Climate changed

18 August 2020 By Antony Currie Follow @AntonyMCurrie

The U.S. president and his team are loosening methane rules and even pushing a daft showers rule. The administration also wants to hobble investors’ ability to weigh environmental, social and governance concerns. Combined, they put the climate and the financial system in peril.

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The U.S. Environmental Protection Agency on Aug. 13 rescinded Obama administration-era rules regulating methane gas emissions. The changes have been in the works for more than a year.

The U.S. Department of Energy on Aug. 12 proposed changing a 28-year-old rule so that water pressure in showerheads can increase to deliver more than the current maximum of 2.5 gallons per minute. President Donald Trump has more than once complained about poor shower pressure, including at an event at the White House last month.

The U.S. Department of Labor at the end of last month closed the 30-day comment period for its proposed rule on investment duties, unveiled on June 23. The federal agency wants, among other issues, to prohibit “fiduciaries from subordinating the interests of plan participants and beneficiaries in retirement income and financial benefits under the plan to non-pecuniary goals.” One of the rule’s main concerns is that achieving optimal financial returns might not be the primary goal of investment funds taking environmental, social and governance concerns into account.

Bank of America and Citigroup on July 29 joined the Partnership for Carbon Accounting Financials, following the lead of Morgan Stanley which was the first large U.S. bank to join the group, on July 20. The PCAF is developing a global accounting standard for financial institutions to measure and then reduce the climate-related risks in their loans, bonds and other financing tools.

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