The FRC prompts boards, companies, and auditors to improve responses to climate change challenges through improved governance structure and narrative reporting.

By Paul A. Davies and Michael D. Green

On 10 November 2020, the Financial Reporting Council (FRC) published its findings (the Report) on its thematic review undertaken in 2020, concerning climate-related considerations that various stakeholders take into account. The Report focuses on boards, companies, auditors, professional bodies, and investors, as these actors help drive appropriate reporting to the market and thus ‘play important roles in delivering society’s climate ambitions’.

Making Europe greener, fairer, and more sustainable is at the heart of the European Commission’s new work programme.

By Paul Davies, David Little, Michael D. Green, and Pierre Bichet

On 19 October 2020, the European Commission (Commission) published its Work Programme (Programme) for 2021. The Programme — “A Union of vitality in a world of fragility” — provides an overview of the Commission’s legislative priorities for the upcoming year and a timeline on when legislative initiatives will likely be published.

The initiatives for 2021 have been revised to support the economic recovery given the COVID-19 pandemic. The Programme makes clear that the recovery should be both green and sustainable.

President Xi Jinping promises to reduce carbon emissions in speech before the UN General Assembly.

By Paul A. Davies, Michael D. Green, R. Andrew Westgate, and Jacqueline J. Yap

On 22 September 2020, during a speech before the UN General Assembly, President Xi Jinping announced China’s commitment to become carbon neutral by 2060 and reaffirmed China’s commitment under the Paris Agreement to peak its carbon emissions by 2030. China is the world’s largest greenhouse gas (GHG) polluter and emitted approximately 10 billion tons of carbon dioxide in 2018, according to the Global Carbon Project. Given this, China’s commitment to become carbon neutral by 2060 would significantly reduce global GHG emissions and set the stage for China’s development of a green economy.

The UK citizens’ assembly identifies overarching principles and makes specific recommendations for achieving the environmental goal.

By Paul A. Davies and Michael D. Green

Background

The Climate Assembly UK has published its report on how the UK can achieve its statutory target for net zero carbon emissions by 2050. The report, which was released on 10 September 2020, followed more than a month of weekend meetings (some of which took place remotely due to the pandemic). Participants underwent a three-stage process of learning, discussion, and decision-making.

Comprising 108 members of the public, the citizens’ assembly was commissioned in June 2019 by six Select Committees of the House of Commons, including the Environmental Audit and Business Energy and Industrial Strategy. The House of Commons sponsored the initiative, with two philanthropic organisations providing additional funding and not-for-profit organisations organising the assembly

The Governor has issued an Executive Order with sweeping implications for the oil and gas industry and others.

By Jean-Philippe Brisson, Joshua T. Bledsoe, Nikki Buffa, and Brian F. McCall

On September 23, 2020, California Governor Gavin Newsom signed Executive Order N-79-20, which will have sweeping implications for the oil and gas industry, automakers, low-carbon fuel producers, the logistics industry, and public transit agencies, among others (the Executive Order). Newsom announced the Executive Order against the backdrop of what he called “simultaneous crises,” none of which he argued is more impactful and forceful as the climate crisis. The press conference included Mary Nichols, Chair of the California Air Resources Board (CARB), standing before a small fleet of zero-emission vehicles.

In what will likely be viewed as the most far-reaching measure, the Executive Order requires all passenger vehicle sales starting in 2035 to have zero emissions — a mandate that essentially bans sales of new internal-combustion-powered passenger vehicles in California. As discussed below, the Executive Order raises several significant issues.

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.