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.
Ford Mustang Mach-E to lose EV tax credit
If you are thinking about buying Ford’s electric Mustang Mach-E, you may want to do so before the end of the year. Ford expects the Mach-E will no longer qualify for the federal EV tax credit.
Ford Mach-E will no longer qualify for the EV tax credit
The Inflation Reduction Act (IRA) is due for drastric changes at the end of the year that will affect which EVs will qualify for the tax credit.
Starting on January 1, more restrictions will be put into place. EVs with battery components from a “foreign entity of concern,” including China will lose a portion of the tax credit.
In 2025, the rules will get even tighter. The changes are designed to promote manufacturing in the US while building up a reliable EV supply chain network.
Ford expects to be among several automakers with EVs losing access. Tesla has already said its Model 3 RWD and Long Range will lose $3,750, starting January 1. Meanwhile, it will still qualify for the other $3,750.
In a bulletin sent to dealers (via CarsDirect), Ford said it expects the changes to impact the Mustang Mach-E. Although Ford is “awaiting finalized requirements,” given what we know, “it is unlikely that any Mustang Mach-Es will qualify” beginning the first of the year.
The company didn’t explain why the Mach-E will no longer qualify for the EV tax credit, but it’s likely due to the CATL-supplied LFP batteries.
Qualified customers are still eligible for a $3,750 credit, “making this an excellent motivator to purchase before the end of the year,” Ford added.
Shoppers can still take advantage of the full $7,500 tax credit through leasing. Meanwhile, Ford didn’t indicate the Lightning would be impacted by the changes.
Ford’s electric truck had its best sales month ever in November. All F-150 Lightning trims, except the Platinum version, qualify for up to $7,500 in savings. The Platinum model is excluded as it exceeds the IRA’s $80K cutoff.
Ready to make a move and save on Ford’s electric vehicles while you still can? You can use our links below to find great deals at a dealership near you today.
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The US’s first utility-scale offshore wind farm delivers its first power
New York’s South Fork Wind has become the first utility-scale offshore wind farm to generate power in the US.
The first operational wind turbine at South Fork Wind sent clean power to Long Island today. The project has completed the installation of two turbines around 35 miles off Montauk, with all 12 SG 11-200 DD Siemens Gamesa turbines expected to be installed by early 2024.
The energy produced is being sold to the Long Island Power Authority under the terms of a 20-year agreement.
Stephanie McClellan, executive director at offshore wind nonprofit Turn Forward, said:
The generation of power from South Fork Wind is an incredible moment in the American clean energy story and for the Long Island communities that will benefit from this project for decades to come.
The 130-megawatt (MW) South Fork Wind will be the US’s first completed utility-scale wind farm in federal waters.
Danish renewables giant Ørsted is jointly developing the offshore wind farm with Boston-based energy provider Eversource. South Fork Wind’s first offshore wind turbine foundation was installed at the end of June, and its first US-built offshore substation was completed at the end of July.
South Fork Wind will produce enough clean energy to power 70,000 homes in New York. It will deliver clean energy directly to the electric grid in East Hampton via a single transmission line installed in March.
It will eliminate up to 6 million tons of carbon emissions, or the equivalent of taking 60,000 cars off the road annually over a 25-year period.
Photo: South Fork Wind
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U.S. crude drops below $70 per barrel, gas prices fall to 11-month low
Gas prices at a Shell gas station in Washington, DC, US, on Tuesday, Nov. 28, 2023.
Al Drago | Bloomberg | Getty Images
U.S. crude declined nearly 4% on Wednesday with retail gasoline prices hitting the lowest point since January ahead of the holiday shopping and travel season.
U.S. crude and the global benchmark have hit their lowest levels since June, despite efforts by OPEC+ to boost prices by promising to slash supply in the first quarter of 2024.
Prices at the pump in the U.S., meanwhile, have followed oil prices lower to hit $3.22 a gallon on average as of Wednesday, the lowest price since Jan. 3, according to AAA.
Oil prices have been on a steep downward trajectory from September highs as nations outside OPEC+, particularly the U.S., pump crude at breakneck clip and worries grow about the Chinese economy.
Moody’s on Tuesday downgraded its outlook for China’s government credit raging to negative from stable.
U.S. crude inventories fell by 4.6 million barrels for the week ending Dec. 1 and gasoline supplied to the market increased by 260,000 barrels per day, according to the Energy Information Agency.
Falling inventories and rising gasoline deliveries implies higher demand, which would typically boost oil prices. Pessimism about the economic outlook in China, however, appeared to be weighing heavier on crude prices.
Oil traders have also been skeptical OPEC+, which includes OPEC members and its allies like Russia, will deliver on supply cuts of 2.2 million bpd in the first quarter next year.
Several OPEC+ members announced the voluntary cuts last week after the group failed to reach a unanimous agreement on production targets.
Saudi Energy Minister Price Abdulaziz bin Salman and Russian Deputy Prime Minister Alexander Novak sough to assure the market this week that they could extend or even deepen the promised cuts.
Tamas Varga, an analyst with PVM Oil Associates, said those reassurances have “fallen to deaf ears.”
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