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Presented by SimpliSafe: | | | | | |  | | By Lorraine Woellert, Ryan Heath and Catherine Boudreau | Presented by SimpliSafe | | | | | 
The New York Stock Exchange | Seth Wenig/AP Photo | REPORTING RISK — Companies are asking Washington regulators to mandate climate risk reporting, but with a catch: They want to be shielded from legal liability. Corporations and their shareholders have filed thousands of letters to the Securities and Exchange Commission in recent weeks, largely aligning on the need for mandatory disclosure. The question is how that risk should be made public — filed in financial documents, or furnished through less formal reports that don’t expose companies to lawsuits if something isn’t right. Even companies commonly traded on environmental, social and governance indexes, including Alphabet Inc. and Salesforce.com, made the case for a safe harbor, arguing that accounting rules and risk data are underdeveloped. The U.S. Chamber of Commerce, National Association of Manufacturers, Bank Policy Institute and American Petroleum Institute took similar positions. It’s not crazy. Corporate filings are, in essence, summaries of events, making them inherently backward-looking. They require a high level of due diligence from officers and auditors and are scrutinized by regulators. Inaccuracies can lead to fines and lawsuits. Climate risk, unlike, say, earnings, requires crystal-ball-gazing that can’t easily be plugged into an SEC form. And large corporations commonly resort to third-party data such as black-box algorithms hawked by consultants to model outcomes. “This data is not just on the shelf waiting to be disclosed,” said Charles Crain, director of tax and domestic economic policy at the National Association of Manufacturers. “We don’t have this sitting in a manila folder ready to go out the door.” Even BlackRock Inc. and The Vanguard Group — financial giants that don’t always see eye to eye with corporate management — endorsed a legal safe harbor to prevent a chilling effect on disclosure. Here’s the problem. Pension funds and other institutional shareholders want climate risk data built into financial reporting. “We need to be able to trust this information,” said Margarita Pirovska , director of policy at Principles for Responsible Investment. “If companies are not certain of their data and investors are not certain of their data, it’s not good data. We need it to be investment grade,” she said. “There are hidden emergent systemic risks out there that will otherwise remain unaddressed.” One more thing. The EU is moving quickly to set its own rules, and the SEC’s entry into the space — combined with pleas from business to avoid a complex, EU-type reporting scheme — sets up the potential for competing systems. The City of London Corp., the U.K. finance industry’s de facto lobby, has backed Washington over Brussels as a global standard-setter. The upshot: While Washington politicians debate whether to address the effects of climate change, Wall Street and corporate execs have accepted it as an urgent threat. Lorraine has more on the subject. Read on to see what Biden insiders are saying.
| | | | A message from SimpliSafe: Most security companies send a technician to your home. SimpliSafe doesn’t. Order online. Set it up in 30 minutes. After that, you’re protected 24/7. Learn more. | | | | | | Hey you! In the C-suite! How‘s your company coping with supply chain snafus? Tell us at lwoellert@politico.com and cboudreau@politico.com. We’re on Twitter at @ceboudreau and @Woellert. FOMO? Subscribe to The Long Game. It’s free.
| | | |   | | | | | | | SUBSCRIBE TO WEST WING PLAYBOOK: Add West Wing Playbook to keep up with the power players, latest policy developments and intriguing whispers percolating inside the West Wing and across the highest levels of the Cabinet. For buzzy nuggets and details you won't find anywhere else, subscribe today. | | | | | | | | FINANCING THE FUTURE — It will take $100 trillion or more to finance the green transition, and with governments dropping the ball, it will fall to private capital and central banks to deliver. To that end, Jake Levine, chief climate officer at the U.S. International Development Finance Corp., is shopping a paper by Barbara Matthews for the Atlantic Council, calling it recommended reading inside the Biden administration. She’s sympathetic to industry’s climate dilemma. “Very real legal liability attaches if a corporation provides an incorrect, misleading, problematic number,” Matthews told an Atlantic Council audience Thursday. “Without clear guidance and consensus on what the number should be and what kind of number should be disclosed, how to measure the risk, then I think it’s understandable to see why issuers are reluctant to put a number on something.” BTW: The EU’s Martin Spolc defended the bloc’s climate disclosure rules, saying business was the one demanding details. “This is actually something that the financial sector itself was calling for,” Spolc said. “They argue that lack of clarity on what is green is actually hampering their efforts to scale up their sustainable investment.” SUPPLY CHAIN WOES — Shippers and retailers are warning of back-to-school and year-end holiday shortages as consumer demand ratchets up, production falters, and ports pile up with ships. | | | BIDEN’S SOLAR CONUNDRUM — The administration is weighing a ban on polysilicon imports from China’s Xinjiang region as pressure mounts to crack down on human rights abuses. Polysilicon is used in solar panels, and about half the world’s supply comes from Xinjiang, where China stands accused of genocide against ethnic Uyghur Muslims. A ban could undermine President Joe Biden’s climate change agenda. And it’s not obvious that it would be effective at removing forced labor from the solar supply chain. China isn’t particularly transparent. The Solar Energy Industries Association released a supply chain tracker in April. "We spent the last nine months basically signaling to our companies that regardless of what actions the federal government took, they needed to take action to get out of there," SEIA President and CEO Abigail Ross Hopper said. "I think the vast majority of them have done that." The other solar headache: Farmers who are competing for land. In Louisiana, three parishes have issued moratoriums on utility-scale solar projects, the Advocate reports. | | | GENDER PARITY — California’s 2018 mandate that companies based in the state have women on their boards took a hit Monday when the 9th Circuit Court of Appeals said a shareholder had standing to challenge the law. The plaintiff said the law forced him to discriminate on the basis of sex when exercising his corporate voting rights. The conservative Pacific Legal Foundation, which is representing the shareholder, called the law unconstitutional and patronizing. TAXING WRAPPERS — Maine is on the verge of becoming the first state in the country to require companies — not taxpayers — to cover the costs of recycling after lawmakers passed a bill to impose a fee on bottles, food wrappers and other packaging. Lawmakers dropped a provision that would have forced companies to foot the bill for sending trash to landfills, but trade groups including AMERIPEN and the Consumer Brands Association still oppose the bill because it gives state regulators too much control, said AMERIPEN’s Andy Hackman . Programs in Canada and Europe put producers in the driver's seat, he said. Still, AMERIPEN will be involved with the state’s rollout, which includes selecting an outside group to run the program. Once a plan is in place, regulators will calculate the tax. Before the bill can be sent to Gov. Janet Mills, lawmakers need to OK upfront program costs of about $314,000.
| | | | A message from SimpliSafe: It’s finally easy to make sure your house is safe. Whatever you’re worried about—from french doors to basement windows—SimpliSafe’s got your back. Just click here to customize your system and get a FREE security camera. | | | | | | Bank of America Corp. could begin reporting some of its financed emissions as soon as next year, the company said Monday. The company will report absolute emissions “with a fair amount of specificity” and might report the data in its annual report, global environmental executive Alexandra Liftman told reporters Monday. The IKEA Foundation and The Rockefeller Foundation will set up a $1 billion global platform to eliminate a billion tons of greenhouse gas emissions and empower a billion people with distributed renewable energy — energy generated near where it’s used instead of at centralized sources like power plants. | | | | 
California wildfire | Noah Berger, File/AP Photo | — Excessive heat toppled temperature records in Arizona, red flag wildfire warnings were in effect in Utah, Colorado and Nevada, and power companies turned up customers’ thermostats in Texas. — It’s not the heat, it’s the humidity. There’s not enough of it, researchers have found. Humidity has dropped by a third on the hottest, driest days in the Southwest. The Los Angeles Times has the story. — Australia rejected a proposed energy hub aimed at supplying the globe with hydrogen and ammonia, citing environmental concerns, Bloomberg reports. With a hand from Zachary Warmbrodt
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