ESG – The Potential for a Biden Administration and Bi-Partisan Climate Change Action in 2021

As we almost turn the page from 2020 to 2021, many have cause for optimism with regard to the incoming Biden Administration and the potential for bi-partisan climate change engagement and action.  A hint of cautious optimism is, indeed, in the air.

Why???

President elect Biden campaigned on an ambitious climate action agenda and both R’s and D’s seem ready to address climate change and risk as part of a renewed focus on the environment.

President-elect Biden’s plans include re-engagement on various green energy and infrastructure projects and also include proposals to address environmental racism as part of the previously announced “Build Back Better” program.

So, what is first on the agenda:

Paris Accord – the U.S. will re-enter the Paris climate accord and will likely look to re-engage on various environmental regulatory rollbacks put into place by President Donald Trump — these can be done by executive action.

Other Executive Orders – President elect Biden has indicated an interest to limit oil and gas drilling on public lands and in public waters, increase gas mileage standards for vehicles and to block the construction of specific fossil fuel pipelines – these can also be done by executive order.

Legislation – much will depend on where the Georgia Senatorial run-off elections end up.  If the Republican party is able to hold onto control of the Senate, however, there still appears to be interest by both parties for climate change policy.

Policy – Biden has also promised to pursue:

  • a 100% clean electricity standard by 2035 (a proposal that could mean the shuttering or total renovation of all coal-fired and gas-fired power plants in the U.S.);
  • Net Zero – attempting to get to net-zero emissions by 2050, at the latest.
  • Renewable Energy – a $2 trillion investment in renewable energy projects, with 40% of the funds benefiting communities of color that have been harmed by pollutants.
  • Green Infrastructure – coordinated systems based approach to agency procurement to focus across the Federal landscape of agencies (e.g., on 
    Transportation, Interior and the GSA) to help build new green infrastructure and incentivize developing green energy sources
  • State Department is likely to be used to focus other international powers to similarly focus on climate policy and carbon emissions.

    Per reporting from ABC News, the Growing Climate Solutions Act, sponsored by Sens. Mike Braun, R-Ind.; Debbie Stabenow, D-Mich.; Lindsey Graham, R-S.C.; and Sheldon Whitehouse, D-R.I., focuses on carbon-capture technologies in the agricultural sector, while Sen. Lisa Murkowski, R-Alaska, and Whitehouse have put together another bipartisan bill focused on increasing carbon-capture methods that occur naturally within ocean and coastal ecosystems.
  • Moreover, Reps. David McKinley, R-W.Va., and Kurt Schrader, D-Ore., have proposed a 10-year public and private partnership to invest in clean energy and infrastructure and subsequent new regulations.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space.  We would be happy to discussion your proposed project with you.  Contact your Duane Morris attorney for more information.

If you have any questions about this post, please contact Brad A. Molotsky, Sheila Slocum Hollis, Patrick Morand, Brad Thompson or the attorney in the firm with whom you are regularly in contact.

ESG – The IOSCO announces support for establishment of a Sustainability Standards Board

Earlier this week, per reporting from ESG Today, the International Organization of Securities Commissions (“IOSCO”) sustainability task force announced it support for the establishment of a Sustainability Standards Board under the IFRS Foundation. A big step towards continued reporting and standardization of reporting methodology. #ESG #Sustainability #IFRS #IOSCO

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space.  We would be happy to discussion your proposed project with you.  Contact your Duane Morris attorney for more information.

If you have any questions about this post, please contact Brad A. Molotsky or the attorney in the firm with whom you are regularly in contact.

ESG – United Airlines makes significant carbon sequestration Joint Venture investment – with a goal to be 100% carbon neutral by 2050

Carbon SequestrationUnited Airlines announced earlier today, Thursday, December 10, 2020 that it is making a “multi-million dollar investment” into carbon capture and sequestration technology, a move they say will help them reach a goal of 100% carbon-free by 2050.

United said it is developing the carbon sequestration technology through a joint venture  with Occidental and Rusheen Capital Management.

Known as “direct air capture,” the technology is intended to capture carbon dioxide from the air and, thereafter, store it underground.

“As the leader of one of the world’s largest airlines, I recognize our responsibility in contributing to fight climate change, as well as our responsibility to solve it,” reads a statement from United Chief Executive Officer Scott Kirby.

Per NJ Biz, United is one of the largest employers in New Jersey, and uses Newark Liberty International Airport as one of its major hubs. Their air traffic makes up close to 70% of the flights in and out of the airport.

Airlines typically account for approximately 3% of worldwide carbon emission, even with the significantly reduced COVID-19 pandemic impacted travel. 

If airlines were all aggregated together and compared to countries internationally, they would place 6th out of all countries in the world in terms of negative emissions impact.  Moreover, while aircraft have become much more fuel efficient since the 1970’s, they have significantly increased their collective emissions – increasing by 70% the amount of carbon emissions from 2005 to 2020.

The Murphy administration’s announced goal is to move NJ towards a 100% clean and renewable sourcing of energy by 2050, including solar and offshore wind capacity.

Duane Morris has an active Environmental, Social and Governance (ESG) Team to help clients and NGOs, respond to, and evaluate ESG, sustainability, energy efficiency and climate change risks, regulations and mandates as well as counsels on how to structure investments in various verticals that are creating technology that responds to the issues posed by Climate Change and ESG.

If you have any questions about this post, please contact Brad A. Molotsky, Seth Cooley, David Amerikaner or the attorney in the firm with whom you are regularly in contact.

Top 10 LEED States in the US – Colorado on Top – Brad A. Molotsky, Esq.

Earlier this week, the U.S. Green Building Council (USGBC) announced its list of Top 10 States for LEED green building. Congrats to Colorado who took the top spot on the list, which ranks states based on the number of LEED certified square feet per person. Yes slightly odd way to measure things but they are the ones counting so onward we roll.

LEED, as you likely know, stands for Leadership in Energy and Environmental Design, and is the most widely used green building rating system in the world with more than 100,000 projects engaged.

This year’s top states are home to more than 105 million people, including more than 80,000 LEED green building professionals with the credentials and skills needed to support the sustainable transformation of buildings.
LEED-certified projects support personal health and well-being, as well as use less energy and water, reduce carbon emissions and have been proven to save money for families, businesses and taxpayers.

Per USGBC, the Top 10 list is based on 2010 U.S. Census data and includes commercial and institutional green building projects certified throughout 2019.

Colorado certified 102 green building projects representing 4.76 square feet of LEED-certified space per resident. The state has made the Top 10 list each year but jumped to the top spot after ranking sixth in 2018.

Minnesota and Oregon reemerged as Top 10 states after missing the list last year, coming in at number eight and nine respectively. The full rankings are as follows:

2019 Top 10 States for LEED
Rank State, Certified Gross Square Footage (GSF), GSF Per Capita, Number of Projects Certified, and LEED Professionals

1 CO     23,962,344      4.76      102          6,339
2 IL       49,363,822       3.85     121          8,662
3 NY     72,778,916       3.76     193       12,576
4 MA    24,505,512       3.74     101          6,827
5 HI        4,083,713       3.00      121         1,145
6 MD    15,234,554       2.64        96         4,998
7 VA     19,981,112        2.50       98         6,526
8 MN    12,708,706       2.40        25         3,346
9 OR       8,825,432       2.30        33         2,908
10 CA   80,669,066       2.17      400      26,794
** DC   31,810,018     52.86      143        2,597

**Washington, D.C. is not ranked as it is a federal district, not a state

USGBC calculates the list using per capita figures to allow for a fair comparison of the level of green building taking place among states with significant differences in population and number of overall buildings.

Despite Washington, D.C. not appearing in the official Top 10 list because of its status as a federal territory, it consistently leads the nation and in 2019 certified 52.86 square feet of space per resident across 143 green building projects. The nation’s capital has a strong legacy of sustainability leadership and has expanded its use of LEED from buildings to cities and communities to support its goals.

In 2017, it became the first LEED-certified city and in 2019 certified the Golden Triangle Business Improvement District LEED Platinum, the first business improvement district in the world to certify.

Across the U.S. there are more than 165,000 LEED green building professionals.

As USGBC continues to advance green buildings, cities and communities through the adoption of LEED and the latest version of the rating system, LEED v4.1, the organization is also considering a future that is focused on a more regenerative approach.

In November 2019 at the annual Greenbuild International Conference & Expo, USGBC introduced “LEED Positive” – a roadmap that will lay the foundation for a future of LEED that transitions away from strategies that only reduce harm and instead focus on those that help repair and restore. With a continued focus on performance, USGBC is attempting to lay the groundwork to ensure sustainable design, construction and operations of buildings, cities and communities remains focused on better buildings that contribute to better lives.

For more on LEED and sustainability, do not hesitate to email or call and we would be happy to discuss this and other ESG, CSR and sustainability topics. Best regards. -Brad

Climate Change viewed as a Major Problem in NJ according to a recent Stockton University poll

According to a Stockton University poll released earlier this week, 2/3 of New Jersey residents believe climate change is a crisis and almost 75% believe it is affecting New Jersey.

Per Stockton’s press release, “the results show climate change is a concern to people all over New Jersey and not just those who live along the Jersey shore,” said John Froonjian, interim director of the William J. Hughes Center for Public Policy at Stockton, who presented an overview of the results at Coast Day at Stockton Atlantic City on Oct. 13.

As reported in Bisnow, among those who believe climate change is currently affecting NJ, more than 75% cited rising sea level, earth warming, harming or changing the ocean, extreme weather, and worsening pollution as major problems they are concerned about.

Beach erosion was cited by 70% as a major problem, while harm to farming was mentioned by 68%, flooding by 66%, and health effects by 57%.

More than half of respondents (56%) believe government could or should do more, and 31% say the government response is totally inadequate.

Per the poll, views did vary along party lines. Democrats (92%) and independents (64%) were more likely to see climate change as a crisis or major problem than Republicans (35%). Women (72%) were also more likely to view it as a crisis or major problem than men (62%).

The results also showed while young people are the most concerned about the issue, concern cuts across age, racial, ethnic, economic, gender and geographic lines. Almost 80% of respondents ages 18-29 see climate changes as a crisis or a major problem. That percentage drops to under 70% for those over 65.

We will continue to monitor trends and thinking in ESG and climate change and report back. If you have any questions, please do not hesitate to contact me at bamolotsky@duanemorris.com and I will direct your question accordingly.

-Brad A. Molotsky, Esq., LEED AP – O+M

ESG – Is anybody listening, does anybody care – YES indeed!

Who Cares About ESG?

Before we answer the question “Who cares about ESG?” I think we should first define it. The acronym itself stands for environmental, social and governance factors that apply to a business or enterprise. According to Investopedia, E-S and G are the three main factors investors consider with regard to a firm’s ethical impact and sustainable practices. The site gives some examples that fall under each of the broad headings, including “the company’s impact on climate change or carbon emissions, water use or conservation efforts, anti-corruption policies, board member diversity, human rights efforts and community development.”

ESG and sustainability are often used interchangeably (even though they are not) because the investor community tends to refer to ESG whereas companies tend to refer to these criteria under the umbrella of sustainability. Regardless, Nasdaq reports that both terms refer to the ESG factors that “can impact a company’s ability to execute its business strategy and create value.”

So, who cares about ESG? Certainly member states of the U.N. who signed on to the organization’s Sustainable Development Goals (SDGs) are monitoring, measuring and verifying these criteria. And, moving from the perspective of the nation state to an enterprise, more than 12,000 have pledged to support the 17 SDGs of the 2030 Agenda for Sustainable Development. Drilling down to the individual level, Thomson Reuters notes that we’re in the midst of the “the largest inter-generational transfer of wealth ever seen, with some US $24 Trillion expected to be under the control of the millennial population by 2020.” Yes, by next year. And, just as millenials value purpose in their work, they also choose investments that reflect their values.

At Duane Morris, we strive to serve our clients as trusted business partners so we can deliver them exceptional value. Throughout the year, starting later this month, we will be convening business leaders to take a deeper dive into various ESG topics that are affecting their companies and creating opportunities for investors and venture partners. In addition to this blog, we will also be hosting a webinar series and will seek to create additional content as ESG-related issues arise through new legislation and regulatory mandates.

With so much of the world’s attention on the impact we’re having on our collective environment and in our communities, and with so much of the world’s wealth at stake, perhaps the real question is not who cares about ESG, but, rather who isn’t concerned about ESG?

#ESG #sustainability #GRESB #SDG #SASB #GRI

ESG – Relevant in this day and age or just a fad?

I had the pleasure of attending the National Association of Corporate Directors (NACD) – Philadelphia Chapter meeting yesterday morning at the Union League in Philadelphia.  Very good attendance to hear Dave Stangis (Campbell’s Soup), Jamie Rantanen (US Trust) and Jennifer Wong (Glenmede) discuss the topic of ESG (“Environmental, Social and Governance”) as it relates to public company and private company investment.

ESG provides companies and investors with a systematic means to identify risk within the lens of environmental issues, social issues and governance issues.  Different, but related to, Corporate Social Responsibility (“CSR”) which is the means of improving social outcomes within an organization and how and organization measures its ESG outcomes.

Super conversation and some interesting questions from the audience during the presentation that touched on aligning values with investment outcomes (i.e., impact investing), risk mitigation through focus on ESG, the Sustainable Development Goals (or SDGs), the increase of shareholder activism in the investment space, including an increased focus on ESG issues, the Sustainable Accounting Standards Board (or SASB) and their focus on measurable sustainability metrics, and the difference between philanthropy, impact investing, ESG investing and standard market investing.

To the question about ESG and is it relevant from the audience member focused on mutual fund investing – the panel and this author firmly believe yes, ESG is relevant, becoming more relevant and an increasing amount of investors are seeking to invest in companies that align their ROI with ESG.  No, not everyone, of course, but more and more as time goes on.  I for one believe ESG will continue to become more relevant as a lens within which to view investing, efficiency, and alignment of investor interests with companies that more closely match their values.

I look forward to engaging in the conversation as the year progresses and to including some of my friends and colleagues in a monthly chat on ESG. Come join us if of interest.

Check out RBS’s chart at http://go.pardot.com/l/441592/2018-09-18/jjjrt8 for some interesting data

See also, Larry Fink, CEO of Blackrock’s statement on ESG – https://www.blackrock.com/corporate/literature/publication/blk-esg-investment-statement-web.pdf

#Sustainability #ESG #SRI #impactinvesting #governance #SASB #environmental, social, governanceBrad