Welcome to the Climate Nexus finance newsletter – a regular update that looks at the big stories and players at the intersection of climate change, finance, regulation, and energy, with tips for the week ahead.
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Climate risk transparency at long last
Climate risk transparency for corporate America is here. The Securities and Exchange Commission (SEC) is introducing its first-ever climate-related financial disclosure requirements, set to be finalized tomorrow morning. These regulations aim to provide investors with standardized, reliable, and decision-useful information concerning climate-related financial risks. Interested parties can follow the proceedings via a live webstream on the SEC's website starting at 9:45 am ET.
This initiative represents a critical, albeit modest, first step by U.S. financial regulators to catch up to what the American public, investors, businesses, market participants, and other jurisdictions know: climate change is financial risk. The reality of this risk is underscored by last year's unprecedented number of billion-dollar climate disasters, impacts to workers, and the escalating climate-driven insurance crisis, which threatens not only individual livelihoods but also trillions of dollars across the broader economy. So while the SEC’s initial measures may not have gone as far as they should have on its first attempt, the inevitability of more robust transparency and emissions disclosure is coming regardless of tomorrow's outcome—a warning for all corporate greenwashers.
Join a press briefing with issue expert panelists on Wednesday afternoon at 2 pm ET to learn what to know about the rule and climate disclosure. Register here. A SEC specific media training guide is available here and suggested talking points, resources, and a quote sheet are available here.
Surf and turf
America’s lobster industry—the second-most valuable fishery in the country—is close to hitting rock bottom. Maine fishermen brought in their smallest catch since 2009, and there’s “no question” that climate change is affecting the cold water species, according to Dave Cousens, former president of the Maine Lobstermen’s Association. Maine lobsters, responsible for 80% of the U.S. market and 18,000 jobs in the state, are prematurely boiling in the Gulf of Maine, which is warming faster than 99% of the world’s oceans.
Back on land, solutions meant to confront Big Agribusiness’s contributions to climate change could be doing the
opposite. A recent report from the Environmental Working Group (EWG) reveals that more than half of federal funding allocated for "climate-smart" agriculture goes to farming practices unlikely to diminish greenhouse gas emissions, with some practices potentially causing an increase in emissions. And with the Inflation Reduction Act (IRA) set to contribute $8.45 billion into “climate-smart” programs between 2023 and 2026, even more money could be funding practices with unproven climate benefits.
Counting the cost
A new study published in Nature Medicine examining Medicare records from before and after billion-dollar extreme weather events finds that health impacts and deaths remain heightened for weeks following the disasters. This means that previous estimates of the death tolls and costs from these are likely undercounted. Furthermore, since the study only examined Medicare beneficiaries, which make up about one-fifth of the US population, the actual rates of mortality and ER visits are likely much higher. The authors of the study hope that their research will help health systems and communities better prepare for different types of extreme weather in the future. It also opens up the possibility of updating the way NOAA NCEI tracks mortality from billion-dollar disasters and lays the groundwork for future research to quantify the additional costs of increased healthcare utilization among Medicare beneficiaries.
Brazil joins the club
Last week, Glasgow Financial Alliance for Net Zero (GFANZ) announced they’re backing a new climate transition platform led by the Brazilian Development Bank. The goal is to better define a cross-economy investment pipeline for blended public-private finance that will help Brazil reduce its greenhouse gas emissions by 50% by 2050. Brazil will design and lead the platform to spur their “green reindustrialization,” focusing on sustainable jobs, low-carbon technologies, and economies that protect biodiversity and nature. Currently, 45% of Brazil’s primary energy demand is met by renewables, even while new oil drilling projects are actively opening in Pau Brazil and the Amazon.
On our radar
Carbon Tracker: A new report titled "Crude Intentions II" highlights a significant inconsistency in the oil and gas industry: while many companies claim commitment to energy transition, their executive compensation structures mainly reward fossil fuel production expansion.