Publication | BRG
An Evolving Landscape: Using Artificial Intelligence to Adapt to Increased Environmental Enforcement
Michael Pace and Eric Matrejek
Environmental issues have been gaining attention in the public square for quite some time, but government entities have been slow to take action to combat concerns. But that is changing, and technologies can assist in managing increased regulatory scrutiny on environmental activities.
Increased Federal Focus
Since his inauguration, President Biden has taken actions that suggest a shift in federal policy toward environmental issues. On his first day in office, Biden rejoined the Paris Agreement, revoked the permit for the Keystone XL pipeline, and established a moratorium on federal leases in the Arctic National Wildlife Refuge. Shortly thereafter, Biden issued an executive order, Tackling the Climate Crisis at Home and Abroad, which sought to enhance global action on climate change by combining both domestic and international efforts. Each action suggests that the Biden administration will continue to place importance on climate-related issues.
In addition to the executive branch, federal regulatory agencies have increased their efforts on environmental-related issues. In March 2021, the Securities and Exchange Commission (SEC) requested input from the public on its required climate-related disclosures “with an eye toward facilitating the disclosure of consistent, comparable, and reliable information on climate change.” The request followed recommendations from the SEC’s Investor Advisory Committee and the Environmental, Social and Corporate Governance (ESG) Subcommittee of the SEC Asset Management Advisory Committee to update standards and reporting requirements for corporate issuers related to environmental factors.
Intensified State-Level Enforcement
Along with the mounting pressure at the federal level, there is an expectation that state attorneys general will intensify environmental enforcement actions. Recently, many state attorneys general have signaled their intent to put environmental issues front and center with the creation of dedicated environmental justice units. These units often initiate independent litigation while also lending support to nonprofit and community-driven environmental efforts.
In addition to the generalized efforts of the environmental justice units, state attorneys general have shown their specific intentions through multistate-initiated lawsuits, including:
- A nine-state suit against the Environmental Protection Agency (EPA) challenging a temporary policy that allowed the agency some enforcement discretion for noncompliance resulting from complications of the COVID-19 pandemic
- A twenty-one-state suit challenging eased restrictions for coal-fired power plants
- A twenty-one-state suit calling for review of the EPA’s rescission of emissions regulations for methane and other volatile organic compounds from new sources in the energy sector
Michael Pace and Eric Matrejek discuss how increased federal focus on climate-related disclosures and intensified enforcement on environmental regulations will require companies to evaluate the cost and benefits of AI adoption.