The energy transition law was the result of long debate related to the industry. The law was passed to provide more care of the environment by taking different issues related to the environment into consideration. The environmental issues were common in the European nations and the law was passed with the view of having some solutions. The law focuses on carbon emissions and reducing other types of problems related to the environment. The law has been passed after a long debate, but it still has some areas with weak ground that requires improvement in order to make it more competitive and effective.
“a presentation of the entity's or portfolio management company's general approach to accounting for environmental, social and quality of governance criteria in investment policy and, as appropriate, risk management;” (Legifrance, 2015).
The appropriate investment policy and the risk management policy is also the term in question. There is lack of presentations of the approaches that can be taken for the environmental, social or other related terms. It still needs to focus on the ethical values as well as come out with a investment policy that can be governed properly. The environmental policy should be utilized for sustainable development in environmental perspective. Furthermore, the investment policy for social and environmental perspective makes more concerned in the development of environmental management.
“the content, frequency and means used by the entity or portfolio management company to inform subscribers, affiliates, contributors, beneficiaries or clients about the criteria relating to the environmental, social and quality of governance objectives taken into account in the investment policy and, as appropriate, risk management;” (Legifrance, 2015).
It was necessity to inform the related companies related to field to inform the appropriate organizations about the environmental, social as well as the quality of the governance. However, the objectives followed isn’t sufficient enough. The investment policy and risk management still lack some strong foundation to move forward. Even, several challenges are involved in the social, economic, environmental areas. In order to avoid such issues, the recognition by each individual- natural or institutional of its accessibility towards administering and monitoring the quality of the environment. It is significant every beneficiaries and contributors provide strong support to these policies.
“for a portfolio management company mentioned in 1. of I, a list of the undertakings for collective investment managed as mentioned in 1. of I which simultaneously taken into account environmental, social and quality of governance criteria; the proportion of assets of these undertakings, as a percentage, of the total amount of assets managed by the management company;” (Legifrance, 2015).
The process described has lack of strength. The undertakings of assets proportion is not described properly or the percentage of total assets that can be managed by a company still need some modifications to move forward. The language used in that case is quite unclear and make it one of the problematic part. It still need some improvement to provide it in an easier format. The act for total assets need some recognition with respect to the social, quality of governance and environmental criteria.
“Description of the methodology of the analysis conducted on the criteria relating to environmental, social and quality of governance objectives, and its results.” (Legifrance, 2015).
The act has looked for attention of every sector of producer and consumer, such as housing, transportation and waste. The law requires everyone to take part on the project of reducing greenhouse gas, but it doesn’t have any specific and clear information about the process or related scenarios. The methodology is not clearly specified any actions there. There has no specific project description to reduce the carbon. The governance objectives needs to be modified in order to achieve the desired objectives. The law has focused on economic growth as well. The economic growth means more CO2 emissions and more environmental problems. The past experience indicates the same problems. The efforts taken in order to limit the CO2 emissions by keeping the industrial progress didn’t bring fruitful result. It will be hard to achieve the goal on that way and there are possibilities of failure. The economic growth relates to emissions of carbon dioxide and environmental issues which cause harms to the human being.
“Description of the way in which the results of the analysis implemented for criteria relating to compliance with environmental, in particular exposure to climate risks, social and quality of governance objectives are integrated in the investment policy.” (Legifrance, 2015).
The climate risks are more common while the production of pollution is much more. The analysis is carried out to meet with some steps that will be helpful to reduce the emission of carbon in a place. The climate risks also exists while the country is using the fossil fuel or other energy sources that are being the main element of current production of energy. The law has explained about the renewable sources but it really doesn’t evaluate the reality. The renewable sources are still in very less usage in the country. It doesn’t focus much on the governance of current pollution by using the law but focused on long term plans. The environmental problems can rise to a more problematic level by time.
“past, current and future measurements of greenhouse gas emissions, direct or indirect, associated with issuers that form part of the investment portfolio, in particular by stipulating, as regards the method used, its general characteristics and specifically the scope used, and the way in which it gives rise to a risk analysis. If the measurement gives rise to an intensity calculation, the denominator used. If the measurement is an aggregate, the definition of the weightings used;” (Legifrance, 2015).
Currently, the carbon gas emission is in very high level. The law has taken the greenhouse gas impact of current and previous time in to consideration as well as the direct and indirect pollutions are discussed. That can be considered to be a good sign. However, the process of measurement that has been taken can play important role to eliminate all the efforts of achieving the desired objectives. However, the resale of care or renovation of the house is a great idea described in the act but the section has very less information about the way of achieving it. (White, 2015). The risk analysis is also need to be conducted. The risk analysis will identify the factors which influence the scope and objectives of the green house emissions. Except that, more useful steps about the use of renewable energy needs to implemented.
“presentation of engagement policies, including in terms of exercising voting rights, carried out with the managers for portfolios for which the management is delegated by the entity as part of a mandate” (Legifrance, 2015).
The law has focus on building a committee that can be used on the management of the businesses and that can ensure that the businesses are following all the rules that can eliminate the greenhouse gas. However, the process of selecting the committee members needs to improved. The law has very less information on that issue. It is also necessary to implement the time for a committee as well as a proper guideline to describe how the committee will work in order to achieve the goals.
“the coherence of issuers' investment expenditure with a low-carbon strategy, in particular, in the case of actors involved in the exploitation of fossil fuel reserves, the assumptions underlying the investment expenditure intended for the development of these reserves;” (Legifrance, 2015).
The low carbon strategy has been specified on the act. The act focuses on the use of renewables or other sources that can be successful to achieve the goals of this strategy. However, the country has researve of different energy sources that can create economical loss for the country as well as without proper planning of utilizing that reserves will result in bad outcome. A proper maintenance of the current reserve is necessary to avoid the pollution. They need to come out with a proper framework to achieve the goal. There are possible chances of failure if the framework implemented don’t have any strong measure that can be used effectively to implement proper strategy.
“Description of the methodology of the analysis conducted on the criteria relating to environmental, social and quality of governance objectives, and its results.” (Legifrance, 2015).
The methodology of analysis of factors that are needs to be implemented to achieve th goals still requires many changes. The proper governance is required in order for the methods to be successful. The proper governance will help the policy makers to take necessary actions. The proper methodology of governing the changes still needs to be presented. There is no clear methodology that can be used to achieve the goals. Except that the objectives are still unclear at many cases. The identification of the objectives related to social, environment and quality of governance criteria should address the possible determination of each respective.
“The contribution to compliance with the objectives mentioned in the previous paragraph shall be assessed using information relating”. (Legifrance, 2015).
The compliance should be followed by all the individuals as well as the business. There should have a accessible information bank for all the members to whom the law is considered. It is still needs to be developed. The low carbon economy can only be obtained while everyone is following the law and making use of it in each sector. In this both physical and transition risks are caused by low carbon economy. Others condemn that it is still hazy which reactor will be removed the lattice and when this will happen. (Rudinger, 2015). The government should be careful about it and the process are still needs to be taken.
The act is still considered to be business friendly. However, with less knowledge on the act it will be hard to take actions. The act has many problems on providing information’s and it needs to be upgraded with more detailed guidelines. The businesses will have to understand the trend in order to act properly. They will have to bring ideas from the global condition to implement any sets of action. The lack of guidelines will make it impossible to compare the businesses with the benchmark. It can bring bad consequences in the future. It is important to develop a proper guidelines and a clear methodology in order to make the act successful.
References
Rudinger, A. (2015). The French Energy Transition Law for Green Growth: At the limits of governance by objectives. Iddri.org. Retrieved 20 August 2016, from http://www.iddri.org/Publications/The-French-Energy-Transition-Law-for-Green-Growth-At-the-limits-of-governance-by-objectives
White, S. (2015). France targets carbon tax in energy transition law. EurActiv.com. Retrieved 20 August 2016, from http://www.euractiv.com/section/sustainable-dev/news/france-targets-carbon-tax-in-energy-transition-law/
Legifrance,. (2015). Décret n° 2015-1850 du 29 décembre 2015 prisen application de l'article L. 533-22-1 du code monétaire et financier | Legifrance. Legifrance.gouv.fr. Retrieved 21 August 2016, from https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000031740341&categorieLien=id
