HVAC News Roundup May 2022
May was a busy month in the HVAC/R world. Between conferences, legislative and government updates, and new reports, there was a lot to stay on top of. At Trakref, we’ve been tracking the latest and have the run-down to share with you.
Let’s dive in.
SEC Extends Comment Period on Climate Disclosures and Tightens Rules on Investment Funds
In March, the SEC decided to move forward with rulemaking to make climate disclosures required for publicly traded companies. Since then, this rulemaking has been open to public comment.
On May 9, the SEC announced that they will be extending this public comment period to June 17, 2022. SEC chair Gary Gensler noted that “the SEC benefits greatly from hearing from the public on proposed regulatory changes.”
Trakref will be submitting our own comments, and we encourage others in the industry to do the same. This is a history-making moment in climate disclosures and ESG reporting, and it is important for the HVAC/R industry’s voice to be heard.
Furthermore, on May 25, the SEC moved forward two new proposals to tighten rules surrounding investment funds focused on ESG – the one most relevant to HVAC professionals is the proposal to increase disclosure requirements, including filling out standardized tables as well as providing additional information about greenhouse gases. The other proposal broadens rules around fund names. You can read more about these additional proposals here.
ConnexFM and JLL Engineering Services Conference
Two major conferences happened recently – ConnexFM in Long Beach at the end of April, and the JLL Engineering Services Conference in San Antonio in May. Trakref attended both. We enjoyed getting to talk with folks in the industry and learn more about how we can partner with companies to help professionals better operationalize sustainability.
Take a look at these pictures we took during our travels!
2022 EHS Operational Excellence Conference
In addition to ConnexFM and the JLL Engineering Services Conference, we also attended the 2022 EHS Operational Excellence Conference held by NAEM. Although not in person like the others, we enjoyed hearing more about innovations in operations and reducing risk. It was also great to learn from leaders in the industry.
Washington HFC Regulations
Washington is the latest state to embark on a mission to phase out HFCs – we covered this on our blog back in March when they held their first stakeholder meeting.
This month, the Department of Ecology held another stakeholder meeting to give their latest updates. They went over new definitions and allowed more time for questions and discussion. While nothing major has changed, we’ll continue to attend these meetings and encourage others in the HVAC/R industry to do so as well.
You can learn more about the regulations that will go into effect in 2024 on the Washington Department of Ecology website.
Refrigerant Market Forecasts
The Insight Partners came out with a new report with forecasts for the refrigerant market through 2028. The report also discusses the impact of the COVID-19 pandemic on the market.
The report states that the refrigerant market was worth $16,458.3 million in 2021 and is projected to reach $25,534.6 million by 2028. Major factors driving this growth are increase in demand in the automotive and electronics industry as well as more demand for refrigeration systems in general– even though there was some drop off during the pandemic.
More information about the study is available in this press release.
Low GWP Refrigerants Market Trends
The Insight Partners also put out another study on the low GWP refrigerants market. The report notes that there is anticipated growth in the market due to their low environmental impact. Increasing worries about climate change will also continue to drive the market.
Read more about the study in this press release.
Kigali Amendment Moves Forward in the Senate
The Kigali Amendment is moving forward in the Senate – the Senate Foreign Relations Committee has recommended that it be fully approved. Industry leaders are applauding the bipartisan support for the vote.
In order to be approved, it must receive 67 votes from the Senate. While it does have bipartisan approval, there are still some conservative groups who are against it. We’ll see whether it is approved in the coming weeks.
Read more in The Cooling Post.
AGC develops “safe” replacement for R410A
The Japanese refrigerant manufacturer AGC developed a new HFO1123 blend that solves previous safety issues. HFO1123 is a climate-friendly replacement for R410A, but can have a disproportionate reaction under high-temperature and high-pressure conditions. This reaction has been suppressed in this new blend by adding more propane.
This new blend has yet to undergo ASHRAE flammability and toxicity assessment, but we look forward to learning more about it. Read more in The Cooling Post.
Schnitzer Steel Fined for Releasing Refrigerants
The latest company to be fined for not meeting EPA standards is Schnitzer Steel in Portland, OR. The complaint against Schnitzer alleges that they failed to recover refrigerants from small appliances and vehicles before disposal, and they also did not verify from suppliers that refrigerant had been properly recovered.
Schnitzer will receive a fine of $1,550,000 and must also implement compliance measures. This serves as another reminder to ensure that you are in compliance when handling refrigerant.
SEC charges BNY Mellon unit with making false ESG statements
The SEC charge BNY Mellon with misstating how it applied ESG decisions when making investment decisions. BNY Mellon agreed to pay a $1.5 million fine. BNY Mellon will also be updating compliance materials and ensuring better communication to investors.
Adam Aderton, co-chief of the SEC’s Enforcement Division’s Asset Management Unit made a statement about the fine, saying that “The commission will hold investment advisers accountable when they do not accurately describe their incorporation of ESG factors into their investment selection process.”
More Support for Global ESG-Standard Setting
The International Sustainability Standards Board is creating a working group of regulators from the US, Europe, Japan, and other jurisdictions. Noting that there is a lack of standards that businesses can easily turn to, they hope to begin crafting a global baseline of ESG standards.
The new proposals will be open for public comment through July 29. ISSB will then complete the standards by the end of this year.
As we’ve often noted at Trakref, there is much interest from investors and other stakeholders for companies to follow better standards. The ISSB hopes that companies will adopt their standards, helping alleviate the problem. As ISSB Chair Emmanuel Faber states, “There is strong public interest in seeking to align where possible the international and jurisdictional requirements for sustainability disclosures.”
Read more about the initiative in this article from CFO dive.
Moving Beyond Carbon Dioxide to Fight Climate Change
A recent study published in Proceedings of the National Academy of Sciences concludes that strategies to fight climate change need to broaden. Instead of just focusing on carbon dioxide, other pollutants need to be included in the fight against warming.
The study points to methane, black carbon, soot, and yes – refrigerants – as a source of pollution that we need to focus on. It specifically points to HFCs, which we are already seeing phase-downs of. The authors hope to reiterate the importance of not just focusing on decarbonization and reducing fossil fuels, but also looking to decrease other pollutants.
Read more about the study in this article from Phys.org.
IASB and ISSB Working Together
The International Accounting Standards Board and the International Sustainability Standards Board announced plans to together work on the Value Reporting Foundation’s Integrated Reporting Framework and Integrated Thinking Principals. This will articulate a future path forward to standardizing ESG and sustainability data – something that Trakref advocates for.
Along with the Value Reporting Foundation, the IASB and ISSB will publish material from both boards. They hope to improve the quality of information available to investors and other stakeholders, since current data is not well standardized.
Davos 2022, the World Economic Forum’s annual meeting, took place at the end of the month. In addition to conversation around the COVID-19 pandemic, economic recovery, and technological innovation, leaders focused on climate action.
Speakers including John Kerry, Faith Birol, and Olaf Scholz spoke of the need for urgent action on climate change. A session bringing together five heads of state from Latin America spoke of the need for collaboration between the private sector and integrating action into policy choices. Even an astronaut from the European Space Agency called in from space to plead for change.
You can read a rundown of key highlights from the annual meeting here.
Climate-related disclosure annually costs companies $677,000 on average
A new study from ERM found that climate-related disclosures costs companies $677,000 on average each year. This is different than what the SEC estimated. ERM included two new categories that the SEC failed to consider.
Read more about the study in this article.
Pentagon Expanded Climate Role During Clinton Presidency
According to newly declassified documents, the Pentagon’s role in environmental policy expanded during the Clinton presidency, including becoming an active player at international climate conferences. The documents also provide perspective into the Pentagon’s role in the 1997 Kyoto climate negotiations, including pushing for exemptions for military operations from emissions requirements.
The documents reveal the tension between following the president’s charge for more protection for the environment while also prioritizing national security. The military prioritized some elements of climate policy while also looking for exemptions from others.
That wraps up our roundup for this month. We’ll continue to bring you more news and insights from the HVAC/R world in June – be sure to subscribe to our blog and sign up for our open mics. This month, we’ll be focusing on our latest research in ESG reporting as well as IPCC’s Sixth Assessment Report.
If you’re looking for more ways to engage in the HVAC/R community in June, check out the EPA’s upcoming webinar schedule. They will be holding a webinar on the GHG inventory on June 1. You can register here. On June 21, they’ll be hosting another webinar on GreenChill exploring food refrigeration leaks. You can sign up by emailing GreenChill@epa.gov.
Gavin is the Lead Writer at Trakref.