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In October 2022, the International Sustainability Standards Board (“ISSB”) met to discuss comments received and future work pertaining to the ISSB’s proposed disclosure standards for Disclosure of Sustainability-related Financial Information (“Draft S1”) and  Climate-related Disclosures (“Draft S2”).

The ISSB’s reconsideration of topics addressed in its proposed disclosure standards provides insight into the progress the ISSB is making towards the development of a global baseline of sustainability-related standards.  Additionally, the ISSB’s clarification of certain proposed disclosure standards might also inform the key debates that jurisdictions worldwide are deliberating as they consider and finalize their mandatory climate-related disclosure requirements. Below we summarize the ISSB’s background; key topics discussed during the October meetings; and the ISSB’s “next steps” with respect to the finalization of the Drafts.…

Continue Reading International Sustainability Standards Board Updates: Progress Towards A Global Baseline

Driven by the entry of renewable generation resources locating far from load centers and the new demands placed on the grid by their differing characteristics, the Federal Energy Regulatory Commission (FERC) launched a comprehensive review of its policies regarding regional transmission planning, interconnection and cost-allocation.  In an Advance Notice of Proposed Rulemaking (ANOPR), the agency requested public comments on its current policies and offered potential areas for reform with a view toward anticipated future generation.  According to FERC Chairman Richard Glick, “(a) piecemeal approach to expanding the transmission system is not going to get the job done. We must take steps today to build the transmission that tomorrow’s new generation resources will require.”…
Continue Reading FERC Reviewing Rules for Grid of the Future

This is the twenty-fourth in our series, “The ABCs of the AJP.”

In 2020 alone, the United States suffered 22 separate extreme weather and climate-related disasters that each caused at least $1 billion in damages, for a total of more than $100 billion in losses.  That staggering statistic is not an anomaly, as climate change continues to result in more and more extreme weather events every year.  For example, the Texas freeze that rocked the state earlier this year and killed more than one hundred people, also shut down the state’s significant petrochemical industry, disrupting supply chains nationwide, and caused an estimated $80 billion to $130 billion in direct and indirect economic losses.  Hundreds of deaths are attributed to the unprecedented and record-breaking heat wave of the Pacific Northwest, and a British Columbia village where the highest temperature ever recorded in Canada was devastated by wildfire.  Taking into account these and other weather-related tragedies, the losses become inestimable on a human scale. …
Continue Reading X-Treme Weather and the Need for Climate Resiliency

In a recent order, FERC pulled back, for now, its decision to sharply limit the ability of retail regulators to prohibit distributed energy resource (DER) aggregators from bidding retail customer demand response (DR) into wholesale markets.  Instead, the issue will be considered in  an ongoing inquiry that is addressing whether to totally eliminate the ability of retail regulators to keep retail DR resource offers out of FERC-jurisdictional wholesale markets.
Continue Reading FERC Reconsidering Limits On Retail Regulator Control Over Aggregating Demand Response

In two recent certificate orders issued on May 20, 2021, the Federal Energy Regulatory Commission (“FERC”) did not assess the significance of the greenhouse gas (“GHG”) emissions of natural gas pipeline projects in terms of their contribution to climate change. This seems to be a step back from a March, 2021 order, which indicated that FERC would consider the significance of natural gas emissions in the context of a certificate involving pipeline replacement facilities, but reflects an unusual last-minute compromise reached during an open meeting in order to gain sufficient votes to approve the certificates.
Continue Reading FERC Policy on GHG Impact of Gas Pipelines on Climate Still in Flux

This post is the 13th in a series, “The ABCs of the AJP.”

As made clear by its name, the Biden Administration intends for its “infrastructure” plan to be a jobs plan.  As is also apparent from the Administration’s proposal, it views requirements to ensure that goods are actually made in America as critical to creating new American jobs.  According to the White House, “by ensuring that American taxpayers’ dollars benefit working families and their communities, and not multinational corporations or foreign governments, the plan will require that goods and materials are made in America.”  Such rules should also help give the United States a boost in its competition with other countries, particularly China.
Continue Reading Made in America: Spurring Domestic Job Creation and Production Through Buy America Rules and Beyond

The European Commission has published a proposal for a Corporate Sustainability Reporting Directive (2021/0104) (“CSRD”), which forms just one part of a comprehensive package of sustainable finance measures (see our blog here).  The Commission has put forward these measures in response to demand for stronger and wider sustainability reporting standards, over and above what the EU Non-Financial Reporting Directive currently provides.  The CSRD seeks to mandate sustainability reporting and assurance through the amendment of existing EU laws, including the Transparency Directive, the Accounting Directive, and the Audit Directive.  More fundamentally, according to the Commission, it will move the EU one step closer to realizing its aim of having sustainability reporting be “on a par” with financial reporting, in terms of attached weight and importance.  This is reflected in the change of terminology used in the CSRD proposal, from a focus on “non-financial” information reporting, to “sustainability”.

We cover below the background and detail, but in summary, these are the key elements of the CSRD proposal that corporates should be aware of:

  • Scope: The CSRD reporting requirements will apply to all large EU companies and all listed companies, including listed small and medium-sized enterprises (“SMEs”). This is estimated to cover around 49,000 companies.
  • Reporting: The so-called “double materiality” principle remains, but in-scope companies will now have to report according to mandatory sustainability standards. Simpler and “proportionate” standards will apply to listed SMEs.
  • Audit: The CSRD will require, for the first time, a general EU-wide audit (assurance) requirement for sustainability information.
  • Digitization: The sustainability information must be published in companies’ management reports — and not separately reported — and the information will need to be digitized or “tagged” so it can be incorporated into a planned European Single Access Point.
  • Timing: If the proposal is adopted and standards can be agreed in line with current ambitious estimates, large in-scope companies must comply from financial years starting on or after 1 January 2023, publishing reports from 2024; whilst SMEs have to comply from 1 January 2026.

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Continue Reading The EU Corporate Sustainability Reporting Directive Proposal: What Companies Need to Know

This blog is the seventh in a series, “The ABCs of the AJP.”

Grid Modernization and Resiliency

Grid modernization and resiliency are critical and intertwined issues that only grow more important as climate change increases the frequency and severity of extreme weather events. As the Biden Administration notes in its American Jobs Plan fact sheet, recent power outages in Texas took a tremendous human and economic toll, and power outages generally cost the country $70 billion dollars a year in lost productivity. In light of that figure, the American Jobs Plan’s proposed $100 billion dollar investment in grid modernization may be too conservative. When factoring in health and environmental benefits, the return on investment for an improved grid looks to be extraordinarily robust.
Continue Reading Grid Modernization and Greenhouse Gases

This blog is the sixth in a series, “The ABCs of the AJP.”

One of the key underpinnings of the case for climate legislation is the idea that natural and working lands will suffer without swift and meaningful action. President Biden’s American Jobs Plan (AJP) proposes to “protect and, where necessary, restore nature-based infrastructure – our lands, forests, wetlands, watersheds, and coastal and ocean resources.” But what should that look like? And how will the new administration find common ground with lawmakers who fear that forest conservation can only come at the expense of rural communities and the industries that rely on these resources?
Continue Reading Finding the Common Ground for Forests

FERC recently took two actions regarding its transmission rate incentives policies.  FERC proposed to scale back an earlier proposed increase in the return on equity (ROE) premium allowed in the rates of transmission owners that join Transmission Organizations such as RTOs/ISOs and proposed to clamp limits on its term.  The Commission also scheduled a workshop to address performance-based incentives for transmission technology deployment.  Both actions were taken in the context of a March 2020 Notice of Proposed Rulemaking (NOPR) aimed at, in part, awarding rate incentives for certain beneficial transmission investments.
Continue Reading FERC Focusing On Electric Transmission Incentives