Bloomberg-backed Corporate Reporting Standards Likely to Perpetuate Myths that Bioenergy is Clean, Carbon-Neutral
Sustainability Accounting Standards Board Disclosure Rules Should be Improved so that Companies Do Not Mislead Investors
For Immediate Release
Pelham, MA – New sustainability standards proposed by the Bloomberg-backed Sustainability Accounting Standards Board (SASB) will allow companies to continue misleading investors about environmental benefits of wood-burning power plants, said the environmental nonprofit Partnership for Policy Integrity (PFPI) in comments submitted to SASB today.
PFPI has specialized in identifying misleading statements by biomass power and wood pellet fuel manufacturing companies and has previously petitioned the Securities and Exchange Commission (SEC) to require such companies to disclose their greenhouse gas and forest impacts to investors. The organization submitted comments today on SASB's proposed disclosure guidelines that are intended to help companies in different sectors prepare required disclosures to the SEC on issues material to investors. Disclosures about sustainability-related issues are increasingly material as investors embrace investments that promise environmental, social, and corporate governance benefits.
Despite SASB itself stating that “biomass production can cause significant adverse impacts such as deforestation, biodiversity loss, land depletion, and high pesticide use,” and “It may therefore not be prudent for the industry to use such feedstocks without investigating how they are produced,” PFPI found that SASB’s proposed standards allow companies to continue obscuring actual emissions and environmental impacts of bioenergy from investors:
- The SASB standards require companies to disclose emissions from fossil fuels, but not emissions from burning wood and other biomass for energy, although wood-burning power plants emit significantly more CO2 per megawatt-hour than coal and gas plants
- The standards do not require companies to disclose the fact that burning biomass emits CO2, thus reinforcing misleading statements made by many biomass and wood pellet companies that burning biomass has “low” or “zero” emissions
- The standards exempt companies from disclosing what types of biomass they are burning, meaning companies could be burning contaminated fuels like garbage, tires, and contaminated wood, and valuable natural resources like trees from old-growth forests, but would not be required to disclose that fact
- The standards exempt companies manufacturing liquid biofuels from disclosing the materials they use as feedstocks, although feedstock sourcing and threats to the food supply from land allocated to biofuels is a highly contentious issue internationally.
“Bioenergy and wood pellet companies harvest entire forests for power plant fuel and emit millions of tons of CO2 and other pollutants, yet claim they provide a climate change solution by hiding these impacts from investors,” said Mary Booth, PFPI’s director and lead author of the comments. “SASB has an opportunity to reform a chronic problem of bioenergy and wood pellet manufacturing companies misleading investors by simply requiring them to report their emissions and forest impacts, just like any other sector.”
"No one wants to invest in a bioenergy company to reduce climate impacts and then find out later that any such benefits are, at best, highly doubtful," said Dusty Horwitt, PFPI's Senior Counsel and coauthor of the comments. "SASB has an obligation to improve its standards so that investors are fully informed about the risks and realities of biopower."
SASB has stated that it expects to publish final investor disclosure standards in the first half of 2018 after reviewing public comments.
PFPI’s comments to SASB can be found here: http://bit.ly/2DSDtBS
The Partnership for Policy Integrity (PFPI) uses science, legal action, and strategic communications to promote sound energy policy and help citizens enact science-based policies that protect air, water, ecosystems, and the climate. Our current work focuses on biomass energy and oil and gas extraction. www.pfpi.net
Photo: Enviva wood pellet manufacturing plant in North Carolina, courtesy of Dogwood Alliance.