Series 12, Episode 2: Methane and the looming regulatory and reputational risks for Banks, asset owners

In this episode Lindsey Rogerson and Rachel Wolcott, senior editors in London discuss the growing risk – both reputational and regulatory for financial firms invested or lending to methane-intensive corporates. Methane has 28 times the warming effect of CO2. The two main sources of man-made methane are agriculture and fossil fuels, and increasingly lawmakers are pushing responsibility for reigning in emissions onto the financial services firms. Lindsey and Rachel discuss the various regulations that are in place or in train to ensure banks and investment firms are collecting data on the methane intensity of their loan books and portfolios. These include the Sustainable Financial Disclosure Regulation (SFDR), the Corporate Sustainability Reporting Directive (CSRD), the EU Methane Regulation and the EU Deforestation Regulation. They go on to discuss the growing public interest in who is funding agribusiness and the fossil fuel industry. And how the satellites coming online to monitor methane leaks will increase the scrutiny on banks. And Rachel can't resist a cow joke or two. Links: Planet Tracker Hot Money report: https://planet-tracker.org/wp-content/uploads/2023/01/Hot-Money.pdfBanking on Climate Chaos report from Rainforest Alliance: https://www.bankingonclimatechaos.org/wp-content/uploads/2024/05/BOCC_2024_vF1.pdfEnvironmental Defense Fund Missing Methane: A European Perspective Report: https://business.edf.org/insights/missing-methane-a-european-perspective/Article on satellite monitoring: https://www.thomsonreuters.com/en-us/posts/esg/deforestation-carbon-reduction-technology/The GreenShed project: https://www.sruc.ac.uk/connect/about-sruc/major-projects/greenshed/Article on academic research on bark absorbing methane: https://theconversation.com/weve-discovered-the-worlds-trees-absorb-methane-so-forests-are-even-more-important-in-the-climate-fight-than-we-thought-235233Article on feeding seaweed to cows: https://caes.ucdavis.edu/news/feeding-cattle-seaweed-reduces-their-greenhouse-gas-emissions-82-percent#:~:text=New%20Long-Term%20Study%20Could,the%20University%20of%20California%2C%20Davis.EU deforestation regulation (supply chain); https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_enUK deforestation rules (supply chain): https://www.legislation.gov.uk/ukpga/2021/30/schedule/17 Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer.  Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.