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Mandatory Climate Reporting: Requirements & Reprieves
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This week: Lithium's landing; EVs and their tax credits; Receding coastlines.
Welcome back. Mandatory climate reporting is one of the sustainability themes of the year. Finalized rules are coming over the next few weeks and months from the three main global standards setters: the U.S. Securities and Exchange Commission, the International Sustainability Standards Board and the European Financial Reporting Advisory Group.
All three basically started with the voluntary guidance from the Task Force on Climate-related Financial Disclosures, and officials have sort of been working together. But no one expects one global standard. To be fair, a global patchwork of regulations is a big pain but also rather well-trodden territory for multinational businesses.
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This week WSJ Pro reported that at least 10,000 foreign-headquartered companies are likely to have to meet the EU’s climate disclosure requirements, according to an analysis by data company Refinitiv. About a third of those are from the U.S., while Canada and Britain account for a little more than a tenth each. The final number is likely to be even higher as Refinitiv’s analysis only included some of the full list of criteria.
That 10,000 figure matters because the EU rules are shaping up to be the most onerous. U.S. rules are expected to be lighter touch, with the ISSB likely landing somewhere in the middle.
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Producing the information will undeniably be a big lift, particularly the first time. Fortunately, standard setters do seem to be listening and adapting to some of the feedback they have received from business.
The SEC is reconsidering its bright-line test and rethinking some requirements around reporting emissions in the value chain, so-called Scope 3 emissions. Likewise, the ISSB has given businesses an extra year to report Scope 3 and for nonclimate information.
Even the EU rules might be eased under a recently announced bloc-wide initiative to cut the regulatory burden on companies by about a quarter, though what exactly that means has yet to be determined.
✍️ Let me know what you think. If you were forwarded this newsletter, you can sign up at the bottom right of this page.
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“One of the reasons we are proposing this [delay] is because we know there is quite a bit of work to do.”
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— ISSB Vice Chair Sue Lloyd
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Prices for lithium are down more than 30% this year, ending the two-year run that pushed up the value of the key battery material by a factor of 12, according to Benchmark Mineral Intelligence, write Scott Patterson and Amrith Ramkumar.
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The falling prices are due to slowing demand for electric vehicles, particularly in China, and volatile markets that are making traders cautious. Prices for other metals that go into batteries, such as cobalt and nickel, are also sliding.
Most analysts already expect long-term battery metals supply to fall well short of demand. If the notoriously boom-and-bust markets suppress prices for a long period and make producers more cautious about investing in supply, the current slide could make that problem even worse, some said.
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EVs and Their Tax Credits
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The Ford F-150 Lightning offers battery options supplying 230 and 320 miles of range.
Photo: Rebecca Cook/ Reuters
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New Treasury Department rules have clarified who can get the Inflation Reduction Act tax credit on electric vehicles. The criteria will take effect on April 18, when a list of models that qualify for the $7,500 tax credit will be issued.
The aim is to make the U.S. less reliant on batteries and critical minerals shipped from China, by setting requirements for them to be sourced from the U.S. or certain friendly countries.
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Since the IRA was introduced, companies have announced plans to build 75 facilities with a total investment of more than $45 billion, according to administration officials. BMW, Panasonic and Stellantis are in talks about more projects.
The electric pickup race is heating up. Stellantis announced its Ram 1500 REV, arriving in late 2024, and will have a battery option to deliver a 500 mile range. That is on par with Tesla's soon-to-be-released Cybertruck but well ahead of Ford’s F-150 Lightning 230 to 320 mile range, Rivian's R1T at 350-miles and Chevy Silverado EV's expected range of more than 400 miles.
However, it is still too early to pick the winning car makers just yet, writes Stephen Wilmot, given it will be a costly race to build an entire domestic battery industry virtually from scratch.
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2.5 to 7
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Number of parking spots for each registered vehicle in the U.S., according to Donald Shoup, an urban planner at the University of California, Los Angeles
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In Atafona, Brazil, at the mouth of the Paraíba do Sul river, the coastline is receding as much as 18 feet a year. Between 1984 and 2016, some 550 feet have disappeared. It is an extreme example of the challenge that lies ahead in a country with some 4,600 miles of coastline, one of the world’s longest, writes Samantha Pearson.
Environmental researchers say scores of other beachside communities face similar fates in Brazil, among the top 10 countries that will be most affected by rising sea levels, according to Climate Central, a research organization on climate science.
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Carlos Osorio/Associated Press
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Sustainable-infrastructure investment firm Spring Lane Capital is backing Spring Free EV Inc., leading a $30 million investment in the financing company, which helps fleet owners convert to electric vehicles.
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Oleg Borodin for The Wall Street Journal, iStock (8); Getty Images; Shutterstock
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Do older workers work harder? Some bosses think so. Older workers are in demand at a growing number of companies, with some firms recruiting seniors on the premise that age equals a stronger work ethic.
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Christian Charisius/Agence France-Presse/Getty Images
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Green energy winners and casualties are becoming easier to spot as politicians across Europe sharpen their sometimes vague climate policies.
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Rob Schumacher/USA Today Sports
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Benjamin Girette/Bloomberg News
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Each week, we will share selections from WSJ Pro that provide insight and analysis we hope is useful to you. The stories are unlocked for The Wall Street Journal’s subscribers.
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Movie fans have been trickling back to the cinema after the pandemic upheaval, but the financial pain has intensified for some of the largest theater-industry players, including Cineworld Group and AMC Entertainment.
Private-equity investors looking to stand out as they enter the crowded—and potentially lucrative—playing field of sports are buying into less popular segments such as rugby, where pricing pressure is lower, but risks loom large.
America is aging, but many companies don’t want to hire older people. Some employers may subtly communicate through their wording in online help-wanted ads that older workers ought not apply. But including this demographic is important for maintaining a healthy labor market.
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How Tesla batteries are helping Australia quit coal in record time. (Bloomberg)
The world needs to close coal-fired power plants almost five times faster than it currently is to meet the Paris Agreement targets. (Guardian)
EPA tightens limits on mercury and other pollutants from coal-fired power plants. (AP)
Two tricks that could avoid the need for expensive EV charging infrastructure. (Anthropocene)
Pilot test to convert an abandoned gas well into an underground battery. (Canary)
Why climate coalitions of global businesses need an antitrust safe harbor. (Reuters)
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Google's Renewable Power-Purchase Agreement Could Boost Sustainability Commitments
Alphabet's Google has signed a 150 megawatt power-purchase agreement with Orsted for renewable energy generated by Helena Wind Farm in Texas for the next 15 years. The partnership could have positive implications for Google and its parent company's environmental standing, specifically its energy-management credentials as the agreement falls in line with Google's commitment to operate all its data centers, cloud regions and offices on carbon-free energy by 2030. Alphabet's energy-management efforts are in line with sector peer Microsoft, which signed an offtake agreement with ReNew Power for 150 megawatt of solar capacity in India in December.
This is a sample of exclusive analysis of sustainability news from the Journal’s environment, social and governance (ESG) research analysts, whose work is primarily published by Dow Jones Newswires to help institutional investors and wealth managers integrate ESG factors into portfolio models, risk management programs and financial advice. The commentary by our research analysts is independent of the news coverage by reporters at the Journal. For more information about Dow Jones Newswires, click here.
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✍️ Feedback on this newsletter? We would love to hear from you, so please get in touch.
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