Latest news with #ClimateRisk
Reuters
15-07-2025
- Business
- Reuters
Extreme weather could cause 5% drop in euro zone GDP, bank watchdogs find
LONDON, July 9 (Reuters) - Extreme weather events such as heatwaves, flooding and wildfires could wipe as much off euro zone GDP in the next five years as the global financial crisis or the COVID-19 pandemic, a senior European Central Bank official said on Wednesday. A series of severe weather-related events could cause an almost 5% near-term drop in euro zone growth, based on the most extreme climate scenario devised by a group of over 140 bank supervisors and regulators earlier this year, according to Livio Stracca, deputy director general at the ECB. "The peak negative effect on euro area GDP is almost 5%, which is the same order of magnitude as what we have seen in the global financial crisis and a little bit less than COVID-19," said Stracca, who also chairs the Network for Greening the Financial System's workstream on scenario design and analysis. The findings are based on a new set of tools designed by the NGFS, a group of central bankers and supervisors working to address climate-risk in the financial sector and economy. The tools aim to help banks and companies understand how climate change may impact their businesses in the short term by testing out a series of climate-related scenarios. The group found euro zone growth was most severely impacted in a scenario known as "Disasters and Policy Stagnation" where heatwaves, droughts and wildfires in 2026 were followed by a combination of floods and storms in 2027. Should the euro zone follow through with its net-zero transition policies, including its plan for a 55% reduction in greenhouse gas emissions by 2030, it could largely mitigate losses, another scenario found. "Climate-related risks are an immediate concern for financial stability and economic growth," Stracca and Bundesbank board member Sabine Mauderer said in a blog published by the ECB on Wednesday. "The NGFS scenarios ... indicate that a globally coordinated net-zero effort would safeguard the euro area's economic interests over the next five years." The NGFS has already released a widely used set of climate scenarios, but this is the first time they have offered tools to assess the short-term and physical impacts.
Associated Press
07-07-2025
- Business
- Associated Press
Regulatory Spotlight: Navigating California's Climate Accountability Package (CCAP)
Passed in 2023, the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261) were viewed as groundbreaking legislation in the United States and around the world. Despite challenges to the legislation, changes in geopolitical pressures, and the latest from the European Union's Omnibus I package, California has remained steadfast in their commitment to ensuring companies consider and disclose climate-related matters starting in 2026. Understanding these regulations and their evolving timelines is crucial for compliance and strategic planning. Summarizing California's Key Climate Acts SB 253: The Climate Corporate Data Accountability Act This act mandates that public and private companies doing business in California with total annual revenues exceeding $1 billion USD report their greenhouse gas (GHG) emissions in accordance with the GHG Protocols. SB 261: The Climate-Related Financial Risk Act This act requires public and private companies doing business in California with total revenues exceeding $500 million USD to biennially disclose their climate-related financial risks. These disclosures must follow the Task Force on Climate-Related Financial Disclosures (TCFD) framework or its successors, such as the International Financial Reporting Standards (IFRS) Sustainability Standards, specifically 'IFRS S2". The key deadline for SB 261 is January 1, 2026. SB 219: Greenhouse gases: climate corporate accountability: climate-related financial risk This bill was introduced in September 2024, providing an extension for CARB to finalize and adopt the new rules for both SB 253 and SB 261 in July 2025. The bill also streamlines SB 253 reporting requirements for parent companies, removing the requirement for subsidiaries to file separate reports. Latest Developments and Global Influence On May 29, 2025, the California Air Resources Board (CARB) hosted a virtual workshop to discuss the implementation of SB 253 and SB 261, as well as the amendments under SB 219. During the workshop, State Senators Scott Weiner and Henry Stern acknowledged the global influence of similar disclosure regulations, such as the EU's Corporate Sustainability Reporting Directive (CSRD), but reiterated that the compliance deadlines for California's bills remain unchanged. CARB presented initial concepts regarding definitions for 'doing business in California,' 'revenue,' and 'corporate relationships'. However, CARB also indicated that more time is needed to finalize their proposed rules and that meeting the July 1 deadline presented in SB 219 would be unlikely. Instead, the rules package for SB 253 and SB 261 is now anticipated to be finalized by the end of the 2025 calendar year. In a similar fashion, on July 1, 2025, the European Financial Reporting Advisory Group (EFRAG) announced that they would also extend their public consultation period from the end of July through the end of September, extending the revision and simplification deadline of the European Sustainability Reporting Standards (ESRS) until November 30, 2025. It is yet to be seen if the delay for the updated ESRS will have further impact on the status of the California rules. A notable point from the workshop was CARB's reminder about a December 2024 Enforcement Notice: reporting entities will not be subject to penalties for incomplete disclosures related to SB 253, provided they demonstrate 'good faith efforts' to collect GHG emissions data. It's important to note that a similar Enforcement Notice has not been introduced for SB 261 at this time. The California rulemaking process is comprehensive, offering opportunities for public engagement and compliance reviews. CARB remains in the 'Pre-Rulemaking' stage and intends to continue public engagement before issuing proposed regulations. Once the proposed rules are ready, CARB will enter the 'Formal Rulemaking' status, with one year to finalize and adopt the rules into law. This means that the final rules might not be ready until late 2026. Preparing for Compliance: Actionable Steps Despite the delayed release of formal guidance materials, the statutory deadlines for these regulations remain in effect. Therefore, companies, especially those new to GHG emissions inventories and/or climate-related risk reporting, should begin preparations as soon as possible. Here are key areas your organization should focus on: Key Deadlines at a Glance: The evolving landscape of climate corporate accountability demands proactive engagement. Antea Group is here to help your organization navigate these complex regulations and build a resilient sustainability reporting framework. Is your company prepared for California's new climate disclosure mandates? Learn how Antea Group can support your compliance journey and enhance your sustainability reporting: Visit 3BL Media to see more multimedia and stories from Antea Group
