Words like ‘stalled’, ‘delayed’, and ‘postponed’ dominated headlines regarding the SEC’s climate risk and ESG regulatory agenda –– an incomplete agenda by any measure.
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Will 2024 be the year the SEC gets its act together?
New year, new opportunities. Words like ‘stalled’, ‘delayed’, and ‘postponed’ dominated headlines regarding the SEC’s climate risk and ESG regulatory agenda –– an incomplete agenda by any measure. While other agencies made progress, the SEC’s strategy of placating detractors instead of getting the job done ahead of election-year politics might not have been the wisest choice. But that can all change in a moment. Investors are expecting strong rules that safeguard investments, ensure fair and efficient capital markets, and facilitate capital formation through risk mitigation, quelling greenwashing, and enhancing transparency. It’s exactly what the SEC is mandated to do. What’s the hold up? Dark-money-fueled, climate-risk-denying Republicans and the U.S. Chamber of Commerce. Are we worried? Not really. Given the SEC is playing catchup to nearly all of its other international counterparts and California, the writing is on the wall that transparency is coming, including Scope 3 emissions disclosure. That said, the longer the SEC dilly-dallies, the more political obstruction becomes a real reality. Let's hope getting the climate rules out is #1 on Jerome Powell’s New Year resolutions list.
Green bucks beat fossil fares
Global banks made more money capitalizing on green debt than financing fossil fuel activities for the second year in a row. Lenders generated about $3 billion in fees from underwriting bonds and providing loans for green projects, with BNP Paribas—the European Union’s largest bank—leading the way. On the other hand, fossil-fuel fees generated $2.7 million in 2023, with Wall Street giants Wells Fargo and JPMorgan raking in the most. This continental divide comes as no surprise, as stricter European regulations encourage a faster energy transition and U.S. regulatory inaction enables fragmented anti-ESG policies and Republican attacks. Regardless of the slight win, banks are still nowhere near the rate of transition required to meet their own climate goals, let alone avoid climate catastrophe.
Déjà vu
Azerbaijan is hosting COP29 this year, and in a country where over 90% of export revenue comes from oil and gas, it’s no surprise the newly appointed COP “president-in-waiting,” Mukhtar Babayev, has a long history of working in the industry. While Babayev has served as the country’s ecology and natural resources minister since 2018, he spent 26 years at the state-run oil company (SOCAR) before his foray into politics. Considering the parallels with COP28 President Sultan Al Jaber, many climate advocates are continuing a campaign to “kick big polluters out” of these major international climate talks to attain the highest levels of ambition. Will Babayev, a relatively low-profile figure in the climate world, be able to deliver on the mandates of COP29 including a new global goal on climate finance?
With great power…
Louisiana is set to become a major testing ground for the carbon removal industry after the Biden administration’s EPA authorized a state agency to approve underground carbon storage facilities. The state is already home to a project aiming to capture more than 1 million metric tons of carbon dioxide per year, one of two Regional Direct Air Capture Hubs approved by DoE last year. The fossil fuel industry and Big Oil’s lobbying arm cheered the news, saying it would streamline permitting for the projects and open a door to a wave of new applications. While Louisiana officials claim it’ll be a boon for the state’s economy and job creation, local activists said the plan “leaves Louisiana’s most vulnerable exposed to an untested pollution control technology.”