How the Transition to Net-Zero By 2050 will Drive Regulations and Affect Compliance Risk Assessments

Climate action has evolved into a macro market driver that affects governments, businesses, and individuals. It will have a profound impact on demand, capital allocations, supply chains, jobs, consumption patterns and compliance risk assessments for most industries.

It is also becoming apparent that climate action is a team effort on a global scale. For measurable results, governments, businesses, and individuals need to get serious and get involved.

For various industries, net-zero 2050-related compliance risk assessment needs will not be equal.  According to the consultancy firm McKinsey, industries will have different levels of exposure to climate action depending on their current emissions status. For fossil fuel industries like oil and gas, the focus will be on reducing direct emissions with compliance needs changing accordingly.

For construction, the emphasis will be on the decarbonization of high-emission supply chains, with respective compliance goals tracked. The building sector will prioritize energy efficiency and low-emissions heating and cooking equipment. The list goes on, but the essence remains: the net-zero 2050 goals are 28 years away, but they affect your compliance risk management now.

The net-zero 2050 regulation is already here

Net-zero by 2050 is an ambitious goal that takes complex regulatory action and enforcement at varying levels of granularity. Some regulations will be most effective at the country level, and in the USA, this means the federal level. Others will be enacted at the state level in the USA, where state legislatures will have diverse energy-related policy priorities. Such priorities range from the reduction of emissions and promotion of clean energy to managing the anticipated electrification of vehicle fleets and the related changes to infrastructure, with compliance requirements varying accordingly across states.

The National Conference of State Legislatures reports that most states already have some type of legislation addressing climate change or emissions on the books. However, in 2021, 20 states, Washington, D.C., and Puerto Rico enacted more than 100 bills that addressed emissions reductions or the impacts of climate change. Overall state legislatures considered more than 4,600 energy-related measures in 2021 covering a wide range of policies, with approximately 15% of the introduced bills ultimately enacted. Keeping in mind all that activity occurred against the pressing needs of an ongoing pandemic, its priority for regulators and its potential to affect compliance risk management objectives becomes very clear.

Citation Manage™ drives compliance with the net-zero 2050 regulations

Our mission is to keep you up to date on all relevant regulatory changes, with “relevant” being the keyword. There is a tidal wave of net-zero 2050-related regulations coming our way and its implications for compliance risk management will be dictated by the industry, the location, and the type of business you are in.

Citation Manage™ will deliver the pertinent updates to your desktop and distil the language of the regulation into clear action items. This way, you will know what compliance requirements are new and how to respond, how to report and how to pass an audit. Such clarity will become more valuable as the regulations get more complex.

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