COP 28 Agenda Still Forming

EU Commission Softens CSRD

Shortly after we posted Friday's edition, the EU Commission published an update to the EU's European Sustainability Reporting Standard (ESRS). We highlighted the anticipated changes a couple of weeks ago , and now they have been officially issued.

The big news is that reporting on all eleven sustainability topics will be subject to a "double materiality assessment." The previous version would have required all covered companies to report on each of these topics. This would have allowed for comparisons between companies, but also would have forced reporting on immaterial issues.

In addition to the materiality changes, companies with less than 750 employees have more time to report on some of the standards.

The changes have been decried by activists who claim that the new Standard is watered-down compared to the original version. Giorgia Ranzato , sustainable finance manager at T&E, said: “The European Commission must change course and adopt ambitious sustainability reporting standards. ”

Others, however, say the changes were necessary to improve operability with the ISSB standards and be less demanding for smaller companies.

The consultation period for the new policy is open until July 7, before an expected finalization at the end of July.

COP 28 Agenda Still Forming

This week’s pre-COP 28 meeting in Bonn, Germany, is a ‘temperature check’ on countries' ambitions ahead of the big event in Dubai in November.? With no clear agenda going into the talks, optimism for the 10-day negotiations remains low. Simon Stiell , executive secretary of the UN Framework Convention on Climate Change, said, "What we experienced today ... with the non-adoption of the agenda, it's not desirable .”

The meeting was overshadowed by revelations that the UAE state oil company has access to COP 28 emails and challenges to the appointment of Sultan Al-Jaber (CEO of the same company) as COP president. Juan Carlos Monterrey Gómez , a former chief climate negotiator for Panama, said, "With that appointment, you are just sending the message that the oil industry is in charge ." However, COP 28 Director-General Majid A. claims no conflict of interest, saying, "I think that he's (Al-Jaber) perfectly positioned within our system ” to lead the proceedings.

The Bonn summit talks will center around the key issues of phasing out (or phasing down) fossil fuels and the ‘global stocktake,’ which reviews countries' collective progress toward their climate commitments. This interactive graph from the BBC lets you see whether your country is on track to meet its pledges.

50th World Environment Day

This year’s Environment Day was marked by a global celebration of international efforts to create a more sustainable world and protests about accelerating climate change, biodiversity loss, and other environmental crises. This article from the Guardian shows a snippet of the environmental issues, protests, and celebrations that happened this Environment Day.?

New Yorkers Wake to An Orange Haze

New Yorkers woke up on the morning after World Environment Day with the smell of campfires in their nose and an orange haze across their city . Smoke from distant Canadian wildfires descended on cities in the US and Canada, causing a series of air quality warnings as public officials worried about the health implications.?

The intense smoke is a result of what may be the worst wildfire season in Canada to date . The fires, exacerbated by higher temperatures, have caused over 100,000 Canadians to evacuate their homes.?

As summer kicks in and El Ni?o begins, other countries worldwide are also plagued with extreme heat. Spain just had their hottest and second-driest Spring ever , and Puerto Rico reached a heat index as high as 125 degrees, a temperature meteorologist Jeff Berardelli called “life-threatening heat .”

Damning the Environment

The horrifying destruction of the Nova Kakhovka dam on Ukraine’s Dnipro River marked another escalation in the war in Ukraine, worsening the humanitarian crisis in the region . Along with the dire immediate effects, the dam's collapse will cause profound and long-lasting environmental damage to the area.?

Ukraine's President Volodymyr Zelensky called it an "environmental bomb of mass destruction ." The collapse will immediately affect drinking water, agriculture, and the surrounding towns. But the leakage of 150 tons of oil from the dam will likely have long-lasting effects on the fragile ecosystems in the Black Sea and Dnipro Delta .?

A new study to be released this week at the Bonn climate summit is set to reveal that the first? 12 months of the war triggered an increase of 120 million tonnes of GHG, the yearly equivalent of the emissions of Belgium.?

Crackdown on Greenwashing Intensifies

The global crackdown on greenwashing continued this week as the UK banned a series of ads for misleading claims. The UK’s Advertising Standards Authority (ASA) banned a series of ads from major energy companies Shell, Petronas, and Repsol for claims that they misrepresented the environmental impact of the companies' products. The ASA said, “Because the ads did not include such information (supporting evidence), we concluded that they omitted material information and were likely to mislead .”

In Holland, a similar claim against the airline KLM in the Dutch courts was moved forward by judges . The case brought by environmental groups was thrown out of court earlier in the year, but in revisiting, judges decided the plaintiffs had standing. Similarly, a class-action lawsuit in California, aims to force Delta Air Lines to pay damages for misrepresenting itself as a carbon-neutral airline in marketing campaigns.??

“Consumers can’t make informed eco-friendly choices if companies are misleading them,” attorney Jonathan Haderlein said.

Even the COP28 President Sultan Al-Jaber was accused of greenwashing after it emerged that his team was editing his Wikipedia page . The claims were that the Al-Jabers team was trying to improve the President's climate credentials and underplay his role as the United Arab Emirates state oil company.

The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer.?

Other Notable News:

• Shareholders at both Exxon and Chevron overwhelmingly voted against more robust measures to mitigate climate change . The vote supported the US oil giants resisting following their European rivals in accepting tougher goals.?
• The EU’s ESG standard-setting body, EFRAG, has recommended the ISSB make a comprehensive update to the SASB standards . The areas for improvement advised by EFRAG included the disclosure of scope 3 emissions and transition plans on biodiversity.
• My company, BCG, teamed up with decarbonization solutions-focused investment platform GenZero to create a new Climate Impact Measurement Framework . The framework aims to enable investors to measure the climate impact of their decarbonization investments.?
• Ahead of the eagerly awaited SEC climate disclosure final rule, BCG released a white paper spelling out actions US companies can take to prepare for climate disclosure obligations before the rule is issued, expected before the end of the year.?
• There has never been a more exciting and dynamic time to work in sustainability. Here is just a snippet of some of the tremendous job opportunities on offer .
• “To me, ESG is really about material factors that affect the future cash flows and cost of capital of a firm .” These are the words of Shiva Rajgopal , a Professor of Accounting and Auditing at Columbia Business School, at a Congressional hearing this week. He argues that ESG is a set of metrics any good analyst would look at anyway, but the current reporting model is not fit for the purpose.
• Oil and gas wells have more than one long-lasting negative environmental effect . A new study found that abandoned wells were found to omit carcinogens and other harmful pollutants.?
• The US's Colorado River is disappearing . This NYT deep dive looks into what is depleting the river and what's being done to stop it.?
• In better news for waterways, Paris’ river, the Seine, is being cleaned up to swimmable levels ahead of the Paris 2024 Olympic games . The ambitious project aims to combat pollution in the river by building a vast underground basin to store runoff.?
• Links between the climate crisis and mental health are constantly being made . But it may be affecting those on the frontline of climate research and activism the most as they come to grips with the realities of climate change.

Notable Podcasts:

• I was a guest on this week’s Climate. Money. Work. Podcast hosted by Keesa C. S. . Together we kicked off the first part of a three-part series on sustainability jobs, discussing how sustainability has moved from an activist movement to a mainstream one thanks to the investor community.
• In this week’s episode of Outrage and Optimism , podcast hosts Christiana Figueres , Tom Rivett-Carnac , and Paul Dickinson discuss the insurers leaving the Net Zero Insurance Alliance after the ESG backlash in the U.S. and what is being discussed at the pre-COP28 meeting in Bonn.?
• This episode of Climate Rising from Harvard Business Schools features an interview with Ashley Orgain , Chief Impact Officer at Seventh Generation - a sustainable home cleaning products company. The interview centers around how Seventh Generation is going beyond a net zero goal and setting a real zero climate goal - one without the help of offsets - and how they plan to achieve it.?