Expected Cool Fronts and Low Cooling Demand, Delay in SEC Climate Disclosure Rule, & Integrate User Conference

Weekly Energy Market Update:

The June ‘23 natural gas contract is trading at $2.17/MMbtu. Working gas in storage was 2,141 Bcf as of Friday, May 5, 2023, according to EIA estimates. Stocks were 509 Bcf or 31.2% more than the same period last year and 332 Bcf or 18.4% more than the 5-year average. Supply is flat as production stays just above the 100 Bcf/d level while demand is falling slightly this week because of moderate temperatures in the East. The transition to warmer weather will be slow for most of the country as cool fronts move across the nation over the next couple of weeks. Expectations of below normal temperatures will have cooling demand low. Meanwhile, in Europe and Asia, summer temperatures are expected to be above historical norms.

Natural gas pricing plays a key role in electricity power pricing due to the increasing reliance on natural gas-fired generators as nuclear, coal, and oil generation is retired and mothballed. As the marginal unit of generation, gas prices are directly correlated to power pricing (more so in some regions such as NYC vs. others such as parts of PJM). We keep an eye on natural gas market fundamentals in order to provide insights into forward power pricing for our clients. Gas production has grown and surpassed any speculation that production would not be able to keep up with demand due to LNG and Mexican exports.?

View Charts and Graphs Here >>

Sustainability

Integrate23

On Thursday, April 27th, WatchWire held its first annual INTEGRATE User Conference, an event aimed to bring together WatchWire users and industry leaders across energy and sustainability teams to create a uniquely collaborative and educational space that addressed the issues facing the ESG space today.

WatchWire’s first annual INTEGRATE conference was focused on bridging the gap between energy and sustainability to facilitate a pragmatic and action-oriented approach over far-reaching goal proclamations that are not grounded in data-driven plans.

To learn more about INTEGRATE, check out our press release here:

Read Here >>>

Updates to Sustainability Reporting?Regulations?and Moves for?Consolidation?of Standards:

SEC

• SEC climate disclosure rule delayed until fall 2023, former commissioner says, S&P Global. The SEC initially suggested the rule would be published in December 2022 and then again pushed that date back to April 2023.
• Given the new time frame, financial statements and disclosures under the rule would not be due until 2024
• A new interview from the WSJ discusses climate disclosure and the usefulness of ISSB, and GRI standards in preparing for anticipated U.S. SEC disclosure rules:?A Materiality Focus Can Help Clear Up Climate Disclosure Uncertainty

ISSB?The?International Sustainability Standards Board

• ISSB?on April 4 announced that companies can take a phased-in approach to reporting under its forthcoming?sustainability?standards, allowing them to focus only on?climate-specific information in the first reporting year of 2024 and wait to add other sustainability-related disclosures in 2025.?
• ISSB said it will relax other elements of the standards for the full first year a company uses the standards, including not having to report on Scope 3 greenhouse gas emissions
• Key dates for S1 General Sustainability-Related Disclosures and S2 Climate-Related Disclosures:
• Released by: end of June 2023
• Come into effect: start of Jan 2024
• Thirteen of fourteen members of ISSB’s board?agreed to reference both the Global Reporting Initiative (GRI) and the European Sustainability Reporting Standard (ESRS) frameworks in sources of guidance for IFRS S1.
• ISSB has just decided that its initial IFRS Sustainability Disclosure Standards, S1 (general sustainability) and S2 (climate-specific), will?become?effective starting January 2024, meaning that businesses can start collecting sustainability-related disclosure information for the 2024 period to publish reports in 2025.
• ISSB will be releasing the finalized versions of the first global standards for sustainability and climate-related reporting (IFRS S1 and IFRS S2) in?June?of this year or end of Q2 2023?—?according to the IFRS head, Erikki Liikanen?

CSRD

• The release of sector specific European Sustainability Reporting Standards (ESRS) will be delayed by one year, according to European Financial Reporting Advisory Group (EFRAG).
• ?EFRAG Update?for March 2023
• Europe’s three primary financial regulatory agencies, the European Supervisory Authorities (ESAs) each announced the?release of their opinions?on the first set of draft European Sustainability Reporting Standards.
• The?European Commission?re-confirmed that it will publish its regulatory proposal on ESG ratings on?June 13, 2023.
• European Financial Reporting Advisory Group (EFRAG) published its?update for January 2023, reporting on the work that has begun to develop the ESRS for listed small and medium enterprises (SME) and small and noncomplex financial institutions and captive insurances and re-insurances. CSRD and ESRS are aiming to bring smaller companies – both listed and private – into the fold, which is important to keep an eye on.

General?Corporate Reporting

SBTi?(Science Based Targets Initiative)

• The Science Based Targets initiative (SBTi) has updated?eight of its key resources?that enable companies and financial institutions to set and commit to setting science-based emission reduction targets. (April 23)
• The SBTI has launched?new guidance?for investors to support in identifying the overlaps of the SBTi Financial Institutions (FIs) framework, and Task Force on Climate-related Financial Disclosures (TCFD) recommendations. This will "support enhanced coordination between financial institutions science-based target setting and climate-related financial disclosures".

SASB

• Future of the SASB Standards: What you need to know for 2023 disclosure. The ISSB recently made several decisions that further clarify the role and evolution of the SASB Standards. The ISSB confirmed that industry-specific disclosures are required and, in the absence of specific IFRS Sustainability Disclosure Standards, companies must consider the SASB Standards to identify sustainability-related risks, opportunities, and appropriate metrics.

GRESB

• Subscribe to the GRESB Linkedin Newsletter?here >>

Notable News

Articles

• Will El Ni?o return for a heated-up 2023?, Financial Times.
• ESG to Have its Day in Court, ESG Investor. "The writing is on the wall for sustainability laggards as shareholders pursue litigation against investee companies."
• New York poised to pass first statewide law banning natural gas in new buildings, CNBC.
• More than a Third of Public Companies Now Reporting Scope 3 Emissions: MSCI, ESG Today.
• DeSantis Signs Anti-ESG Rules into Law, ESG Today. The bill will bar state officials from investing state assets into funds that promote environmental, social, and governance goals and prohibit ESG bond sales.
• ‘A New Spike’ in Global Temperatures in the Forecast, NY Times. "The World Meteorological Organization reports increased odds that El Ni?o, the global weather pattern often tied to intense heat, will arrive by fall."
• Banks and oil groups place bets on carbon capture schemes, Financial Times. "Four companies including H&M and JPMorgan to spend a collective $100mn on carbon removal credits by 2030"
• SEC climate disclosure rule delayed until fall, former commissioner says, S&P global.

Insightful Reports

IBM's recent ESG global survey?covered more than 20,000 consumers and +2,500 executives with a focus on their sustainability preferences when making employment and purchase decisions.

Ember's Global Electricity Review 2023. The report analyzed electricity data from countries representing 93% of global power demand and found that electricity produced in 2022 was the cleanest ever. Solar and wind represented 12% of global electricity production, up from 10% in 2021, and all clean energy, including hydro and nuclear, made up a record 39%.

After years of work, involving hundreds of researchers from around the world, the Intergovernmental Panel on Climate Change (IPCC), has published a synthesis report on the latest?Climate Change?science this week.?Intergovernmental Panel on Climate Change’s (IPCC)?Sixth Assessment Report (AR6)

The 2023 Climate Risk Landscape Report, by the UN Environment Program. It highlights the latest developments in the rapidly evolving climate tool marketplace, featuring over 3 dozen tools for physical and transition risk as well as climate alignment

CDPs latest?Non Disclosure Campaign: 2022 Results Report

Norton Rose Fulbright’s?2023 Annual Litigation Trends Survey?indicates that environmental, social, and governance (ESG) concerns are growing.?

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