Input Stories

Input Stories

Businesses Eye Shifting ESG Landscape

Companies in the United States and around the world will face sustainability policy decisions in the coming year that could impact their approach to climate issues, according to The Wall Street Journal (subscription).

The SEC: The U.S. Securities and Exchange Commission has signaled that it will publish a range of ESG-related proposals early in 2022, including around climate impact disclosure and human capital management. The shape and scope of those rules remains to be determined, with questions still outstanding about how the SEC will approach topics like greenhouse gas reporting, scenario analysis and implementation requirements.

  • Our take: “Manufacturers are taking the lead in innovating solutions to climate change, ensuring clean air and water and enhancing diversity and inclusion in the workforce and in the boardroom,” says NAM Senior Director of Tax and Domestic Economic Policy Charles Crain. “The NAM will continue to engage with the SEC as it considers new ESG rules so we can ensure that investors have access to financially material information about these critical efforts via a principles-based reporting framework.”

China’s carbon market: If implemented in a verifiable, transparent way, China’s new emissions-trading system has the potential to reduce the country’s emissions with strict new pollution allowances. And if China implements robust rules, it could make China-produced products more expensive and influence how other countries approach carbon trading.

The EU’s sustainability fight: The EU is facing internal disagreements over a plan to treat natural gas and nuclear power as sustainable energy sources when they meet strong environmental protections. The result of the disagreement will shape how companies are affected by a range of sustainability-related EU regulations.

ISSB integration: At last year’s U.N. climate conference, several international organizations announced they would join forces to set sustainability standards under a new International Sustainability Standards Board. How those various organizations ultimately integrate into a larger framework is still unclear.

Biodiversity: Many companies and organizations have become newly focused on the principle of “biodiversity”—that is, the need to slow and reverse damage to the natural world. If that broader focus takes center stage, it could add new considerations to traditionally carbon-centric climate action. 

The last word: “There is a lot of competing views and priorities to juggle right now, but manufacturers have understood that for a long time. We have to find a way to do it all at once: protect the planet, profit and people,” explained NAM Vice President of Energy and Resources Policy Rachel Jones. “That’s the North Star of sustainability and a critical balance the NAM will continue to push policymakers at home and abroad to face in a fair and honest way.”

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