Bills Introduced to Strengthen Corporate Climate Disclosure – But is it enough?
by Brittany Tofinchio Palmer
The Security Exchange Commission (SEC) issued guidance to companies in 2010 on providing climate disclosures. Since then, the quality of such disclosures has not improved and enforcement has been insufficient. Despite receiving letters from investors and state governments urging the SEC to improve the guidelines and enforce lack of disclosure, the Government Accountability Office issued a report in January 2016, stating that according to SEC staff, “the agency has no plans to specifically determine if additional actions related to disclosure of climate-related risks are necessary or appropriate in the public interest or for the protection of investors….”
The SEC’s lack of initiative, and pressure from industry and investor groups, has led the Financial Stability Board to establish a Task Force on Climate-Related Financial Disclosures, chaired by Michael Bloomberg. The Task Force will develop disclosure procedures to provide consistency, reliability, and efficiency across industry. However, the procedures that the Task Force will develop in the coming year are strictly voluntary.
As a result of these events, Senator Reed and Representative Cartwright have introduced identical legislation in their respective chambers, S.2716 and H.R.4792, that attempt to strengthen disclosures, and therefore transparency, on a company’s climate-related risks. The bills specifically target the oil, mining and gas industries, calling for the SEC to update and improve their climate disclosure guidance. If passed by both chambers and signed into law, the SEC would have 180 days to update the guides for the above industries. The agency would also be required to work with the Investor Advisory Committee to “(A) solicit and consider public input on appropriate disclosures to include; and (B) submit specific recommendations to the Commission.” Failure to make such revisions would result in the requirement that the Chairman of the SEC appear before committees in both the Senate and House to provide an explanation.
S.2716 has been referred to the Committee on Banking, Housing and Urban Affairs and H.R.4792 has been referred to the Committee on Financial Services. Neither bill has yet to move forward since their referral on March 17, 2016.
Reed and Cartwright hope to better protect investors with these bills, but only three industries have been targeted. While fossil fuel industries do have significant climate-related risks, there are a number of other industries where investors and the public would greatly benefit from strong, structured, and enforceable (and enforced) climate disclosure requirements such as auto, electric power, and insurance. These broader industry disclosure requirements would also put the U.S. more in line with other countries, such as those of the EU that must transpose an EU Directive which requires large undertakings to report on matters related to environmental risk by January 1, 2017.
by Ellen Pinkos Cobb
South Korea’s Ministry of Environment (MoE) has published guidance, available in English, on annual reporting for manufacturers and producers, in accordance the Act on the Registration and Evaluation of Chemicals (K-REACH). Reports are required to be completed by June 30 each year. The Guidance includes an introduction; the reporting procedure; the method to prepare each reporting category; and an example of a chemical substance report. Information is included on exemptions; reporting categories; how to apply for data protection; how and when to report changes; and subsequent record keeping.
Reports may be filed on the K-REACH IT system. The report deadline was changed last July, from April 30 to June 30, as per Article 3 of the ministerial decree. The reporting data will be used, together with information on substance hazards and risks, to designate substances subject to registration.
by Brittany Tofinchio Palmer
A complimentary standard to ISO 14001:2015 was published on March 1, 2016. ISO 14004:2016, titled Environmental Management Systems – General Guidelines and Implementation, aims to provide guidance to organizations in the areas of implementing, maintaining, and improving an environmental management system (EMS) to make it more credible and reliable. An EMS is intended to enhance environmental performance, achieve environmental objectives, and help organizations comply with regulatory obligations.
ISO 14004:2016 is an updated version of the 2004 guidance. It provides several changes, which include: focusing on environmental performance and protection, enhancing the life-cycle perspective, and strengthening approaches on leadership and environmental management strategies. Specific details and information that pertain to ISO 14001:2015 have also been included.
In addition, important modifications have been made to Annex A, and a new Annex B has been added. In the 2004 version, Annex A contained examples of correspondence between environmental management system elements. In the new version, examples of activities, products, and services, along with their associated aspects, impacts and risks have been provided. Annex B allows for a smoother transition between ISO standards by providing a phased approach, using the principles in ISO 14005:2010, for EMS implementation. ISO 14005:2010 provides guidelines for the phased implementation of an EMS.
by Ellen Pinkos Cobb
The European Chemicals Agency (ECHA) has selected approximately 300 substances from REACH registrations, for further review by the Member State competent authorities, who will determine whether regulatory action is required. Substances were chosen on the basis of an automated IT screening that targeted substances with potential carcinogenic, mutagenic or toxic to reproduction (CMR), persistent, bio-accumulative and toxic (PBT), endocrine-disrupting, sensitizing, or specific target organ toxicity following repeated exposure (STOT RE) properties. These substances were then further prioritized, based on uses that are likely to cause exposure to humans or the environment.
ECHA and the Member State competent authorities carry out annual IT and manual screening, with a view to identifying substances that present a risk for human health or the environment and submitting them to the most appropriate REACH and CLP processes, to guarantee their safe use. This screening approach is part of the SVHC Roadmap to 2020 implementation plan.
by Ellen Pinkos Cobb
Multinational employers know the importance of protecting against physical risks in the Workplace. Occupational health and safety legislation has for decades mandated that employers have a duty of care to provide a physically safe work environment for employees, visitors, and contractors.
What US based multinational employers may not know is that in numerous countries, there is health and safety legislation prohibiting psychological harm as well. In these countries, the employer’s duty of care requires ensuring persons in the workplace are safe both physically and psychologically. This requirement is often interpreted to include a workplace free of bullying, violence and other forms of harassment. European countries, Canadian Provinces and Australian territories have all prohibited workplace bullying under occupational health and safety laws.
The costs of workplace bullying are far reaching for both employees and companies. Workplaces in which bullying, harassment, and violence are allowed to occur undermine the pursuit of a business’ growth and profitability and may lead to a detrimental impact on the corporate image with the public at large. Employer and organizational costs may include those from litigation, increased staff turnover and loss of morale, absenteeism, increases in health care and disability costs, higher levels of client dissatisfaction, early retirement costs, and counseling and employee assistance program costs.
If trepidation over a damaged reputation is not enough of a concern, courts have stepped in to emphasize that workplace bullying is a serious offense. Verdicts in Ireland, Finland, France and Sweden have led to management and supervisor liability for bullying under health and safety laws.
Workplace bullying and harassment may be managed like other occupational health and safety hazards. Risk assessments, policies and procedures, information dissemination and training, complaint and investigation processes, resolution/action and follow-up can ensure a compliant and productive workplace.
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