Company: GPI
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001031203-25-000013
Chunk: 57

Company: GROUP 1 AUTOMOTIVE INC
Filing Date: 2025-02-14
Form: 10-K
Item: Item 1
Chunk 57
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 costs for future environmental compliance and remediation. Comparable laws and regulations have been enacted in the U.K. Certain health and safety standards promulgated by the Occupational Safety and Health Administration of the U.S. Department of Labor and related state agencies also apply to our operations.

In recent years, the threat of climate change has attracted considerable attention in the U.S., U.K. and elsewhere globally. As a result, numerous proposals have been made at the international, national and state levels of government, in locations affecting our business, to monitor and limit existing emissions of greenhouse gas (“GHG”), as well as to restrict or eliminate such future emissions. In December 2023, the United Arab Emirates hosted the 28th session of the Conference of the Parties where parties signed onto an agreement to transition “away from fossil fuels in energy systems in a just, orderly and equitable manner” and increase renewable energy capacity so as to achieve net zero by 2050, although no detailed timeline for doing so was set. Subsequent conferences have sought to build on the Paris Agreement, a United Nations-sponsored, non-binding agreement for nations to limit their GHG emissions through individually determined reduction goals every five years after 2020, by calling for various countries to phase out fossil fuels and subsidies related to the same, though none have been legally binding. President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order withdrawing from the Paris Agreement. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders.

The U.K. is committed to the Paris Agreement, and announced that it plans to ban sales of new gasoline and diesel-powered vehicles after 2035. Similar planned bans have been announced in California, New Mexico, Massachusetts and New York. Additional regulation of GHG emissions could increase the cost of the vehicles sold to us. Government bans or restrictions on certain vehicle types could impact the mix of vehicles that we offer for sale. Consumer concerns regarding climate change could also alter consumer preferences and adversely affect our ability to market and sell vehicles. These developments could increase our costs of operation as well as reduce our volume of business. The full impact of these actions is uncertain at this time, though these international agreements have the potential to result in increased pressure from financial institutions and other stakeholders to eliminate or reduce fossil fuel use and GHG emissions related to the same.

Gas and diesel-powered automobiles are a source of GHG emissions and in the recent past,