More Details Roll Out – Biden-Harris Administration’s “Whole of Government” Climate Policies & Actions

June 2021  – This is a biggie!

by Hank Boerner – Chair & Chief Strategist, G&A Institute

The Biden-Harris Administration continues to roll out details of new or proposed or adjusted policies, rules, programs, Federal government financing and various actions to address what the leaders characterize as “the climate crisis”.

What we have now more details of the “Whole of Government” approach for these United States in addressing a widening range of climate change issues. 

In most crisis situations for large organizations, dramatic changes-of-course are always necessary – new paths must be followed.  And so we see…

President Joe Biden certainly being ambitious in navigating the way forward for the public sector in meeting the many climate change challenges (for actions by Federal, state, region, local governments).

President Biden signed yet another order for policy changes and various actions by the many agencies of the national government: “Executive Order #14030 on Climate-Related Financial Risk”.

The new EO #14030 sets out policy and actions to be taken by the whole of America’s public sector, a number of actions intended to be implemented in partnership with state & local governments and financial services sector institutions, and corporate and business interests…”designed to “better protect workers’ hard-earned savings, create good paying jobs, and position America to lead the global economy”.

EO  #14030 builds on the framework for climate change policies and actions set out in President Biden’s January 27th action: “Tackling the Climate Crisis at Home and Abroad” (that is EO #14008).

This and other execute branch orders are designed to “…spur creation of well-paying jobs and achieve a net-zero emissions economy no later than 2050”.

The new EO is intended to “…bolster the resilience of financial institutions and rural and urban communities, States, Tribes, territories…by marshalling the creativity, courage and capital of the United States…and address the climate crisis and not exacerbate its causes to position the U.S. to lead the global economy to a more prosperous and sustainable future…”

The latest order addresses the need for greater financial transparency of the Financial Services Sector — addressing banking, insurance, fiduciary duties of those managing assets — as well as addressing the aspects of Federal financing for business, governments and institutions, and Federal government budgeting both short- and long-term.

For example, the Secretary of the Treasury as chair is instructed to work with the other members of the Financial Stability Oversight Council (FSOC) to assess climate-related risk to the stability of the U.S. financial system; to facilitate sharing of climate-related financial risk data among the members of FSOC; to publish a report in six months on actions / recommendations related to oversight of Financial Institutions.

FSOC members are the influential of Financial Services regulation and oversight:  Treasury Department; the Office of Comptroller of the Currency (inside Treasury, overseeing national banks and foreign banks operating in the USA); chair of Securities & Exchange Commission; chair of the Federal Reserve System; head of FDIC; head of Commodity Futures Trading Commission; as well as a state insurance commissioner; a state banking commissioner; a state securities commissioner.

Addressed in the Executive Order:

  • disclosure and reporting by publicly-traded entities;
  • insurance industry “gaps” of climate-change issues that need to be addressed at Federal and state levels for private insurance;
  • the protection of “worker savings and pensions” (with ERISA and the Department of Labor in focus);
  • Federal level lending and underwriting, including financial aid, loans, grants of such agencies as the Department of Agriculture (farm aid);, and
  • Housing and Urban Development (funneling funds to local and state agencies as well as Federal level financial transactions); and,
  • Department of Veterans Affairs.

For companies providing services and products to the Federal government (largest buyer in the United States), there are numerous policy changes and actions to be taken by agencies that will affect many businesses in the U.S. and abroad.

For many companies this will mean much more disclosure on GHG emissions data, adoption of Science-based Emissions Reduction Targets, and disclosure of ESG policies and actions.

Federal agencies will be guided by policies to look more favorably on companies that bid on contracts [and have] more robust climate change policies and targets in place.

We are bringing here you news coverage and shared perspectives on the important new order and a link to the White House Executive Order in our Top Stories (below).

G&A Institute Perspective:  This EO builds on standing orders of recent years by prior presidents and the orders issued “since Day One” of the Biden-Harris Administration to address what is characterized as the “climate crisis” by President Joe Biden in his campaigning and since taking office.

There are announcements of actions taken and new and proposed policy changes just about every day now, following out of cabinet departments and other agencies of the Federal government.

This is all of the “Whole of Government Approach” to addressing climate change challenges, short- and long-term.

We’re seeing both significant and subtle changes taking place throughout the public sector, at Federal, State and local levels, actions that will increase the pressure on the corporate sector and capital market players to start or to enhance their “sustainability journey” and greatly increase the flow of ESG data and information out to both shareholders and stakeholders/constituencies.

The disclosure and reporting practices of publicly-traded and privately owned/managed corporate entities will be addressed through a variety of Federal agencies, including of course the Securities & Exchange Commission.

SEC has an invitation out to individual and organizations to suggest ways to enhance reporting of the corporate sustainability journey (or lack thereof).

The instructions to Federal agencies in the latest EO will result in stepped up demands by Federal agencies for companies to disclosure more ESG information, such as in bidding on projects and contracts, or seeking financing of various types.

There are many more details in the G&A Institute’s Resource Paper, click here to download a copy.

Let our team know what questions you have!

Top Stories

And related information:  The International Energy Agency (IEA) Report coverage:

The United States of America Moves Forward with the Biden-Harris “Climate Crisis Agenda” for Federal Government Actions

March 2021

by Hank Boerner – Chair & Chief Strategist – G&A Institute

As he assumed the post of the highest elected public officer of the United States, President Joseph Biden characterized his [as the] “Climate Administration” — and immediately (the fabled Day One actions) set out a very ambitious “climate crisis” policy agenda for action by the many arms of the Federal government agencies under his control. (Notably, all cabinet offices with their great reach into all corners of the American Society.)

As a current commentary in the influential Harvard Business Review explains: “Biden put the environment squarely at the heart of U.S. federal policy, and for good reason. The future competitiveness of the U.S. economy is at stake, and climate action is an effective way to boost jobs, prevent future systemic shocks, and secure a prosperous future.”

In the commentary by Maria Mendiluce, CEO of the We Mean Business coalition, she posits at least seven important implications for corporate sector and other business leaders:

  • Climate regulation is coming (with a “net zero emissions” goal envisioned by 2050). Climate-focused regulations are being adopted around the world and we can expect to see some in the near term in the United States of America. The U.K. is an example – 2030 is the end date for sales of gasoline-powered autos.
  • Corporations will be in the vanguard in moving society in transitioning to the net zero ambitions (companies can help to scale up solutions for de-carbonizing society). Examples cited include Amazon, Apple, Ford, Microsoft, Walmart, Uber, and Verizon.
  • There’s risk for companies that delay climate action. Watch out if your enterprise is not “de-carbonizing” and transitioning from “black-to-a-green” energy company.
  • As we are seeing, investors are looking with favor on companies that taking action on climate matters – portfolio managers are moving away from high polluting firms. Asset managers like BlackRock are leading the way in pushing corporate leaders to adopt net zero targets. Capital is “looking” for greener businesses to invest in.
  • Soon, we can expect climate risk disclosures and reporting on GHG emissions to become mandatory. The Commodity Futures Trading Commission (CFTC) has warned that financial regulators must recognize climate change poses risk to the U.S. financial system. The head of that federal agency is now talked about as prospective Chair of the Securities & Exchange Commission in the Biden-Harris Administration.
  • While there has been discussion about carbon pricing schemes, and a bit of action in Europe, we can expect to see that discussion to increase in tempo and a price put on pollution.
  • Public sector investment in clean energy is on the rise (look at the volume of “green bonds” in recent months). In the United States, the new administration pledged to invest US$2 trillion in clean energy and infrastructure and the many Trump-Pence Administration rollbacks of environmental regulations are being put back in place by Biden-Harris actions.

We can expect to see more presidential Executive Orders, more administration, corporate and public sector pledges and commitments, and more Biden-Harris administration policy definitions related to climate action in 2021.

President Biden plans to convene a Leaders Summit for Earth Day and have the U.S. government back at the table at COP 26, the global confab for climate negotiations. “The USA is back” is the theme for 2021.

Concludes Maria Mendiluce: “This is a turning point for the U.S. and the world. It’s not too late for companies to adapt to the new net zero economy and support a green recovery. There is also no time to lose.”

We have selected her essay in HBR for the Top Story category of the G&A Newsletter this week, along with relevant developments in the “Climate Administration” of President Joe Biden and VP Kamala Harris.

The “We Mean Business” coalition has 1,596 companies involved with collective market cap of almost $25 trillion; these firms have made 2,000-plus “bold action climate commitments” to date. There is more information at: https://www.wemeanbusinesscoalition.org/

TOP STORIES