On October 15, 2016, representatives from 170 countries concluded negotiations in Kigali, Rwanda that resulted in a legally binding accord to limit hydrofluorocarbons (HFCs) in an effort to combat climate change. HFCs are chemical coolants used in air conditioners and refrigerants. Chemical companies developed HFCs in the late 1980s after the Montreal Protocol banned ozone-depleting coolants called chlorofluorocarbons (CFCs). HFCs do not harm the ozone layer, but they have 1,000 times the heat trapping potential of carbon dioxide.
The Kigali accord is an amendment to the 1987 Montreal Protocol (which was ratified by the U.S. Senate during the Regan Administration). Thus, the Kigali accord has the legal force of a treaty without further ratification by the current U.S. Senate. Although HFCs make up a small percentage of greenhouse gasses in the atmosphere, because of their extremely high warming potential, the reductions called for in the Kigali accord will lead to the reduction of the equivalent of 70 billion tons of carbon dioxide, which is approximately two times the amount of carbon dioxide emitted globally each year.
As we previously reported, two weeks ago, UN Secretary-General Ban Ki-moon announced that more than 55 countries, including the United States and China, had formally joined the Paris Climate Agreement, officially crossing one of the two thresholds required to bring the Agreement into force. The Paris Climate Agreement was adopted by the 195 Parties to the UN Framework Convention on Climate Change (UNFCCC) at a conference known as COP21 in December 2015. It will enter into force 30 days after at least 55 countries, accounting for 55% of global greenhouse gas emissions, deposit their instruments of ratification.
On Wednesday, October 5th, the UN announced that the European Union and 10 additional countries have deposited their instruments of ratification. Now, countries that have ratified the Paris Climate Agreement account for more than 55% of global greenhouse gas emissions, surpassing the second requirement for the Agreement to enter force. Thus, the Paris Climate Agreement will enter into force on November 4, 2016.
UN Secretary-General Ban Ki-moon made a statement to mark this “momentous occasion”:
“Global momentum for the Paris Agreement to enter into force in 2016 has been remarkable. What once seemed unthinkable is now unstoppable.
Strong international support for the Paris Agreement entering into force is testament to the urgency for action, and reflects the consensus of governments that robust global cooperation is essential to meet the climate challenge.”
The Paris Climate Agreement calls on countries to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low-carbon future, as well as to adapt to the increasing impacts of climate change. Specifically, governments must take actions to limit global temperature rise to well below 2 degrees Celsius, and to strive for 1.5 degrees Celsius. The Paris Climate Agreement also requires developed countries fund $100 billion in investments to assist developing countries meet the Agreement’s goals.
More information about the Paris Climate Agreement is available at the UNFCCC website.
On Tuesday, September 27, 2016, an en banc panel of the U.S. Court of Appeals for the D.C. Circuit heard nearly seven hours of oral arguments in one of the most significant environmental cases of the year: West Virginia v. EPA, Case No. 15-1363. This case involves more than 100 parties, who have filed dozens of petitions challenging EPA’s Clean Power Plan and its regulation of greenhouse gas emissions from existing power plants. Challengers include 27 States – led by West Virginia and Texas – labor unions, rural electric cooperatives, industry and trade groups, and private companies. Four intervenor briefs and 18 amici curiae briefs have been offered in support of the Clean Power Plan, by parties including 18 States, Washington D.C., utilities and power companies, environmental organizations, and former EPA administrators. Among other things, challengers argue that EPA exceeded its authority under the Section 111(d) of the Clean Air Act by including electricity-shifting measures and “Outside the Fenceline” requirements in the Clean Power Plan.
As we previously reported, in February 2016, the U.S. Supreme Court granted a stay of EPA’s Clean Power Plan. The stay was highly unusual because the case is still before the D.C. Circuit Court, which denied a request for a stay in January 2016. Adding to the unusual nature of this case, the D.C. Circuit, on its own motion, decided to hear the case en banc in the first instance, which is why the full court sat for oral arguments on September 27th. Notably, Judge Merrick Garland did not sit for oral arguments and will likely not take part in any decision, as he has recused himself from all decisions of the D.C. Circuit while he awaits resolution of his appointment by President Obama to the U.S. Supreme Court. The remaining 10 judges in the D.C. Circuit, Judges Henderson, Rogers, Tatel, Brown, Griffith, Kavanaugh, Srinivasan, Millett, Pillard, Wilkins, took part in the oral arguments.
EPA’s defense of the Clean Power Plan went well during the oral arguments, with apparent support from the D.C. Circuit’s six democrat-appointed judges. The D.C. Circuit will likely expedite its decision in this widely-followed case, with an opinion expected in late 2016 or early 2017. Regardless of the outcome in the D.C. Circuit, the case will almost certainly be appealed to the U.S. Supreme Court for final resolution.
Audio recording of the oral argument is available on the U.S. Court of Appeals for the D.C. Circuit website.
During the annual meeting of the United Nations General Assembly in New York City, on Wednesday, September 21, 2016, UN Secretary-General Ban Ki-moon announced that more than 55 countries have formally joined the Paris Agreement on climate change, officially crossing one of the two thresholds required to bring the Agreement into force. At the annual meeting, 31 additional countries deposited their instruments of ratification for the Agreement, bringing the total to 60 countries that together represent more than 47.5% of global greenhouse gas emissions. Earlier this month, China and the United States, the world’s two largest greenhouse gas emitters, joined the Agreement.
The Paris Climate Agreement was adopted by the 195 Parties to the UN Framework Convention on Climate Change (UNFCCC) at a conference known as COP21 in December 2015. The Paris Climate Agreement seeks to limit global temperature rise to well below 2 degrees Celsius, and to strive for 1.5 degrees Celsius. The Paris Climate Agreement was signed on April 22, 2016, by 175 countries at the largest, single-day signing ceremony in history. It will enter into force 30 days after at least 55 countries, accounting for 55% of global greenhouse gas emissions, deposit their instruments of ratification. Following today’s UN meeting, formal approval from countries representing 7.5% in global emissions is still needed.
Usually, international treaties of this size and complexity take years to come into effect, while the Paris Climate Agreement is close to achieving full legal force only 9 months after it was adopted. At least some of the urgency behind the ratification of the Agreement is the fact that Republican presidential candidate Donald Trump has vowed to pull the United States out of the Paris Climate Agreement if he is elected. If the Agreement comes into full legal force before the next president takes office, it would take four years for the United States to withdraw under the formal procedures of the Agreement, and the United States would be bound by the Agreement in the interim.
More information about the Paris Climate Agreement and a video of Secretary-General Ban Ki-moon’s remarks is available here.
EPA recently issued fact sheets detailing climate change impacts for each state and U.S. territory. In doing so, EPA confirmed some very basic, general findings about climate change impacts overall:
- Every state will become warmer.
- The impacts of climate change are likely to be very different from state to state.
- Increased rainfall intensity will cause more flooding in some states, while increasingly severe droughts may threaten water supplies in other states.
- Farms and forests will be less productive in some states, but warmer temperatures may extend growing seasons in others.
The fact sheets are short two page documents focused on differing issues for each state including, for example, climate change impacts related to ecosystems; air pollution and human health; the Great Lakes; agriculture; the Illinois, Ohio, and Mississippi Rivers; coastal flooding; heavy precipitation/flooding; sea level rise; and winter recreation. The fact sheet for Illinois provides good insight into the kind of information detailed.
While the new information supplements the existing climate change data available online from EPA, the information in many of the fact sheets appears dated, very general in nature, and perhaps geared to the general public. Existing climate change data associated with impacts by region and by sector is more detailed and may be more useful overall. See https://www3.epa.gov/climatechange/impacts/.
The new fact sheets are available via EPA’s climate change web page at https://www3.epa.gov/climatechange/impacts/state-impact-factsheets.html
The International Bar Association’s Water Law News was published this week and includes an article written by Lynn Grayson regarding the Flint, MI water crisis. Her article titled Flint, Michigan Water Crisis: Lessons Learned provides a detailed factual account of the circumstances, decisions and governmental actions that led to the discovery of elevated levels of lead in Flint’s drinking water.
The article addresses possible lessons learned from the Flint situation, including regulatory oversight failures, aging infrastructure and environmental justice considerations. In her opinion, a quote from Michigan Governor Snyder when he testified before the House Committee on Oversight and Government Reform best summarizes what happened in Flint: “. . . Let me blunt: this was a failure of government at all levels—local, state and federal officials—we all failed the families of Flint.”
Founded in 1947, the International Bar Association (IBA) is the world’s largest leading organizations of international legal practitioners, bar associations and law societies. The IBA influences the development of international law reform and shapes the future of the legal profession throughout the world.
DOL, FAR Council Finalize “Fair Pay and Safe Workplaces” Regulations, Forcing Government Contractors to Disclose Non-Final Labor Law Alleged Violations in the Contracting Process
On August 25, 2016, the Department of Labor (DOL) and the Federal Acquisition Regulatory Council (FAR Council) issued the Final Rule and Final Guidance implementing President Obama’s Fair Pay and Safe Workplaces Executive Order (E.O. 13673), signed on July 31, 2014. Under this new regime, those who seek to contract with the government (contracts over $500,000) must disclose alleged and final wage and labor law “violations,” including non-final agency allegations of labor law violations and agency determinations still subject to appeal, rendered against the contractor within the last three years. The government, through newly established agency labor compliance advisors (ALCAs), will then review each of those alleged and final “violations” and determine whether to award or extend the government contract. The Rule and Guidance will take effect in phases starting on October 25, 2016.
On September 1, 2016, Jenner & Block is hosting a CLE program titled Overview of Critical Litigation Issues for Environmental Practitioners in our Chicago offices at Noon. The program will feature two of our environmental litigation partners as speakers, Steven Siros and Allison Torrence. Together, they will provide environmental litigation updates addressing new developments related to the Clean Power Plan, “waters of the United States,” emerging contaminants, and CERCLA cost recovery/contribution claims.
A recently issued PHMSA advisory bulletin seeks to clarify the regulatory requirements that apply to mothballed or idled unused gas or hazardous liquid pipelines. As required by the Pipeline Safety Bill that was signed into law on June 22, 2016, PHMSA recently issued an advisory bulletin providing guidance to owners and operators of gas or hazardous liquid pipelines regarding the requirements for idle and/or unused pipelines.
Although the bulletin recognizes that owners and operators often refer to pipelines that are not in operation but that might be used again in the future as “idled,” “inactive,” or “decommissioned,” the PHMSA regulations do not recognize “idle” or “inactive” status for hazardous liquid or gas pipelines. Instead, the regulations consider such pipelines to either be active and fully subject to all relevant parts of the safety regulations or abandoned. Assuming that these pipelines have not been abandoned in accordance with the requirements set forth at 49 CFR §§ 192.727 and 195.402, these pipelines must comply with all relevant safety requirements, including periodic maintenance, integrity management assessments, damage prevention programs, and public awareness programs.
The bulletin goes on to suggest, however, that in situations where the pipeline has been purged of all hazardous materials but not yet abandoned because of an expectation that the pipeline may later be used, the owner/operator may be able to defer certain of these safety requirements. Although PHMSA indicated that it intends to engage in a future rulemaking to provide further guidance as to which requirements might be deferred, in the interim the bulletin suggests that owners or operators planning to defer certain activities coordinate the deferral in advance with the regulators.
The guidance also reiterates that notwithstanding that companies might not have access to records relating to where historical pipelines might be located and/or if these pipelines were properly purged of combustibles, the owners and operators still have a responsibility to assure facilities for which they are responsible or last owned do not present a hazard to people, property, or the environment.
Please click here to see PHMSA's advisory bulletin.
EPA has announced a new waste and materials tracking feature in its Energy Start Portfolio Manager—a free benchmarking and tracking tool for commercial building owners and managers. The new waste tracking functionality allows the management of energy, water and waste via one secure online resource. This is another effort to promote and encourage sustainable materials management to conserve resources, remain economically competitive and support a healthy, sustainable environment.
EPA’s Energy Star Portfolio Manager provides a platform to improve energy performance, prioritize efficiency measures, and verify energy reductions in buildings. It currently measures energy, water and greenhouse gas metrics in more than 450,000 U.S. buildings, representing 40 percent of U.S. commercial space. The new resource unifies energy, water and waste under one virtual “roof” to streamline sustainability management programs allowing entities to better understand their environmental footprint and resource costs.
EPA is hosting two webinars to introduce the basics of the new waste tracking component in the Energy Start Portfolio Manager:
- Introducing Waste & Materials Tracking in Portfolio Manager—August 18 at 2:00 p.m. ET
- Introducing Waste & Materials Tracking in Portfolio Manager---September 15 at 1:00 p.m. ET
To learn more about sustainability initiatives in commercial buildings or to register for the upcoming webinars: https://www.energystar.gov/buildings/owners_and_managers/existing_buildings/use_portfolio_manager/track_waste_materials
Earlier this year New York Attorney General Eric Schneiderman spearheaded a coalition of attorneys general investigating whether ExxonMobil misled investors and the public about its knowledge of climate change. As previously reported in this blog (see ExxonMobil, 13 State Attorneys General Fight Back Against the Exxon Climate Probes and Climate Change Allegations Against Big Oil Continue), ExxonMobil has sued the Attorneys General for the U.S. Virgin Islands and Massachusetts pushing back on allegations and related subpoenas dating back at least 40 years into the corporate history and internal communications of the company related to climate change considerations. Two recent developments ensure the conflicts over these government led investigations against ExxonMobil are far from over:
- This week the Energy & Environment Legal Institute and the Free Market Environmental Clinic filed litigation in the Supreme Court of New York against New York Attorney General Eric Schneiderman over his refusal to produce climate change-related communications demanded by these groups in requests filed under the New York Freedom of Information Law (FOIL). The free-market litigation nonprofits requested all correspondence between AG Schneiderman and eight individuals that contained certain keywords including “energy,” “fossil,” “climate,” “RICO” and “fraud.” The individuals targeted were associated with environmental organizations as well as lawyers that had litigated against ExxonMobil in the past. The Attorney General’s Office denied the FOIL requests claiming the communications sought were exempt from disclosure because they were protected as attorney client, attorney work product or inter- or intra-agency memoranda. The nonprofits assert that the majority of the information sought is communications between AG Schneiderman and outside parties that would not fall under any legal protections for withholding information.
- Last month, led by Texas Representative Lamar Smith, the U.S. House Committee on Science, Space and Technology issued ten (10) subpoenas to the Attorneys General of New York and Massachusetts as well as a number of nongovernmental environmental advocacy groups seeking climate change-related communications among the attorneys general and the environmental groups that support them associated, at least in part, with the ongoing investigations against ExxonMobil. The attorneys general have refused to produce any documents saying the request encroaches onto their states’ sovereign power to pursue their fraud investigations. Both Attorneys General Schneiderman and Healey have pushed back on the issuance of these subpoenas noting they are “…are an unprecedented effort to target ongoing state law enforcement investigations or potential prosecutions…” and if allowed would “…eviscerate AG Healey’s ability to conduct an ordinary and lawful investigation.”
Many have expressed skepticism about the legal reasoning and logic of the fraud, securities and RICO investigations launched by the “Green 20” state attorneys general. Critics charge the state attorneys general are using governmental power to further political objectives and in the process violating ExxonMobil’s constitutional rights of free speech and freedom from unreasonable searches. It appears there is nothing “ordinary and lawful” in the context of this unusual investigation aimed at achieving climate change parity where more appropriate regulatory and legislative efforts have failed.
The State Water Resources Control Board has proposed a new maximum contaminant level (MCL) for 1,2,3-trichloropropane (TCP) of five parts per trillion (ppt).TCP is a manmade chemical found at industrial and hazardous waste sites. It has been used as a cleaning and degreasing solvent and also is associated with pesticide products.
California recognizes TCP as a carcinogen, and it has been found in numerous drinking water sources in the state. In August 2009, a public health goal (PHG) for TCP was developed by the Office of Environmental Health Hazard Assessment (OEHHA) for use by the State Water Board to establish an MCL. The PHG represents the level of TCP in drinking water that OEHHA believes does not pose a significant risk to health over a lifetime of exposure (70 years). The PHG for TCP is 0.0007 µg/L, or 0.7 ppt.
A drinking water standard, or MCL, establishes a limit on the allowable concentration of a contaminant in drinking water that is provided by a public water system. The State Water Resources Control Board is proposing 5 ppt as the MCL for TCP. Formal rulemaking is expected later this year, and if approved, the MCL would become effective July 1, 2017.
EPA published a technical fact sheet about TCP in 2014. More background information and guidance on the proposed MCL action for TCP also is available from the California State Water Resources Control Board.
TCP is yet another emerging chemical that has been the subject of ongoing federal and state regulatory review and discussion for several years. It also is a chemical being analyzed and assessed at the lower threshold level of ppt versus more traditional parts per billion (ppb). As is often the case, it appears that the State of California is initiating regulatory action addressing TCP concerns, and it is likely that other states will follow.
2016 Democratic Party Platform: Combat Climate Change, Build a Clean Energy Economy, and Secure Environmental Justice
Last week, we examined the key environmental issues raised in the 2016 Republican platform. Now that the political focus has shifted from Cleveland to Philadelphia, where Democrats are holding their convention, we will examine what the Democratic Party has to say about its environmental priorities in the 2016 Democratic Party Platform. One of the Democratic Party platform’s 13 main sections is entitled “Combat Climate Change, Build a Clean Energy Economy, and Secure Environmental Justice.” Environmental issues are also raised in the section titled “Confront Global Threats”, which discusses “Global Climate Leadership.”
In the platform’s preamble, the Democrats state that:
Democrats believe that climate change poses a real and urgent threat to our economy, our national security, and our children’s health and futures, and that Americans deserve the jobs and security that come from becoming the clean energy superpower of the 21st century.
Other key positions from the Democratic environmental platform include:
Rolled out in December 2015, U.S. EPA’s eDisclosure system has received mixed reviews. Although self-disclosures for “New Owners” or for criminal violations continue to be required to be submitted under the old system, most other self-disclosures must be submitted through U.S. EPA’s new eDisclosure portal. Self-disclosures made through this system are placed into one of two categories. Broadly, Category 1 disclosures are EPCRA violations that meet all of the Audit Policy or Small Business Compliance Policy conditions, while Category 2 disclosures are all other violations. For Category 1 violations, the eDisclosure system will automatically generate an “eNotice of Determination” which confirms that no penalty will be assessed conditioned on the accuracy and completeness of the eDisclosure (and assuming that the violation is corrected within the requisite 60- or 90-day time period). For Category 2 disclosures, the eDisclosure system will automatically generate an “Acknowledgement Letter” acknowledging receipt of the disclosure and notifying the entity that U.S. EPA will make a determination as to eligibility for penalty mitigation if and when it considers taking enforcement action. The self-disclosed violation must still be corrected within the requisite time frame. The new eDisclosure system did not modify any of the underlying eligibility requirements of U.S. EPA’s Audit Policy or Small Business Compliance Policy.
Although the regulated community has acknowledged that the eDisclosure system has streamlined self-disclosures, there has been some concern regarding U.S. EPA’s recent pronouncement that disclosures submitted under the new system would generally be released in response to FOIA requests, notwithstanding the potentially unresolved nature of the alleged violations. These released disclosures would then be made available on a publicly searchable FOIA website. Companies considering whether to self-report under the eDisclosure system must evaluate whether the benefits of civil penalty immunity or mitigation are outweighed by the risks of adverse publicity and/or potential citizen suit claims. System glitches such as website time-outs have also been reported and some have complained that there is inadequate space for narrative responses on the website portal. Time will tell whether the eDisclosure system accomplishes its objective of minimizing U.S. EPA resources while encouraging self-disclosure and the subsequent correction of reported violations.
On Monday, Republicans gathered in Cleveland to kick off the Republican National Convention and adopt the official 2016 platform of the Republican Party. One of the platform’s six main sections is titled “American Natural Resources: Agriculture, Energy, and the Environment.” Republicans summarize their environmental platform by stating:
“We firmly believe environmental problems are best solved by giving incentives for human ingenuity and the development of new technologies, not through top-down, command-and-control regulations that stifle economic growth and cost thousands of jobs.”
Key positions from the Republican environmental platform include:
The latest Security and Exchange Commission (SEC) disclosure effectiveness project outreach seeks input on sustainability metrics important to investor decisions. In the SEC’s 340-page Business and Financial Disclosure Required by Regulation S-K: Concept Release (Concept Release), the Commission seeks input from the public about which sustainability metrics are important to investor decisions and why companies often choose to provide sustainability information outside of their public filing. See 81 Fed. Reg. 23,916 (April 22, 2016).
Since the launch of the disclosure effectiveness project in 2013, the SEC has received numerous communications from socially responsible investor groups urging it to use the review of corporate risk disclosures to look at material environmental, social and governance (ESG) disclosures. One of the leading independent organizations that issues sustainability accounting standards, the Sustainability Accounting Standards Board (SASB), already issued extensive comments on July 1, 2016 regarding the SEC’s Concept Release.
The key comments provided to the SEC by SASB are as follows:
- Today’s reasonable investors use sustainability disclosures;
- While Regulation S-K already requires disclosure of material sustainability information, the resulting disclosures are insufficient;
- Line-item disclosure requirements are not appropriate for sustainability issues;
- To evaluate sustainability performance, an industry lens is needed;
- Effective sustainability disclosure requires a market standard; and
- The Commission should acknowledge SASB standards as an acceptable disclosure framework for use by companies preparing their SEC filings.
The Concept Release is one of several outreach efforts as part of the SEC’s disclosure effectiveness project. At the heart of the initiative is how to make increasingly lengthy, complicated financial reports more effective, understandable and user-friendly. The Concept Release reviews the Regulation S-K disclosure requirements seeking input on what should be kept, modified, eliminated, or added as well as if the current requirements provide the most efficient and effective means of disclosing this information.
As to ESG issues including sustainability considerations, the SASB comments provide a good historical overview and update on environmental disclosures and the growing trend to provide more detailed ESG and sustainability disclosures to investors and the public at large. In its comments, SASB advocates for the SEC to acknowledge its standards as an acceptable framework for companies to use in their mandatory filings to comply with Regulation S-K in a cost-effective and decision-useful manner. SASB's comments include a quote from former SEC Chair and SASB Board member Elisse Walter, noting “…Disclosure is the foundation of securities laws in the United States and many other nations, and transparency is the engine that propels our capital markets forward. But as the world continues to evolve—and its economies along with it—our disclosure requirements and reporting standards have not always kept pace.”
While the SASB framework would provide more transparency, along with much needed structure and guidance on these disclosures, it seems highly unlikely the SEC will embrace the SASB’s recommendation at this time.
The National Toxicology Program (“NTP”) recently announced that it intends to join the crowded playing field (pun intended) of state, federal, and international agencies that are evaluating the potential human health risks associated with synthetic turf fields. Synthetic turf fields have been the subject of ongoing assessment by U.S. EPA, the Agency for Toxic Substances and Disease Registry, the Consumer Product Safety Commission, California’s Office of Environmental Health Hazard Assessment, and the European Union’s chemicals agency. However, the NTP intends to focus specifically on the tire crumb rubber used in those turf fields and to conduct short-term in vivo and in vitro toxicology studies on the crumb rubber.
As more schools and other public facilities install synthetic turf fields, the potential health effects of the infill is an issue that is attracting increased attention. The NTP believes that its proposed study will help to fill what it views to be an important data gap. Although existing health study have not identified an elevated health risk from playing on artificial turf fields, these studies have generally focused on the potential health effects of exposure to lead other materials released from the artificial grass blades and/or exposure to possible emissions associated with the turf field in its entirety. NTP and U.S. EPA have noted that there are limited studies on the effects of exposure to the tire crumb materials specifically which will be the focus of the NTP study.
Please click here to go the NTP press release concerning its study.
According to the Governance & Accountability Institute (G&A), 81% of S&P 500 Index companies published a sustainability or corporate responsibility report in 2015. The S&P Index is one of the most widely-followed barometers of the U.S. economy and conditions for large-cap public companies in the capital markets.
The G&A Institute has analyzed the index company components’ sustainability reporting activities for the past five years. There has been a rapid and significant uptake in corporate sustainability reporting among the 500 companies. Over the years, sustainability reporting rose from just 20% of the companies reporting in 2011 to 81% in 2015. According to the G&A Institute, this increased corporate reporting underscores the importance of setting strategies, measuring and managing environmental, social, and governance issues in response to growing stakeholder and shareholder expectations, and in some cases, demands for such reporting from major customers.
The growth in sustainability reporting tracked by the G&A Institute is as follows:
- In 2011, just under 20% of S&P 500 companies had reported;
- In 2012, 53% (for the first time a majority) of S&P 500 companies were reporting;
- By 2013, 72% were reporting—that is 7-out-of-10 of all companies in the popular benchmark; and
- In 2014, 75% of the S&P 500 were publishing reports.
The G&A Institute has joined forces with the Trust Across America/Trust Around the World (TAA/TAW) program to explore potential relationships of the trustworthiness of companies that do and do not report. The companies have charted and are analyzing the 99 index companies in 2015 that did not report on their sustainability opportunities, risks, strategies, actions, programs and achievements. More information about the work of the G&A Institute and this new initiative with TAA/TAW is available at http://www.ga-institute.com/.
While not yet mandatory in the U.S., sustainability and corporate social responsibility reporting is a growing trend and becoming somewhat of an expectation among the largest public and private companies. It appears that the new focus and scrutiny will not be on the companies reporting but those that have decided not to do so.
As previously reported by my colleague Lynn Grayson, ExxonMobil has faced a recent onslaught of scrutiny over allegations that fossil fuel companies had committed fraud by downplaying the effect of climate change on their businesses. These matters include a subpoena issued by the U.S. Virgin Islands’ Attorney General’s office related to allegations of violating two state laws by obtaining money under false pretenses and conspiring to do so; and New York Attorney General Schneiderman’s investigation where documents have been subpoenaed to determine whether the company misled investors about the dangers climate change posed to its operations.
Two events last week suggest that this fight will not end anytime soon.
- ExxonMobil filed suit in the Northern District of Texas, seeking an injunction barring the enforcement of a civil investigative demand issued by the Massachusetts Attorney General to ExxonMobil, and a declaration that this demand violates ExxonMobil’s rights under state and federal law, including the First and Fourteenth Amendments to the Constitution, as well as the Dormant Commerce Clause.
- The Attorneys General of 13 states wrote a sharply-worded letter to their colleagues, noting that “this effort by our colleagues to police the global warming debate through the power of the subpoena is a grave mistake” and “not a question for the courts.” The letter outlines how this investigation is in fact “far from routine” because of its following three characteristics: “1) the investigation targets a particular type of market participant; 2) the Attorneys General identify themselves with the competitors of their investigative targets; and 3) the investigation implicates an ongoing public policy debate.”
We will continue to monitor developments on this heated situation.
Jenner & Block Partners E. Lynn Grayson and Gabrielle Sigel have been named “Energy & Environmental Trailblazers” by The National Law Journal. The list honors people who have “made their mark in various aspects of legal work in the areas of energy and environmental law.”
The profile of Ms. Grayson notes that she was appointed general counsel for the Illinois Emergency Services and Disaster Agency soon after the agency took over enforcement responsibility for the state’s Emergency Planning and Community Right-to-Know Act. When she moved into private practice in Chicago, she became involved in the first REIT case involving environmental issues; since moving to Jenner & Block, she has done a great deal of international due diligence. Ms. Grayson observes that the future of environmental law will involve international transactions as well as domestic work, particularly around energy and renewable energy.
The profile of Ms. Sigel notes that she focuses on the intersection of workplace health and the environment. The profile highlights one of her cases in which the water supply in retail and medical offices became contaminated, and a number of state agencies became involved. As for the future, Ms. Sigel observes that the lines between organizations will increasingly blur. “Whether it’s business, regulatory agencies, community groups or NGOs, you have to look at issues holistically, and not in a superficial way,” she says.
Actions launched by extreme anti-oil and gas activists claiming Exxon Mobil engaged in an alleged cover-up of climate change risks have taken another interesting turn. This week House Republicans initiated a probe into New York Attorney General Eric Schneiderman’s investigative efforts as well as those of his colleagues. The House Committee on Science, Space and Technology plans to investigate Attorney General Schneiderman and several other attorneys general alleged by House Republicans to be working at the behest of environmental activists to silence critics of global warming possibly resulting in an abuse of prosecutorial discretion.
Recent efforts by environmentalists and governmental authorities include: a notice from the Conservation Law Foundation in Massachusetts of its intent to sue Exxon for allegedly engaging in a deliberate, decades-long cover-up of climate change—it will be the first lawsuit by an environmental group against a petroleum company for climate change matters; a subpoena issued by the U.S. Virgin Islands’ Attorney General’s office related to allegations of violating two state laws by obtaining money under false pretenses and conspiring to do so; and New York Attorney General Schneiderman’s investigation where documents have been subpoenaed to determine whether the company misled investors about the dangers climate change posed to its operations.
Last week the Regional Body for the Great Lakes-St. Lawrence River Basin Water Resources Compact agreed that the City of Waukesha, WI met the compact exception criteria—moving one step closer to approval for a diversion of Great Lakes water outside of the boundaries of the river basin. Many are concerned that this move may establish a bad precedent for others seeking diversion of water from the Great Lakes to address growing water quality and quantity challenges.
The City of Waukesha, located in southeast Wisconsin 17 miles west of Lake Michigan, seeks an exception from the prohibition of diversions under the Great Lakes–St. Lawrence River Basin Water Resources Compact and Great Lakes–St. Lawrence River Basin Sustainable Water Resources Agreement. The Compact and Agreement prohibit diversions of Great Lakes water, with limited exceptions. One exception allows a “community within a straddling county,” such as Waukesha, to apply for a diversion of Great Lakes water.
On January 7, 2016, the Wisconsin Department of Natural Resources forwarded the City of Waukesha’s diversion application to the other Great Lakes states, and the Canadian provinces of Ontario and Quebec for regional review. On May 18, 2016 the Regional Body approved a Declaration of Finding concluding that, with conditions, the City of Waukesha’s diversion application meets the Compact exception criteria. Conditions included a reduced maximum diversion volume of 8.2 million gallons per day and a reduced area the diverted water can be served. The Compact Council will make the final decision with a vote on whether to approve, approve with conditions, or deny the City of Waukesha’s diversion application. The Compact Council is scheduled to meet June 21, 2016 in Chicago, IL.
The Compact was passed in 2008 to protect the Great Lakes from attempted water grabs. The Waukesha, WI proposal to pump water from Lake Michigan, 15 miles to the east, as a replacement water supply for its radium-contaminated wells is the first such application under the compact. The proposal has been the subject of critical review as environmental groups and others worry about setting an inappropriate precedent for access to water from the Great Lakes.
The underlying documentation is available from the Wisconsin Department of Natural Resources as well as more detail about the upcoming meeting of the Compact Council in Chicago.
Jenner & Block CLE Webinar: "Climate Change Law at the Close of the Obama Administration: Understanding the Past and Implications for the Future"
Jenner & Block Partner Gabrielle Sigel will discuss the development of climate change law under the Obama Administration and how that law may affect future efforts to regulate greenhouse gas emissions. She will provide a framework for understanding some of the most complex and dynamic legal decisions regarding administrative and environmental law since the Clean Air Act was enacted. Titled “Climate Change Law at the Close of the Obama Administration: Understanding the Past and Implications for the Future,” this CLE webinar will be held from 12:00 noon to 1:30 pm on May 12, 2016, at the firm’s Chicago office, 353 N. Clark Street.
Ms. Sigel is co-chair of the firm’s Climate and Clean Technology Law Practice and a founding member of the firm’s Environmental and Workplace Health & Safety Law Practice. She publishes extensively and is a frequent speaker on environmental law, climate change, and workplace health and safety issues.
Please click here to RSVP for attend the program in person or via a webinar.
Approximately 700 participants, including leaders from government, business, finance, academia, philanthropy and civil society, will meet in Washington, DC on May 5-6, to attend the Climate Action 2016 Summit. Seven organizations have come together to jointly co-host the summit, providing this diverse group with the information, connections and tools they need to lead effective implementation in a new climate regime.
The co-hosts of the Summit are:
- E. Mr. Ban Ki-moon, Secretary-General of the United Nations
- Jim Yong Kim, President of the World Bank Group
- Michael R. Bloomberg, UN Secretary-General’s Special Envoy for Cities and Climate Change; Founding Partner, Compact of Mayors
- Naoko Ishii, Chief Executive Officer, Global Environment Facility
- Judith Rodin, President, Rockefeller Foundation
- Peter Bakker, Chief Executive Officer, World Business Council on Sustainable Development
- Nigel Topping, Chief Executive Officer, We Mean Business
- Wallace Loh, President, University of Maryland
The goal of the Summit is to strengthen the multi-stakeholder approach to climate implementation. The summit will address how to deliver on climate commitments and embed the transformation agenda across the globe in government, key sectors and among the general population. At the same time, the summit will focus on near-term implementation actions and long-term implementation needs. These will focus on City and Sub-national implementation; Transport; Land-use; Energy; Resilience/Adaptation; and Analysis and Tools to Support Decision Making.
More information about Climate Action 2016 is available here.
On April 22, more than one billion people every year celebrate Earth Day in more than 190 countries. According to the Earth Day Network, it is the largest civic observance in the world. Here are some interesting insights about Earth Day this year:
- It’s going to be more important than ever because at last count 155 countries, including the U.S., have agreed to sign the Paris agreement on climate change during a special ceremony at the United Nations in New York.
- This year’s celebration is a lead up to the 50th anniversary of Earth Day in 2020, and the Earth Day Network has pledged to plant 7.8 billion trees worldwide to account for every single person living on Earth.
- Learn more about Earth Day by viewing Google’s latest Doodle with fascinating paintings and pictures from around the world.