What companies and investors are doing for sustainability. Wsj report
All the big questions for 2022 on investments and sustainability. The Wall Street Journal article
Companies and investors – we read on the WSJ – are facing crucial decisions on sustainability policies in 2022 that will affect the way they operate around the world.
Coming regulatory changes with far-reaching implications include the much-discussed U.S. Securities and Exchange Commission's obligation to disclose climate change, the potential expansion of China's carbon trading system, and the new type of green investment in Europe. . Here are five key questions for 2022.
How will the SEC handle a busy regulatory agenda?
The SEC is expected to publish various ESG-related proposals earlier this year, including climate disclosure rules. On this front, significant decisions include whether companies should report Scope 3 greenhouse gas emissions, whether smaller companies will face less stringent requirements, and how the rules will be scrutinized by a new enforcement task force set up by the SEC. said Bryan McGannon, director of policy and programs at US SIF Sustainable Investment Business Group.
The SEC's agenda also includes changes to fund marketing rules. President Gary Gensler said in October that the SEC should consider getting fund managers to declare their funds are "green" or "sustainable." Workforce diversity is another focus, with proposals on human capital management and board diversity on the SEC's list.
The midterm elections bring the possibility of a Republican-controlled Congress opposing the Biden administration's regulatory agenda, adding time pressure. "I think this may be why they want to do as much as they can this year," said Mr. McGannon.
Will China strengthen its emissions trading system?
This year should provide an indication of whether China's new carbon market has the potential to reduce emissions from the world's second largest economy. The system gives polluters tradable emission quotas, but the initial quotas were not strict enough to create a strong incentive to cut pollution, according to Yan Qin, principal carbon analyst at Refinitiv.
Beijing is expected to update the allocation plan earlier this year, and may also expand the system, which currently only affects power generators, to include other polluting sectors, Ms. Qin said. The Chinese state council will also publish its version of the regulation, a move that would bring greater enforcement powers.
How China's emissions trading system develops will have global ramifications. "If the design of the ETS is significantly strengthened and permit prices rise in the coming years, carbon costs will be passed on to energy prices and industrial products, thus making products made in China more expensive," said Ms. Qin. He added that China could influence how other economies set up carbon trading systems.
How will the EU energy brawl develop?
The European Union has proposed to treat natural gas and nuclear energy as environmentally sustainable sources of energy under its "green taxonomy" for investments. Some EU countries disagree on the plan, exposing the divisions on environmental and energy policy. It will have to be approved by the governments of the member states.
The final form of the green taxonomy will have far-reaching implications. Not only does it determine what types of assets investment managers can include in green-labeled funds, it will also shape how companies are affected by a number of other EU rules related to sustainability, such as the green bond standard for companies that raise money for green projects, and the Ecolabel designation for more sustainable products.
"It's the taxonomy that underlies all of these other regulations," said Rebecca Vaughan, program manager of InfluenceMap, an environmental advocacy group.
How will the ISSB work?
At the UN climate conference last year, several sustainability standards announced they would join forces, a move widely seen as a welcome step towards streamlining the array of different reporting frameworks.
Under the new configuration, the new International Sustainability Standards Board will incorporate the Climate Disclosure Standards Board and the Value Reporting Foundation, which in turn hosts the Integrated Reporting Framework and SASB standards. The ISSB plans to seek public feedback on two disclosure standards proposed earlier this year and to issue a first set of rules in the second half of the year.
"I think one of the big questions for us at the ISSB is how do they plan to integrate all the organizations they have brought together," said Mr. McGannon of the US SIF. In particular, he said it is unclear how the SASB's sectoral approach to assessing corporate sustainability risks will align with other structures.
Can the United Nations make biodiversity the new climate change?
Before the leaders gathered for the COP26 climate conference in Glasgow last year, the first part of a separate UN summit took place virtually. The COP15 Summit, which is working out a global plan to slow and reverse damage to the natural world, will meet in person in Kunming, China, in April, when the picture is expected to be completed. Analysts at Jefferies Financial Group Inc. predict that companies and investors will eventually need to consider their impact on biodiversity more systematically, and the UN conference could play a pivotal role in accelerating this process by establishing a single framework. for reporting.
"We see biodiversity becoming the 'new climate change' in 2022 and the UN biodiversity conference COP15 being the catalyst for this moment," analysts wrote in a statement last month.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/cosa-stanno-facendo-aziende-e-investitori-per-la-sostenibilita-report-wsj/ on Sat, 15 Jan 2022 07:34:17 +0000.