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.
Electric logistics company Einride is set to go public through a SPAC merger deal with blank-check firm Legato Merger Corp. that values the Swedish brand at a staggering $1.8 billion. (!)
A SPAC deal is a transaction in which a Special Purpose Acquisition Company (SPAC), which is effectively a publicly-traded shell corporation that’s formed solely to raise capital, merges with an operating company to bring it into a public trading market. It’s a process that was popular in the heady, “draw a truck, make a billion dollars” era that saw recently pardoned criminal and alleged sex offender Trevor Milton launch the now-defunct hydrogen truck brand Nikola, and one that offers a faster and sometimes more flexible (read: less regulated) alternative to a traditional Initial Public Offering (IPO).
This week’s deal, however, follows hot on the heels of major autonomous trucking milestones and a solid, billion dollar vote of confidence in Einride — both of which serve to make this deal’s valuation to seem more credible than most.
“We’ve proven the technology, built trust with global customers, and shown that autonomous and electric operations are not just possible, but better,” says Einride CEO, Roozbeh Charli. “This Transaction positions us to accelerate our global expansion and continue to deliver with speed and precision for our customers. The foundation is built, the demand is clear, and our focus is on execution and delivering the future of freight.”
We’ve written about Einride’s electric fleet operations in Europe a few times, but it’s worth noting that the company is rapidly expanding its human-operated decarbonized logistics operations as well (the company announced a 150-unit Peterbilt 579EV truck order last summer).
Peterbilt electric semi trucks
“Our proprietary technology stack, purpose built for autonomous operations, combined with our vessel-agnostic approach, provides significant competitive advantages,” comments Henrik Green, CTO of Einride. “With our demonstrated safety record and established ability to operate autonomous vehicles commercially, we are well-positioned to capture the significant market opportunity as the industry transitions to electric and autonomous freight.”
The Transaction values Einride at $1.8 billion in pre-money equity value and is expected to generate approximately $219 million in gross proceeds before accounting for potential redemptions of Legato’s public shares, transaction expenses and any further financing. Additionally, the Company is seeking up to $100 million of private investment in public equity (or, “PIPE”) capital to accelerate growth.
Other notable SPAC deals in the EV space include Lordstown Motors, Proterra, and Volvo spinoff Polestar, all of which have either gone bankrupt or seen dramatic market cap reductions over the last few years.
SOURCE | IMAGES: Einride.
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BYD is bringing its most affordable EV to the Land Down Under. The Atto 1 arrives as Australia’s cheapest new EV, just as BYD is finding its footing.
BYD reveals Atto 1 EV prices in Australia
The Atto 1 is a rebadged version of BYD’s compact electric hatch, sold as the Seagull in China, the Dolphin Surf in Europe, and the Dolphin Mini in other overseas markets.
BYD’s low-cost electric car arrives as the Chinese auto giant closes in on Tesla, which has dominated Australia’s EV market thus far.
Starting at just $23,990 before on-road costs, the Atto 1 is now the cheapest new electric vehicle in Australia. The electric hatch is available in two trims: Essential and Premium. The Atto 1 Premium, priced from $27,990, before on-road costs.
The base Essential model is powered by a 30 kWh BYD Blade battery, providing a WLTP driving range of 220 km. Upgrading to the Premium trim gets you a larger 43.2 kWh battery, good for a WLTP driving range of 310 km.
Inside, the Atto 1 features a 10.1″ floating infotainment screen with Apple CarPlay and Android Auto, as well as a 7″ driver display cluster. The higher-priced Premium trim adds a wireless phone charger, heated front seats, and a 360-degree camera.
BYD also revealed that the Atto 2 SUV starts at $31,990 before on-road costs. The Premium variant is priced from $35,990.
“The Atto 1 and Atto 2 represent the next step in BYD’s vision for accessible, premium electric mobility for Australian drivers,” according to BYD Australia COO, Stephen Collins.
Both will begin arriving at dealerships next month and are expected to see strong demand as some of the most affordable EVs on the market.
BYD is closing in on Tesla in Australia after going back and forth as the best-selling EV brand over the past few months.
Through October, BYD sold 19,248 electric vehicles in Australia, according to data from The Driven. Tesla, on the other hand, has sold 23,569 vehicles.
BYD is already outselling Tesla in the UK, parts of Europe, and other overseas markets. With two new low-cost models rolling out, Australia could be next.
Source: The Driven, BYD Australia
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Tesla is working on Apple CarPlay integration inside its electric vehicles, according to a new report.
If it does happen, it would mark a major reversal of Tesla’s in-car infotainment strategy.
In the mid-2010s, Tesla CEO Elon Musk said that the automaker was working on integrating phone mirroring, such as Android Auto and Apple CarPlay, but that was a decade ago, and it never happened.
Now, half of the industry is moving away from the technology as automakers increasingly seek full control over the infotainment systems in their vehicles.
Today, Bloomberg came out with a surprising report that claims Tesla is currently working to integrate Apple CarPlay:
The carmaker has started testing the capability internally, according to the people, who asked not to be identified because the effort is still private. The CarPlay platform — long supported by other automakers — shows users a version of the iPhone’s software that’s optimized for vehicle infotainment systems. It’s considered a must-have option by many drivers.
There are not many details on the report other than it would be integrated as a window within Tesla’s broader interface, and that it could launch within the next few months – though it could also be killed just like the last time Tesla talked about it.
Tesla is also planning to use the standard version of CarPlay, not the newer “Ultra” iteration that can control instrument clusters and climate functions. However, the company is planning to support the wireless version, allowing drivers to connect their iPhones without a cable.
Electrek’s Take
I’ll file this one under “I’ll believe it when I see it.” It would be quite a reversal of Tesla’s strategy.
Of all the automakers turning away from Apple CarPlay, Tesla was suffering the least because its software experience is by far the best, including its voice-to-text, as CarPlay is particularly useful to answer text messages through voice while driving, but there are still many people who would prefer the CarPlay experience.
The way I see it, CarPlay integration is not particularly difficult and should at least be offered as an option for those who want it.
And if automakers want to own the whole infotainment experience inside their vehicles, they have to earn it by making the experience a smooth one.
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