The European Commission has introduced reporting rules for importers under the Carbon Border Adjustment Mechanism (CBAM), the EU's new carbon tax on imported goods, aiming to align carbon prices paid by European and non-EU producers. Starting in October 2023, companies must collect data on imported products' embedded emissions, with reporting due by January 2024. This regulation extends through CBAM's transitional phase until the end of 2025. CBAM aims to prevent "carbon leakage" where firms shift emissions-intensive production to nations with lax environmental policies.
CBAM will equalize carbon prices for EU products under the Emissions Trading System with those from other countries. Importers will need CBAM certificates to bridge price disparities. The new rules mandate importers to report on emissions, including origin, production facility location, and emissions source coordinates. Data on direct and indirect emissions, such as electricity consumption during production, is required. Initially, CBAM targets sectors like iron and steel, cement, and electricity, with limited obligations during the transition phase.
The EU Commission has issued guidance to assist importers and third-country producers in complying with these rules, along with developing IT tools and training resources. These measures signify the EU's commitment to climate action and global carbon pricing fairness. Stakeholders should monitor these developments closely.
Updapt Views:
The EU's adoption of the Carbon Border Adjustment Mechanism (CBAM) and import emissions reporting rules offers governments revenue opportunities and carbon emission reductions while providing businesses with market stability, incentives for green practices, and regulatory clarity. This proactive approach also positions the EU as a global leader in sustainability and promotes positive trade relations.
In a significant move towards achieving its climate goals, the Government of Canada has unveiled the proposed Clean Electricity Regulations. These regulations mark a vital step in decarbonizing the nation's power grid, aligning with its commitment to achieve a net-zero electricity grid by 2035. Canada's dedication to reducing emissions in the electricity sector reflects its promise at COP26 in 2021 and its collaboration with the G7 to achieve predominantly decarbonized electricity sectors by 2035.
These regulations, which were anticipated following Canada's commitment with the U.S. in 2022, offer a technology-neutral approach. This approach empowers regional decision-makers to select the most suitable path for transitioning to a clean grid tailored to their circumstances. While stringent pollution standards for power generation are set, the regulations do not mandate specific energy technologies.
By implementing these regulations, Canada anticipates reducing emissions from electricity generation by over 340 million tonnes by 2050. A net-zero grid not only supports climate action across the economy but also paves the way for clean technologies, reducing energy costs and dependency on volatile oil and gas prices.
It is a giant leap towards a sustainable future, promoting clean air, good jobs, and a greener Canada. Additionally, the regulations allow for fossil fuel-based power generation in some circumstances, with strict emissions limits and requirements for carbon capture technology. Exemptions are also granted for remote communities with limited access to alternative power sources. These regulations lay the foundation for a cleaner, more sustainable energy future for Canada.
Updapt Views:
Canada's push for a net-zero electricity grid by 2035 offers significant economic benefits. It promotes job creation, lowers energy costs, attracts investments, reduces price volatility, and enhances business reputations. This commitment also encourages innovation and provides businesses with regulatory clarity, positioning them well in a growing global green market.
In a resounding call for transparency and corporate responsibility, a group of investors, collectively managing over $1 trillion in assets, has united behind the International Sustainability Standards Board (ISSB), urging the prioritization of global reporting standards encompassing both human capital and human rights.
The ISSB has initiated a Request for Information (RFI) to shape its two-year work plan. Notably, it is focusing on biodiversity ecosystems and human capital and human rights, alongside exploring sustainability information integration into financial reporting. This process reflects the ISSB's dedication to stakeholder input and evolving sustainability priorities.
Responding to the ISSB's RFI, a consortium of 24 investors, led by ShareAction, has penned a compelling letter. They assert that the ISSB must prioritize research into both human capital and human rights disclosure standards.
The group demand for comprehensive workforce data is at an all-time high. With the global workforce landscape in flux, businesses are grappling with rising resignation rates, layoffs, and the complexities of post-pandemic labor markets. Extensive research has underscored the link between social and governance scores and firm value, emphasizing the vital need for comprehensive social disclosures.
The ISSB is well-positioned to tackle human capital and human rights issues with success. It has a head start and with various existing investor-focused disclosure frameworks like the WDI. With a compelling demand from both investors and businesses for comprehensive social standards, the ISSB has unique opportunity to create universally accepted standards for human capital and human rights reporting.
Updapt Views:
Embracing these reporting standards can position businesses and companies as responsible and forward-thinking entities, Comprehensive reporting enables businesses to identify and mitigate human rights risks more effectively.
IFC and IDEI have teamed up to advance sustainable construction in Mexico through an $800 million green bond initiative. The collaboration between the International Finance Corporation (IFC), a member of the World Bank, and Internacional de Inversiones (IDEI), a specialist in sustainable real estate projects, marks a significant milestone.
This green bond represents a transformative opportunity for Mexico's construction financing landscape. Its primary goal is to promote widespread adoption of certified sustainable construction practices and green financing standards while strengthening the nation's climate finance market. The bond will be issued in two series: 500 million pesos and 300 million pesos, with IFC providing a 50 percent guarantee to boost investor confidence.
Addressing climate change is paramount, particularly in Mexico, where many non-urban areas rely on non-renewable energy sources. In addition to addressing the housing deficit exacerbated by the COVID-19 pandemic, the bond will play a crucial role in reducing greenhouse gas emissions in the country.
The raised funds will support additional square meters in real estate projects certified by EDGE (Excellence in Design for Greater Efficiencies), an IFC initiative streamlining green certification for real estate developers, offering a swift and cost-effective solution.
This partnership signifies a shared commitment to sustainability, promising a more environmentally-conscious future while addressing Mexico's housing and climate challenges, with the potential for substantial economic growth and development nationwide.
Updapt Views:
Mexico's green bond initiative promotes sustainable construction, reduces greenhouse gas emissions, addresses the housing deficit, and strengthens the climate finance market. This endeavor aligns with global sustainability goals, fosters economic growth, and improves living conditions for Mexican citizens.
New Zealand's government and investment titan BlackRock have unveiled a NZ$2 billion (USD$1.2 billion) fund dedicated to advancing the nation's climate infrastructure.
This initiative's primary aim is to bolster New Zealand's ambitious pursuit of becoming a global renewable energy leader. Contributions to the fund will come from various sources, including private sector funds, state-owned enterprises within New Zealand, and superannuation funds.
The fund's dynamic nature will empower businesses by providing them with access to significant capital resources, enabling investments in clean technology and vital infrastructure. These investments are poised to expedite New Zealand's ongoing mission to reduce emissions, with a particular focus on key areas such as battery storage, wind and solar energy generation, green hydrogen production, and expanding electric vehicle charging infrastructure.
Key targets within the plan include achieving 50% of total final energy consumption from renewable sources by 2035 and crafting strategies for a net-zero economy by 2050. Additionally, New Zealand has set an audacious goal of achieving 100% renewable electricity by 2030.
Updapt Views:
Transitioning to renewable energy sources and energy-efficient practices can lead to long-term cost savings on operational expenses for the businesses, These steps provide a strategic advantage, enhance profitability, and position the country as a leader in sustainability and innovation.
