Welcome to Grid Brief! Here’s what we’re looking at today: Germany gets aggressive on energy austerity, the SEC has adopted a new rule for ESG, the White House announced the American Climate Corps, and more.

Germany Mandates Energy Austerity

Germany has passed a new piece of legislation mandating energy savings measures across every sector of the economy.

“The new law, called The Energy Efficiency Act, would regulate energy savings in public buildings, industry, and data centers in hopes of reducing energy consumption by 26.5% by 2030 compared to 2008,” reports Oilprice.com. “In August of last year, Germany banned swimming and bathing pool heat, and capped heating above 66F in office buildings, and banned heating in certain public areas. Hot water was turned down for handwashing in restrooms, and monument and advertisement lighting was mostly prohibited.”

According to Oilprice, Germany’s energy consumption fell to its lowest level since 1990 last year, but the country is unlikely to meet its goal of cutting emissions by 35% compared to 1990.

The German government has said it can enforce these energy saving goals without hurting economic growth.

SEC Adopts Greenwashing Rule for ESG

The Securities and Exchange Commission has announced a new rule to prevent money managers from overselling the “greenness” of ESG funds—a practice called “greenwashing.”

ESG stands for Environmental, Social, and Governance. It’s a framework used to assess a company's or investment's impact and behavior in these three key areas, often considered in ethical and sustainable investing. ESG funds prioritize these issues, especially the E, as much (if not more) than profit.

“The rule tightens regulations preventing money managers from giving their funds an ESG label if it is not merited,” reports the Washington Examiner. “Specifically, the rule mandates that if a fund implies an ESG focus or a focus on a class of companies with certain characteristics, then 80% of the value of their assets must be in the class the name suggests.”

“As the fund industry has developed over the last two decades, gaps in the current Names Rule may undermine investor protection,” SEC Chairman Gary Gensler said. “Today’s final rules will help ensure that a fund’s portfolio aligns with a fund’s name. Such truth in advertising promotes fund integrity on behalf of fund investors.”

ESG scores have been shown to lack any relationship whatsoever with low emissions. Earlier this year, for instance, an ESG fund invested billions in Saudi Aramco on accident. Regardless, Bloomberg forecasts that $53 trillion will be invested in ESG by 2025, or a third of global assets under management.

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White House Announces Climate Corps

President Joe Biden announced the creation of the American Climate Corps, which will put 20,000 Americans to work on clean energy and conservation projects.

“All American Climate Corps programs will be paid experiences that adhere to a common set of programmatic standards, and provide pathways to high-quality employment opportunities in the public and private sectors,” the White House said. “No prior experience is required for most positions.”

According to the White House, the following agencies will all sign a memorandum of understanding: the departments of Labor, Interior, Agriculture, Energy, plus the National Oceanic and Atmospheric Administration and AmeriCorps.

Conversation Starters

• America’s oil and gas pipeline sector is seeing more deals. “Magellan Midstream Partners' unit holders on Thursday voted in favor of the U.S. pipeline operator's planned sale to larger peer ONEOK for $18.8 billion,” reports Reuters. “The oil and gas pipeline business has seen increased consolidation this year as U.S. production grows and new-pipeline permitting problems have made existing operators more valuable.”

• A French utility is snatching up biomethane projects. “French utility Engie SA may spend about €2 billion ($2.1 billion) by the end of the decade to buy and upgrade biomethane assets in Europe as customers switch away from fossil fuels,” reports Bloomberg. “European Union nations are increasingly supporting the use of renewable gases such as biomethane, which is made by recycling agricultural and other organic waste, to replace natural gas and fight global warming. The need became more pressing after Russia squeezed gas supplies following its invasion of Ukraine, plunging the continent into its worst energy crisis in decades.”

• Chevron has agreed to terms that may end the strikes in Australia. “Chevron has agreed to the terms and recommendations made by Australia's Fair Work Commission in a move that could end the strikes at Australia's LNG facilities,” reports Oilprice.com. "‘After considering the recommendation, Chevron has accepted the recommendation to resolve all outstanding issues and finalise the agreements,’ a Chevron spokesperson said on Thursday. ‘We have informed the Commissioner of our position and written to the unions and other employee bargaining representatives confirming our acceptance.’”

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