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.
On today’s episode of Quick Charge, the Trump administration has lost its first battle against state’s rights in California while Tesla faces down (what it’s calling) a union coup in Germany. Meanwhile, SoCal Edison puts 280 Chevy Silverado EV pickups to work on California’s roads and Colorado is putting up a bunch of new DC fast chargers.
We’ve also got a possible Honda-Nissan-Mitsubishi merger shaping up in Japan, some dumb thieves in China, 130 new hybrid bucket trucks getting to work in the northeast, and a massive, twin-rotor wind turbine that is finally online.
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Lucid’s luxury EV just got the Shaq treatment. A Lucid Air was converted into a slick two-door model so that Shaq could fit inside. Check out the custom electric car below.
Standing at 7 feet 1 inch tall, Shaq is much taller than most of us. It’s not easy to find a car you can fit in at that height. Well, not comfortably, at least.
You might remember the Buick LaCrosse ad from 2012, where it looked like the vehicle was actually built around Shaq because he appeared so big.
The big man has moved on from the NBA and is now a DJ known as DJ Diesel. To fit the persona, Shaq needed more than your average vehicle, so he turned to the Lucid Air. However, the electric luxury sedan wouldn’t cut it as a four-door model, so Shaq converted the Lucid Air into a two-door coupe.
Shaq shared the new vehicle on his Instagram Monday with the caption, “When you’re 7″1″, you’ve got to do things your own way.”
The conversion was done by West Coast Customs, known for its custom designs for celebrities like Kylie Jenner and Justin Bieber. The company even created a custom Range Rover “Stormer” for a member of the Dubai royal family.
Most recently, you may have heard about Mark Zuckerberg’s Porsche Cayenne turned mini-van. That was also a West Coast Customs design.
Although sales have been slower than Lucid planned, demand is starting to pick up. The EV maker delivered over 7,100 vehicles through the first six months of 2024, more than the roughly 6,000 delivered in total last year.
Maybe getting the Shaq treatment will help get the word out. Lucid just launched its second EV, the Gravity SUV, as it looks to expand the brand.
What do you think of Shaq’s custom Lucid Air? Would you buy a two-door Lucid coupe? Drop us a comment below and let us know.
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Tensions are rising at Tesla Gigafactory Berlin as the automaker accuses a local union of a coup against the head of its workers’ council.
Tesla operates the only auto plant in Germany without a collective bargaining agreement with a union and it’s not sitting well with IG Metall, the most powerful union in the country.
Plants in Germany have workers’ councils, which can, but in Tesla’s case isn’t, control by a broader union.
Earlier this year, a majority of Tesla Gigafactory Berlin workers voted against union representatives of IG Metall in their new work council, but the union has still made significant progress. The powerful union managed to get 16 seats on the worker council, more than any other group.
IG Metall has been claiming that Tesla is using anti-union tactics and alleges issues with safety, pay, and work-life balance to justify unionizing.
Tesla has denied those accusations and claims that its employees are happy without a union.
However, Tesla admits that the situation is not without issues.
This summer, the company held a factory-wide meeting where the union issue was discussed, and the meeting turned bizarre when plant manager Andre Thierig threatened to take away employee cutlery after he noted that the plant had to order 65,000 coffee cups because they kept disappearing.
After the meeting, IG Metall union secretary Jannes Bojert threatened the potential use of a strike to force Tesla to the table for a collective bargaining argument.
Michaela Schmitz, the pro-management leader of Tesla Giga Berlin’s Worker’s Council, claims that IG Metall is the one creating a difficult environment at the plant.
IG Metall is now ramping things up by filing in court a request to remove Schmitz from her role at the council over claims of violation of German labour laws meant to prevent companies from impeding unionization efforts.
Tesla described the move as “desperate” and an attempted coup to take control of the workers’ council.
The automaker claimed:
Our independence and the resulting good working conditions and secure jobs at our plant are a constant source of annoyance for the union.
Tesla has been embroiled in several fights against unions around the world – more famously against IF Metall in Sweden and UAW in the US.
Electrek’s Take
With Tesla greatly reducing its employee stock compensation over the last few years, they are not benefiting as much from the recent stock price increase, while CEO Elon Musk is becoming the richest man of all times.
Considering stock options were Musk’s go-to arguments against unions, things might become more difficult for Tesla on that front.
Then, we need to take into account that Tesla’s sales are significantly down in Europe this year. It could put Tesla’s Berlin factory at risk of layoffs.
There were also significant layoffs and cuts in the US this year while UAW had a great victory against the big three in Michigan.
I wouldn’t be shocked to see unions make gains against Tesla in 2025.
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