As we addressed here, the International Sustainability Standards Board has issued its first two exposure drafts, General Sustainability-related Disclosures and Climate-related Disclosures, which were both open for comment until July 29, 2022.
As you’d expect, the more than 1,400 comment letters received on the two projects take every approach imaginable: some provide detailed point by point analysis; others take a, well, broader approach. This is from the wondrously named Friends of Science Society, a “a group of scientists, Professional Geoscientists, Professional Engineers, and businesspeople that has been reviewing climate science and related energy policies since 2002 and issuing commentaries”:
- We are deeply concerned that the proposed reporting regulations:
- (1) Are not based on current understanding of climate science, that being, we are not in a ‘climate emergency’ as the formerly alleged ‘business-as-usual’ scenario “RCP 8.5” is no longer seen as ‘humanity’s likely future’ by the IPCC in their Working Group I (Physical Sciences) report of August 2021;
- (2) Put far too much weight on Greenhouse Gas Pollution as a risk, rather than a benefit from CO2 (Carbon dioxide) fertilization, which has enhanced crop growth and which appears to be, volumetrically, mostly driven by natural influences – meaning carbon dioxide concentration in the atmosphere is a consequence of climate change and only nominally a cause.
- (3) Present an onerous financial and labour force burden on small, medium, and large-sized domestic industries, particularly small farms, with no apparent real benefit to the world….
And onward. Obviously, I don’t have the ability to take on scientists, geoscientists and the like on their own turf. But regarding their point (1), even the source footnoted in their comment letter stipulates that “climate change is real and important. Aggressive adaptation and mitigation policies make good sense, as I’ve argued for 25+ years.” Later in the letter, they assert: “CLINTEL – the climate intelligence network of over 1,100 scientists and scholars, based in The Netherlands, explains that there is no climate emergency, we do have time, and natural influences are more powerful than human emissions.” But again, even on the basis of their own footnoted sourcing, CLINTEL also believes that “The aim of global policy should be ‘prosperity for all’ by providing reliable and affordable energy at all times.” It’s hard to imagine that much about the current chaotic, geopolitically toxic energy system could be described as such. And one might go on like that. So even on their own terms, it seems that the Friends of Science don’t make much of a case for doing nothing.
And then, some of their letter just seems like the same old tiresome pro-business drum-beating – for example they approvingly quote another commentator who complains that “in an inflationary environment, in which stagflation is a real risk, the SEC wishes to impose AT least a 250% increase in compliance costs on ALL publicly traded companies for disclosures that it doesn’t even know will be beneficial Talk about ‘broadening the drivers of inflation.’” Such lamenting would carry much more weight if “ALL publicly traded companies” showed more discipline in their runaway executive compensation policies, their expensive lobbying practices, and so on.
The letter argues that “we are in inflationary times; the world faces famine in many regions due to the conflict in Ukraine/Russia and due to climate policies. These reporting requirements will make things worse.” This aligns with a common feeling that climate-related action, whatever its virtue in the long term, is (let’s say) counterproductive in the short term; the US red states are increasingly casting ESG as an outright enemy. Clearly there’s no easy way through this debate – if the standards “work” in the way that’s hoped for, positively affecting decisions by finance providers and others, then it inherently requires that some businesses (however useful they might be by some measures) will be viewed unfavorably. Conversely though, if the demand for a particular business’s products or services is such that it’s strong enough to survive inflationary times, existing geopolitical upheaval and all the rest of it, it’s hard to see that the act of complying with new ISSB standards will very often be the straw that breaks that worthy camel’s back.
Anyway, the letter concludes as follows: “We request that you review the updated scientific understanding of Greenhouse Gas Impacts, the fact that no evidence supports the claim that we are in a climate emergency (despite political declarations to the contrary), and the burden of costs/potential to destroy important food providers in a time of inflation and looming global famine.” Again, the overreach hardly helps here. It’s unproductively over the top to say that there’s “no evidence” of a climate emergency (maybe they don’t think the evidence presented is persuasive, but that’s a different thing); if it were plausibly identified by society that “important food providers” were commonly being destroyed as a direct result of complying with ISSB standards, it wouldn’t likely take long for the standards to lose their constituency. But then, if inflation and its adverse impacts persist indefinitely, that constituency may never adequately coalesce in the first place…
The opinions expressed are solely those of the author.