Creating a climate of change digest


Creating a climate of change digest

Issue 31: June 2024

In a virtual roundtable held on March 19, 2024, the US Department of the Treasury engaged insurance industry stakeholders in a discussion on the escalating risks of climate change to US insurance markets.

This event was conducted in line with President Biden’s Executive Order 14030, intending to address climate-related financial risk. The Treasury and the Federal Insurance Office (FIO) are collaborating with state insurance regulators and the National Association of Insurance Commissioners to understand the impacts of climate-related financial risks on the insurance industry.

The Treasury Department and IRS released guidance on the Inflation Reduction Act (IRA) provisions for clean energy projects on March 22, 2024. The bonus credit, offered by the IRA, seeks to renew investment in communities traditionally associated with energy production, aiming to fuel job creation in the clean energy sector and cut energy costs.

The Securities and Exchange Commission (SEC) has temporarily suspended the implementation of its Final Rule on Climate-Related Disclosures for Investors. Petitions seeking review of the Final Rules were filed in multiple courts of appeals, leading to the SEC requesting consolidation of the petitions in a single court of appeals. The SEC continues to defend the Final Rules’ validity in court.

The Science Based Targets initiative (SBTi) is revising its Corporate Net-Zero Standard to expand the use of environmental attribute certificates (EACs) for addressing scope 3 emissions. SBTi has begun exploring the use of EACs for abatement of scope 3 emissions, with the goal of  establishing a comprehensive framework that includes transparent rules and thresholds for using EACs in corporate climate action.

Finally, the Net-Zero Asset Owner Alliance (Alliance) has introduced its fourth edition of the Target-Setting Protocol, designed to guide institutional investors in reducing portfolio emissions over the next five years. The protocol sets targets for its members, aiming for a 40% to 60% reduction in greenhouse gas emissions by 2030, in alignment with IPCC estimates and the goal of limiting global warming to 1.5°C. The Alliance provides tools and resources to assist its members in developing credible transition plans.

These recent developments underscore the mounting urgency of addressing climate change and its financial implications. For a more detailed analysis of each topic, download the full report.

Creating a climate of change digest: June 2024

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