On September 15, 2021, the Central Bank of Brazil (BCB) released its first “Report on Social, Environmental and Climate-related Risks and Opportunities”. Based on the recommendations by the World Economic Forum (WEF), the Task Force on Climate-related Financial Disclosure (TCFD), and the Network for Greening the Financial System (NGFS), the publication highlights the potential impacts of social, environmental, and climate-related issues on Brazil’s economy and financial stability, and details the initiatives aimed at assessing, disclosing and managing ESG risks and opportunities within the BCB structure and in the financial system.
This article follows-up on our previous Blog Post exploring the “jargon” of the EU Commission’s Chemicals Strategy for Sustainability (CSS), an ambitious political action plan for chemicals regulation in the EU that was released in October 2020.
Today, we are digging into another key concept of the CSS: the concept of “one substance, one assessment” (hereafter referred to as “OSOA“), which is essential for the Commission, and more generally for the European Union, to simplify and consolidate the chemicals legal framework.
It was recently reported, on 8 September 2021, that investors managing USD 2.3 trillion in assets called for standardised climate and environmental disclosure from more than 1,000 privately held portfolio companies. The investors, who joined a growing chorus advocating for improved disclosures around environmental issues, requested the private companies to provide such data through the non-profit disclosure platform, CDP, which provides a mechanism for climate disclosures that align with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD recommendations were published in June 2017, and have accelerated the focus on climate disclosures by providing the leading framework for disclosures relating to the financial impacts of climate-related risks.
But what are the TCFD recommendations, and how can companies prepare for reporting in compliance with them?
Just months after we discussed a recent climate lawsuit filed in Brazil against a rural landowner due to alleged illegal deforestation in the Amazon, a new chapter in Brazilian climate litigation unfolds and reinforces the trend of climate change lawsuits against public and private entities. In this Blog Post, we take a look at this new precedent and how it further impacts climate change discussions in the context of carbon-intensive activities.
On September 9, 2021, the Biden administration issued a fact sheet (Fact Sheet) describing recent actions that aim to produce 3 billion gallons of sustainable aviation fuel (SAF) annually, reduce aviation emissions by 20% by 2030, and grow good-paying, union jobs.
The Fact Sheet notes that “aviation (including all non-military flights within and departing from the United States) represents 11% of United States transportation-related emissions. Without increased action, aviation’s share of emissions is likely to increase as more people and goods fly” and that “President Biden proposed a Sustainable Aviation Fuel tax credit as part of the Build Back Better Agenda. This credit will help cut costs and rapidly scale domestic production of sustainable fuels for aviation. The proposed tax credit requires at least a 50% reduction in lifecycle greenhouse gas emissions and offers increased incentive for greater reductions.”
In this Blog Post, we highlight important aspects of the Fact Sheet, as well as related initiatives from the US Department of Energy (DOE) in support of SAF development in the United States.
There is an undisputed trend of increased and strengthened human rights and environmental due diligence laws (for example, see our previous Blogs here and here). A related trend is the rise of import controls to supplement such measures. For example, the United States’ Customs and Border Protection agency have in recent times increasingly issued Withhold Release Orders to detain shipments of products suspected to be produced, in whole or in part, using forced labour (for example, see our Legal Updates here and here).
The European Commission is now assessing the adoption of action and enforcement instruments to tackle forced labour. Its consideration of such mechanisms coincides with the forthcoming legislative proposals from the European Commission on Sustainable Corporate Governance (SCG), a key element of which includes an obligation for corporations to undertake human rights and environmental due diligence (HREDD).
A coalition of NGOs, including Anti-Slavery International and the European Coalition for Corporate Justice, have released an NGO position paper raising some key considerations in the development of potential import control measures in tandem with a mandatory corporate HREDD obligation.
Much has been going on over a hot summer of ESG (incidentally, July is reported to have been the world’s hottest month ever recorded). In this Blog Post, we help make sense of the busy season and highlight important developments across Europe and Asia, including:
- The EU’s “Fit for 55” Package and Taxonomy
- Carbon Disclosures in the UK
- The Launch of the TNFD
- Increasing ESG Litigation
- Climate-related Regulation in Asia
On August 25, 2021, the Environmental Defenders Office (EDO), acting on behalf of the Australasian Centre for Corporate Responsibility (ACCR), filed a consumer protection lawsuit with the Federal Court of Australia in respect of certain ESG related statements made in a gas company’s 2020 Annual Report (the Report).
This is the first lawsuit in the world that challenges the veracity of a company’s net zero emissions target, and in relation to the viability of carbon capture and storage and the environmental impacts of hydrogen as an energy source, increasingly touted as the key elements in gas companies’ pathways toward net zero emissions.
The UN’s Intergovernmental Panel on Climate Change’s Sixth Assessment Report (“IPCC Report“), published on 9 August 2021, delivered the starkest warning to date that human activity is responsible for significant changes in the Earth’s climate. The attention of the world’s scientific, political, and business communities, and of society at large, is increasingly focused on the urgency of the need for drastic action to counteract these changes, and the devastating impacts they are having.
In a new Legal Update, we explore whether, and how, the issues addressed in the IPCC Report may heighten the already-growing climate change litigation risk for businesses.
Continue reading on MayerBrown.com.
On August 31, 2021, the Federal Insurance Office (FIO) of the US Department of the Treasury published a request for information (RFI) on the insurance sector and climate-related financial risks for the FIO’s future work on:
- insurance supervision and regulation,
- insurance markets and mitigation/resilience, and
- insurance sector engagement.
Citing its role and statutory authorities, FIO solicits public input under the RFI for 19 separate questions regarding a variety of matters ranging from general views for the FIO to assess and implement the Biden administration’s Executive Order on Climate-Related Financial Risk to more specific questions regarding the FIO’s specified future work streams.
Comments are to be made on or before November 15, 2021, as specified in the RFI.
 That include, among others, to monitor all aspects of the insurance sector, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance sector or the US financial system and to collect data and information on and from the insurance sector. The FIO is also authorized to coordinate federal efforts and develop federal policy on prudential aspects of international insurance matters, including representing the United States, as appropriate, in the International Association of Insurance Supervisors (IAIS).
 Discussed in our earlier February 8, 2021, Legal Update, “Biden Signs Far-Reaching Executive Order Setting Forth Climate Change Priorities.”