By @ CH4 Global
January 23, 2024
When it comes to the conscience of the business world, environmental, social, and corporate governance (ESG) is front and center. As part of a modern business strategy, it recognizes that measuring success in today’s world goes beyond the bottom line to also include a company’s impact on the world. To that end, ESG is a framework for assessing business practices and performance around sustainability (i.e., both environmental and social impact) and ethics, along with measuring risks and opportunities in those areas.
The framework helps ensure accountability for and implementation of systems and processes for managing an organization’s impact, such as around their carbon footprint (including greenhouse gas – GHG – emissions). This positions organizations for long-term success, while satisfying potential regulatory mandates.
And it couldn’t be more relevant in a world facing unprecedented threats related to climate change.
2024 Regulatory Updates
As concerns regulatory mandates, more scrutiny regarding environmental impacts is on the horizon in the United States. To that end, of the regulations that Lubomila Jordanova – CEO & Founder Plan A & Co-Founder Greentech Alliance – summarized in a recent LinkedIn post, the following caught our eye.
- In its proposed rule 33-11042, The Enhancement and Standardization of Climate-Related Disclosures for Investors released March 2022, the SEC proposed that SEC registrants would be obligated to disclose GHG emissions in annual reports and registration statements, financial statements, and elsewhere in filings. Expect the SEC to make its decision on this rule in April 2024.
- Home to one of the world’s largest economies, California has passed the Climate Corporate Data Accountability Act (SB253), which requires large businesses operating in California to publicly report GHG emissions and to secure auditing by the end of 2024.
- The U.S. unveiled its new rules at COP28 aimed at cutting methane emissions in oil and gas production. According to the EPA, the rules would prevent approximately 58 million tons of methane from reaching the atmosphere between 2024 and 2038.
- The COP28 agreement for "near-zero" buildings by 2030 will affect the United States. Known as The Buildings Breakthrough, this initiative – launched with the support of 27 countries and led by France and Morocco – addresses the fact that the building sector accounts for nearly 40% of global energy-related CO2 emissions.
- EPA’s $27 billion Greenhouse Gas Reduction Fund for climate tech will be distributed.
Why Regulation Matters
We at CH4 Global are especially interested in regulations relating to methane emissions, as our very reason for being is to reduce those at gigatonne scale. And we are feeling even more urgency to achieve our goal since GHG emissions are worse than ever. Regulations can help or hinder these efforts.
2023 is now the hottest year since humans have begun keeping records.
According to Berkeley Earth, an independent climate research group, 2023 was 1.54 degrees Celsius, or 2.77 degrees Fahrenheit, warmer than the global average at the dawn of the Industrial Revolution. This jibes with the European Union’s Copernicus Climate Change Service, which says 2023 was the hottest year in at least 173 years.
Figure 1. 2023 is the hottest year on record
The repeated breaches of 1.5 Celsius in 2023 are escalating at an alarming rate.
As NOAA reported, “Atmospheric CO2 is now 50% higher than pre-industrial levels. 2022 was the 11th consecutive year CO2 increased by more than 2 ppm, the highest sustained rate of CO2 increases in the 65 years since monitoring began.”
At the same time, NOAA reports that “The 2022 methane increase was…the fourth-largest annual increase recorded since NOAA’s systematic measurements began in 1983.” To underscore the significance of this change, consider that methane is the reason for about 30% of the increase in global temperatures since the industrial revolution, according to the International Energy Agency (IEA).
Source: NOAA Global Monitoring Laboratory
Figure 2. Increase in atmospheric methane concentrations globally
To combat the effects of climate change, we are seeing more solutions designed to boost sustainability. Consider that existing solutions to reduce enteric methane – like our Methane TamerTM – from cattle can reduce up to hundreds of millions of methane emissions by 2030 – the equivalent of nearly 100 million or more gasoline-powered cars. And quite affordably.
Those in certain quarters are taking note. For example, the California Air Resources Board believes feed additives could help the state reach its goal to reduce 2013 greenhouse gas emissions 40% by 2030.
That said, we’ve always seen our mission to help reduce global methane emissions at gigatonne scale as doing our part in a much larger effort. Meaningful methane reductions are not a one-company effort. And there’s no time to waste. Regulations help drive needed changes and accountability.
Will ESG reporting mandates encourage large corporations to step up and make meaningful short-term reductions by complying with regulations and by backing existing, proven solutions?
We hope so for the sake of the planet and humankind.