Proposed regulation will require companies to substantiate their environmental footprint claims, seeking to ensure green claims are more reliable.
By Paul A. Davies and Michael D. Green
Background
On 27 August 2020, the European Commission (the Commission) launched a public consultation on a possible proposal on substantiating green claims about products or services. This follows on from the Commission’s Inception Impact Assessment Roadmap on potential regulation of green claims. The consultation period for this Roadmap closed on 31 August 2020, so the Commission is already moving ahead with the consultation on the proposal itself. This initiative is another step toward meeting the objectives identified in the European Green Deal, pursuant to which the Commission committed itself to making the EU climate neutral by 2050.
On 3 August 2020, the Partnership for Carbon Accounting Financials (PCAF), a global collaboration of 70 financial institutions with total financial assets of more than US$10 trillion, released its proposed Global Carbon Accounting Standard (GCAS), aiming to provide financial institutions with a common set of robust carbon accounting methods. The proposed standard will help institutions assess and track the greenhouse gas (GHG) emissions financed by their loans and investments.
On 22 July 2020, investors filed a class-action claim against the Australian government, alleging that it failed to disclose material climate change risks relating to its bonds (O’Donnell v. Commonwealth and Ors). The claim is thought to be the first of its kind against a national government.
On 14 July 2020, the UK government published the draft Greenhouse Gas Emissions Trading Scheme Order 2020 (the Order), establishing a framework for the potential UK Emissions Trading System (UK ETS). Subsequently, on 21 July 2020, the government published a consultation on the operation of a potential new carbon emissions tax.
The Transportation & Climate Initiative (TCI), a regional collaboration of Northeast and Mid-Atlantic states and the District of Columbia, has advanced its program to reduce greenhouse gas (GHG) emissions from the combustion of transportation fuels. On October 1, 2019, TCI published a Framework for a Draft Regional Policy Proposal (the Policy Proposal).
On 2 November 2019, the UK government announced further details on two initiatives focused on helping the UK reach net zero greenhouse gas emissions by 2050. The first of these measures, HM Treasury’s Net Zero Review (Review), will consider how the UK should fund efforts to meet its net zero target. The second measure, the proposed Industrial Energy Transformation Fund (IETF), aims to help energy-intensive industries reduce their carbon emissions. New details surrounding the proposed measures signal how both the Review and the IETF will impact the UK’s transition to net zero.
On October 18, 2019, the EU, China, India, and five other countries combined to launch the International Platform on Sustainable Finance (IPSF). Acknowledging the role that private capital has to play in scaling up sustainable investment worldwide, the IPSF seeks to provide a platform to increase private-sector funding in this area. This blog post will consider in more detail the IPSF’s aims, as well as the ways in which the IPSF intends to achieve them.