Warmer Weather Forecasts in the Midwest, Dipping LNG Exports, and AI's Impact on Sustainability

The Oct ‘23 natural gas contract is trading at $2.65. The prompt month has been trading within the mid two-dollar range throughout September. Weather forecasts are predicting most of the warmer seasonal temperatures residing in the Midwest region. The West and East Coasts are, for the most part, expected to stay within seasonal averages. LNG exports dipped a bit to 11.7 Bcf/d, with no major ongoing outages across any facility. The weekly EIA storage report of an injection of 64 Bcf is higher than recent injection levels. However, this would still fall 20 Bcf short of the 5-year average and 35 Bcf lower than last year's injection for this same time period.

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Sustainability

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There is still much to uncover in terms of how we can best utilize AI technology to benefit the planet and businesses, but for now, it is clear that AI can help anywhere from strengthening climate risk prediction modeling, to enabling smarter decision-making for decarbonizing industries, and to working out how to best allocate renewable energy.

In our recent blog we explore in detail some examples of how AI can impact greater sustainability efforts for corporations.

<< Helpful Guides >>

• SEC Climate Disclosure Rules Toolkit
• Retailer's Guide to Sustainability

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

• International Sustainability Standards Board (ISSB)?will take over the Task Force on Climate-related Financial Disclosures’ (TCFD)?role in monitoring companies’ progress on climate-related disclosures. ISSB Chair?Emmanuel Faber?said, “The ISSB welcomes the FSB's request to transfer the TCFD’s monitoring responsibilities to the ISSB… This announcement provides yet further clarification of the so-called ‘alphabet soup’ of ESG initiatives for companies and investors.”
• ISSB Standards?launch week?26-30 June?2023:?More information here
• In its recent meeting, the G7 reiterated its support for the ISSB: “We support the International Sustainability Standards Board (ISSB) finalizing the standards for general reporting on sustainability and for climate-related disclosures and working toward achieving globally interoperable sustainability disclosure frameworks.”?
• Is G7 Support for ISSB Climate Reporting Standards a Sign That Scope 3 Emission Disclosures Will Soon Be Required in U.S.?, National Law Review?Article >>
• NEW:?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?

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".

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

• 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

• 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!

Articles:

• California Governor Commits to Sign Climate Disclosure Bills into Law
• New files shed light on ExxonMobil’s efforts to undermine climate science. ExxonMobil executives privately sought to undermine climate science even after they publicly acknowledged the link between fossil fuel emissions and climate change. According to the WSJ, the revelations are based on documents subpoenaed by New York’s attorney general.
• EU Commission Considers Requiring Sustainability-Related Disclosures for All Financial Products
• Home insurers cut natural disasters from policies as climate risks grow. At least five large U.S. property insurers — including Allstate, American Family, Nationwide, Erie Insurance Group and Berkshire Hathaway — have told regulators that extreme weather patterns caused by climate change have led them to stop writing coverages in some regions, exclude protections from various weather events and raise monthly premiums and deductibles.“When you see the insurance companies pulling out en masse because the cost of rebuilding homes in Florida is bankrupting them, it’s either hubris or folly to think the state wouldn’t be bankrupted stepping in to help.”
• California Sues Giant Oil Companies, Citing Decades of Deception
• Liberia to concede territory to UAE firm in carbon offset deal
• Microsoft's water consumption jumps 34 percent amid AI boom. Microsoft said that the company consumed 6.4 million cubic meters of water in 2022, primarily for its cloud data centers. That represents a 34 percent jump over the year before, with generative AI workloads believed to be at least partially to blame.
• All planetary boundaries were mapped out for the first time, and six of nine crossed. Climate change: CO2 is 417 v 350 ppm ? Biosphere integrity: Rate of species extinction exceeds boundary by 10x ? Land-system change: Global forest cover is about 62%, v boundary of 75% ? Biogeochemical flows: Nitrogen and Phosphorus levels ~ 2x boundary. ? Novel entities: Synthetic chemicals, radioactive materials, exceeds boundary. ? Stratospheric ozone depletion: ODS too low at 283 v 300 Dobson Units.
• https://www.scientificamerican.com/article/humans-have-crossed-6-of-9-planetary-boundaries/