Creating a climate of change digest

More than 30 senior insurance supervisors from 16 countries attended the ASSAL-FSI-IAIS High-Level Meeting, co-organized by the Association of Insurance Supervisors of Latin America (ASSAL), the Financial Stability Institute (FSI) of the Bank for International Settlements (BIS), and the International Association of Insurance Supervisors (IAIS), hosted by the Central Bank of Uruguay. Topics included insurance regulatory reforms in Latin America, supervisors' roles against natural catastrophe challenges, climate-related risks, and operational resilience in the tech-driven insurance sector.

At the IOSCO Presidents Committee meeting on May 28, the ISSB chair unveiled the ISSB Standards Adoption Guide. Published in May 2024, the guide supports global consistency in sustainability disclosures, increasing transparency and reducing costs. It also outlines various jurisdictional approaches and will be updated by the IFRS Foundation to reflect ongoing developments and jurisdictional progress.

Also on May 28, the Biden-Harris administration announced new principles for high-integrity Voluntary Carbon Markets. The initiative includes a Joint Statement of Policy and Principles for Responsible Participation in VCMs, outlining the US government's strategy to promote high-integrity VCMs. The policy highlights VCMs' potential to attract private capital for the energy transition and climate action, and also provides voluntary principles for US market participants to follow.  

On May 29, the US Department of the Treasury and the Internal Revenue Service (IRS) released proposed guidance on the Clean Electricity Production Credit and Clean Electricity Investment Credit established by the Inflation Reduction Act of 2022. The Inflation Reduction Act's Clean Electricity Production Credit (section 45Y) and Clean Electricity Investment Credit (section 48E) will replace existing tax credits. The Notice of Proposed Rulemaking (NPRM) incentivizes net-zero GHG emissions for clean energy facilities and provides guidance on determining GHG emissions rates, petitioning for provisional rates, and eligibility for the new credits.

On June 4, Carbon Disclosure Project (CDP) unveiled its new disclosure platform to streamline and remove barriers to high-quality reporting on climate and nature. CDP launched both a revamped reporting platform as well as a new corporate questionnaire aligned with IFRS S2, amid increasing climate reporting mandates. This alignment aims to drive efficiencies as jurisdictions representing nearly 55% of global GDP adopt or align with ISSB Standards.

The ISSB delivers further harmonization of the sustainability disclosure landscape as it embarks on a new work plan. From November 2023 to April 2024, the ISSB reviewed feedback from its May 2023 Request for Information and set its 2024–2026 priorities. The work plan focuses on connectivity, stakeholder engagement, and interoperability, emphasizing the implementation of IFRS S1 and IFRS S2. Key priorities include harmonizing transition plan disclosures, effective GHG emissions measurement, partnering with CDP for alignment, achieving full interoperability with GRI, and considering TNFD recommendations for biodiversity research.

On June 28, California Governor Gavin Newsom’s administration proposed that the implementation of California’s mandatory climate disclosure laws relating to GHG emissions and climate-related risks be delayed for two years. Newsom's office proposed amendments through the 2024–25 Budget Trailer Bill, allowing it to bypass standard legislative procedures. Key amendments include delaying scope 1 and 2 GHG emissions disclosure for entities with over $1 billion in revenue until 2028, and scope 3 until 2029. Entities earning over $500 million won't need to disclose climate-related financial risk until 2028. 

On July 8, the Office of Information and Regulatory Affairs released the semiannual Unified Agenda of Regulatory and Deregulatory Actions, which includes the Securities and Exchange Commission’s Spring 2024 Regulatory Agenda. The SEC has delayed the release of three ESG-related regulations on greenwashing, human capital management, and corporate board diversity. The rule, “Enhanced Disclosures by Certain Investment Advisers and Investment Companies about ESG Investment Practices,” now requires additional disclosures from various advisers and companies. Initially set for April 2024, the final rule's release has been postponed to October 2024.

The Science Based Targets initiative (SBTi) calls for financial institutions worldwide to pilot test the draft Financial Institutions Net-Zero Standard. SBTi invites global financial institutions to pilot test the Financial Institutions Net-Zero (FINZ) Standard, aimed at driving net-zero transformation. The pilot phase, which began on August 19, 2024, will last at least six weeks and seeks feedback on the newly released draft standards. Participants will gain early insights, address issues, and provide feedback.

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