about this last year but as a quick summary – Penny selected a...
GHG Emissions Disclosures in the SEC’s New Climate Rule
The final SEC climate disclosure rule differs significantly from the 2022 proposed release. The section on the GHG emissions disclosures was revised heavily. Let’s look at what the final release now requires (Pages 222 -261). For technical GHG consultants and others...
Chicago Files Climate Lawsuit Against Major Oil Companies
Climate and greenwashing litigation has advanced at a breakneck pace and shows no signs of slowing down. Recently, the City of Chicago threw their hat in the ring when it brought suit against several major oil companies including BP, Chevron,...
Mining Industry Pushes for Green Nickel Price Premium
Stop me if you’ve heard this one before – critical metals miners and producers walk into a bar and ask for premium pricing for their ore/refined products based on “green” attributes… Anyone experienced in conflict minerals is saying “Yeah, I...
SEC’s New GHG Emissions Rule: Non-Financial Auditors Beware
Yesterday, of course, the SEC passed their final climate disclosure rule (886 pages as sent to the Federal Register). PracticalESG.com members can access the full rule here and a fact sheet here. My colleague Meredith Ervine penned a few of...
Low Early Reporting Rate for CBAM
In news other than the SEC climate disclosure rule… the EU’s Carbon Border Adjustment Mechanism (CBAM) is designed to tax embedded carbon on imports into the Union. This is designed to level the playing field between EU importers and domestic...
The Fight Against SEC’s New Climate Rules Begins
That sure was fast. The Hill reports that “West Virginia Attorney General Patrick Morrisey announced a coalition of 10 states will file a legal challenge to new regulations requiring public companies to disclose their climate-related risks and direct greenhouse gas emissions.” Action...
Today is the Day for SEC’s Climate Disclosure Rule
Unless you’ve been on extended vacation or otherwise “unplugged” for the past week or so, you know that today at 9:45am eastern time, the SEC Commissioners will take up and vote on the final climate disclosure rule. But be aware...
New York AG Sues JBS USA for Future Climate Emissions
As the body of greenwashing litigation grows globally, New York’s Attorney General added a major case to the pile with a lawsuit against the world’s largest beef producer JBS. The case calls JBS’s climate messaging into question as the AG...
Carbon Removal Pricing Scenarios Vary Wildly
Last year we witnessed competing claims of viability in voluntary carbon markets with all sides claiming the high ground of science, methodology, governance and risk management. This week I saw competing information about the future costs of Direct Air Capture...
All DEI Roles Eliminated at the University of Florida
In a significant move, the University of Florida is terminating all employees in roles related to Diversity, Equity, and Inclusion (DEI). Prompted by a 2023 state law targeting DEI funding, the move includes cutting DEI positions and discontinuing contracts with...
Is Fraud A High Risk in Climate/Decarbonization Businesses? (Part 1)
First it was Nikola, now it is Lordstown Motors. Last week, the SEC charged EV manufacturer Lordstown Motors Corp. with misleading investors about the sales prospects of the company’s electric pickup truck. According to the SEC’s announcement: “’We allege that,...
Is Fraud A High Risk in Climate/Decarbonization Businesses? (Part 2)
Cydney Posner at Cooley had a post yesterday that reminds us of other EV companies that faced SEC enforcement recently: “Then we had a twofer [after the Nikola enforcement] – settled actions against two manufacturers of electric vehicles for misleading...
EU Regulator Asks Zalando to Remove Sustainability Claims
Fashion company Zalando will alter its sustainable marketing practices after a dialogue with EU regulators. The company was making generalized sustainability claims and implying that its products had unproven sustainability benefits. Enforcement action was avoided by coming to an agreement...
Small Companies – Sustainability is Easier Than You Think
People tend to think sustainability and reducing a company’s environmental footprint is easier in big companies. They have significant resources available to assess ESG gaps and needs, engage stakeholders and make investments in process changes or IT systems. Small companies...
Inspire Change This Women’s History Month
March brings us Women’s History Month, a time dedicated to reflecting and honoring achievements, struggles, and contributions of women in various fields such as politics, science, literature, arts, and beyond. It originated from International Women’s Day, first celebrated in 1911...
Apple’s Worker Rights Report Roasted
[Ed. note: A brief history lesson – tomorrow is Texas Independence Day. The fight for independence from Mexico took a significant turn in February 1836 when around 200 Texan defenders, including American legend Davy Crockett, were besieged at the Alamo...
Oatly Agrees to $9.3 Million Greenwashing Settlement
Oat milk company Oatly recently agreed to pay $9.3 million to settle an investor lawsuit alleging the company artificially inflated its stock price with false sustainability claims. The lawsuit, originally filed in July 2021, went through several dismissals and refilings...
Managing Conflicts Between AI and Sustainability
One thing is for sure – AI permeates every business conversation, article and advertisement at the moment. AI had a huge presence at GreenBiz24 – in terms of vendors, panel topics and reception discussions. It is touted as an unstoppable...
SEC Schedules Climate Rule Vote – Really!
The day has finally arrived – or actually, it will next week. The SEC has scheduled the Commission vote on the final climate rule for March 6. The meeting will begin at 9:45 a.m. (ET) and will be open to...
CS3D Negotiations Fall Apart
The Corporate Supply Chain Due Diligence Directive (CS3D), an EU law aimed at improving human rights and environmental issues in company supply chains, may never come to be after European Council voting on the Directive fell short yesterday. ESG Today...
Greenwashing Suit Against Colgate Moves Forward
Several California residents brought a greenwashing suit against Colgate, alleging recyclability claims on the company’s toothpaste packaging are false and misleading. At its core, the case boils down to whether or not recyclability claims can be made based solely on...
Will SEC Consider Double Materiality?
There has been a bit of back and forth between EU views on double materiality and the SEC’s stated (and legally mandated) emphasis on financial materiality. Actually, even the EU has experienced a bit of back-and-forth on the matter –...
Sweden May Delay CSRD Reporting by a Year
At the EU level, the CSRD is a done deal. The legal framework and first set of ESRS were approved by the European Council and Parliament last year and have been published in the Official Journal of the European Union....
MSCI, FTSE Russell, S&P DJI Targeted for Myanmar Human Rights Concerns
Inclusive Development International published an article on complaints filed against MSCI, FTSE Russell and S&P Dow Jones Indices, for “violating the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct by promoting ESG-labeled investment in dozens of companies linked to...
A “To Do” List for New CSOs
This article from GreenBiz followed up on the session “What to Do in the First 90 Days as a Chief Sustainability Officer” from GreenBiz24 a couple weeks ago. I didn’t attend this panel – there were SO many sessions that...
SEC’s Climate Disclosure Rule: When and If…
Last week, the climate and ESG world was ablaze with the rumor that the SEC will bring its final climate disclosure rule to a vote next month, and that Scope 3 emissions will not be included in the final release....
New Podcast: How Company Leaders Can Meet the Moment in Driving Organizational Inclusion
A new podcast is now available for members. In a recent discussion with Jennifer Brown (she/her), an award-winning entrepreneur, speaker, author, and diversity and inclusion expert, we explore the role that company leaders should play in moving the needle on...
NGO Requests Investigation into Lululemon
Canadian apparel company Lululemon was called out recently by NGO Stand.earth alleging that the company is engaged in greenwashing. Stand.earth filed a complaint with the Canadian Competition Bureau arguing that Lululemon’s recent advertising touting their products’ low environmental impact is...
Regulators Not Currently Pursuing ESG Agreements
Competition law and ESG haven’t always played well together. While some jurisdictions have new rules for ESG cooperation between companies, the US has not published new guidance on the issue. Lina Khan, head of the Federal Trade Commission (FTC), has...
New Podcast: An Update on Human Rights Due Diligence Auditing and Technology
Our latest podcast is now available. Human rights due diligence (HRDD) has not become unimportant, but it has been deprioritized by many companies in comparison to climate risk management. I talk with Andrew Britton, CEO and Founder and Kumi Consulting...
EU Finalizes Directive to Empower Consumers for the Green Transition
The EU took a major step to cut down on greenwashing as the European Council adopted the Directive to Empower Consumers for the Green Transition. The Directive will ban certain generic environmental claims and introduce a limitation on claims based...
Sustainability Funds Feel Some Effects of Anti-ESG
The past two years have seen a trend among Republican-controlled states passing legislation prohibiting state pension funds from considering ESG factors. Additionally, some states like Texas created “banned lists” of financial institutions that state funds are not allowed to do...
ECB Warns of Risks from Misalignment of Financing and Policy
The climate crisis is unavoidable but can be mitigated if companies take the required action to keep rising global temperatures in check. Many of the major decarbonization pathways are relatively known, requiring a move away from fossil fuels to renewable...
Danone Gets Caught in Plastics Net
French consumer goods giant Danone is already facing a lawsuit from an NGO over its plastic use, and a new article from Eco-Business could result in more legal troubles – this time in Indonesia. According to Eco-Business: “A study of...
Sustainability and ESG Assurance Remains a Risk
One of the most popular table discussion sessions at GreenBiz24 last week was on ESG assurance. Lots of folks sat around the table (actually, it was more like three tables pulled together) for quick 20-minute rotating sessions led by Kristen...
Major Financial Firms Leave Climate Action 100+
Climate Action 100+ recently lost three major members, while a fourth pulled back support from its US operations. JPMorgan and State Street Global Advisors both announced that they are leaving the organization, while BlackRock will now only participate through its...
New Podcast: Unpacking Intersectionality – The Black Millennial Woman’s Experience in the Workplace
A new podcast is now available for members. I spoke with Dr. Tiffany Ingram, who received her Doctorate in Educational Leadership and Management and whose research focuses on African American Millennial women and the impact of the intersections of age,...
The SEC May Have Been Outdone on Climate Disclosures
In 2022, the ESG community was buzzing with anxiety and anticipation over the SEC’s proposed Climate-related Disclosures Rule which would require companies to disclose Scope 1, 2, and 3 emissions as well as certain climate-related risks. In the almost two...
AI: Terminator or Monkey’s Paw?
I’m back from GreenBiz24, which was both amazing and overwhelming. There were estimates of up to 4000 attendees, more vendor exhibits than you could shake a stick at and more sessions/panels than anyone could possibly attend. While valuable and worthwhile,...
How Will EU Politics Affect ESG Policy?
ESG backlash and anti-ESG may be front and center in America, but those sentiments aren’t exclusive to this side of the Atlantic. The EU is feeling political backlash to the Green Deal. Elections for EU’s new government, which will be...
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Featured Q&A Members Only
Contract manufacturer emissions under the SEC’s climate disclosure rules
Could I have to report contract manufacturer emissions under the SEC’s final climate disclosure rules?
03/14/2024, Question #21308
California AB 1305 – What is a “significant” emissions reduction claim?
The new California AB 1305 – Voluntary Carbon Market Disclosures Act – requires certain website disclosures Jan 1, 2024 for businesses operating in California that make “carbon neutral,” “net zero emissions,” or “significant emissions reductions” claims. What constitutes a “significant” emissions reduction claim? Any thoughts on approach or thresholds? For companies that issue sustainability reports that include emissions reduction information, at what point do you cross the line and have required reporting?
11/10/2023, Question #19206
Private equity and the CSRD
I saw Meredith’s DealLawyers blog about private equity and the CSRD, and am looking to better understand how that could apply to non-EU entities. The checklist, which is helpful, says that the scope for the CSRD will be expanded to cover non-EU companies if they meet both of the following criteria:
a. net turnover of more than €150 million in the EU at the consolidated level; and
b. at least one subsidiary or branch generating a turnover of €40 million in the EU.
I have three questions:
1. Does this only apply to “companies” or also entities like limited partnerships, etc.
2. Is there anything stopping a company from creating more subsidiaries so that none of them meet the “turnover” prong of the test?
3. Is “turnover” a similar concept to revenue?
09/15/2023, Question #18073