In our latest installment of our video series on important regulatory and legislative events in the first 100 days of the Biden Administration, Baker Botts partner Alexandra Dunn provides an update on the Environmental Protection Agency (EPA).
Baker Botts partner Tom Holmberg discusses the announcement the administration made regarding funding for research on clean energy and decarbonization technology.
Partner Carina Antweil provides the latest update on the SEC's announcement regarding its creation of an enforcement task force on climate and environmental, social and governance issues (ESG).
Lastly, Partner Jeff Oliver gives us the latest update on antitrust news this week.
We will continue to provide weekly updates on relevant administrative and legislative actions through the first 100 days.
This week was busy for EPA with Michael Regan, confirmed as EPA Administrator on March 10th. During his confirmation hearing, Regan highlighted environmental justice and emerging chemicals like PFAS as priorities.
This week, EPA also announced reconsideration of several Trump Administration regulations.
First, EPA will delay the effective date of the Revised Lead and Copper Rule while it seeks more input, particularly from communities that are most at-risk of lead exposure in drinking water. The rule requires cities to notify residents of exposure to lead-tainted water within 24 hours and requires lead monitoring at schools and childcare centers.
The 2020 overhaul of the Lead and Copper Rule was the first in 30 years, however, critics argue that it does not limit lead exposure enough.
EPA is also seeking additional comments on rules restricting or prohibiting the use of five persistent, bioaccumulative, and toxic chemicals, including PIP (3:1). PIP (3:1) is a plasticizer, flame retardant, or anti-wear additive. PIP (3:1) is found in a wide range of items from TVs to forklifts.
Companies raised concerns that a March 8th phase out for PIP (3:1) would disrupt supply chains across the country.
In response, EPA will not enforce the PIP (3:1) prohibitions for 6 months while EPA reconsiders the rule.
These developments highlight the rapidly changing regulatory environment of the new administration and the importance of participation in the rulemaking process.
Department of Energy Update:
Last week, the administration announced funding for research on clean energy and decarbonization technology. On March 4, the Department of Energy announced a $115 million dollars of grant funding for clean energy research and development projects through the DOE’s Small Business Innovation Research and Small Business Technology Transfer programs. The funding opportunity is available to small businesses and is intended to promote the development of breakthrough technologies in the clean energy space.
On March 5, the Department of Energy announced its intention to invest up to $24 million dollars in research for direct air carbon capture technology. This funding opportunity is available to national laboratories, universities, industry, and nonprofit organizations and is administered through the DOE’s office of Basic Energy Science.
On March 4, 2021, the SEC announced its creation of an enforcement task force on climate and environmental, social and governance issues – or ESG. This is just the latest SEC development in climate risk and sustainability, and comes on the heels of (1) the recent appointment of a senior policy advisor for climate and ESG, (2) increased emphasis on climate and ESG in SEC examinations and (3) a ramp up of the SEC’s review of climate risk disclosure.
The Climate and ESG Task Force will develop initiatives designed to identify ESG-related misconduct. Initially, the task force will look for “material gaps or misstatements in issuers’ disclosure of climate risks” under existing SEC disclosure rules and will also analyze “disclosure and compliance issues” related to ESG strategies used by investment advisers and funds. The intent, of course, is to provide investors with more information about companies’ exposure to the effects of climate change.
Public companies should take steps now to ensure that their ESG-related disclosures, not only in their Exchange Act filings but also those on their websites, and sustainability reports go through the same disclosure controls and procedures as financial information and MD&A.
The announcement of the Task Force is more evidence of the SEC’s intention to provide further scrutiny on topics relating to ESG and climate change, as President Biden pushes for a dramatic shift in the national agenda. For now, SEC disclosure obligations remain the same. However, we expect this to be a rapidly evolving area of law so please reach out if we can assist you in any way as you navigate these waters.
- News/media bill and collective bargaining:
- On Friday, the House of Representatives Judiciary antitrust panel will hold a hearing on potential legislation aimed to help news media companies negotiate with big tech platforms.
- The bill was introduced by Sen. Klobuchar and Rep. Cicilline, and seems to have bipartisan support.
- It would allow print, broadcast, and digital news organizations to collaborate with one another to win better deals from Facebook and Google during a four-year period in which they would not be subject to the antitrust laws.
- Lina Khan:
- Biden rumored to nominate Lina Khan in one of the two open slots at the FTC. Khan is a scholar at Columbia University and supports strong antitrust reforms, particularly those aimed at big tech.
- If appointed, Khan, age 32, would be the youngest ever FTC commissioner.
- Tim Wu:
- Biden has tapped Tim Wu, another Columbia scholar and critic of big tech, for a seat on the WH National Economic Council.
- Politicians on both sides of the aisle have been vocal in response to these appointments.
- Democrats, including Amy Klobuchar, have praised the selection of Khan and Wu, with Klobuchar describing Wu’s appointment as evidence that the Biden administration “is serious about promoting competition.”
- Mike Lee, the top GOP member of the Senate Antitrust Committee, was quick to criticize the potential appointment of Khan to the Commission, citing her age and aggressive stance on antitrust reforms.
- Others being reportedly considered for the other open seat at the FTC include:
- Alvaro Bedoya, head of the Center on Privacy and Technology at Georgetown Law
- Michael Kades, a former Klobuchar aide, current head of the Washington Center for Equitable Growth
- DC AG Karl Racine
- All three are perceived as aggressive on tech and antitrust reform
- Potential nominees for DOJ Assistant AG:
- Jonathan Sallet: former Obama administration antitrust enforcer
- Jonathan Kanter, lawyer who has represented big tech critics
- Terrell McSweeny, former FTC commissioner and longtime Biden aide, viewed as a centrist
- Lina Khan:
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