ESG Investment Funds Look to the EPA for Regulations on Methane Emissions

Earlier this month, several Members of Congress probed the methods some large investors are using on energy companies to force a shift away from oil production. The most prominent in the news lately is CalPERS actions against Exxon. Less visible than public shareholder meetings, however, are actions by these same investors to influence regulations on these same entities.  

RDVM Analytics performed an analysis of the comments submitted to the EPA on their recently Proposed Rules for Methane Emissions, that per the EPA, implements "the requirements of the Clean Air Act (CAA) as specified in the Methane Emissions Reduction Program of the Inflation Reduction Act. This program requires the EPA to impose and collect an annual charge on methane emissions that exceed specified waste emissions thresholds from an owner or operator of an applicable facility that reports more than 25,000 metric tons of carbon dioxide equivalent of greenhouse gases emitted per year pursuant to the petroleum and natural gas systems source category requirements of the Greenhouse Gas Reporting Rule. The proposal would implement calculation procedures, flexibilities, and exemptions related to the waste emissions charge and proposes to establish confidentiality determinations for data elements included in waste emissions charge filings."

Of the more than 58,200 comments submitted to the EPA, 57,496 were templated comments submitted by grassroots organizations in support of the regulatory change. There were 660 original individual comments from concerned citizens that were in opposition or support of the proposed regulation.

Only 127 organizations submitted comments on the proposed rule. In addition to the groups one might expect — energy trade groups and businesses, environment groups, patient and physician groups, and other advocacy organizations, several large investment funds also submitted comments. Specifically, four investment funds with a combined 2.525 trillion under management weighed in and commented on the Proposed Rules for Methane Emissions: CalPERs (California Public Employees' Retirement System), CalSTRs (California State Teachers' Retirement System), EOS Federated Hermes, and the British Columbia Investment Management Corporation (BCI). All of these funds were in support of the Proposed Rules for Methane Emissions. No investment funds submitted comments in opposition to Proposed Rules for Methane Emissions.

Four investment funds with a combined 2.525 trillion under management weighed in and commented on the Proposed Rules for Methane Emissions. All of these funds were in support of the Proposed Rules for Methane Emissions. No investment funds submitted comments in opposition to Proposed Rules for Methane Emissions.

As Congress explores the actions of CALPERs and other investment funds in their campaign to apply pressure on energy companies to reduce their carbon output, our analysis of the organizational comments on this regulation also showed a united perspective among investment funds in support of this proposed regulation.

RDVM Analytics is impartial to pressures from the politicization of issues presented before Congress. We remain stewards of unbiased research and provide continued regulatory monitoring and analysis for our stakeholders. For insights into our analysis process or to gain access to our reports on proposed regulations, feel free to contact us.