The European Union said it may delay some key elements of its new rules around corporate sustainability reporting, citing a need to keep Europe competitive.
Welcome back 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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Regulatory ease-up?
Businesses are complaining they can’t keep up as they finally wake up to the reality of new environmental, social, and governance (ESG) transparency requirements coming online in the near future. It seems to have worked with European Commissioners, who are now calling for a two-year implementation delay of key sustainability reporting provisions to reduce burdens on small and medium-sized businesses and to maintain market competitiveness. The decision to delay implementation follows a failed attempt in the EU parliament to entirely rework the sustainability framework. The steady drumbeat of complaints hasn’t deterred other jurisdictions from moving forward, and a new supplemental comment letter submitted last week reminded the SEC that millions of investors are still being misled by greenwashing. One thing we’ll note is that the ratio of EU/international to US signatories seems to be unbalanced, with seemingly far fewer American corporations listed than foreign ones.
Everyone wants elevation
As coastal homeowners look inland to avoid increasing flood risks, more than half of Miami's 2.6 million residents could experience "climate gentrification” if sea levels rise by 40 inches, according to a new study. Low-income minority neighborhoods like Little Haiti—situated 10 feet above sea level—face development and property value surges, raising concerns of displacement. But climate gentrification could hurt low-income populations beyond Florida, with sea-level rise expected to displace as many as 13 million people in the U.S. by 2100. Regulatory fixes and a stable government insurer-of-last resort will influence who gets to stay in their homes and who needs to move.
Carbon capture goes quiet
Oil company Oxy quietly sold off what is reported to be the world's largest CCS plant, which never operated at more than a third of its capacity. This is despite Oxy making major investments in direct air capture and looking to rebrand itself as a carbon management company. The plant's failure highlights the problems associated with linking CCS to fossil fuel revenues.
130+ corps push for fossil fuel phaseout
Over 130 major companies, including Ikea, BT, Volvo Cars, Unilever, and Nestlé, with a combined annual revenue of nearly $1 trillion, have jointly issued an open letter ahead of COP28 in Dubai calling on world leaders to establish a clear timeline for phasing out fossil fuels. Emphasizing that the burning of non-renewable energy sources is the primary driver of climate change, signatories contend that their businesses are already bearing the brunt of escalating climate-related costs. The letter coordinated by the We Mean Business Coalition reflects the growing urgency to transition away from fossil fuels and achieve substantial emissions reductions within this decade, calling for collaboration between businesses, policymakers, and financial institutions to accelerate this shift and meet the goals of the Paris Agreement.
