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Policy changes and backtracks by national governments were holding back corporate plans to limit global warming, a former Federal Reserve board member conducting a UN consultation said.
Sarah Bloom Raskin, who was US president Joe Biden’s pick to lead financial regulation at the Fed before running into Republican opposition, told the Financial Times that companies were struggling to make climate plans.
“It’s hard to plan to invest when a policy context is either patchy, non-existent [or] not well designed,” said Raskin, who also served as US Treasury deputy secretary during the Obama administration.
Raskin, now a climate policy consultant who teaches corporate law at Duke University in North Carolina, was in London to canvass business and finance leaders on their climate change challenges. She is co-lead of the UN consultation with Bin Leng, the Shanghai-based International Sustainability Standards Board member.
The findings will be released at the UN COP28 climate summit held in Dubai from November 30, as part of the groundwork for a new UN framework on accountability of net zero goals.
“Many businesses, banks, investors, cities and regions are making fuzzy claims, or face barriers that are limiting their ambition or slowing their progress,” Raskin told business leaders in a briefing earlier this month.
French president Emmanuel Macron earlier this year called for a “regulatory pause” on climate directives, while Germany’s proposed ban on oil and gas boilers has been stymied by a public and political backlash.
Prime Minister Rishi Sunak’s decision to backtrack on climate action, including a delay to a ban on sales of new petrol and diesel cars to 2035, was heavily opposed by carmakers in the UK last month and drew complaints from many other business groups for its inconsistency.
Raskin highlighted “conflicting standards, definitions and accounting rules,” “a cacophony of reporting frameworks” and “poor quality or inaccessible data”. Small and medium-sized businesses faced particular challenges in disclosing data and investing in decarbonisation, she said.
Republicans on the powerful Senate banking committee last year launched a campaign to block her advancement to become the Fed’s vice-chair for supervision after taking issue with her calls for regulators to more proactively address financial risks related to climate change.
The latest UN corporate climate initiative will build on recommendations on corporate greenwashing in a report delivered at COP27 in Egypt last year. It recommended companies disclose emissions data and net zero targets annually, and said claims should be independently audited.
Former Canadian environment minister Catherine McKenna, who chaired that high-level expert group, told the FT that the voluntary industry initiatives that were filling a vacuum in the absence of enforceable rules also needed to be properly scrutinised.
“Until you regulate a lot of this, there are limits to voluntary initiatives,” said McKenna, who expected the results of the UN consultation would be “an assessment of what the barriers are, whether these are perceived, or real, or [just] arguments in favour of not doing things”.
For example, the net zero insurance alliance has said it cannot compel its members to stop underwriting of thermal coal mines, the dirtiest fossil fuel, without risking accusations of anti-competitive behaviour.
McKenna said competition authorities could spur climate action by explicitly allowing activities that are aligned with global warming targets. “We need to be clear that’s not the reality. We need to take these [antitrust] arguments off the table.”
The UK’s Competition and Markets Authority was this month the latest competition authority to say that companies teaming up to tackle climate change are unlikely to be pursued under antitrust rules.