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U.S. unveils crackdown on methane from oil and gas industry

Source: Reuters

Nov 2 (Reuters) – The United States on Tuesday unveiled a plan to slash emissions of the greenhouse gas methane from oil and gas operations as part of its strategy to crack down on climate change, drawing cautious support from both environmental groups and drillers.

The announcement coincided with the U.N. climate conference in Glasgow, Scotland, where the United States, the world’s second-largest greenhouse gas emitter, is seeking to reclaim leadership on the world stage by demonstrating tangible steps to curb emissions at home.

U.S. President Joe Biden has set a target to slash greenhouse gas emissions by more than 50% by 2030 but is struggling to pass climate legislation through a deeply divided Congress, making policies by federal agencies more crucial.

His administration and the European Union are also seeking to lead a new international pact to reduce methane economy-wide by 30% by 2030, drawing participation from over 100 countries.

Methane is the second-biggest cause of climate change after carbon dioxide. Its high heat-trapping potential and relatively short lifespan in the atmosphere means cutting its emissions can have an outsized impact on the trajectory of the world’s climate.

At the center of the U.S. plan to tackle methane domestically is an Environmental Protection Agency proposal that will for the first time require oil and gas operators to aggressively detect and repair methane leaks. Oil and gas operations account for a third of methane emissions.

“The timing of this is critical. As we speak, world leaders are gathering right now in Glasgow and they are looking to the United States for true leadership,” EPA Administrator Michael Regan told Reuters in an interview. “This proposal is absolutely bold, aggressive and comprehensive.”

Specifically, the proposal will require companies to monitor 300,000 of their biggest well sites every three months, ban the venting of methane produced as a byproduct of crude oil into the atmosphere, and require upgrades to equipment such as storage tanks, compressors, and pneumatic pumps.

The rules will most likely take effect in 2023 and will be aimed at slashing methane from oil and gas operations by 74% from 2005 levels by 2035, an amount equivalent to the emissions created by all U.S. passenger cars and planes in 2019, according to the summary.

While the United States has never before proposed to regulate methane emissions from existing sources, the Obama administration in 2016 introduced curbs on methane emissions from new oil and gas infrastructure.

Those regulations, which were weaker than the new EPA proposals, were scrapped by former President Donald Trump before being reinstated earlier this year by Congress.

The new EPA rules are expected to add “pennies” to the cost of a barrel of oil or thousand cubic feet of gas, according to the EPA’s analysis. But oil industry group the American Exploration & Production Council said they could add “siginficant new costs associated with compliance.”

The American Petroleum Institute, which represents the U.S. oil and gas industry, said it was reviewing the proposals.

“We support the direct regulation of methane from new and existing sources and are committed to building on the progress we have achieved in reducing methane emissions,” it said in a statement.

Major producer BP Plc (BP.L), which has been seeking to burnish its green credentials and is investing heavily in clean energy, said it applauded the EPA proposals.

Washington-based environmental group Earthworks also called the proposals a positive step, but its policy director, Lauren Pagel, said “no well should be exempt from common-sense pollution standards when we know all wells pollute.”

The American Lung Association also said the proposal was a good start but the EPA needs to “set stronger limits and finalize them into law without delay”.

QUARTERLY MONITORING

One issue of contention is the fact the EPA’s well monitoring proposal applies only to sites emitting an estimated three tons of methane per year or more.

The agency said the three ton threshold would capture sites responsible for 86% of leaks.

Smaller sites will require less scrutiny.

Oil and gas industry groups had pressed the EPA to exclude smaller wells from the regulations, citing the sheer number of such wells and the costs of the monitoring and repairs.

Environmental advocates, meanwhile, had pushed for all well sites to be covered, and were also seeking limits on flaring: the practice of burning off methane that comes out of the ground as a byproduct during crude oil drilling.

The EPA said it will release a supplemental proposal next year to flesh out the rules and possibly expand them to include additional methane sources, including abandoned oil and gas wells, flares and tank truck loading.

The Biden administration’s methane strategy will also include a new proposal by the Pipeline and Hazardous Materials Safety Administration requiring companies to monitor and repair leaks on about 400,000 miles (643,740 km) of previously unregulated natural gas gathering lines.

The administration’s broader methane plan also proposes new voluntary measures from the Agriculture and Interior departments to tackle methane emissions from other major sources, including landfills, agriculture and abandoned wells and coal mines.

Reporting by Valerie Volcovici and Nichola Groom; Editing by Gerry Doyle and Alistair Bell

Our Standards: The Thomson Reuters Trust Principles.

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Business

Future-proofing financial services investment

Source: Finance Derivative

Adrian Ah-Chin-Kow, Global Commercial Director at leading software escrow company, Escode, discusses how the financial services sector can prepare for the increasing investment ahead of the government’s industrial growth strategy, Invest 2035, ensuring resilience against technological risks.

The UK’s proposed Invest 2035 strategy sets a bold vision: to elevate the UK as a global leader in high-growth sectors. Financial services are at the heart of this roadmap, tasked with driving innovation, sustainability, and competitiveness. But as we look towards the future, it’s critical that the sector strikes a careful balance between embracing strategic investments and maintaining operational resilience in the face of an increasingly complex technological risk landscape.

The digital transformation currently underway in financial services is set to accelerate even further as organisations adopt new technologies like artificial intelligence, blockchain, and cloud computing. These innovations hold immense potential for growth and efficiency, but they also introduce new layers of vulnerability. For financial services to thrive in this environment, firms need to ensure their technology infrastructure is resilient, reliable, and capable of withstanding disruption.

Growing risks in a digital-first world
As government and industry push forward with initiatives to digitise the financial services ecosystem, the sector is becoming more dependent on technology than ever before. With this reliance comes the inevitable rise of new risks—risks that can threaten operations, customer trust, and even the stability of markets.

We’ve seen first-hand the consequences of technology disruptions in this space. When key software providers experience outages or security breaches, the ripple effect can be significant, disrupting not just the companies involved but entire networks of financial institutions that depend on those systems. The impacts of such disruptions, particularly in a sector where reliability is paramount, can extend beyond the immediate downtime, eroding investor confidence and creating long-term reputational damage.

In a world that is becoming more interconnected by the day, it’s crucial that financial services organisations are prepared for these challenges. Protecting against technology failures and ensuring business continuity must be top priorities for any firm that wants to remain competitive in the years to come.

Operational resilience: The foundation of future growth
The ability to withstand and recover from disruption is at the core of what will define successful financial services firms in the future. Operational resilience is no longer just a regulatory requirement—it’s a business imperative that builds trust with investors, customers, and stakeholders. The strategies needed to build this resilience are varied, but there are a few critical components every organisation should consider.

  • Software Escrow: As financial institutions increasingly depend on digital tools, software escrow becomes a fundamental safeguard. We know how crucial escrow agreements are for protecting access to essential tools. If a provider fails or encounters insolvency, escrow ensures that critical software and intellectual property (IP) are held securely by a third party, ready to be released to the firm. In a sector where continuous access to technology is crucial, this arrangement offers peace of mind, ensuring core operations are protected from unexpected interruptions.
  • Stress-testing and Business Continuity: Regular stress-testing and comprehensive business continuity plans are essential components of any resilience strategy. By simulating disruptions, firms can identify weaknesses in their operations and put in place measures to address them. Continuity planning ensures that businesses can continue to operate, even under extreme circumstances, helping to mitigate the impacts of unanticipated events and minimise disruption to clients and markets.
  • Collaborative Resilience Standards: The interconnectivity of today’s financial ecosystem demands industry-wide standards. We’ve seen collaboration across both the private sector and with government initiatives become increasingly important. The UK’s Invest 2035 strategy offers an excellent foundation for fostering these partnerships, helping to establish resilience as a shared priority across the sector. We’re already seeing frameworks like the EU’s Digital Operational Resilience Act (DORA) lead the way in embedding resilience into the financial services supply chain. This kind of regulatory guidance helps institutions understand how to manage risks effectively, reducing overreliance on third-party providers and ensuring that firms can respond quickly to disruptions.

Collectively, these strategies reinforce the importance of being proactive rather than reactive when it comes to risk management. Operational resilience isn’t just about surviving the next crisis—it’s about building a foundation for long-term stability and growth in a rapidly changing environment.

Resilience as the key to securing Invest 2035
As we move towards Invest 2035, operational resilience will be the cornerstone of success. The financial services sector plays a pivotal role in driving economic growth and innovation, and its ability to adapt and respond to disruption will be key to maintaining the UK’s competitiveness on the global stage.

Embracing proactive resilience measures is the key to future success. By incorporating solutions like software escrow, stress-testing, and government-backed collaboration into their operational strategies, financial institutions can secure the UK’s position as a competitive, reliable investment hub.

Looking to the future, the ability to navigate these risks while maintaining operational integrity will determine whether financial services can continue to be the engine of economic growth in the UK. With the right safeguards in place, the sector can not only meet the goals of Invest 2035 but also build a reputation as a safe and dependable destination for global investment.

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Business

How retailers can improve sustainability during peak returns season

By Inge Bujakiewicz ‑ Baars​​​​, Head of Sustainability, Security, and Quality at ReBound Returns

 In recent years, a significant trend has emerged for retailers: the rising rate of returns. Although retail sales hit their peak between Black Friday sales and Christmas gift shopping, the peak for returning items lags well into January, when the extended returns windows for Christmas gifting closes.

The growing volume of returns brings a hidden environmental cost. This is not only from a logistical point of view, with carbon emissions from transporting items back to warehouses, but also for product wastage if the returned products aren’t able to be resold to another customer.

This challenge is even more pronounced when items are being shipped and returned internationally. Fortunately, there are a number of ways that retailers can manage returns sustainably during high-volume periods.

Local sorting and grading

A highly effective way to reduce the carbon footprint of returns is through the localised sorting and grading of items. Instead of returned items being sent to their original warehouse or a central hub, they can instead be assessed closer to their return location. This cuts down on emissions associated with unnecessary transport as it reduces the need for long trips back to the item’s starting location.

This localised sorting enables retailers to quickly determine the condition of returned products to understand whether they are in a resellable condition or not. Items that are deemed suitable to be resold can be reintroduced into the local market faster, reducing overstock and waste. Items that aren’t able to be immediately resold can then be locally repaired or reconditioned ready to be returned to stock; or donated or recycled nearby.

This localised approach to returns processing reduces transport emissions and also minimises product wastage. It also enables customers to be refunded quickly as the items are checked much faster.

Returns forecasting 

Capturing data throughout the returns process is crucial for operational efficiency, accurate product distribution, and customer communication. It is also a key tool enabling the accurate forecasting of returns volumes, and in particular can help retailers to factor low-emission transport solutions into their plans.

For example, rail freight options can be more eco-friendly than truck transport, emitting less CO2. However, rail transport typically requires more planning due to its infrastructure and scheduling restrictions, so proactivity is vital.

By forecasting return volumes, retailers can prioritise more eco-friendly returns logistics options during peak periods. The insight can also be used to optimise the space in transport vehicles, planning fuller loads and avoiding any empty spaces to cut down on unnecessary trips. This approach has the added benefit of also ensuring that returns are processed efficiently without any delays or bottlenecks, leading to a better experience for the end consumer too.

Optimising pre-stocking and inventory management

Returns data isn’t just useful for returns logistics, it’s also a valuable resource for inventory management. It allows brands to better anticipate the volume and type of items likely to be returned, in what volume, and when. The data can then be used to leveraged to pre-stock items in the right quantities whilst correctly anticipating future returns.

This pre-stocking approach based on returns data insight reduces the risk of overstocking, which could lead to wastage further down the line if items aren’t sold. The ability to predict returns in advance means returned goods can be factored in as part of the broader stock rather than a separate logistical challenge, keeping inventory levels sustainable.

Prioritising high-demand items in regional hubs

During peak sales and return seasons, more items will inevitably be returned. Retailers need to identify fast-moving, high-demand items through data analytics. Rather than these items being sent back to central warehouses or their original sale point, they can be retained at regional returns hubs. This ensures they can be quickly returned to stock and be made readily available for resale or redistribution.

This reduces the need for long-distance transport, cutting down on emissions, as well as the time it takes to get the product back in stock and into the hands of a new customer. By using returns data to identify which items are most likely to be resold quickly, brands can streamline their logistics and keep high-demand items closer to potential buyers.  

The sustainability of retail returns, especially during peak seasons when volumes of sales and returns soar, is expected to be a key focus for retailers in 2025. Although the environmental impact can be significant, it is not insurmountable, and there are a number of strategies that brands can implement, especially when assisted by expert returns management partners, such as ReBound Returns. By addressing these key areas, retailers can navigate peak return periods with a reduced environmental impact, whilst improving agility and operational efficiency.

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Business

How businesses can adopt good Environmental, Social, and Governance (ESG) practices and the benefits of doing so

Source: Finance Derivative

The business and financial services community has witnessed the rise of sustainability in the last decade. Companies small and large have taken on ESG. In fact, 95 percent of the 250 largest companies worldwide report on corporate sustainability activities.

Meeting societal, environmental, economic and future generation needs – the four pillars of sustainable development – is now critical for businesses to succeed. So, what are the benefits of committing to sustainability, and how can the financial sector do so?

The benefits of committing to sustainability

There are three main reasons why businesses pursue sustainability goals: revenue and cost optimization, risk management, and brand and reputation management. But a fourth reason is becoming just as prevalent – the retention and engagement of top talent.

  1. Revenue and cost optimization

Businesses are naturally aiming to keep costs low and revenues high, and it is possible to achieve both objectives through certain approaches to sustainability. If an organisation can reduce its water and energy usage, then its water and energy bills will also be lower. When we reduce our waste, the cost of having this waste removed or processed also reduces. Similarly, by considering if products or services tick the following boxes, it’s possible to cultivate more innovative solutions and new business models that add value for both society and businesses:

  • last for future generations?
  • create social cohesion?
  • protect the environment?
  • contribute towards economic wellbeing?
  1. Risk management

Before the word “sustainability” came into widespread use, the word “risk” encompassed many sustainability considerations. Identifying and mitigating social and environmental risks helps reduce litigation, compliance costs, and the need for pollution cleanup. Companies can avoid the expensive costs associated with lawsuits by following ethical standards in the labour supply chain, using cradle-to-cradle principles in manufacturing, and more.

  1. Brand and reputation management

The jury is in regarding consumer concern for sustainability. A good image goes a long way. Sustainable companies are better able to maintain brand loyalty. 46 percent of consumers are buying more sustainable products as a way to reduce their impact on the environment, according to a 2024 survey.

  1. Employee retention and performance

Not only have customers shown a concern for people and the planet, but employees have as well – over two-thirds of staff want to work for a company that is trying to have a positive impact on the world. Companies can attract and retain talent by showing that sustainability is integral to their business model, by attaching bonuses and financial rewards to sustainability results, and by creating opportunities for employees to engage in the issues. If sustainability isn’t visible in a company, employees are more likely to leave, as one-third of employees have resigned from their jobs because they felt the efforts by their company to tackle environmental and social challenges were insufficient.

Sustainability tips for professionals in the financial services sector

There are numerous initiatives to render the financial services industry more sustainable. Long-term institutional investors such as pension funds and insurance companies are increasingly seeing the potential for minimising ESG risks and gaining from ESG opportunities by building green and socially responsible portfolios.

Similarly, commercial and retail banks are increasingly bringing ESG considerations into lending policies and in designing sustainable financial products. Depository banks such as Climate First Bank in the United States and fintech neobanks such as Green Got in France are laser focused on supporting a just ecological transition. Amid global crises, the COVID-19 pandemic and resultant economic challenges, climate finance has continued to grow in an upward trend (Figure 1). In 2022, it reached USD 1.46tn according to the Climate Policy Initiative, showing resilience and growth despite heightened levels of inflation and global conflicts.

Figure 1: Global Landscape of Climate Finance 2024, 2018-2023 (Source: Climate Policy Initiative).

There are even sustainability aims for stock exchanges. For example, the Sustainable Stock Exchanges (SSE) is an initiative aimed at exploring how exchanges can work together with investors, regulators, and companies to enhance corporate transparency (and ultimately performance) on ESG issues and encourage responsible long-term approaches to investment. In April of this year, China’s three major stock exchanges (Shanghai, Shenzhen, and Beijing) issued new guidance mandating sustainability reporting for larger listed entities. The guidelines adopt a “double materiality” approach, addressing both financial and societal impacts of companies’ activities. The guidelines cover: climate change, social responsibilities, governance, and supply chain management, and are largely aligned with global frameworks like the Global Reporting Initiative (GRI) Standards. The initiative aims to integrate sustainability into business strategies while easing compliance for companies operating across multiple jurisdictions. Here are 5 practical tips for professionals in this sector:

  1. Use frameworks to gauge sustainability progress, including the SURF Framework (Supply Chain, User, Relationships and Future Generations).
  1. Join professional networks, including dedicated Slack groups such as these, that address sustainable business and finance.
  2. Attend conferences that address sustainable finance and business.
  3. Read and contribute to ESG investment publications.
  4. Adhere to sustainable finance, investing, and accounting standards, frameworks, and guidelines, such as:
  5. Due Diligence 2.0 Commitment
  6. The Global Reporting Initiative (GRI)
  7. The Principles for Responsible Banking (PRB)
  8. The Principles for Responsible Investment (PRI)
  9. The Greenhouse Gas Protocol (GHGP)
  10. The Partnership for Carbon Accounting Financials (PCAF)
  11. The Equator Principles
  12. The Private Equity Council’s Guidelines for Responsible Investment
  13. Taskforce on Inequality-related Financial Disclosures (TIFD)

1 Climate Policy Initiative, Global Landscape of Climate Finance 2024. Retrieved: 26 November 2024. Available from:  https://www.climatepolicyinitiative.org/publication/global-landscape-of-climate-finance-2024/.

Marilyn Waite is the author of Sustainability at Work: Careers That Make a Difference. Marilyn has worked across four continents in low carbon energy, climate modeling, and investment. She currently leads the Climate Finance Fund and teaches ESG Strategies at Sciences Po and other universities across the globe. Find out more at marilynwaite.com. 

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