Greenspace Main Logo
Greenspace Main Logo
03 June 2024
Climate News May 2024

UK Climate News

 

UK government’s climate action plan is unlawful, High Court rules

The High Court ruled on the 3rd of May that the UK government acted unlawfully by approving the Carbon Budget Delivery Plan (CBDP) in March 2023, according to the Financial Times. Grant Shapps was energy secretary at the time. The Campaign groups ClientEarth, Friends of the Earth and Good Law Project had argued that the government’s revised strategy was unlawful because it provided too little information on the government’s assessment of the risk of policies not being delivered. The groups also raised concerns about the reliance on technologies such as carbon capture and storage, which is expensive and has yet to be proven at scale anywhere.

The latest, revised climate plan outlines how the country will achieve targets set out in the sixth carbon budget, which runs until 2037, as part of wider efforts to reach net zero by 2050.

The Climate Change Act requires the government to meet five-yearly carbon budgets to stay on course for net-zero greenhouse gas emissions by 2050. The government’s own analysis found that it had low or very low confidence in policies that were designed to make half of the carbon reductions necessary to meet its fifth and sixth carbon budgets, covering the years 2028-37.

The judge ruled that the details in the draft plan were “vague and unquantified” and did not provide officials with enough information on whether the plan should be approved and ordered Energy secretary Claire Coutinho to draw up a revised plan within 12 months. The new plan must ensure that the UK achieves its legally binding carbon budgets and its pledge to cut emissions by more than two-thirds by 2030, both of which the government is off track to meet.

This is the second time that the UK government’s plans for hitting climate goals have been ruled unlawful in the High Court. In July 2022, the High Court first ruled that the UK government’s net zero policy fell short of reaching the requirements of the Climate Change Act which forced the Conservatives to produce a revised plan.

 

 

Sadiq Khan vows more climate action after London mayor win

On the 4th of May, it was announced that Sadiq Khan won a historic third term as London Mayor. During his victory speech, he vowed to continue enacting policies to limit carbon emissions and reduce crime. Khan oversaw a surge in electric vehicles on the city’s roads within his last two terms – and he plans for thousands more EV chargers to be installed across the UK capital. His controversial expansion of the city’s low-emission zone was a point of contention amongst the mayoral candidates, with Conservative candidate Susan Hall pledging to abolish ULEZ as soon as she got into office. However, Khan’s win will mean the ULEZ zone in both inner and outer London will stay firmly in place.

 

UK electric vehicle sales

British electric vehicle sales have reportedly got off to a record start this year, with more than 100,000 EVs sold between January and April. The figures for total electric vehicle sales marked a 10% increase from April 2023. The Guardian reports that the UK installed a record number of public electric vehicle charging stations, with nearly 6,000 new chargers installed in the first three months of 2024. The number of public chargers in the UK has doubled since the start of 2022, the paper notes. 

Incoming ESG Regulation for UK Companies

Regulation

About / Scope

Effective Dates

CSRD

The ESRS standards (CSRD Regulation) are highly granular with 5 Environmental pillars, 4 Social pillars, 1 Governance pillar. Companies will need to take a double materiality approach (unlike the ISSB), in which they specify how they identified material topics and provide reasoning for excluding disclosure on materiality-relevant topics.

Mandatory Scope for UK Companies:

  • Company has >€150 million net turnover in 2 consecutive FYs
  • AND Company has at least 1 EU branch w/>€40 million turnover; OR
  • Company has an EU subsidiary with >250 employees.
  • OR is listed on an EU-regulated market

FY29 (on FY28 data) for all third-country companies

EU-listed subsidiaries may need to report in:

FY25: Large entities in NFRD scope (e.g. >500 employees)

FY26: if either >250 Employees, or Net turnover of >€40 million, or >€20 million in total assets.

If you have multiple EU subsidiaries that meet the above, the largest subsidiary consolidates reporting for the others in FY26.

ISSB

As per The UK Companies Act 2006 and related Listing Rules, UK-listed entities must publish TCFD-aligned disclosures.

TCFD has been consolidated into the IFRS S2 standards published by ISSB. UK companies can use IFRS S2 voluntarily as their chosen TCFD-aligned disclosure. IFRS S1 is less aligned.

However, given incoming regulatory guidance published by the FCA, UK companies are likely to be mandated to publish ISSB-aligned disclosures in the next couple of years.

TCFD-aligned reporting is currently mandatory for UK listed entities.

Companies can choose from Climate-related financial disclosures (CFD) (least granular), TCFD or IFRS S2 (most granular).

Given TPT and UK SDS (see below), IFRS S2 disclosing companies are best positioned for incoming regulatory requirements.

TPT

In April 2022, the Government launched the Transition Plan Taskforce (TPT) to develop a framework for corporate Climate Transition Plans to achieve Net Zero and communicate with their stakeholders.

The TPT framework builds on the approach to transition plans within UK regulation and FCA rules and provides technical mapping to IFRS S2 and the ESRS.

 

Disclosure on Climate Transition Plans is currently mandatory for companies via TCFD-aligned disclosures.

It is likely that the framework itself will factor into the prospective UK Sustainable Disclosure Standards Regulation.

UK Sustainability Disclosure Standards

In May 2024 the UK government released its framework for creating Sustainability Reporting Standards (“UK SRS”). This will require corporate disclosures on sustainability-related risks and opportunities, in more detail than current TCFD obligations.

The standards are expected to be based on IFRS S1 (overall requirements and sustainability-related financial information) and IFRS S2 (climate-related disclosure), aka ISSB.

The UK SRS will be overseen by the Financial Conduct Authority (FCA) and will likely apply to LLPs and UK-listed companies who are currently in scope for TCFD-aligned disclosures.

Official consultations on the draft standard are expected in Q1 2025.

If you are in scope of TCFD you should expect to be in scope for the UK SRS. In Q2 2025 the UK government will consider exemptions from pre-existing requirements.

Based on the latest advice, the UK SRS will come into effect no earlier than January 2026

 

EU Climate News

Understanding the Corporate Sustainability Due Diligence Directive

The Corporate Sustainability Due Diligence Directive (CSDDD) sets stringent standards for human rights and environmental due diligence for companies operating in the European Union. The primary objective of the CSDDD is to require companies operating within the EU to conduct thorough human rights and environmental due diligence of their operations and supply chain. This directive aims to enhance the protection of human rights and the environment while minimizing negative impacts on global value chains.

By creating a unified approach across the EU, the directive seeks to provide businesses, customers, and victims with clearer expectations and potential liabilities.

To comply, companies must integrate responsible business practices into their daily operations, actively identifying and addressing risks to human rights and the environment. This due diligence applies to a company's own operations, subsidiaries, and business partners, regardless of whether impacts occur within or outside the European Union.

The CSDDD was adopted by the EU on 24 April 2024, giving member states two years to incorporate the Directive into their national legislation (2024-2026). The provisions will start to apply between 2027 and 2029 depending on the size of the company.

Requirements

The CSDDD includes extensive due diligence requirements, adopting a risk-based approach aligned with international frameworks such as the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. Companies are required to:

  1. Incorporate responsible business conduct into policies and management systems.
  2. Identify, assess, and prioritize actual or potential adverse impacts on human rights or the environment.
  3. Prevent, mitigate, or eliminate adverse impacts and provide remediation where necessary.
  4. Engage meaningfully with stakeholders and implement effective complaint mechanisms.
  5. Monitor the effectiveness of measures taken and communicate publicly about due diligence efforts.

To comply, companies must ensure human rights and environmental due diligence across their operations, subsidiaries, and direct and indirect business partners, whether impacts occur within or outside the EU. However, due diligence related to product disposal and indirect downstream business partners is exempted from the directive's scope.

Additionally, the CSDDD requires companies to develop and implement a climate transition plan aligned with the Paris Agreement global warming limit of 1.5°C.

Scope

The CSDDD includes a phased implementation scheme for companies:

  1. From 2027: Companies with more than 5,000 employees and €1,500 million in turnover over the past two consecutive financial years. Additionally, non-EU companies operating within the EU that meet the turnover threshold of €450 million generated within the EU, and / or companies with franchising or licensing agreements in the EU with royalties exceeding €22.5 million (provided their worldwide net turnover exceeds €80 million) also fall under the Directive's scope.
  2. From 2028: Companies with more than 3,000 employees and €900 million in turnover over the past two consecutive financial years.
  3. From 2029: Companies with more than 1,000 employees and €450 million in turnover over the past two consecutive financial years.

Additionally, non-EU companies operating within the EU that meet the turnover threshold of €450 million generated within the EU, and companies with franchising or licensing agreements in the EU with royalties exceeding €22.5 million (provided their worldwide net turnover exceeds €80 million) also fall under the Directive's scope.

Penalties and civil liabilities

Designated supervisory authorities in the EU will impose penalties for non-compliance. They will have the power to order the cessation of breaches, impose fines (with a maximum of up to 5% of the net worldwide turnover of the company) and adopt injunctive measures in case of imminent risk of severe and irreparable harm.

Additionally, the Directive allows victims to bring a civil liability claim before competent national courts and obtain compensation for damages against those companies who fail to comply.

 

 

Heavy-duty vehicles: Council signs off on stricter CO2 emission standards

EU rules that will cut carbon dioxide emissions from trucks and require new heavy-duty vehicles emissions to fall 90% by 2040 received final approval from member states on the 13th of May. The rules will enter into force 20 days after its publication in the Official Journal of the EU. The rules will mean manufacturers have to sell a large share of fully CO2 free trucks – including electric vehicles and those running on hydrogen fuels. Interim emissions reduction targets for new sales will be 45% by 2030 – up from an existing goal of 30% – and 65% by 2035. The new rules introduce a 100% zero-emission target for new urban buses by 2035, with an intermediate target of 90% for this category by 2030. Inter-urban buses will be exempt from this target. The new Regulation is set out in Regulation of the European Parliament and of the Council amending Regulation (EU) 2019/1242 as regards strengthening the CO2 emission performance for new heavy-duty vehicles and integrating reporting obligations amending Regulation (EU) 2018/858 and repealing Regulation (EU 2018/956.

 

Global Climate News

  • A report released on the 9th of May by the Thinktank Ember finds that renewables accounted for more than 30% of the world’s electricity for the first time last year following a rapid rise in wind and solar power. The report suggests that the “world may be on the brink of driving down fossil fuel generation”, with renewables already helping to slow the growth in fossil fuels by almost two-thirds in the past 10 years. Solar is by far the fastest-growing electricity source, increasing its share of generation from 4.6% in 2022 to 5.5% in 2023, according to Ember analysis. The report adds that, since 2000, wind and solar power have gone from generating just 0.2% of global electricity to a record 13.4% today. Elsewhere, according to the International Energy Agency (IEA) analysis, investment in manufacturing capacity for solar panels, wind turbines, batteries, electrolysers and heat pumps surged by 70% last year, to USD 200 billion.

 

  • On the 12th May, the 2024 Europe Report of the Lancet Countdown on Health and Climate Change was released. This report tracks 42 indicators highlighting the negative impacts of climate change on human health, the delayed climate action of European countries, and the missed opportunities to protect or improve health with health-responsive climate action.  Since last year’s report, nine new indicators have been added, covering leishmaniasis (a parasitic disease caused by sand flies), ticks, food security, health-care emissions, production and consumption-based emissions, clean energy investment, and scientific, political, and media engagement with climate and health. The report also reflects on aspects of inequality and justice by highlighting at-risk groups within Europe and Europe's responsibility for the climate crisis.

 

G7 nations to end use of unabated coal power plants.

Energy ministers from the G7 nations have signed a deal to end the use of unabated coal power plants between 2030 and 2035. The agreement also includes a caveat that countries could choose “a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with countries’ net-zero pathways.” This marks a key climate milestone for the G7 nations – the UK, US, Canada, France, Italy, Germany and Japan – who had previously been unable to reach an agreement on phasing out coal despite several years of talks. Several members of the G7 have already come close to ending the use of coal. Coal makes up less than 6% of the electricity mix in the UK, Italy and Canada, and almost nothing in France. But it still comprises 32% of Japan’s electricity mix, 27% of Germany’s and 16% of the US’, according to the think tank Ember.

 

ISSB’s next steps on biodiversity and human capital

The International Sustainability Standards Board (ISSB) has said that it will commence projects to research disclosure about risks and opportunities associated with biodiversity and human capital. The ISSB will look at how it might build from existing initiatives, including the SASB standards, CDSB guidance and the work of the Task Force on Nature-related Financial Disclosures (TNFD). The research projects will enable the ISSB to assess the limitations with current disclosure in these areas and decide whether it needs to develop any disclosure standards on these two topics. The ISSB has indicated that its priority for the next two years will be supporting the implementation of the ISSB’s first two standards - IFRS S1 and IFRS S2. The two new research projects, as well as work to enhance the SASB standards, will be the ISSB’s other key focus areas.

The IFRS has launched a webpage listing which countries are consulting on integrating the International Sustainability Standards Board (ISSB) standards into national law. The webpage is divided into open/ongoing consultations and closed consultations.

On 2 May 2024, the IFRS Foundation and EFRAG, the body advising on European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD), published Interoperability Guidance to illustrate the alignment between the International Sustainability Standards Board’s IFRS Sustainability Disclosure Standards (ISSB Standards) and the ESRS. The Guidance explains how companies can efficiently comply with both sets of standards, with a specific focus on climate-related reporting. The goal of the guidance is to increase efficiency for entities that report under ESRS and the ISSB Standards by describing how the standards are interoperable.

 

Global: IETA publishes guidelines for high integrity use of carbon credits

The International Emissions Trading Agency (IETA) has issued further guidance on how to use carbon credits as part of a decarbonisation strategy, urging companies to not delay investing in the market – see Guidelines for High Integrity Use of Carbon Credits. To help companies incorporate carbon credits into their climate strategies, it has set out six guidelines for using the voluntary carbon market:

  • Demonstrate support for the Paris Agreement goals;
  • Quantify and publicly disclose Scope 1, 2 and 3 emissions profiles;
  • Establish a net zero decarbonisation pathway and near-term targets;
  • Use carbon credits in line with the mitigation hierarchy;
  • Ensure that only high-quality carbon credits are use; and
  • Transparently disclose use of carbon credits.

 

Unprecedented climatic conditions across Africa, Asia, and South America: Those least responsible for the climate crisis continue to be those most affected.

A state of emergency was declared in southern Brazil following days of heavy rainfall leading to significant flooding and landslides in Rio Grande do Sul, Brazil’s southernmost state. More than half of the 497 cities in the state have been affected by the storms, with roads and bridges destroyed in several areas. The storms also caused landslides and the collapse of a hydroelectric dam near the city of Bento Gonçalves, killing 30 people. The Guardian reports that 75 people have died and more than 100 are still missing. This is thought to be Brazil’s fourth such environmental disaster in a year, following floods in July, September, and November 2023 that killed 75 people in total. Experts point to a combined source of both climate change and the El Niño-La Niña weather pattern.

Moving to Africa, the death toll from flooding and landslides in Kenya has risen to at least 181 since March, the Red Cross announced on the 1st of May. At least 48 people have died in flash floods in the central Kenyan town of Mai Mahiu and more people have been killed in floods in neighbouring Tanzania and Burundi. The floods are also reported to have reached parts of the Masai Mara, one of Africa’s greatest wildlife national reserves, following the Telek river bursting its banks on the 1st of May. This led to tourist camps being flooded and 90 people having to be evacuated. Again, climate change and El Niño are thought to be responsible for this disaster, however these floods are also thought to have exposed decades of poor urban planning and bad land management.

Numerous other climate-related records are being broken across the Asia. Bangladesh had the hottest April ever recorded, Pakistan has recorded its wettest April since 1961 (with more than double the usual rainfall for the month), the Philippines is suffering a heatwave causing dams to dry up and forcing schools to close, and some sources estimate that 40 people are dying each day in Myanmar due to the heat. Meanwhile India recorded an all-time high temperature 52.9°C on 29th of May 2024.

Canada: Greenhouse-gas emissions falling, but oil-sands emissions continue to climb

Based on Canada’s latest inventory report released on the 2nd May, there is evidence that Canadian federal climate policies are beginning to reduce the nation’s overall greenhouse gas emissions, but those from its large oil-sand industry continue in rise. One significant reason for this is fossil-fuel producers ramping up their production to supply the Trans Mountain pipeline expansion system. This is the proposed twinning of an existing pipeline which would increase its capacity from 300,000 barrels per day to 890,000.

Environment minister, Steven Guilbeault, says the numbers showed the country remains on track for its 2030 goal, which is to cut emissions by 40% below 2005 levels by 2030, with a short-term target to cut them by 20% by 2026. However, emissions in 2022 were only 7% lower than in 2005, meaning there is still a significant amount of work to do.

 

New Research in Climate Science

  • The summer of 2023 was the warmest for the northern hemisphere, outside of the tropics, for the past two millennia, a new study says. Using observed and reconstructed summer temperature data, the researchers show that the coldest summer of the past 2,000 years – in AD536 – was almost 4°C cooler than 2023. The authors note that the heat of 2023 “is consistent with a greenhouse gases-induced warming trend” that was “amplified by an unfolding El Niño event” and the extremes emphasise “the urgency to implement international agreements for carbon emission reduction”.
  • New research warns that the Indian Ocean is experiencing unprecedented and accelerated warming and could warm at a rate of 1.7-3.8°C per century unless greenhouse gases (GHGs) are reduced immediately.  “The future increase in heat content is equivalent to adding the energy of one Hiroshima atomic bomb detonation every second, all day, every day, for a decade,” Dr Roxy Mathew Koll, climate scientist and lead author of the work says. Marine heatwave days “are expected to rise” from 20 to 220-250 a year, meaning that most of the Indian Ocean could be in a near-permanent state of marine heatwave conditions. Increasing marine heatwaves could cause tropical cyclones to intensify rapidly, with people calling for the addition of another category of category 6 cyclones.

 

  • New research from the International Institute for Environment and Development (IIED), reported by BBC has found that days above 35°C are becoming more common in London, as are consecutive days above 30°C. In the last three decades, the capital has seen 116 days above 30°C, but more than half of these (59) happened in the last 10 years. Consecutive days above 30°C have become more frequent too - in the 1990s and 2000s there were two years in each decade with three or more days in a row over 30°C. But since 2017, every year except 2021 has seen the temperature climb above 30°C in London for three or more consecutive days each summer. IIED said strategies to adapt London to the growing heat already exist but must be implemented.

 

  • The activity of tornado-producing tropical storms may increase “substantially” in the US by 2050 as climate change worsens, new research finds. The study uses high resolution climate models to examine how the number of tornado-producing tropical storm surrogates could increase in future. There is also evidence for enhanced tornado activity at night, when people are asleep and more likely to miss warning.

 

  • A new study published on the 2nd of May finds that implementing a range of CO2 removal methods in urban areas could mitigate up to 1bn tonnes of CO2 annually by 2050. Researchers examine four primary methods of carbon sequestration: direct capture of CO2 from buildings, removal of CO2 through parks, trees and green roofs, storing carbon in soils and using timber in construction. They find that storing CO2 in the built environment – that is, using building materials with carbon storage capacity – has the largest potential for drawing down CO2. However, the study notes that storage potential of each method will likely vary significantly between different urban areas, and that uncertain science limits quantitative estimates.