Powering tomorrow Navigating the energy transition landscape 2024 - Flipbook - Page 9
As business leaders evaluate their approach
to addressing climate change whilst also
managing their bottom line, they should
consider the following:
• Be cognizant of potential opportunities
to leverage protectionist trade policies:
For example, a European company could
leverage incentives received to develop
a green project in the U.S to get better
terms domestically.
Whether or not the Paris Agreement goals are
met, related regulation and subsidies are not
going anywhere. Multinationals across the
globe will be taking action regardless of shifting
policies or geopolitical trends. Those who haven’t
already should start evaluating their options and
follow suit.
‘‘
The team is very experienced,
attentive to clients’ needs
and extremely responsive.
Projects & Energy, Europe-wide,
Chambers Global, 2023
• Evaluate political risk. For instance, in the
U.S., most IRA tax credits are relatively simple:
they’re authorized and can be earned without
competition on a clear timeline. Renewable
tax credits run up to 10 years or more. While
some believe these won’t go away even if we
see a Republican in the White House (because
most of those dollars are going toward projects
in red states), organizations should be sure
to assess political risk before accepting
these credits.
‘‘
The current landscape presents signi昀椀cant
opportunities for organizations which can
take advantage of new subsidies to transform
their businesses while complying with new
regulations. Nevertheless, stakeholders should
remain alert to political developments that may
shift their calculus—be it European responses to
U.S. subsidies, the role of China amid mounting
geopolitical tensions, or e昀昀orts to support the
Global South so that we can achieve the Paris
goals in an equitable way (to name just a few).
• Beware of “Crowd Reg”: In addition to
soft non-binding provisions, such as the
United Nation’s Sustainable Development
Goals or the Principles for Responsible
Investment, businesses that do not “walk the
walk” could fall behind their competitors as a
result of public backlash via social media and
consumer choice. Increasingly, this pressure
may translate into ESG-related class action
litigation, largely associated with assertions of
greenwashing against those who may be doing
or achieving less than they claim.
Hogan Lovells | Powering tomorrow: Navigating the energy transition landscape
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