EU climate rule about to hit U.S. businesses - POLITICO
EU climate rule about to hit U.S. businesses - POLITICO
EU climate rule about to hit U.S. businesses
Presented by Chevron
The U.S. has struggled to require companies to disclose how much their operations pollute the atmosphere. But a new European regulation is making many of them do it, writes Avery Ellfeldt.
Starting as soon as January, major U.S. companies that raise money on European stock exchanges will start compiling information on their carbon emissions, climate risks and strategies to counter the damage.
By 2025, when a more expansive European Union rule takes effect, an estimated 3,000 U.S. businesses will be required to provide such disclosures. The rules will cover any U.S.-based business that has an EU branch with more than 250 employees, more than $42 million in local revenue or a balance sheet larger than $21 million.
That means U.S. companies can no longer afford to wait to see what the Securities and Exchange Commission will do with its climate disclosure proposal. Six experts who work closely with U.S. companies on corporate climate disclosure told Avery their clients have already started preparing to meet the EU mandate.
A tougher mandate from Europe
The SEC proposed a climate disclosure rule last year, but the agency is trying to deal with pushback from Republican lawmakers and industry groups.
Major differences exist between the EU regulation and the narrower U.S. proposal. While the U.S. rule focuses almost solely on climate risks to companies and their bottom lines, the EU version also requires disclosures on how businesses affect society.
“That’s where most angst is for the U.S. companies,” Farzad Damania, a partner at Katten Muchin Rosenman who represents companies on securities law compliance issues, told Avery. “Most U.S. companies don’t know how to do that, so that’s where the stress point is.”
The European standard also requires companies to share information on their approach to biodiversity and pollution, how extreme weather will affect profits and their greenhouse gas emissions — including those from supply chains and customers.
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Today in POLITICO Energy’s podcast: Catherine Morehouse breaks down the details of a new plan to reduce the risk of blackouts during extreme weather and why both fossil fuel and clean power generators are on board.
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‘Game-changer’ LNG project
A $10 billion liquefied natural gas terminal could help revitalize a southwestern Louisiana community that’s been repeatedly pummeled by hurricanes — if the facility can withstand climate change, writes Miranda Willson.
If approved, the project would be one of the largest of its kind, bringing thousands of workers to Cameron Parish, whose economy has struggled after being hit by four hurricanes in 18 years. It would also become one of the biggest carbon polluters in the Bayou State, raising questions about the role of LNG in a warming world.
Thunberg arrested
Climate activist Greta Thunberg was detained by police in London today while protesting against the oil and gas industry, writes Laura Hülsemann.
Thunberg joined other protesters in front of the InterContinental Hotel on Park Lane in London where she warned that “the world is drowning in fossil fuels,” before being led away by police.
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The world’s electricity grids require a massive overhaul by 2040 for countries to meet their climate goals, the International Energy Agency said Tuesday.
That’s it for today, folks! Thanks for reading.
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”