Inside Track: Planning, Environment & Sustainability - In the media, In practice and courts, Cases and Legislation - Real Estate and Construction

Upon taking office in January, the Biden Administration
immediately prioritized climate change and environmental justice, fulfilling President
Biden’s campaign promise. In the past two weeks, President
Biden reiterated those priorities at COP26, the 2021 United Nations
Climate Change Conference, where world leaders, activists and
stakeholders gathered to discuss strategies to tackle climate
change. President Biden emphasized aligning domestic and
international in this “decisive
decade”1 and pledged that the United States
will be an active participant and leader. Three topics of
particular interest that are likely to impact regulated entities
are (1) methane emissions reduction pledges, (2) continued
attention on climate justice at the domestic and international
levels, and (3) evolving environmental, social and governance (ESG)
disclosure standards. The COP26 commitments will likely influence
domestic environmental policies and affect businesses across
industries, as highlighted below.

Methane Emissions Reduction

Methane significantly contributes to ground-level ozone
formation and warming, making it a prime target in climate change
reduction efforts. To combat methane’s effects on the climate,
international and domestic entities introduced methane reduction
strategies at COP26. At the time of publication of this alert, more
than 100 countries representing 70% of the global economy,
including the United States, have joined the global methane pledge,
which commits to meeting the Paris Agreement goal of keeping
warming well below two degrees Celsius.2 Crucial in
this effort lies a deal between the United States and China, the
two largest carbon dioxide emitters, to boost climate cooperation.
While the commitments are voluntary and without enforcement
mechanisms, the agreement nonetheless includes curbing
deforestation and reducing methane emissions-even though, notably,
China did not sign the global methane pledge. The United States and
China agreed to develop new methane policies for the energy, waste
and agricultural sectors before next year’s climate talks in

President Biden signaled his support for the global pledge by
releasing the U.S. Methane Emissions Reduction Action Plan. The
plan focuses on reducing methane emissions in the oil and gas
sectors and landfills, remediating abandoned coal mines, and
expanding incentive-based and voluntary partnership efforts to
reduce agricultural methane emissions. The plan features harmonized
efforts by multiple US agencies, including the Environmental
Protection Agency (EPA), Pipeline and Hazardous Materials Safety
Administration, Bureau of Land Management and Bureau of Ocean
Energy Management.

Because several agencies are participating in the plan, many
industrial sectors should expect new regulations aimed at ensuring
the United States achieves its domestic and international methane
reduction commitments. For example, the plan calls for measurable
improvements in agriculture-based carbon sequestration, reducing
food waste in landfills, upgrading pipelines to limit vented and
flared gas, and introducing education and incentives to further
limit methane emissions. These and other domestic regulations will
create changes for businesses in the oil and gas, mining, and
agriculture industries.

Climate Justice

Climate justice recognizes that climate change often
disproportionately impacts underprivileged populations. This idea
ties to the broader concept of environmental justice, which
describes the effects of environmental harms, from climate change
and other factors, in minority and low-income communities and
Indigenous populations. Environmental justice is a pillar of the
Biden Administration, integrated into virtually every policy and
agency action. During the conference, activists marched in Glasgow
to demand climate justice. Many argued that the formal proceedings
failed to include communities disproportionately impacted by
warming temperatures and severe weather events.

Inside the negotiations, several nations reiterated promises to
provide financial assistance to countries facing rising sea levels,
food shortages and other effects of climate change. Twelve donor
governments pledged $413 million to the Least Developed Countries
Fund, providing support for those most at risk from climate change.
The fund provides climate resilience financing to 46 countries that
have contributed the least to carbon emissions yet bear some of the
most extreme consequences. And under the final agreement, developed
nations committed to double by 2025 the roughly $20 billion they
provided to developing nations in 2019 to adapt to climate impacts.
These conversations mirror efforts to advance environmental and
climate justice in the United States.

The Biden Administration implemented a whole-of-government
approach to prioritize environmental justice across federal
agencies. COP26 coincided with the passage of the Bipartisan
Infrastructure Deal in the US House of Representatives, which
includes provisions to remediate environmental harms, build a clean
power grid and expand access to clean drinking water. The
legislation also includes justice-focused sections designed to
address historical environmental injustices and ensure that
disadvantaged communities benefit from substantial climate-related
investments. The proposed Budget Reconciliation Bill includes $3
billion for environmental and climate justice block grants, $555
billion in tax credits and incentives to develop renewable energies
such as wind and solar and promote electric vehicles, and
motivation for these facilities to be built near overburdened
communities. International efforts to provide financial assistance
to developing countries facing severe climate change impacts also
reflect the White House’s Justice40 Initiative, which aims to
ensure that at least 40% of the benefits of clean energy and
climate investments-including those under the Bipartisan
Infrastructure Deal-reach disadvantaged communities.

While climate justice is a focus of domestic legislation and
regulation in the United States, companies may also increasingly be
held accountable for the environmental justice impacts of their
operations abroad. The conversations and protests at COP26
highlight the reputational risk that corporations may face for
outsourcing environmental impacts to developing countries. While
this information has not always historically been made public or
otherwise disclosed, climate and sustainability data points may be
encompassed in emerging disclosure requirements applicable to
companies operating in the United States and internationally, as
discussed below.

ESG Disclosures

For decades, reporting requirements for sustainability and
climate topics have been fractured, and companies operating in
multiple jurisdictions typically must navigate between multiple
regulatory schemes depending on where their operations are located,
from management to production to consumption. The parties to COP26
aim to streamline and standardize the disclosure system in 2022.
Notably, the International Financial Reporting Standards Foundation
announced the launch of the International Sustainability Standards
Board (ISSB), which will develop a comprehensive global baseline of
sustainability disclosure standards. A draft standard on climate
reporting is expected to be published in early 2022, and standards
for other sustainability topics will follow. Similar changes are
underway in the United States. As detailed in a prior WilmerHale alert, the Securities and
Exchange Commission (SEC) is poised to release proposed climate and
ESG disclosure regulations during the first quarter of 2022.

A global, uniform reporting system from the ISSB, to the extent
implemented in other jurisdictions, would have many impacts: set
companies’ expectations of what should be included in their
disclosures; allow investors, stakeholders and philanthropists to
easily compare enterprise value and corporate performance; and
foster discussion about climate and social issues-with the ultimate
aim of increasing corporate action on these issues, such as
commitments to reduction of greenhouse gas emissions. For companies
with international operations, ESG disclosures are an inherently
global issue. New standards established by the ISSB (to the extent
implemented in jurisdictions, as these standards are only guidance
until adopted) and the SEC would ultimately require companies to
implement more robust data collection and reporting structures. It
is difficult to predict at this time what reporting will be
required for companies, but it is almost a certainty that
additional reporting will be required.


Many of the commitments emerging from COP26 align with the
historic social and environmental legislation and executive actions
enacted during President Biden’s administration, such as the
January 27, 2021, executive order tackling the climate crisis. Both
at home and abroad, there is a confluence of increased attention on
environmental justice, corporate disclosures and climate change
that likely will drive measurable changes in domestic regulation on
these topics.

As President Biden returns from Glasgow, the federal government
will likely continue to develop the administration’s commitment
to reducing methane emissions and other climate
“superpollutants,” expanding environmental justice
initiatives, and developing ESG disclosure requirements. For
example, the EPA already proposed performance standards for new and
existing sources under the Clean Air Act, and additional
methane-targeted rulemaking is anticipated throughout 2022.

US climate change policy under the Biden Administration will
likely continue to influence and complement the international
agenda. WilmerHale is at the forefront of advising clients in
adapting to this changing landscape and preparing for what is to
come in the United States and abroad.


1 Remarks by President Biden at the COP26 Leaders
Statement, The White House (Nov. 1, 2021),

2 Launch by United States, the European Union, and
Partners of the Global Methane Pledge to Keep 1.5C Within Reach,
European Commission (Nov. 2, 2021),

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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