After a long and troubled development process, the Corporate Sustainability Due Diligence Directive (CS3D) has passed in European Parliament, leaving only a final vote by the European Council before its official passage. The final version of the directive is watered down from the political agreement that was originally reached by Parliament and the Council. In a press release, European Parliament describes the current version of the Directive: “Firms will have to integrate due diligence into their policies, make related investments, seek contractual assurances from their partners, improve the ..read more

Last year, in an attempt to curtail greenwashing in the financial sector, the UK’s Financial Conduct Authority (FCA) issued an anti-greenwashing rule through the Policy Statement on Sustainability Disclosure Requirements and Investment Labels. With the implementation of the rule right around the corner (May 31, 2024), the FCA now releases more guidance on the rule and how financial services companies will be expected to comply with it. PA Future discusses this guidance stating: “When referencing ‘sustainability’, firms should ensure the following It is correct and capable of being substantiat ..read more

California Governor Gavin Newsom announced a new program to use “more than half of its land to fight the climate crisis.” The program includes 81 targets for nature-based solutions intended to help California achieve its world-leading climate goals, including reaching carbon neutrality by 2045 through land management efforts that include: 33.5 million acres managed to reduce wildfire risk, mostly through beneficial fire 11.9 million acres of forest managed for biodiversity protection, carbon storage, and water supply protection 7.6 million acres conserved with protections 3.4 millio ..read more

Here’s some fascinating news from Responsible Investor – the International Accounting Standards Board (IASB) is developing illustrative examples of climate-related financial information that should be included in company disclosures and accounting. This action is the result of an IASB project that launched March 2023. In IASB’s announcement of that project, they pointed out that in their initial outreach on the question of whether/how to consider climate-related matters in financial statements,  “Respondents to that consultation told us: climate-related risks are often perceived as rem ..read more

In response to its concern about workplace conditions in assets held by private equity funded by New York’s Common Retirement Fund (CRF), New York State Comptroller Thomas P. DiNapoli announced the Fund’s adoption of its Responsible Workforce Management Policy and Principles. According to the policy, which applies to CRF’s “private equity asset class investments, other than funds of funds, secondary funds, and funds that don’t have a strategy of independently making equity investments”: “The CRF believes that investment managers in its private equity asset class (PE Managers) should ..read more

Oil and gas giant Shell is no stranger to climate controversy. The company was the defendant in a major Dutch case which ruled that Shell had a duty to reduce their emissions, a ruling now being appealed. The company also successfully fended off a UK shareholder suit regarding its emissions brought by NGO ClientEarth. Now the company faces a shareholder proposal aimed at encouraging the company to reduce its scope 3 emissions as Responsible Investor reports: “UK pension pool Brunel Pension Partnership will vote against Shell board members in response to its ‘perceived misalignment’ with the o ..read more

Back in March, we wrote about the EU reaching a political agreement on legislation that would ban the import in the EU of goods created with forced labor into the Union. That legislation has now been officially adopted by Parliament and will become law in three years after the EU Council grants final approval. European Parliament summarizes the law in a press release stating: “Member state authorities and the European Commission will be able to investigate suspicious goods, supply chains, and manufacturers. If a product is deemed to have been made using forced labour, it will no longer be pos ..read more

We’ve written previously on concerns about energy needs for AI and its predicted growth. The industry seems to be getting concerned as well. According to this article from The Wall Street Journal (subscription required), US software company Salesforce announced “it will be advocating for lawmakers and regulators to start building legislation to require companies to disclose their AI emissions, with standardized metrics for measuring and reporting the environmental impact of AI systems. Salesforce is calling on all companies employing general-purpose AI models to publicly disclose the energy e ..read more

Yesterday, Zach wrote that Poland generates so much renewable power that prices go negative during peak sunlight hours. Looks like California is in a similar boat – but with potentially more perverse impacts. According to this piece from the Washington Post, “… the state and its grid operator are grappling with a strange reality: There is so much solar on the grid that, on sunny spring days when there’s not as much demand, electricity prices go negative. Gigawatts of solar are ‘curtailed’ — essentially, thrown away. In response, California has cut back incentives for ..read more

One of the world’s premier climate pacts for financial institutions is the UN-backed Net Zero Banking Alliance (NZBA). Formed in 2021, the NZBA aimed at getting financial institutions to adopt voluntary climate commitments to limit global heating to 1.5 degrees Celsius. NZBA is one of the most stringent climate pacts with over half of its 144 members adopting SBTi targets for 2030. However, the effectiveness of NZBA and other climate finance pacts is being called into question. The European Central Bank (EBC) recently published a paper looking into the effects of voluntary climate commitments ..read more