Climate Finance News - January 5
US FASB proposes accounting standard update on environmental credits; Vermont Climate Superfund Act; Citigroup leaves Net Zero Banking Alliance
In this newsletter
Taiwan's Silicon Valley Plan Approved Amid Resource Concerns
EU Platform Recommends Sustainable Finance Product Categorization
FMSB Consults on Sustainability-Linked Product Governance
Vermont Climate Superfund Act Faces Lawsuit
Equinor Secures Funding for Empire Wind 1 Offshore Wind Project
Citigroup leaves Net Zero Banking Alliance, focuses on GFANZ
Canada's First Biennial Transparency Report on Climate Action
JPX Launches Sustainability Information Search Tool
Keidanren's Vision for a Sustainable Japan by 2040
FASB Proposes ASU on Accounting for Environmental Credit Programs
EU's progress on Global Biodiversity Framework
UK's Response to Climate Change Committee's 2024 Progress Report
South Korea Issues Green Finance Guidelines
Taiwan's Silicon Valley Plan Approved
(January 04)
Taiwan's Cabinet approved a new plan for developing a ‘Silicon Valley’ in southern Taiwan and accelerating AI innovation. The plan mentions four strategies
the first is "expansion power", the establishment of high-efficiency AI operation resources and safe digital infrastructure;
the second is the "chain field", which must be integrate Sharon Wisdom Green Energy Science City and surrounding industries to promote the development of innovation in application fields;
the third is "fascivating", focus on cultivating AI soft body systems to integrate professional talents;
the fourth is "Exhibition Application", which promotes AI application scenarios such as smart medical care, seniority, net zero green energy, and intelligent transportation to improve the depth and breadth of industrial applications.
(as translated from NSTC’s Press Release)
Executive Yuan (Taiwan Cabinet) | National Science and Technology Council, Taiwan
EU Platform Recommends Sustainable Finance Product Categorization
(January 03)
The EU Platform on Sustainable Finance published a report on categorizing financial products under the Sustainable Finance Disclosure Regulation (SFDR). The Platform recommends categorizing products based on three sustainability strategies: sustainable, transition, and ESG collection. The Platform also suggests expanding the scope of categorization beyond the current SFDR and developing a common understanding of impact investing within the EU's sustainable finance framework.
FMSB Consults on Sustainability-Linked Product Governance
(January 03)
The Financial Markets Standards Board (FMSB) in the UK has published a consultation on its statement of good practice for the governance of sustainability-linked products (SLPs). SLPs are financial products whose characteristics vary depending on whether users meet sustainability or ESG objectives. The statement aims to improve SLP quality, boost market confidence, mitigate greenwashing, and develop a more robust SLP market. It applies to service providers and users in wholesale financial markets and complements existing asset-class guidance.
Vermont Climate Superfund Act Faces Lawsuit
(January 03)
In May 2024, Vermont passed the Climate Superfund Act, requiring large fossil fuel companies to pay for climate change cleanup costs.
This act establishes the Climate Superfund Cost Recovery Program at the Agency of Natural Resources (ANR). The purpose of the Program is to hold parties responsible for covered greenhouse gas emissions between the covered period of January 1, 1995 and December 31, 2024 for the entity’s share of the State’s costs due to climate change. Responsible parties are defined as fossil fuel extractors or crude oil refiners that ANR attributes one billion metric tons or more of covered greenhouse gases during the covered period. Responsible parties are strictly liable for cost recovery payments to the State.
The American Petroleum Institute and the U.S. Chamber of Commerce have filed a lawsuit challenging the law. In December, New York also enacted a similar climate superfund law.
Equinor Secures Funding for Empire Wind 1 Offshore Wind Project
(January 02)
US-based Equinor has secured over USD 3 billion in project financing for its Empire Wind 1 offshore wind project, which will power 500,000 New York homes. The total capital investment is approximately USD 5 billion, including fees for the South Brooklyn Marine Terminal and expected tax credits. Construction has begun, and the project is expected to reach commercial operation in 2027.
Citigroup leaves Net Zero Banking Alliance, focuses on GFANZ
(December 31)
US-based Citigroup has left the Net Zero Banking Alliance and will focus on supporting the Glasgow Financial Alliance for Net Zero (GFANZ). Citigroup remains committed to reaching net zero emissions and continues to work with clients on their low-carbon transitions, while also addressing energy security concerns.
Canada's First Biennial Transparency Report on Climate Action
(December 30)
Canada has released its First Biennial Transparency Report under the Paris Agreement, outlining its progress in reducing emissions and establishing a low-carbon future. The report highlights various measures implemented, including pollution pricing, a proposed cap on oil and gas greenhouse gas pollution, and over $60 billion in investments for clean electricity. Canada also reaffirmed its commitment to providing $5.3 billion in climate finance to support developing countries.
JPX Launches Sustainability Information Search Tool
(December 26)
Japan Exchange Group, Inc. and JPX Market Innovation & Research, Inc. launched the JPX Sustainability Information Search Tool (Beta Version) for Tokyo Stock Exchange (TSE) listed companies to enhance sustainability-related information disclosure. The tool, developed with assistance from Cierpa & Company, Inc., allows companies to view links to sustainability information from Prime Market-listed companies' publications. It is currently available only in Japanese and is free to use for TSE listed companies.
Keidanren's Vision for a Sustainable Japan by 2040
(December 25)
The Japan Business Federation (Keidanren) released a report, FUTURE DESIGN 2040, outlining Chairman TOKURA Masakazu’s vision for Japan’s society by 2040. The report focuses on six policy pillars, including environment and energy, aiming to advance GX policies, contribute to global carbon neutrality, and ensure stable energy supply at internationally competitive prices. Keidanren advocates for maximizing decarbonizing power sources, including nuclear power, and achieving carbon neutrality through various measures.
FASB Proposes ASU on Accounting for Environmental Credit Programs
(December 20)
The US Financial Accounting Standards Board (FASB) released a proposed Accounting Standards Update (ASU) on accounting for environmental credit programs.
The following are examples of environmental credits and the associated regulatory compliance program that are subject to the amendments in this proposed Update (these examples are not all-inclusive):
Emissions allowances originating from domestic and global cap-andtrade programs
Corporate Average Fuel Economy (CAFE) credits originating from U.S. CAFE Standards
Renewable identification numbers originating from the U.S. Renewable Fuel Standard
Renewable energy certificates originating from U.S. State Renewable Portfolio Standards.
The proposal aims to improve recognition, measurement, presentation, and disclosure requirements for environmental credits and related compliance obligations. Companies will need strong processes for establishing intent regarding credit use, as changes in intent affect subsequent measurement.
EU's progress on Global Biodiversity Framework
(December 19)
The European Union has been actively working towards the commitments made in the 2022 Kunming-Montréal Global Biodiversity Framework (GBF). The EU doubled its external financing for biodiversity to €7 billion from 2021 to 2027 and unveiled new initiatives worth close to €160 million at COP16. The Commission is also funding at least 74 nature-based solutions projects in Europe with a total contribution of €654 million.
UK's Response to Climate Change Committee's 2024 Progress Report
(December 17)
The UK government has published its response to the Climate Change Committee’s 2024 Progress Report, outlining steps taken to accelerate net zero and meet climate targets. Key actions include lifting the onshore wind ban, approving major solar projects, launching Great British Energy (£125m funding announced for 2025-2026), delivering a record-breaking renewables auction, and investing £21.7bn in carbon capture and hydrogen industries. The UK also announced an ambitious 2035 NDC target to reduce greenhouse gas emissions by at least 81% compared to 1990 levels.
South Korea Issues Green Finance Guidelines
(December 12)
South Korea announced the establishment of administrative guidelines on green finance for application on green economic activities specified by K-taxonomy. The guidelines provide specific criteria for determining the appropriateness of financing green economic activities for financial companies and address issues regarding the prevention of greenwashing and internal control. Financial companies can determine the appropriateness of green economic activities on behalf of businesses and use green finance certifications to publicly announce their green activities.
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