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CalSTRS, New York Common welcome new US methane emissions rules

New Environmental Protection Agency’s draft regulations applauded by leading institutions

The US Environmental Protection Agency’s announcement of draft rules to reduce methane emissions from the oil and gas industry has been welcomed by leading investors such as the California State Teachers’ Retirement System and New York State Comptroller Thomas DiNapoli, who oversees the New York State Common Retirement Fund.

Methane is a potent greenhouse gas and it’s the second most prevalent GHG emitted in the US from human activities – and nearly 30% of those emissions come from oil production and the production, transmission and distribution of natural gas, the regulator says.

The EPA proposed what it called “commonsense” standards to cut emissions as a part of President Obama’s Climate Action Plan to cut methane emissions from the sector by 40-45% from 2012 levels by 2025.

In July, advocacy group Ceres and SRI fund specialist Trillium Asset Management brought together investors representing $1.5trn in support of a strong federal standard for methane – and leading investors that are part of Ceres’ $13trn Investor Network on Climate Risk (INCR) have welcomed the latest development.

“As a long-term investor with a fiduciary responsibility to California’s educators, CalSTRS is concerned about the loss of revenue associated with methane leakage,” said Anne Sheehan, Director of Corporate Governance at CalSTRS. Ceres said the rules were in the long-term interest of the industry, as well as the US economy as a whole.“I applaud the White House for its commitment to address climate change and improve air quality,” said DiNapoli.

“I applaud the White House for its commitment”

Staying in the US, more than 60 North American and European institutional investors with a combined $2.6trn in assets have sent joint letters to 15 food and beverage companies calling for increased water risk management and disclosure practices.

They want the firms to disclose additional water risk information to the CDP Water Questionnaire in the coming year. They will be following up with company management.

The letters were sent to companies identified as poor performers on water management issues, including Archer Daniels Midland, Monster Beverage, Tyson Foods and Kraft Heinz.

“We…believe that global water risk management is a critical aspect of financial risk oversight in the food and beverage sector,” say the letters, which were coordinated by Ceres with support from the Interfaith Center on Corporate Responsibility and the Principles for Responsible Investment.

“In California, we are keenly aware of how water scarcity can impact lives and businesses, as our state struggles to manage a depleting water supply,” said CalSTRS’s Sheehan.