The Inflation Reduction Act was officially signed into law on August 16th 2022 by President Biden, and it includes historic steps in the fight against climate change. Does this bill do enough to address climate change? No, but it is a significant step closer to where we need to be if we are to achieve net-zero by 2050.
Although this bill does not require companies to disclose reporting on carbon footprints and climate risk (we are still eagerly awaiting the results of the SEC ruling for that), it creates momentum and an enabling environment for the private sector to achieve carbon reduction targets while setting the United States on the right path.
In short, the Inflation Reduction Act aims to lower energy costs for Americans, increase American energy security, invest in the decarbonization of all sectors of the economy, and support resilient rural communities.
Given our extensive experience in areas such as setting science-based targets (we’ve set over 50 for our clients, including both short-term reduction targets and long-term net-zero targets), we believe that the federal support brought by this bill will accelerate the number of American private sector companies in setting ambitious carbon reduction targets. While there is much more work and innovation needed to get to the 50% reduction target by 2030 in the US, at least this bill provides a clear signal that the path is now more achievable.
Here we highlight some of the reasons to be excited about this bill:
There is still a lot left to be done if we are to reach net-zero by 2050 and we believe that more specific requirements for companies to disclose their climate impacts and commitments is essential (as the saying goes, “you can only manage what you measure”).
That said, we applaud the significant step that the Inflation Reduction Act takes in terms of fighting climate change. We look forward to seeing the positive impacts as we continue to support our partners along the net-zero journey.
A new guide to help you communicate your climate commitments and achievements in a way that is transparent, technically accurate and in line with climate science. It identifies key challenges, helps you avoid making misleading claims and will enable you to confidently communicate your net-zero transition.
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