EU climate rule about to hit U.S. businesses

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Oct 17, 2023 View in browser   By Arianna Skibell Presented by Chevron Analysts work at the Euronext headquarters in the business district La Defense, outside Paris. | Kamil Zihnioglu/AP The U.S. has struggled to require companies to disclose how much their operations pollute the atmosphere. But a new European regulation is making many of them do it, writes Avery Ellfeldt. Starting as soon as January, major U.S. companies that raise money on European stock exchanges will start compiling information on their carbon emissions, climate risks and strategies to counter the damage. By 2025, when a more expansive European Union rule takes effect, an estimated 3,000 U.S. businesses will be required to provide such disclosures. The rules will cover any U.S.-based business that has an EU branch with more than 250 employees, more than $42 million in local revenue or a balance sheet larger than $21 million. That means U.S. companies can no longer afford to wait to see what the Securities and Exchange Commission will do with its climate disclosure proposal. Six experts who work closely with U.S. companies on corporate climate disclosure told Avery their clients have already started preparing to meet the EU mandate. A tougher mandate from Europe The SEC proposed a climate disclosure rule last year, but the agency is trying to deal with pushback from Republican lawmakers and industry groups. Major differences exist between the EU regulation and the narrower U.S. proposal. While the U.S. rule focuses almost solely on climate risks to companies and their bottom lines, the EU version also requires disclosures on how businesses affect society. “That’s where most angst is for the U.S. companies,” Farzad Damania, a partner at Katten Muchin Rosenman who represents companies on securities law compliance issues, told Avery. “Most U.S. companies don’t know how to do that, so that’s where the stress point is.” The European standard also requires companies to share information on their approach to biodiversity and pollution, how extreme weather will affect profits and their greenhouse gas emissions — including those from supply chains and customers.   It's Tuesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.   A message from Chevron: Chevron knows methane management is critical for a lower carbon future. We’re striving to lead in methane management with innovative practices, partnerships, and new technologies. These are a few ways we’re aiming to keep methane in the pipe.   Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Catherine Morehouse breaks down the details of a new plan to reduce the risk of blackouts during extreme weather and why both fossil fuel and clean power generators are on board.   A message from Chevron:   Power Centers A Venture Global LNG facility is pictured in Louisiana. | Venture Global LNG ‘Game-changer’ LNG project A $10 billion liquefied natural gas terminal could help revitalize a southwestern Louisiana community that’s been repeatedly pummeled by hurricanes — if the facility can withstand climate change, writes Miranda Willson. If approved, the project would be one of the largest of its kind, bringing thousands of workers to Cameron Parish, whose economy has struggled after being hit by four hurricanes in 18 years. It would also become one of the biggest carbon polluters in the Bayou State, raising questions about the role of LNG in a warming world. Thunberg arrested Climate activist Greta Thunberg was detained by police in London today while protesting against the oil and gas industry, writes Laura Hülsemann. Thunberg joined other protesters in front of the InterContinental Hotel on Park Lane in London where she warned that "the world is drowning in fossil fuels," before being led away by police. In Other News Breaking point: A severe drought has pushed the imperiled Amazon rainforest to the brink. Climate costs: Home insurance is so high in this Florida town that residents are leaving.   GROWING IN THE GOLDEN STATE: POLITICO California is growing, reinforcing our role as the indispensable insider source for reporting on politics, policy and power. From the corridors of power in Sacramento and Los Angeles to the players and innovation hubs in Silicon Valley, we're your go-to for navigating the political landscape across the state. Exclusive scoops, essential daily newsletters, unmatched policy reporting and insights — POLITICO California is your key to unlocking Golden State politics. LEARN MORE.     Subscriber Zone A showcase of some of our best subscriber content. U.S. climate envoy John Kerry speaks in Sharm el-Sheikh, Egypt, in 2022. | Sean Gallup/Getty Images Biden's proposal to put the World Bank in charge of a fund to pay poorer countries suffering irreversible climate damage is threatening to rattle U.N. climate talks in Dubai, United Arab Emirates, next month. More than half of the 2.6 million residents in the Miami area will experience “climate gentrification” and pressure to relocate if sea levels continue to rise. The world's electricity grids require a massive overhaul by 2040 for countries to meet their climate goals, the International Energy Agency said Tuesday. That's it for today, folks! Thanks for reading.   JOIN 10/25 FOR A TALK ON THE FUTURE OF GRID RELIABILITY: The EPA’s proposed standards for coal and new natural gas fired power plants have implications for the future of the electric grid. These rules may lead to changes in the power generation mix—shifting to more renewable sources in favor of fossil-fuel plants. Join POLITICO on Oct. 25 for a deep-dive conversation on what it will take to ensure a reliable electric grid for the future. REGISTER NOW.       A message from Chevron: By 2028, our upstream methane intensity target is set to be 53% below the 2016 baseline. To help us get there, we’ve trialed over 13 advanced methane technologies including satellites, planes, drones, and fixed sensors to help reduce methane emissions intensity. In the Permian, we have deployed real-time autonomous optimizers that continuously monitor facilities and well conditions to help prevent flaring, venting and well shutdowns. Developing new solutions to provide energy that’s affordable, reliable and ever-cleaner, that’s energy in progress.     Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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