January 5, 2010
On December 28, 2009, Mayor Michael Bloomberg signed into law four bills that together comprise New York City’s Greener, Greater Buildings Plan. The legislation, which the Mayor described as “the most significant action to date” to achieving the City’s PlaNYC emissions goals—30 percent reduction of annual greenhouse gas emissions below 2005 levels by 2030—is designed to reduce greenhouse gas emissions by 4.75 percent.
The first of the four bills, Intro 476-A, requires private buildings that exceed 50,000 square feet and City buildings that exceed 10,000 square feet to track and asses their energy and water use by utilizing an internet “benchmarking tool” developed by the federal Environmental Protection Agency. Energy and water use will be reported on an annual basis, and the City will make such information available to the public.
Intro 564-A amends the City’s administrative code to establish an energy conservation construction code for the City. The new energy code sets energy performance standards for covered residential and commercial buildings and applies to all renovations to such buildings. This legislation represents a more stringent approach than that of the New York State Energy Code, the standards of which apply to renovation projects only if such projects entail the replacement of at least fifty percent of a particular building system.
Intro 967-A amends the City’s administrative code to require the performance of energy efficiency audits and the submission of energy efficiency reports for buildings that exceed 50,000 square feet. An energy audit must identify all reasonable energy efficiency and retrofit measures that would reduce energy use and the costs and savings of such measures. Building owners must implement energy efficient maintenance practices prior to the filing of the energy efficiency report for their building. Intro 967-A also amends the New York City Charter to require City buildings to implement those retrofits that have been recommended in the buildings’ energy audits that will pay for themselves in seven years in energy savings.
The fourth bill, Intro 973, calls for the upgrade of lighting systems in commercial buildings exceeding 50,000 square feet before 2025. The legislation also requires that electrical consumption by certain commercial tenants be measured by sub-meters.
In addition to the new legislation, the City’s Greener, Greater Buildings Plan establishes a working group designed to assess green workforce training needs and a revolving loan fund to help finance energy efficient retrofits.
December 4, 2009
On November 19, The AES Corporation (“AES”) entered into a settlement with the Attorney General of the State of New York (“NYAG”) regarding disclosure of climate change risk to investors. This is the third such settlement with the NYAG by a major power company (the other two settling power companies were Xcel Energy and Dynegy). The terms of the NYAG settlements provide a useful roadmap for climate change disclosure, and should be studied carefully by energy, industrial and other companies with significant carbon footprints. In brief summary, the settlement requires each company (on an annual basis) to:
- Analyze material financial risks associated with GHG laws and regulation. This includes:
- identification of current GHG laws and regulations in the states and countries where the companies operate (including the Regional Greenhouse Gas Initiative (RGGI);
- discussion of expected trends in GHG laws and regulations; and
- analysis of the material financial impact (if any) of these laws and regulations on the company’s business.
- Analyze material financial risks from climate change litigation. This includes:
- a description of any climate change litigation involving the company the outcome of which is likely to have a material financial effect; and
- any climate change-related decisions issued by the Supreme Court of the United States, the US Court of Appeals or any court in any jurisdiction in which the company operates, that the company concludes are likely to have a material financial impact on the company’s business.
- Analyze material financial risks from the physical impacts of climate change. This includes material financial risks to the company arising from increases in sea level and changes in weather conditions (such as extreme weather, droughts or water shortages and changes in temperature).
- Analyze strategies to manage climate change risk and GHG emissions. To the extent that the company’s GHG emissions (or the impacts of climate change on company operations) materially impact its financial exposure, the company is required to:
- state its current position on climate change;
- estimate its GHG emissions for the reporting year;
- identify expected GHG emission from new plants that are subject to federal or state permitting;
- include strategies to reduce its climate change risk and adapt to the physical impacts of climate change;
- identify the results of such strategies; and
- address the company’s corporate governance process applicable to climate change issues, including the role of the board of directors and whether officer compensation is based on meeting climate change objectives.
Only a few days after the AES settlement was announced, the NYAG joined a supplemental petition to the Securities and Exchange Commission (SEC) filed by a coalition of institutional investors, asset managers and environmental organizations renewing its call for interpretive guidance on climate risk disclosure. The supplemental petition cites a number of new developments that make the need for national guidance on climate change risk even more compelling than it was when the coalition filed its original petition in 2007. Those developments include:
- Increasing scientific evidence that climate change is happening at a more rapid pace than had previously been predicted;
- Current EPA regulations requiring reporting of greenhouse gas (GHG) emissions;
- The progression of proposed cap and trade legislation through Congress;
- EPA’s proposed finding that GHGs endanger human health and welfare;
- EPA’s proposed “tailoring rule” that would require GHG permitting under the Clean Air Act for large stationary sources; and
- Recent appellate court decisions recognizing standing and federal court jurisdiction over climate change claims.
In a speech before the Corporate Counsel Institute at Northwestern University School of Law on October 9, SEC Commissioner Elisse B. Walter stated:
We are taking a very serious look at our disclosure system in [the climate change] area. Although I’ve stated publicly that we are not an agency populated with climate experts, we are taking affirmative steps to better educate ourselves. I have recently met with a number of experts who analyze the risks and opportunities posed by climate change. Discussions at these meetings have confirmed my belief that climate change is a very serious issue. And I believe that it is time for us to consider issuing interpretive guidance regarding disclosure in this area.
Although Commissioner Walter was speaking for herself and not making an official pronouncement on behalf of the SEC, two working groups have been created within the SEC to study the issue. It appears that the petition filed in 2007 seeking interpretive guidance from the SEC on climate change disclosure is receiving more favorable consideration now than was the case under the prior administration.
September 21, 2009
Dot Earth highlights a new study out in MIT’s Sloan Management Review, from its First Annual Business of Sustainability Survey.
The MIT report finds that 92% of respondents say their company is taking action to address sustainability, but most companies are not doing more than required to meet regulatory requirements. Read more at the links below.
September 18, 2009
A group of investors, organized by the New York State Comptroller’s Office and the Ceres Investor Network on Climate Risk, has announced strong support for cuts in global greenhouse gas emissions. The groups — representing over $13 trillion in assets across 181 institutions — called for reduction of emissions worldwide by 50-85% by 2050. Developing nations are called upon to reduce emissions 25–40% below 1990 levels by 2020.
Revisions to the Clean Development Mechanism to ensure real, permanent and verifiable emission
reductions
The statement seeks increased governmental investment in energy efficiency initiatives, and low-carbon technologies. The group also focuses on issues common to international sequestration projects, calling for, “revisions to the Clean Development Mechanism to ensure real, permanent and verifiable emission reductions.” Adaptation to unavailable adverse impacts is also encouraged. A global carbon market, with caps on emissions and linkages between different trading schemes, would help effectuate the cuts called for in the issue paper.
The report marks the latest in a string of efforts on behalf of investors to encourage climate change action–a recent report found that shareholder resolutions urging climate action were more both common and more successful than in years past.
August 25, 2009
A new report finds that shareholder resolutions on the issue of climate change are increasing in both frequency and success. The report, released by the non-profit groups Ceres and the Interfaith Center on Corporate Responsibility, finds that a record number of 68 climate-related shareholder resolutions were filed during the 2009 proxy season. The report indicates that 31 resolutions were withdrawn in response to the company in question taking affirmative steps on climate. Higher levels of support are being seen in votes on climate-related shareholder resolutions, with 6 resolutions receiving more than 30% of the vote.
One resolution, by shareholders of IDACORP—an Idaho energy company—achieved a majority vote of 51.2%. Following the vote the company is working with a shareholder advisory group on identifying renewable energy pilot projects, and the company promised to adopt greenhouse gas reduction goals, according to the report. The majority vote on the IDACORP resolution marked the first time such a resolution has achieved majority approval.
If the trends identified in the report continue, corporations will increasingly face pressure from shareholder resolutions to take action on the issue of global climate change.
August 24, 2009
Todd Woody at Green Inc. takes a look at the financing and Power Purchase Agreement arrangements between Pacific Gas & Electric (PG&E) and BrightSource Energy, a solar plant developer from Oakland, CA. The transaction also included a technology royalty agreement, the first of its kind that PG&E has entered into. Read the full account at the link below.
August 18, 2009
On Thursday August 13, 2009, Judge Deborah A. Batts of the United States District Court in Manhattan ruled that certain provisions of the Bigger Better Bottle Bill (“Bill”) could be implemented immediately. This ruling followed the issuance of a preliminary injunction in May that halted enactment of the entire Bill until April 1, 2010. Judge Batts’ ruling determined that:
- NY State may begin collecting 80% of the unclaimed deposits on all non-water bottled beverages from the bottling industry;
- The beverage industry is required to increase the handling fees paid to redemption centers for taking empty bottles;
- All provisions involving “bottled water” cannot go into effect until at least October 22, 2009 when a follow up hearing will be held; and
- No decision was rendered on the New York-specific UPC bar code.
The Bill, which was passed in April, was challenged in May when Nestle, the Polar Corp., and the International Bottled Water Association (collectively, the “water companies”) filed suit in the U.S. District Court for the Southern District of New York. The water companies claimed that the Bill was unconstitutional because it violated the Dormant Commerce Clause, the Equal Protection Clause, and Substantive Due Process of the U.S. Constitution. Judge Thomas P. Griesa of the United States District Court in Manhattan ruled in favor of the water companies when he determined that certain provisions of the Bill were unconstitutional. In particular, the requirement that a NY State-specific UPC be placed on all bottles sold in the state was found unconstitutional due to infringement on interstate commerce. For more information on Judge Griesa’s reasons for issuing the preliminary injunction see our prior post on that ruling.
(more…)
Older Posts »
|
|
| |
|
