G7 & SEC: Mandatory Climate Risk Disclosure Needed Now
Originally published on NRDC Expert Blog.
By Sarah Dougherty, Tom Zimpleman, & Gabriel Daly
G7 leaders met in the UK last week, and climate was high on the agenda, as it must be. One of the areas of agreement among the leaders of the world’s largest economies might seem new but has been in the works for years: mandatory climate disclosures from companies.
The US has broad disclosure laws, which allow the Securities and Exchange Commission (SEC), as a regulator of stock exchanges and stock sales, to require companies to provide the public with information that can help us make decisions, like about a company’s finances, operations, how it compensates executives, and how it is run. Climate change is an issue on which the SEC needs to require more disclosure — and the Chair of the SEC has indicated he and the Commission intend to require companies to disclose how climate change affects the risks and opportunities they face. The SEC is expected to issue a rule later this year. We think it is about time: NRDC has been pushing for more disclosure on environmental issues since 1971. And, it matters to investors with a recent CFA Institute survey finding 40 percent of investment professionals already incorporating climate risk to inform their investment decisions.
As part of our advocacy for mandatory climate disclosure, NRDC submitted comments to the SEC’s recent request for information. Only mandatory disclosures will allow the SEC to meet its mandate: “to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.” If investors do not know the climate risks — and opportunities — that the companies they are invested in may face, it’s hard to see how investors can be protected and markets can function efficiently.
As we explained in our comments, new rules need to require each company to disclose:
- the full scope of its greenhouse gas (GHG) emissions. This includes GHG emissions from assets that it owns, like factories, buildings, or transportation fleets; GHG emissions from the power is uses to run its factories and buildings; and GHG emissions from using the products it makes (in the case of manufacturers) or the investments it makes (in the case of banks or investment companies).
- the company’s projections about how realistic climate change scenarios will affect the company. Climate change is likely to result in more widespread flooding, wildfires, and more powerful hurricanes. Those events can damage property, disrupt supply chains, and hurt employees. But climate change may also lead to a shift to more sustainable products, alternative energy sources, and new business opportunities. Investors need to know how companies are planning for these possibilities.
- how the company’s operations affect communities vulnerable to climate change.
These disclosures would give investors information that’s useful for their decisions, allowing investors to identify companies (and industries) taking the risks of climate change seriously and planning accordingly. Investors would be better able to allocate capital efficiently to companies that are responsibly planning for the physical risks climate change is already creating — like wildfires and sea-level rise — as well as the transitions risks — changes in policy, consumer preferences, prices, and the like — that our collective response to climate change is likely to impose. And as we know, the costs of climate change will be — and are already — borne disproportionately by low-income communities and communities of color. Disclosures could provide information and insights into how different stakeholders may be impacted by climate change, including vulnerable communities. Additionally, shifting financial incentives away from climate-harming investments is one step towards alleviating those burdens on vulnerable communities.
A voluntary system, which has been in effect for about 15 years, was a good start. But voluntary disclosure has not generated important information nor made it easy to compare between companies. Requiring that companies disclose the risks their businesses face from, and contribute to, climate change will produce information comparable across companies and industries, allowing investors and the public to make better-informed decisions.
In their communique summarizing the G7 meeting, the G7 leaders highlighted their agreement on the importance of climate disclosures:
“We emphasise the need to green the global financial system so that financial decisions take climate considerations into account. We support moving towards mandatory climate-related financial disclosures that provide consistent and decision-useful information for market participants and that are based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, in line with domestic regulatory frameworks.”
Ensuring that investors know the climate risks of the companies they own or may consider purchasing is an obvious first step to greening the global financial system. We are glad the G7 leaders agree and are working to make it happen in the world’s largest economies.
Polaris Ranger EV supports security operations at G7 Summit: “The G7 Summit was the largest operation in Devon and Cornwall Police history, with a total of 6,500 officers and staff on duty from all over the UK. We worked extremely hard to minimise the impact on the community around Cornwall, and as part of those efforts, we enlisted a fleet of electric Polaris Ranger vehicles to patrol and monitor the beaches and other hard to reach areas. Being completely electric off-road vehicles, they were the perfect choice for use on sand and provided our officers with the ideal solution for maintaining security without noise, pollution or disruption to the local community.” Image courtesy of Polaris.
Tesla has requested that NHTSA withhold its response to the numerous questions the regulators had about its recent Robotaxi launch.
As for the agency, it said that it is aware of some disturbing videos in which we can see Tesla’s system making serious mistakes on its first day.
Prior to Tesla’s Robotaxi launch on Sunday, NHTSA had sent Tesla a series of questions about the program, which Tesla was required to answer by June 19th.
The agency wanted a lot more details because it is particularly concerned about the fact that Tesla is using its ‘Supervised Full Self-Driving’ in the Robotaxi service while it is currently under investigation for its involvement in several serious crashes.
Tesla has now responded to NHTSA, but it has requested that the agency keep all its answers confidential.
The automaker has consistently avoided sharing data about its Autopilot and Full Self-Driving programs, particularly crash data.
Automakers and companies developing self-driving and ADAS systems are required to report all crashes related to those systems, but Tesla has been abusing NHTSA’s program to get some of the data reported.
Publications have been trying to obtain the data through the courts, and Tesla has fought the effort, claiming that it would ‘suffer financial harm’ if its self-driving crash data were released.
There’s currently no indication that NHTSA will be able to release any information about Tesla’s Robotaxi service.
As we previously reported, the service launched with a Tesla employee in the front passenger seat with a finger constantly on the door unlactch button, which is likely to have been reprogrammed as a kill switch for the self-driving system.
This is likely information that would be confirmed and detailed in Tesla’s responses to NHTSA, and it would be critical, as it would prove that Tesla’s autonomous driving system can’t be considered level 4, which is now required to operate a commercial autonomous driving system, such as Robotaxi, in Texas.
Robotaxi has already been spotted making several significant mistakes over its first day of commercial operations, including driving in the wrong lane with incoming traffic and dropping passengers in the middle of an intersection.
NHTSA has confirmed that it is aware of those incidents and that it is currently gathering information about the situation:
NHTSA is aware of the referenced incidents and is in contact with the manufacturer to gather additional information. NHTSA will continue to enforce the law on all manufacturers of motor vehicles and equipment, in accordance with the Vehicle Safety Act and our data-driven, risk-based investigative process. Under U.S. law, NHTSA does not pre-approve new technologies or vehicle systems – rather, manufacturers certify that each vehicle meets NHTSA’s rigorous safety standards, and the agency investigates incidents involving potential safety defects. Following an assessment of those reports and other relevant information, NHTSA will take any necessary actions to protect road safety.
The agency has also stated that its investigation into Tesla’s FSD-Supervised/Beta “remains open.”
Electrek’s Take
Tesla CEO Elon Musk is on record saying, “Transparency is the key to trust.” Yet, Tesla has not been anything close to transparent about any of its autonomous driving or ADAS system efforts.
On the contrary, it has gone out of its way to try to hide any level of data consistently.
In fact, Tesla has never released any data about FSD beyond cumulative mileage, which doesn’t indicate the system’s performance. Tesla even mentioned multiple increases in improvements in miles between disengagements without ever sharing actual data.
It’s incredibly disappointing. Elon is a great example of: Do what I say, not what I do.
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With much of the US sweltering under a record-breaking heat dome, many EV buyers and owners are left wondering how their favorite electric cars perform in extreme summer temperatures. A new study tracking over 29,700 electric cars in real-world conditions provides the answers, and we’re sharing them here: these are the EVs that handle the summer heat best.
The EV leasing and subscription specialists Recurrent Auto have had tens of thousands of new and used EVs in their database over the years, giving them a massive dataset to analyze and draw conclusions from. So when they published their findings about which EVs had the best range in 90- and 100-degree weather, it was required reading for any would-be EV expert.
“Most of the country has a heat advisory right now, so we’re fielding lots of questions about EV batteries in extreme heat,” reads the intro to the Recurrent report. “Here’s the deal … electric cars work perfectly fine in hot weather. Range loss at 90F (32C) is minimal. Less than 5% change.”
Like many real-world aspects of EV ownership and longevity, that seems a lot better than what most people – or even most analysts would likely tell you. So, what gives?
“When temperatures pass 100F (37C), range impacts can be 17-18%,” they continue, “but these reductions are temporary while the AC is working to keep passengers cool … we advise that owners and dealerships avoid letting an EV sit with extremely low states of charge in this heat. An EV uses its battery power to keep the battery cool.”
The infographic
Recurrent’s findings put the Audi e-tron in the top spot, followed closely by recent JD Power favorites BMW i4 and Rivian R1S, all of which reportedly lose less than 3% of their range, even at an absolutely blistering 100°F.
To put those percentages into some easier to digest numbers (and fix the fact that Recurrent’s infographic makes it look, to my eyes, like you can’t drive a Nissan Ariya or Chevy Blazer at 100+ degrees), I’ve done the math, starting with the EV’s EPA-rated range under “ideal” conditions, then translated that using the percentages from Recurrent.
Would I bet my family’s safety and convenience on this rough-and-tumble chart while planning my next road trip? Absolutely not – go download Chargeway for that. Would I do the math because it’s a fun mental exercise that’s going to generate fun comments? Absolutely.
Check out the math, below, and if you see an EV you like in there click on the link in the table to go find a great local deal on a hot weather ready electric car near you. Links to Rivian and Tesla dealers weren’t included because they don’t have dealers.
EV range in extreme heat
SOURCES: Recurrent Auto, via LinkedIn; featured image via Audi.
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