U.S.: Anti-DEI Suit Against Starbucks Dismissed
On August 11, 2023, a federal judge in Washington State dismissed a lawsuit brought by the National Center for Public Policy Research claiming that Starbucks’s hiring and supplier diversity goals violated civil rights laws. Although the court’s order is not yet published, Judge Stanley Bastian reportedly stated at the hearing that, “if the plaintiff doesn’t want to be invested in ‘woke’ corporate America, perhaps it should seek other investment opportunities rather than wasting this court’s time.”
Since the U.S. Supreme Court’s decision striking down affirmative action in college admissions, Students for Fair Admissions v. President & Fellows of Harvard College, No. 20-1199 (U.S. June 29, 2023), companies in the United States have anticipated increased legal challenges to DEI programs. In addition to such lawsuits, conservative organizations have filed shareholder proposals challenging corporate DEI programs that allegedly discriminate against certain groups.
Links:
Hearing Minutes
Docket
Article
EU: Emissions Reporting Rules Adopted for the New Carbon Tax
On August 17, 2023, the European Commission adopted rules governing the implementation of the Carbon Border Adjustment Mechanism (“CBAM”) during its transitional phase, which will run from October 1, 2023 until the end of 2025.
CBAM aims to avoid “carbon leakage,” which occurs when companies move the production of high-emitting goods to countries with less strict environmental policies. To prevent this, CBAM will balance the carbon price paid by European producers with those paid by non-European producers by requiring companies that import goods into the EU to purchase CBAM certificates to make up the difference in the price paid (equalizing the price of carbon under the Emissions Trading System with that paid for products produced in other countries).
During the transitional period, importers will not be required to purchase CBAM certificates, but they will be subject to new reporting rules and face penalties if they fail to comply with them. Under those rules, importers must collect and report data on embedded emissions of certain imported products (such as steel and cement) from October, with the first reports due by the end of January 2024. Embedded emissions are emissions from the production process; both direct and indirect production emissions must be reported. Embedded emissions are a narrower measure of emissions than carbon footprint as they do not include emissions from the use of the product nor from transporting the product. To assist companies in reporting their emissions, the EU Commission has published guidance alongside the reporting requirements.
Currently, EU carbon permits under the ETS are trading at around EUR 88 per ton of emissions. Penalties for importers that fail to report will be EUR 10-50 per ton of emissions to incentivize reporting emissions and to help prepare companies for the end of the transitional period.
Links:
Press Release
EU Guidance
EU: Greenhouse Gas Emissions Fell in the First Quarter of 2023 While Economy Grew
The European Union reported a decrease in its overall greenhouse gas emissions during the first quarter of 2023. The fall in emissions coincided with a 1.2% increase in the EU’s GDP during the same period compared with the first quarter of 2022.
Emissions decreased in five of nine economic sectors compared with the first quarter of 2022, with the biggest decline registered in the “electricity, gas supply” sector (-12.3%). Emissions were down in almost all of the EU member states—21 out of 27—compared with the first quarter of 2022. The largest reductions in emissions were registered in Bulgaria (-15.2%), Estonia (-14.7%), and Slovenia (-9.6%). Of the 21 countries that decreased their emissions, 15 (Portugal, Croatia, Belgium, Malta, France, Spain, Netherlands, Germany, Austria, Romania, Italy, Cyprus, Greece, Slovenia, and Bulgaria) saw an increase in GDP.
Emissions grew in Ireland (+9.1%), Latvia (+7.5%), Slovakia (+1.9%), Denmark (+1.7%), Sweden (+1.6%), and Finland (0.3%).
Link:
European Commission – Press Release