Editor’s note: US SEC gears up for climate disclosure rule vote
The latest edition of our Sustainable Views newsletter
Dear reader,
“With the pandemic behind us, we must once again be responsible and increase our resilience to future shocks,” the UK chancellor Jeremy Hunt will say when he announces the Spring Budget today.
Those calling for the government to pledge measures to make the country more resilient to the future shocks that will be wrought by climate change are certain to be disappointed, however. There are no signs the chancellor has plans to say much, if anything, about climate and the energy transition, even if the main demand from UK companies and investors is for policy certainty and full government commitment to the net zero transition rather than necessarily financial support.
“I don’t think investors are looking for handouts,” Sebastian Peck, managing partner at venture capital firm Kompas VC, told Sustainable Views ahead of the Budget. “Investors are looking for a clear framework and predictability, and if you underpin that with financial incentives in the form of tax breaks and non-dilutive funding, that’s great, but before you take budgetary measures you need to do the fundamental work of setting clear policy targets and committing to them.”
Alex will be keeping a beady eye on the Budget for Sustainable Views and we will bring you some analysis later.
Another area where campaigners would like to see action in the UK is around pensions. The vast majority of UK adults want their investments to do good as well as provide a financial return, yet pension funds remain firmly locked into fossil fuel funding.
“Recent research from Make My Money Matter estimates UK pension funds have more than £88bn invested in the fossil fuel industry,” writes Claire Brinn, UK policy manager at ShareAction in today’s opinion piece. “With some notable exceptions, UK pension funds make only modest allocations of capital in clean energy despite the urgent need for private capital to flow to the green transition.”
The non-profit is calling for a formal evolution of fiduciary duty, and has provided oral and written evidence to the Work and Pensions Committee setting out why it believes the government should update the law to create a clear legal framework for pension saving and to “empower trustees to take real action to consider social and environmental impacts alongside risk and return”, writes Brinn.
Across the Atlantic, the US Securities and Exchange Commission is gearing up to finally vote today on the long-awaited rule that will require public companies to disclose information on their climate-related risks and greenhouse gas emissions. Justin Gerdes will be reporting on the news for Sustainable Views, but don’t expect Scope 3 emissions to be in the final rule.
A survey of executives and institutional investors from across North America suggests companies are concerned about their ability to meet SEC reporting requirements and the demands of other regulations, such as the EU’s Corporate Sustainability Reporting Directive and California’s climate disclosure laws.
Meanwhile, companies in the EU remain troubled about the quality of ESG data and its limitations for meeting reporting requirements, according to a Bloomberg survey.
Finally, while you wait for these events to unfold, grab yourself a cup of coffee, sit back and dive into Florence’s fascinating and informative read on the world of fashion. How many of us have given ourselves a mental pat on the back for refusing a plastic carrier bag, while not thinking twice about the fact the clothes we have just purchased are made from plastic? Legislation, pressure on investors and a change in our purchasing habits are all touted as necessary to improve the industry’s sustainability credentials.
Until tomorrow,
Philippa
Philippa Nuttall is the editor of Sustainable Views