Tech startups see green in SEC rules

Apr 08, 2022 View in browser   By Debra Kahn and Jordan Wolman THE WEEK THAT WAS The SEC's proposed climate rules are fueling a boom for some tech firms. | (Toby Talbot/AP Photo) NEW SOFTWARE, WHO DIS? — The Securities and Exchange Commission's proposed rules requiring companies to start disclosing their greenhouse gas emissions and climate-related risks won't go into effect until 2024 at the earliest. But software startups that help corporations keep track are already seeing a boom, Avery Ellfeldt reports for POLITICO's E&E News. Under the SEC's proposed rules, the biggest companies will have to start reporting their 2023 emissions in 2024. "Really they have a very short runway to get their act together," said Tim Mohin, the chief sustainability officer at Persefoni, a leading carbon accounting software company. "We've gotten lots of calls from these large companies saying, 'Tell us about what you do and how we can work with you.'" There are multiple flavors of sustainability management software. Persefoni is the "TurboTax of greenhouse gas reporting," Mohin said, focusing on collecting data and crunching numbers. Another company, Watershed, also promises its clients detailed emissions accounting — including by tracking down data from suppliers directly — plus guidance on ways to help bring down emissions. They've helped Sweetgreen "measure the carbon footprint of the cheese in its salads based on the agricultural practices of the creameries it buys from," said Taylor Francis, the company's co-founder. Another, nZero, touts a "24/7 approach" to calculating emissions that factors in the differences in output and intensity at different points during the day, rather than relying on industry or activity averages. Will this proliferation of accounting software make things more or less murky? The SEC rule is aimed at providing clarity around what types of information companies have to disclose and whether outside groups will need to review it. But it isn't expected to guide how they should be collecting and calculating their emissions. In that way, neither the agency nor the startup companies are addressing a key obstacle: that a range of greenhouse gas accounting methodologies already exist — but aren't harmonized, said Nicole Labutong, principal with the Rocky Mountain Institute's Climate Intelligence Program. While some of those methodologies rely heavily on high-level data and industry averages that offer little insight into the emissions associated with particular suppliers and even products, others are more granular, but might skip over certain asset classes or types of products. The startups are "collecting as much data as possible, they're filling in most of the gaps with emissions factors and other estimations," Labutong said. "But if you don't calculate everything correctly or consistently, then that still lends itself to a wide range of error for any particular organization." Companies might have to wait for clarity until an outside group like the International Sustainability Standards Board comes up with global criteria for disclosures, a step one expert said would likely would prompt an industry-wide software update. BUILDING BLOCKS High gasoline prices have obscured lawmakers' focus on climate change. | (Nam Y. Huh, File/AP Photo) CLIMATE ON THE BACK BURNER — Climate change is getting short shrift in the U.S. response to the Russian invasion. That will probably continue if Wednesday's House Energy and Commerce hearing on rising gas prices is any signal, as Nick Sobczyk reports for POLITICO's E&E News. The first person to discuss greenhouse gas emissions at length during the hearing was BP America President David Lawler. Democrats accused oil company CEOs of price gouging, but didn't hammer them on climate change, even as they're still trying to salvage some version of their massive climate and social spending bill. Instead, they asked oil executives why they weren't increasing production faster to keep up with shortfalls of Russian imports. "We need a long-term energy policy that moves toward clean energy, that will keep us independent from foreign oil, and that's what we need to do," said Oversight and Investigations Subcommittee Chair Diana DeGette (D-Colo.). "But you know something? When my constituents went to get gas in their cars today, they paid $3.95 a gallon. And nationally, they're paying $4.16 a gallon." It could portend a larger rhetorical shift as Democrats enter the midterm season with high gas prices and inflation a major focus for voters. Republicans are standing by, eager to pounce. "I've certainly enjoyed watching my Democrat[ic] colleagues convulse dramatically between two opposing stances — drill more, drill less," said Rep. Dan Crenshaw (R-Texas). WHAT'S GOING ON? — Driving and gasoline consumption usually go hand in hand. But electric vehicles may be breaking that link in California, as David Ferris reports for POLITICO's E&E News. U.S. gasoline consumption last year bounced back to nearly where it was before the pandemic, or 8.3 million barrels per day, according to Energy Information Administration data released Tuesday. But sales dropped by 16 percent in California compared with pre-pandemic times (2016-19, in EIA's calculations). EIA crunched the numbers to tease out the effects of population change and miles driven, and found that most of the decline wasn't because Californians were driving less. Researchers said it could be partly attributable to the fact that the Golden State has almost 40 percent of the nation's electric vehicles. If this trend holds and expands to other states as more EVs hit the market, it could have national implications for oil consumption and greenhouse gas emissions. In related news, the Los Angeles City Council voted yesterday to set a goal of electrifying all of its 10,000 city-owned vehicles and building charging infrastructure to match. The bill set no timeline for the conversion. YOU TELL US GAME ON – Happy Friday! Welcome to the Long Game, where we're delivering the latest on efforts to shape our future. Tuesday through Friday, we've got data-driven storytelling, compelling interviews with industry and political leaders, and more news to keep you in the loop on sustainability. Our team is sustainability editor Greg Mott, deputy editor Debra Kahn, reporters Lorraine Woellert and Catherine Boudreau and digital producer Jordan Wolman. Reach them at gmott@politico.com, dkahn@politico.com, lwoellert@politico.com, cboudreau@politico.com and jwolman@politico.com. Want more? Sign up for the Long Game. Four days a week and still totally free!   SUBSCRIBE TO NATIONAL SECURITY DAILY : Keep up with the latest critical developments from Ukraine and across Europe in our daily newsletter, National Security Daily. The Russian invasion of Ukraine could disrupt the established world order and result in a refugee crisis, increased cyberattacks, rising energy costs and additional disruption to global supply chains. Go inside the top national security and foreign-policymaking shops for insight on the global threats faced by the U.S. and its allies and what actions world leaders are taking to address them. Subscribe today.     WHAT WE'RE CLICKING — For the second year in a row, we saw a record increase in atmospheric levels of methane, the National Oceanic and Atmospheric Administration reports . The annual increase in methane in 2021 was the largest annual increase since measurements began in 1983. "Global emissions continue to move in the wrong direction at a rapid pace," NOAA administrator Rick Spinrad said. "The evidence is consistent, alarming, and undeniable." — Going EV? You will want to read this piece of advice for how to take care of that precious new car battery. Wired has you covered. LOOK AHEAD April 12 — The American Enterprise Institute for Public Policy Research holds a discussion on climate change and food security at 9 a.m.  April 13 — The Wilson Center holds a forum on decarbonization and nuclear power in China at 9 a.m. April 13 — The Wilson Center will discuss the impact of Russia's war on the food, energy and mineral supply chains at 11:30 a.m. April 13 — The Environmental and Energy Study Institute discusses anticipating threats and building preparedness for climate change at 12 p.m. Events are listed in Eastern Time   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.       Follow us on Twitter Catherine Boudreau @ceboudreau Debra Kahn @debra_kahn Greg Mott @gwmott Lorraine Woellert @Woellert Jordan Wolman @jordanwolman   Follow us

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