By Ira Srivastava
1. US SEC pauses climate disclosure rules. After significant delays, the United States Securities and Exchange Commission (SEC) published a new set of climate disclosure rules in March. Before the rules were even voted upon, legal challenges were expected from conservative states. Almost immediately, the Sierra Club, the U.S. Chamber of Commerce, and a coalition of 10 states all filed legal challenges. The Sierra Club argued these disclosures did not go far enough, while the Chamber of Commerce and state coalition argued these rules went too far and that the SEC was overreaching. As a result, in early April the SEC announced that it would pause these disclosure rules until all legal challenges had been resolved. The rules were not expected to go into force until 2025 so this pause will not have immediate impacts, but if the legal challenges against the SEC succeed the rules may be scrapped altogether.
2. Florida law to remove the term ‘climate change’ from existing state laws. Bill HB 1645 would wipe mentions of climate change from a number of Florida’s laws. The bill has been approved by the state house and senate, and is expected to receive the approval of Florida’s governor soon. The bill is related to the state’s energy policies, but once it passes into law it would delete eight mentions of the term ‘climate change’. These changes range from removing the term from a sentence to repealing entire sections of laws such as grant programs for emissions reductions, pipeline regulations, and fuel efficiency considerations for government vehicles. One of the most drastic changes replaces the sentence “The Legislature finds that … the impacts of global climate change can be reduced through the reduction of greenhouse gas emissions” with “an adequate, reliable, and cost-effective supply of energy for the state in a manner that promotes the health and welfare of the public and economic growth.” In a state ravaged by natural disasters, facing an insurance crisis, and at immediate risk from sea level rise, legislators burying their heads in the sand will have dire consequences.
3. Water and electricity demand skyrocket due to AI. Generative AI tools such as ChatGPT have revolutionized the way companies plan to operate in the coming years. However, companies need to be cautious in their AI implementation because AI emits significantly more carbon emissions than traditional web searches and collectively uses millions of gallons of water. Regulators in the United States and Europe are discussing legislation that would limit the environmental impacts of AI and require disclosures on these issues. The EU’s AI Act will come into force next year, while the International Organization for Standardization plans to develop “sustainable AI” classifications by the end of 2024. Projections for 2026 show that the data centres needed to support generative AI will use as much electricity as the entire country of Japan in a year, doubling from 2022 levels.
4. Canadian pension funds are lagging on climate. Shift Action for Pension Wealth and Planet Health has published a report card for Canadian pension plans, and many are failing to adequately address climate issues. Quebec’s CDPQ was the climate leader followed by the University Pension Plan, Investment Management Corporation of Ontario and Ontario Teachers’ Pension Plan with scores ranging from B- to B+. The Alberta Investment Management Corporation had the lowest score, sitting at a D. Out of the 11 pension plans in the report, 8 have set net zero targets with one aiming for net zero by 2040 and another including Scope 3 emissions in its net zero ambitions. The area that most of these funds are struggling in is fossil fuel exclusions, as divestment is a divisive issue. Read the full report here.
5. G20 countries are failing to end fossil fuel investments. Despite promises made at various United Nations climate and biodiversity conferences to end fossil fuel subsidies, G20 nations are not taking action to achieve these goals. Between 2020 and 2022, US$142 billion was invested in overseas oil and gas projects in developing countries, with only US$104 billion spent on renewable energy. Canada, Japan, and South Korea were the countries who invested the most in oil and gas, particularly natural gas. A lack of funds is a common argument that countries and companies make when questioned on the net zero transition, but these figures clearly show that the issue is not money, but the will to direct it to clean energy. Read the full report here.
Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.