Tag: climate

Real Estate Roundtable Requests Member Feedback on SEC Climate Risk Disclosure Proposal

Posted on by Trey Jackson

SEC building

Monday, April 11 is the deadline for responses to a voluntary Real Estate Roundtable membership survey on a proposed rule issued by the U.S. Securities and Exchange Commission (SEC), above, that would require corporate disclosures of climate-related financial risks. (Roundtable Fact Sheet, March 25)  

  • The responses will influence The Roundtable’s comments to the SEC about the March 21 proposed rule. (Roundtable Weekly, March 25)
  • Roundtable members are encouraged to review The Roundtable’s fact sheet summarizing the SEC’s proposed rule before submitting responses.
  • The survey, originally sent on April 1, aims to obtain a high-level understanding of the existing practices and standards used by Roundtable members in assessing and quantifying:
    • greenhouse gas (GHG) emissions across portfolios,
    • buildings’ electricity use,
    • the impact of floods and rising sea levels to real estate assets,
    • tenant interactions about these issues, and
    • other questions that may require registered companies to report on their climate-related financial risks.
  • The proposed SEC rule has no immediate effect. If it is finalized, the action could have a significant impact on the real estate industry, requiring all SEC registered companies to report on climate-related risks through annual 10-Ks and additional filings. (SEC News Release | Proposed Rule | Fact Sheet, March 22) 
  • If any Roundtable member has questions about the survey, please contact Roundtable Senior Vice President and Counsel, Duane Desiderio.

Policymakers & SEC Regulation

Capitol view from side - bright

  • Several Senate Democrats support a more stringent SEC climate disclosure rule, including Elizabeth Warren and Edward Markey of Massachusetts. (Politico, April 5 and Markey news release, March 21)
  • Senator Joe Manchin (D-WV), chairman of the Senate Committee on Energy and Natural Resources, sent a letter to Commission Chairman Gary Gensler on April 4 outlining his concerns with the 506-page proposed SEC rule.
  • A group of 19 Senate Republicans from the Senate Environment and Public Works (EPW) and Banking committees expressed their opposition to the SEC proposal in an April 5 letter to Gensler.
  • While some opposition to the SEC’s proposed rule is mounting in Congress, particularly from the GOP, the Biden Administration is nonetheless expected to push forward with a final rule that could be issued later this year.  

The Roundtable’s Sustainability Policy Advisory Committee (SPAC) will convene a working group that will review the SEC’s proposed climate rule and our comment letter response to the Commission.

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Roundtable Survey Seeks Members’ Input on SEC Climate Risk Disclosure Proposal

Posted on by Trey Jackson

SEC building exterior

Real Estate Roundtable members received a survey earlier today that will help formulate comments in response to a proposed rule issued on March 21 by the U.S. Securities and Exchange Commission (SEC) regarding corporate disclosures of climate-related financial risks. (Roundtable Weekly, March 25) 

Roundtable Member Participation 

  • The Roundtable requests that members respond to the SEC climate issues survey by COB April 11.

  • Before submitting responses to the survey, members are encouraged to review The Roundtable’s fact sheet summarizing the SEC’s proposed rule.
  • The survey sent today aims to obtain a high-level understanding of the existing practices and standards used by Roundtable members in assessing and quantifying the following:
    • greenhouse gas (GHG) emissions across their portfolios,
    • their buildings’ electricity use,
    • impacts to their real estate assets from floods and rising sea levels,
    • how they interact with their tenants on these matters, and
    • similar questions that will likely require registered companies to report on their climate-related financial risks.
  • If any Roundtable member has questions about the survey, please contact Roundtable Senior Vice President and Counsel, Duane Desiderio.

SEC Climate Risk Proposal

Flooding of mixed used building

  • The proposed rule has no immediate effect. If the proposal is finalized, all companies registered with the SEC would be required to report, measure, and quantify “material” risks related to climate change in their annual Form 10-Ks and certain other filings. (SEC News Release | Proposed Rule | Fact Sheet, March 22)
  • Compliance would phase-in over the next several years. For example, registrants with a global market value of $700 million or more would need to comply first for filings in FY 2024 (covering FY 2023 emissions).
  • “Limited assurance” from independent third party verifiers, regarding so-called Scope 1 and Scope 2 emissions, would be required for the first two compliance years. Thereafter, “limited assurance” would ramp-up to “reasonable assurance” at a level provided in a financial statement audit filed with a 10-K.
  • Indirect “supply chain” emissions – known as “Scope 3” – are considered the most difficult emissions to measure and quantify. Under the SEC’s proposal, reasonable efforts to report on Scope 3 emissions would receive a “safe harbor” from certain liability under federal securities laws. Also, third-party verification of Scope 3 reporting would be optional. 

The SEC proposal, formally titled “Enhancement and Standardization of Climate-Related Disclosures for Investors,” is considered a key component of the Biden Administration’s efforts to cut U.S. greenhouse gas emissions by as much as 52% (below 2005 levels) by 2030. (CBS-AP | Bloomberg | Axios, March 21)  

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CRE Industry Encouraged to Participate in Energy Department’s “Better Climate Challenge” to Reduce GHG Emissions

Posted on by Trey Jackson

U.S. Energy Secretary Jennifer Granholm

U.S. Energy Secretary Jennifer Granholm, above, announced on Nov. 3  a “soft launch” of the multi-sector Better Climate Challenge at the COP26 international conference in Glasgow. This new Department of Energy (DOE) effort aims to recognize U.S. real estate, industrial, and other companies that voluntarily agree to slash their GHG emissions – and share their “best practices” toward achieving emissions reduction goals. (Climate Challenge Factsheet | FAQs | Informational webinar) 

Program Requirements 

  • The key element of DOE’s voluntary challenge is for companies to commit to reduce  direct emissions (“scope 1”), and emissions from electricity purchases (“scope 2”), by 50% over 10 years. There is no requirement to quantify or reduce indirect “scope 3” emissions.
  • The 10-year window is measured from a baseline of up to five years before a company joins the program.
  • Commitments to reduce emissions must be across a building portfolio.
  • Participating companies must also pursue an efficiency target, to prioritize energy savings that will contribute toward the 50% reduction in portfolio-wide emissions over a decade.
  • Companies joining the program must pledge to share energy and emissions data for 10 years through  EPA’s Portfolio Manager, publicly report on progress, participate in peer-to-peer exchanges, and help develop industry best practices.

Corporate Purchases of Clean Power

Better Climate Challenge logo

  • DOE staff discussed the new program yesterday with The Roundtable’s Sustainability Policy Advisory Committee (SPAC).
  • DOE explained that to reach the 50% emissions reduction target, companies can tally their long-term clean power purchase agreements (PPA) and associated renewable energy certificates (RECs). PPAs and RECs are increasingly common strategies used by CRE and other sectors to help deliver more renewable energy to the electricity grid.
  • Staff further explained that it does not intend for certain carbon “offsets” (such as planting trees offsite) to count towards meeting the 50% emissions reduction target.

Partnership Agreements and Public Recognition

  • Companies that pledge to participate in the Better Climate Challenge must sign a partnership agreement with DOE.
  • DOE will work with organizations as they develop organization-wide GHG emissions reduction plans and provide technical assistance with meeting corporate goals.
  • DOE aims for the Challenge to develop and provide “alternative pathways” that present options for companies to set and achieve climate targets.

  • Organizations that have already made similar commitments are encouraged to reach out to DOE to discuss how they can participate. For example, DOE will accept pre-established corporate goals with an approved 1.5° Celsius aligned science-based target, on a case-by-case basis.
  • Aside from Wednesday’s “soft launch,” DOE plans further public recognition for participating companies during a formal launch slated for early 2022. DOE also intends to feature companies that participate in the Challenge at its next annual Better Buildings Summit in Washington, D.C. on May 17-19, 2022.
  • So far, 32 organizations have publicly pledged their commitment to the Better Climate Challenge as DOE elevates outreach out to private sector companies, states, municipalities and other organizations.

Contact the Department of Energy to Participate 

Modern buildings and American flag

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