Energy Market Update
The Oct ‘23 natural gas contract is trading up at $2.80. The new prompt month of Oct. 23 settled at $3.181/MMBtu during yesterday's trading session. Fundamentally, demand decreased by nearly 2 Bcf/d and supply remained constant day-over-day. The drop was driven by a loss of power burn demand in the Southeast as Storm Idalia made landfall. Inventories are 3,115 Bcf, 18.4% more than the same period last year and 8.7% more than the 5-year average. On the power side, ERCOT continues to have a volatile August, with the month-to-month normal around $200/MWh. For the next 10 to 14 days, temperatures will be above average across most of the country, with the exception of the West.
Sustainability
August Content Roundup:
Updates to Sustainability Reporting?Regulations?and Moves for?Consolidation?of Standards:
SEC Climate Related Disclosures
- The week of June 19-23, the Securities & Exchange Commission indicated--through an update to a?GSA website
?--that the proposed climate change disclosure rule would likely be finalized and released in October 2023
- 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
European Commission: ESRS under the CSRD
- The European Commission officially adopted the?first set of European Sustainability Reporting Standards (ESRS)
?requiring companies to provide comprehensive and robust information about social and environmental impacts, risks and opportunities to a broad group of stakeholders on July 31, 2023.
- Mapping table
?of final standards for climate disclosures (IFRS S1 + IFRS S2 compared with ESRS 2 + ESRS E2) prepared by EFRAG
- The new standards seek to support the European Green Deal by making available relevant, consistent, and comparable data under a new reporting framework, the?Corporate Sustainability Reporting Directive (CSRD)
.
- Amendments to the rules released in June:?EU Commission Eases Sustainability Rules
, "The most significant amendments are proposals to ease the burden on smaller companies and first-time reporters by extending the phase-in times for some key sustainability factors such as Scope 3 value chain emissions, and rules enabling all companies to focus specifically on material sustainability factors."
- The release of sector-specific European Sustainability Reporting Standards (ESRS) will be delayed by one year, according to European Financial Reporting Advisory Group (EFRAG).
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".
- 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.
- As a reminder, the deadline to complete the GRESB Assessments is?July 1
- Subscribe to the GRESB Linkedin Newsletter?here >>
?and read the?latest
?edition for GRESB assessment updates for August 2023
- CDP
's deadline for companies to submit their questionnaires for scoring is?July 26, 2023!
- If you haven't already there's an extensive resource repository -?https://lnkd.in/ek5NsqpD
?that helps you with details on its scoring methodology, sector-specific best practices, and more!
Notable News
Articles on Climate & the Environment
- G20 Fossil Fuel Subsidies Exceed $1 Trillion Since COP26
- EU fossil generation hits record low as demand falls
, Ember.
- How China became the king of new nuclear power, and how the U.S. is trying to stage a comeback
, CNBC.
- Young climate activist tells Greenpeace to drop ‘old-fashioned’ anti-nuclear stance
, The Guardian.
- Hurricane Idalia’s Explosive Power Comes from Abnormally Hot Oceans
, The New Yorker. "By burning fossil fuels, humans force the oceans to soak up the heat equivalent of a Hiroshima-size bomb, over and over again. In midsummer
, forty-four per cent
of the world’s oceans were in a “marine heat wave.” That heat powered Hurricane Idalia until it crashed into Florida’s Apalachee Bay, a stretch of land that hasn’t been bashed
by a major hurricane since recordkeeping began in 1851."
- Drill, Baby, Drill: The Promise of Geothermal Power,
The New York Times. "A new class of start-ups is investing in the industry, as is the U.S. Energy Department, which estimates
there’s enough energy in the rocks below the surface to power the entire country five times over. And much of the research and development needed for the new geothermal technologies is already done, thanks in large part to recent advances by the oil and gas industry"
- Five Takeaways From Our Investigation Into America’s Groundwater Crisis,
New York Times. "Aquifers are shrinking nationwide, threatening supplies of drinking water and America’s status as a food superpower. Climate change is amplifying the problem."
- China’s summer of climate destruction
, BBC News.
- Falsehoods Follow Close Behind This Summer’s Natural Disasters
, New York Times. "Misattributed videos, recycled lies and warped fears are fueling unfounded claims about the recent record-breaking heat, floods and wildfires."
- The status of 7 climate tipping points on land, sea, and ice
, Grist.
- TIME's new cover: Oceans Issue, The most important place on Earth.
The next big wave in the fight to save our oceans
Articles on Corporate Sustainability, Regulation, & Global Events
- Europe's Biggest Oil Company Quietly Shelves a Radical Plan to Shrink Its Carbon Footprint
, Bloomberg.
- Proponents and Critics of ESG Claim It Can Change Society. Both Will Be Disappointed.
, Institutional Investor.
- Vanguard joins BlackRock, cuts support for shareholder items on climate, social issues
, Reuters.
- An Investor’s Perspective on Corporate Climate Action, Harvard Business School Podcast.
"Today’s episode in our corporate net zero climate series features Paul Bodnar, Director of Sustainable Finance, Industry, and Diplomacy, Bezos Earth Fund, and former Global Head of Sustainable Investing at BlackRock. Paul discusses how investors approach the complex web of weighing climate priorities with fiduciary responsibilities."
- How a Small Group of Firms Changed the Math for Insuring Against Natural Disasters
, NY Times. "Climate change, inflation and global instability have thrust companies that sell insurance to insurers into the spotlight."
Insightful Reports
Investing in American Energy report
by the US Department of Energy (DOE). Significant Impacts of the Inflation Reduction Act and Bipartisan Infrastructure Law on the U.S. Energy Economy and Emissions Reductions
Struggling with the details of?ISSB?/?IFRS,?ESRS?/?CSRD?or just overall?ESG?or?sustainability?frameworks? Check out the detailed analysis, tips and guidelines from?WBCSD – World Business Council for Sustainable Development.
This year’s edition of the?World Energy Investment
?provides a full update on the investment picture in 2022 and an initial reading of the emerging picture for 2023.
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
Norton Rose Fulbright’s?2023 Annual Litigation Trends Survey
?indicates that environmental, social, and governance (ESG) concerns are growing.
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