UK Gov unveils Great British Energy
The UK government has introduced the Great British Energy Bill, which aims to establish a new publicly-owned company to manage clean energy projects. Based in Scotland, Great British Energy will receive £8.3 billion from the government over the next five years, funded by a windfall tax on oil and gas companies.
Energy Security and Net Zero Secretary Ed Miliband emphasised that the bill seeks to ensure British people benefit from natural resources while enhancing the UK’s energy security through investments in clean power.
Additionally, a new partnership between Great British Energy and the Crown Estate will focus on developing offshore wind farms. This collaboration aims to leverage up to £60 billion in private investment to facilitate 20-30GW of new offshore wind developments by 2030. The new Prime Minister has welcomed the partnership as a crucial step towards achieving the country’s energy goals by 2030 and reducing energy bills.
The Great British Energy Bill and its focus on publicly-funded clean energy projects signals a strengthened commitment to renewable energy that could lead to significant opportunities and growth in the UK’s green energy sector.
The challenge of conflicting ESG reporting rules
According to a new report by law firm Thompson Hine, companies are grappling with conflicting environmental, social and governance (ESG) regulations as the US, EU and California demand different climate disclosures. A survey revealed that 41% of public companies view these conflicting requirements as their biggest short term ESG challenge.
Image source: Bloomberg, Data Source: Thompson Hine LLP
Recent mandates from the US Securities and Exchange Commission (SEC) and the state of California on greenhouse gas emissions reporting have added to the complexity. The EU’s climate disclosure standards are also starting to take effect this year, extending to large multinational companies by 2028.The requirements of each differ significantly, with the SEC’s limited emissions disclosures contrasting California and the EU’s more comprehensive rules, including Scope 3 emissions from supply chains. The SEC’s rules are currently paused due to legal action, and California’s requirements may be delayed until 2028.
Companies are uncertain about how to navigate these varying regulations. Nearly half of public companies now demand emissions data from suppliers to meet potential Scope 3 requirements. However, private companies are less prepared, with only a small percentage readying for compliance with any of the rules.
The challenge of navigating conflicting ESG reporting regulations across different jurisdictions could lead to increased costs and present operational risks, but it also offers potential opportunities for companies that can effectively adapt and demonstrate strong ESG credentials.
SBTi delays decision on carbon offsetting until 2025 after finding mixed evidence on effectiveness of carbon offsets
The Science-Based Targets initiative (SBTi) has released technical publications to refine its Net-Zero Standard for large businesses. It currently requires a 90% reduction in absolute emissions across the business’s operations and value chains.
In April 2024, the SBTi caused an upset following a statement that it could relax its rules on environmental attribute certificates including carbon credits; potentially allowing businesses to offset Scope 3 emissions instead of delivering direct reductions.
The SBTi’s recent publications do not set out their position on changes to the Standard; no changes are likely to happen until 2025. Moreover, the publications show no conclusive evidence of the effectiveness of carbon offsetting. Instead, the reports focus on solutions such as nature-based projects, renewable energy, and clean cookstoves.
The SBTi also notes that there is no “general leaning” on top-line research into voluntary carbon market infrastructure, and mixed evidence on whether the private sector’s use of carbon credits meaningfully contributes to the global net-zero transition.