Companies and communities alike have felt the negative impacts of climate change in one capacity or another. In an effort to mitigate its escalating threat and more extreme repercussions, governments across the globe have stepped in to make sustainability a top priority. This sentiment has taken hold in the United States as well, prompting new—and what some may consider aggressive—legislation that’s poised to intensify in the coming years.
Here are some already significant policies to pay attention to that will undoubtedly impact business, infrastructure and our day-to-day lives, today and in the foreseeable future.
Cracking down on methane emissions has been repeatedly stated as a priority for a plethora of governments, including the Biden administration, due to its significant, yet traditionally overlooked, role in catalyzing climate change. Although carbon dioxide (CO2) is most often associated with the planet’s rising temperatures and volatile weather patterns, methane has proven to be a powerful contributor in its own right. In fact, it has approximately 84 times the warming potency of CO2 over a 20-year period—a timeframe many scientists consider pivotal to curbing the worst that climate change has to offer. Because of its short-lived, but impressive climate-altering strength, experts estimate methane is currently responsible for approximately one-third of the warming from greenhouse gases (GHGs), though that figure may still be greater than previously thought. As a result, it’s been the subject of increasing regulation over the past decade and continues to be a growing focus area as more impact data comes to light.
Recently, the U.S. Environmental Protection Agency (EPA) announced that it is bolstering its proposed standards to cut methane and other harmful air pollutants. While the planned standards primarily focus on the oil and gas industry, they are poised to extend to other sectors. Newer policies will likely encompass the emissions associated with waste generation and disposal too, given the recent identification of landfills as methane super-emitters, and the increased efforts to measure and track those emissions.
The EPA also recently proposed requiring states and tribal governments to develop their own plans to regulate methane. Should that occur, it could lead to some problematic regulatory issues for various businesses.
What You Can Do:
Make sure both your business and environmental strategies are geared toward methane abatement and that your third-party providers are likewise committed to such efforts. Engage with environmental, social and governance (ESG) and sustainable materials management consultants and service providers that keep current on the issue of methane and its solutions.
More stringent federal emissions standards for cars and trucks were recently implemented, but by the end of 2023, the EPA plans to issue even tougher GHG emissions rules for heavy-duty trucks and other large vehicles through at least the 2030 model year.
After the Inflation Reduction Act—which includes climate and spending provisions—passed in August 2022, the agency said it would begin the official process of developing such rules, a move that could speed the U.S. shift to electric heavy-duty vehicles alongside the introduction of commercial vehicle credits.
What’s more, on the side of passenger vehicles, the EPA also made moves to incentivize cleaner vehicle electricity sources through another type of credit—renewable identification numbers (RINs). These are fuel credits used to track and enforce compliance with renewable fuel mandates. In the case of electric vehicles, the EPA proposed a major new regulatory component of the Renewable Fuel Standard program to recognize electricity produced from organic waste—an “eRIN” policy.
What You Can Do:
If you have a fleet of vehicles, make sure your sustainability team and/or an effective provider of logistics consulting and support ensures that you’re meeting existing emissions standards by monitoring outputs and utilizing credits where applicable. This will help you maintain and improve your ESG goals.
Keep an eye on future rules and incentives for vehicles you might use at your facilities and other sites. Throughout your fleets, transition to newer vehicle models that are cleaner and more energy-efficient, utilize fuel from renewable sources and identify government grants and incentives to further offset your costs and improve your environmental standing.
To go a step further, see how else your third-party service providers can support your ESG goals through accreditation or more direct solutions.
As the concerns surrounding waste and its pollution compound, legislators have taken greater measures to hold producers accountable for the entire lifecycles of the goods and commodities they provide. This policy approach, known as Extended Producer Responsibility (EPR), aims to eliminate (or curb) wasteful production and packaging practices; spur the pervasiveness of longer-lasting, reusable and recyclable products and product components; and incentivize ecofriendly product design so that materials benefit the environment instead of harm it—or simply be inoffensive to it—at their end-of-life.
Although producer accountability is nothing new, in 2008, The Waste Framework Directive reinvigorated EPR across Europe, prompting 25 of the 28 EU member states to eventually set up EPR programs for household, packaging, electronic, automobile and battery waste materials. Canada too has EPR policies that cover fully half of the country’s 10 provinces. In the United States, 11 states have EPR laws on the books, though given the recent rate at which EPR legislation is being discussed on the state level, that number is poised to soar in the coming years.
What You Can Do:
Assemble a strong in-house environmental sustainability team; have them work closely with product design, operations and any other key production drivers; and engage a sustainable materials management firm to support and concert EPR compliance efforts across those various channels. Such firms will help you assess the nature and impacts of your resource use, your products and packaging, your waste generation, and your down-stream processes. This level of transparency and control could be critical for being compliant with EPR regulations; it could also be critical to protecting the wellbeing of your employees, customers and brand.
In March 2022, the U.S. Securities and Exchange Commission (SEC) proposed rule changes that would require registrants to include certain climate-related disclosures in their registration statements and periodic reports addressing any climate-related business risks and actions to mitigate them. The SEC is also working on new rules that would combat false ESG claims by investment funds and ensure that companies disclose how climate change affects their operations.
What You Can Do:
If your company is publicly traded or you otherwise have any reason to be concerned about SEC regulations related to ESG, you should ensure that your organization understands all reporting standards and is capable of providing timely, accurate and accessible metrics to support claims stating that those standards have been met. More broadly, businesses (not just publicly traded ones) that make claims or representations concerning their ESG efforts need to be aware of how their downstream impact might adversely influence the environment and how they should interact with various federal and state policies that govern such issues. Third-party verification often goes a long way in this regard, providing vertical auditing and the data to prove genuine and effective sustainability.
On his first day in office, President Biden established the first-ever White House Environmental Justice Advisory Council in an executive order and tasked it with increasing the federal government's efforts to address current and historic environmental injustice.
Some locales have been disproportionately burdened by pollution and contamination due to the cumulative effects of industrial operations, highways, airports, seaports, and that burden has tended to fall mostly on economically disadvantaged and/or non-white communities. Addressing the environmental impacts to such communities is a major concern and has been reenforced by additional action.
Environmental justice can include financial investments in such communities to promote a cleaner environment. It can also mean being consistently engaged and supportive of the issues that matter to a company’s neighbors—through such activities as scholarships, local clean-ups, street fairs, food insecurity programs and more.
What You Can Do:
While a lot of the activity surrounding this executive order may focus on enforcement decisions, conducting permitting reviews and allocating infrastructure spending, companies should remain aware of the greater focus on environmental justice as they adjust and expand their own ESG plans.
ESG is an important element to consider as part of your larger goals to adhere to the government and legal obligations that apply to your business and industry. It’s also a critical factor to demonstrate good stewardship and bolster your company’s public image. Executing effective ESG policies can be challenging, however, so finding the right partner to help is key to success in today’s stringent environmental and regulatory landscape.
For more information on emerging environmental policies and how you can stay compliant with them to achieve your ESG goals, speak to one of our experts.