ESG Monthly News Update: November 2024
November 2024 ESG Insights: How the Latest Shifts Are Shaping the Future of Sustainability
November 2024 has been a pivotal month in the ESG and sustainability space, with significant shifts that could influence the future direction of sustainability efforts. Across the globe, companies continue to invest heavily in sustainability, especially in addressing climate change. The rise of nature-related frameworks, enhanced reporting standards, and more regulatory attention have driven companies to align their operations with long-term environmental goals. However, the shifting political landscape—highlighted by the election of Donald Trump—raises critical questions about the future of these efforts.
While many U.S. companies, along with global leaders, have committed to long-term emissions reductions and climate action, the political landscape is evolving in ways that could test the sustainability of this progress. Will these investments hold up in the face of potential regulatory rollbacks, or will the steady progress made in recent years continue despite these challenges?
At the same time, global events like COP29 reflect the ongoing investment in the future of climate action. For corporate leaders, it’s essential to ensure sustainability strategies are not only robust but also flexible, keeping pace with global shifts and local regulatory frameworks. Staying ahead of regulatory changes and understanding their implications will be key to maintaining momentum in ESG programs.
Stay tuned as we continue to track these shifts and provide insights on how to navigate the changing ESG landscape.
If there are questions about how these developments might impact sustainability strategies or efforts to align with evolving expectations, consider scheduling a free 60-minute consultation with our team.
What We Read in November 2024
Reporting Matters 2024: Changing Gears in Sustainability Reporting
WBCSD, November 7, 2024
WBCSD’s Reporting Matters 2024 report explores how companies are adapting to increased demands and higher expectations in sustainability reporting. This year’s edition highlights key trends from an in-depth review of 181 reports, including a significant rise in double materiality assessments and a growing emphasis on sustainability governance and performance metrics.
The report reveals a notable shift in how companies approach frameworks and standards, with a dramatic increase in references to nature-related frameworks like TNFD and SBTN. It also highlights the rising importance of external assurance, with 90% of reports including external assurance on sustainability indicators.
Reporting Matters 2024 includes 35 good practice examples from a diverse range of companies, showcasing how businesses are navigating the transition to more robust and impactful sustainability reporting.
Trump Won. What Will Happen to Electric Vehicles?
Gear, November 6, 2024
Trump’s election win complicates the future of electric vehicles (EVs), with potential rollbacks of Biden-era policies like EV tax credits and fuel economy standards, though undoing these measures will require Congressional support.
Despite Trump’s criticisms of EV subsidies, his relationship with Tesla’s Elon Musk and industry leaders’ backing of certain regulations may influence the direction of EV policies, especially in red states.
States like California will continue pushing forward with aggressive EV policies, while the Biden administration is expected to finalize key regulations before leaving office, ensuring continued progress on the EV transition.
Read more here.
Exxon Chief to Trump: Don’t Withdraw From Paris Climate Deal
New York Times, November 12, 2024
Darren Woods, CEO of ExxonMobil, urged President-elect Donald Trump to maintain U.S. participation in the Paris climate agreement, emphasizing the necessity of a global framework to manage emissions effectively.
Speaking at the COP29 climate summit in Baku, Azerbaijan, Woods highlighted the importance of the U.S. having a seat at the table to ensure equitable and practical climate policies.
Woods advocated for government incentives that enable companies to transition to cleaner energy profitably, aligning environmental goals with economic interests.
Read more here.
Trump May Thwart Federal Climate Action, but Opportunities for Progress Remain
World Resources Institute, November 13, 2024
With Trump’s second term, significant climate setbacks are expected, including cuts to climate agencies, a focus on fossil fuel production, and a potential withdrawal from the Paris Agreement. For example, Trump has already promised to rescind billions in clean energy funding from the Inflation Reduction Act.
Trump’s policies may stall new federal climate legislation and target environmental justice initiatives, but subnational actors like states, cities, and businesses are stepping up to drive climate action. California, for instance, has approved a $10 billion bond for climate change adaptation, and Maryland has issued an executive order to ensure continued progress toward its climate goals.
Bipartisan support for clean energy and industrial decarbonization remains, with opportunities for progress in geothermal, carbon removal, and critical minerals, even in a challenging political environment. For example, the bipartisan Carbon Removal and Efficient Storage Technologies (CREST) Act and initiatives for next-generation geothermal energy are gaining traction across party lines.
Read more here.
ESG, Climate Rules at Stake Under a Second Trump Term
Utility Dive, November 14, 2024
The SEC's climate-risk disclosure rule, which requires large companies to report on climate-related risks and mitigation strategies, faces further challenges with Trump’s second term. The rule, already delayed due to lawsuits from Republican-led states, may be overturned or weakened under the new administration.
Other ESG regulations are also at risk. Trump’s administration could halt or scale back rules aimed at combating greenwashing, improving human capital management, and enhancing corporate diversity. This could stall progress in standardizing ESG disclosures.
The Department of Labor’s ESG rule, which allows fund managers to consider ESG factors in investment decisions as a tiebreaker, is expected to face significant opposition. With ongoing legal challenges and resistance from Republican states, a Trump administration may push to revoke or limit this rule, shifting focus back to traditional financial factors.
Read more here.
Here’s Where Voters Delivered Climate Wins at the State Level
Trellis, November 20, 2024
Climate-focused ballot measures gained significant support in the November elections, reflecting public demand for state-level action on climate adaptation and mitigation. Examples include:
California voters approved Proposition 4, authorizing $10 billion in bonds to fund climate initiatives, including water projects, wildfire prevention, and offshore wind development.
Louisiana passed a constitutional amendment requiring revenue from renewable energy production to go directly into the Coastal Protection and Restoration Fund to finance coastal preservation projects.
Washington residents voted to keep the state’s Climate Commitment Act, preserving its cap-and-trade program that reduces emissions through annual allowance limits.
Read more here.
COP29: Five Things We Learned
Bloomberg Green, November 24, 2024
$300 Billion Climate Finance Pledge: Developed countries committed to providing at least $300 billion annually by 2035 to help developing nations combat climate change. However, many developing countries argue the amount is insufficient and are pushing for more affordable financial support.
Carbon Credit Trading Agreement: COP29 finalized a deal to launch global carbon credit trading under the Paris Agreement. While this opens up new opportunities for carbon markets, critics warn that the rules may allow credits with little environmental value, potentially leading to greenwashing.
Saudi Arabia and China’s Influence: Saudi Arabia and China played a significant role in blocking stronger language on fossil fuels, with Saudi Arabia leading a bloc of nations resisting any sector-specific transition commitments. China, while wealthy, refused to officially join the climate finance donor group.
Controversy Around Petrostate Hosts: Azerbaijan's leadership of COP29 was controversial due to its status as a petrostate. However, a report suggested Azerbaijan’s fossil fuel production is lower than that of previous COP hosts, complicating the debate around fossil fuel-producing countries hosting climate talks.
Looking Ahead to COP30: With COP30 scheduled to take place in Brazil, countries are expected to present new emission reduction commitments. However, debates around the language on fossil fuel transitions are set to continue, creating another challenging negotiation in 2025.
Read more here.
Kick-start for Carbon Credit Market After Loose Rules Agreed at COP29
Financial Times, November 23, 2024
COP29 in Baku finalized rules for carbon credit markets, allowing countries and companies to trade emissions reduction credits under UN oversight, as outlined in the Paris Agreement.
A dispute over the authority of a proposed UN registry for tracking carbon credits was resolved through compromise, enabling the launch of the market.
Experts raised concerns about the loose and opaque rules, warning they may lead to greenwashing and misalignment with net-zero goals. There will also be further discussions on the types of credits allowed, particularly those tied to avoided emissions, which some argue could undermine efforts to cut actual emissions.
Read more here.
U.N. Reaches $300 Billion Climate Financing Deal as Trump Looms
Wall Street Journal, November 24, 2024
Wealthy nations, including the U.S. and Europe, committed to tripling annual climate financing for developing countries to $300 billion by 2035 at COP29 in Baku.
The incoming Trump administration threatens U.S. contributions, putting pressure on European nations to fill potential funding gaps amidst budget constraints from the Ukraine war and military spending.
Developing nations sought $1 trillion annually by 2030 but accepted the lower target, while wealthier developing countries like China and Gulf states offered limited additional support.
Read more here.
A Climate Change: Exploring Donald Trump’s Climate Agenda
The New York Times, November 25, 2024
Trump’s presidency will likely undo many of Biden’s climate policies, including pulling out of the Paris Agreement, repealing pollution limits on automobiles and power plants, and easing oil and gas drilling regulations.
A major focus will be dismantling the Inflation Reduction Act, which includes clean energy funding, tax credits for electric vehicles, and subsidies for wind and solar energy.
Despite opposition from some corporate sectors, like automakers and utilities, Trump's policies will push for reduced environmental protections, including ending offshore wind turbine subsidies and eliminating clean energy incentives.
Read more here.
Trump and the AI Power Boom Are Putting Utility Climate Goals at Risk
Bloomberg Green, November 2024,
The rapid growth in electricity demand, driven by data centers and the electrification of industries, is forcing utilities to rethink their climate strategies. Some companies are delaying the retirement of coal plants and planning more natural gas generation to meet rising demand.
President-elect Trump’s policy shift towards fossil fuels, including a vow to cut power plant pollution regulations, will make it more difficult for utilities to achieve net-zero emissions goals. Some utilities in Republican-led states have already altered or delayed their climate targets due to political and economic pressures.
Major utilities like American Electric Power and FirstEnergy are adjusting their emissions reduction targets, with some abandoning ambitious timelines due to resource concerns and the potential easing of federal emissions regulations under Trump. This has raised doubts about whether the U.S. will meet its climate goals.
Read more here.