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August 11, 2023

In Brief: lawyers seek guarantees to protect activists at COP28; Australian energy firm faces carbon neutrality lawsuit

The latest news on ESG policy and regulation.

Human rights lawyers have written to UK foreign minister James Cleverly to ask if the UK government will seek an undertaking from the United Arab Emirates — which will host COP28 in December — that lawyers or “other individuals acting lawfully, will be able to travel to the UAE unhindered and without fear of arrest immediately before, during and after” the international climate change summit. The letter was sent following an announcement by the UAE that “there will be space available for climate activists to assemble peacefully and make their voices heard” at COP28. “There are real risks, based upon the UAE’s previous behaviour and, in particular, its human rights record, that any public protests will be extremely restricted or extinguished,” the lawyers wrote. 

The UK Financial Reporting Council has opened a consultation on its revision to the “ethical standard”, which lists the principles of integrity, objectivity and independence with which auditors operating in the country should comply. Changes proposed include enhancing prohibitions in cases where the independence of an audit firm could be compromised by an economic over-reliance on fees from connected entities. The consultation is open until October 31.

The UK government has published an independent report into the the country’s electricity networks, in which several recommendations are formulated to halve the development time of electricity transmission infrastructure. One of the suggestions is to implement a major review of engineering and technician skills needed to speed up electricity transmission. Energy security secretary Grant Shapps has said the government will consider the recommendations ahead of an action plan to be revealed later this year. The report was put together by electricity networks commissioner Nick Winser, who was appointed as an independent adviser to the government last year.

EnergyAustralia, one of the country’s largest energy companies, has been sued by non-profit Australian Parents for Climate Action over its carbon neutrality claims. The charity says EnergyAustralia’s offering of “carbon neutral” electricity and gas is based on the purchase of carbon credits, and therefore amounts to greenwashing. The lawsuit is considered to be the first civil action against carbon neutrality statements in the country. EnergyAustralia is a subsidiary owned by Hong-Kong based China Light Power. 

Taiwan has launched a carbon solutions exchange aimed at facilitating carbon trading among domestic companies. The carbon exchange, which is funded by the Taiwan Stock Exchange and the National Development Fund, will focus initially on training, consultation and education, while trading is only expected to start in the first half of next year.

Brazil, Bolivia, Colombia, Ecuador, Guyana, Peru and Venezuela have signed a joint declaration aimed at combating deforestation in the Amazon. As part of the pact, an intergovernmental technical-scientific panel for the Amazon will be created to debate deforestation methodologies and sustainable practices, with the inclusion of indigenous communities. Recent official data suggests that deforestation rates in the Amazon are dropping significantly under Brazil’s new government, led by Luiz Inácio Lula da Silva. The Amazon countries, however, failed in agreeing a common deforestation policy, and differences in opinion regarding oil development in the region persist. The countries met during a summit of the Amazon Cooperation Treaty Organisation, a body that has been nearly dormant for over a decade, in the Brazilian rainforest city of Belém, which will host the COP30 climate meeting in 2025.

The North Dakota Public Service Commission has denied a siting permit for the construction of an ethanol carbon capture and storage pipeline on its territory. The authority is tasked with regulating in the public interest utilities, mining and telecommunications industries operating in the US state. In its statement, the commission said the company applying for the permit – Summit Carbon Solutions – failed to address “outstanding legitimate impacts and concerns expressed by landowners”, and that it did not adequately respond to requests by the authority.

S&P Global Ratings has announced it has stopped publishing credit indicators for environmental, social and governance factors. Since 2021, the rating agency had been providing numerical ESG indicators for corporate borrowers on a scale from one to five, with one being the highest score. “After further review, we have determined that the dedicated analytical narrative paragraphs in our credit rating reports are most effective at providing detail and transparency on ESG credit factors material to our rating analysis,” the agency said. ESG ratings have come under scrutiny, with regulators globally considering introducing regulation following market criticism on transparency and comparability issues in the sector. US Republicans have targeted S&P Global directly over its use of ESG credit scores.

 

A service from the Financial Times