THIS MATERIAL IS A MARKETING COMMUNICATION.
ESG Monthly (October 2022)
This month’s highlights:
The International Sustainability Standards Board (ISSB) confirmed that Scope 3 emissions will be included as part of required company climate disclosures being developed by the International Financial Reporting Standards (IFRS) (IFRS, October 2022).
- Scope 3 emissions are indirect greenhouse gas emissions (outside of emissions from purchased electricity, which is Scope 2) that occur in the value chain of a company, both upstream and downstream. (GHG Protocol, October 2022)
- Reporting requirements around Scope 3 are one of the most controversial aspects of ESG reporting regimes.
- Although Scope 3 emissions often account for the vast majority of many companies’ carbon footprints, they are also typically the hardest to track and calculate as associated activities occur outside of the company’s direct control.
- The Securities and Exchange Commission (SEC) received significant pushback on the inclusion of Scope 3 reporting in its proposed climate-related disclosure rule.
Commentary on ESG News and Developments:
- The International Sustainability Standards Board (ISSB) confirmed that Scope 3 emissions will be included as part of required company climate disclosures being developed by the International Financial Reporting Standards (IFRS) (IFRS, October 2022).
- The European Union (EU) announced a proposal to add requirements for investment products classified under the Sustainable Finance Disclosure Regulation (SFDR) as Article 8 or Article 9 to disclose the product’s intent to invest in nuclear or gas, and if yes the proportion of investments in such activities (ESMA, September 2022).
- The United Kingdom’s Green Technical Advisory Group (GTAG) released its first report which recommended the UK green taxonomy to take an “adopt some and revise some” approach when considering the EU’s technical screening criteria (Green Finance Institute, October 2022).
- The United States (US) Federal Reserve Board announced the launch of a pilot climate scenario analysis exercise with six large banks to assess the resilience of financial institutions to climate-related financial risks (New York Times, October 2022).
In Asian Pacific markets…
- The New Zealand government announced that agricultural emissions will be priced at the farm level; farmers will have to start paying a regulated price for their methane, carbon dioxide and nitrous oxide emissions from 2025 (Bloomberg, October 2022).
- Indonesia plans to begin subsidizing purchases of electric vehicles (EV) in 2023 as the country aspires to have 2.5m EV users by 2025 (Bloomberg, October 2022).
- China’s National Development and Reform Commission asked state-owned gas importers to stop reselling LNG to foreign buyers in Europe and Asia to ensure a sufficient supply for the coming winter season (Bloomberg, October 2022).
November 01, 2022
Staying Ahead with Mirae Asset’s Latest Insights
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