James Whitaker

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During last year’s COP26, the UK Government announced that it would mandate the disclosure of listed companies’ and financial institutions’ net zero transition plan, and that it would form a taskforce to assist private sector actors in doing so.

Coinciding with the start of COP27, the UK’s Transition Plan Taskforce (“TPT”) – a taskforce with a mandate from His Majesty’s Treasury to help enable private sector actors in the UK create robust climate transition plans to fulfil their net zero commitments – on 8 November 2022, published, for consultation, its new Disclosure Framework for companies to disclose their climate transition plans.

Importantly, the Disclosure Framework draws on existing and emerging disclosure regimes, such as the Taskforce on Climate-Related Financial Disclosure (“TCFD”) Recommendations and the International Sustainability Standards Board’s (“ISSB”) Sustainability Disclosure Standards (for more information on the TCFD and ISSB regimes, read our previous blog posts here, here, here and here).

The TPT’s publication of its Disclosure Framework recommendations is supplemented by the TPT’s Implementation Guidance. The Implementation Guidance sets out practical steps to help private sector actors develop climate transition plans, as well as information on when, where and how to disclose such plans.Continue Reading Climate Disclosure: the UK’s Transition Plan Taskforce launches ‘gold standard’ for climate transition plans

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To help companies improve their reporting on net zero commitments, the FRC Lab have published its Net zero disclosures report (“the Report”), which provides companies with practical tips and questions to consider when preparing disclosures in their financial reports on net zero and other Greenhouse Gas (“GHG“) reduction commitments.Continue Reading The UK’s Financial Reporting Council publishes guidance to assist companies reporting on their net zero commitments

Governance

The UK’s Financial Conduct Authority (“FCA”) and Financial Reporting Council (“FRC”) have published the findings of their respective reviews of the first batch of premium listed companies’ Taskforce on Climate-related Financial Disclosures (“TCFD”)-aligned disclosures (the “Reports”). The FCA’s review involved a relatively high-level quantitative assessment of climate-related disclosures made by 171 premium listed companies, and a more detailed qualitative assessment of the alignment of those disclosures with the TCFD Recommendations for 31 of those companies. The FRC’s review, on the other hand, involved a more granular analysis of the disclosures of 25 premium listed companies that are perceived to face greater climate change-related risks.Continue Reading The UK’s FCA and FRC review the quality of companies’ TCFD disclosures

Governance

Litigation is increasingly being used as a means of advancing – or delaying – effective climate action.

As discussed in our recent legal update on the Grantham Research Institute on Climate Change and the Environment’s 2021 Global Trends in Climate Change Litigation Policy Report (the “2021 Report“), between 2015 and 2021, there was a marked increase in the number of such climate-related cases being brought against private sector actors.  This reflects the growing recognition by prospective litigants of litigation as an effective means of influencing the actions private sector actors are taking to address climate change.

Most recently, the London School of Economics’ Grantham Research Institute on Climate Change and the Environment’s 2022 Global Trends in Climate Change Litigation Policy Report (the “2022 Report“) confirms that litigation against private sector actors continues to expand as an avenue for climate action.  We discuss the trends identified in the 2022 Report in this blog post.Continue Reading The Grantham Research Institute on Climate Change and the Environment publishes its 2022 global trends in climate litigation report

Governance

Climate-related litigation is increasingly being used as a tool to hold companies and governments to account over their contributions to climate change.  According to the Grantham Institute’s 2021 Global Trends in Climate Change Litigation Policy Report (the “Report”), the number of climate-related cases has more than doubled since 2015: between 1986 and 2014, approximately…

Lightbulb is located on the soil, and plant are growing.Renewable energy generation is essential in the future.

Emissions reporting standards and practices in the private equity sector have been described by certain commentators as being some way behind those in the public markets; certainly the private equity asset class has, so far, received less attention in the context of Environmental, Social and Governance (ESG)-related reporting developments more generally.  That is changing, however; General Partners (“GPs“) are increasingly called upon to disclose climate-related data and establish greenhouse gas (“GHG“) emissions reduction targets across their portfolios.

There is not, at present, an agreed standard for reporting such information at a fund level, which has resulted in inconsistent approaches being adopted by different funds.  Inconsistencies, of course, potentially impair the ability of investors to make meaningful comparisons between portfolio companies, and indeed between funds.

In an attempt to address this inconsistency, the Initiative Climat International (“ICI“) — a practitioner-led group of private equity funds and investors that represents over USD $3 trillion in assets under management — in partnership with sustainability consultancy group Environmental Resources Management (“ERM“), have taken the proactive step of launching a new, non-binding standard that sets out a consistent approach to GHG disclosure across the private equity sector.  The standard, outlined in the ICI and ERM’s Greenhouse Gas Accounting and Reporting report (the “Report”), aims to better align the disclosure practices of private equity funds with the practices currently adopted by many listed companies in the public markets.Continue Reading New standard published for Greenhouse Gas Emissions reporting in Private Equity

Environmental

“Greenwashing” – that is, environmental claims that are not fully or properly substantiated, or that contain false information, omit critical information, are exaggerated or are presented in an unclear, ambiguous and/or inaccurate manner – continues to be a major focus of scrutiny across all sectors, and the advertising industry is no exception.  The volume of statements and claims regarding the sustainability credentials of businesses’ goods and services, often made in the context of advertising and marketing, is increasing rapidly.

At the same time, the interests of regulators, consumers, and other stakeholders, in combatting misleading, “greenwashed” environmental claims has grown commensurately.  According to analysis conducted by the Independent, over the past 12 months alone, the UK’s Advertising Standards Agency (“ASA“) has found 16 advertising campaigns to have exaggerated the green credentials of, or made unsubstantiated environmental claims about, the advertised brands.

As a consequence of this growing interest, the World Federation of Advertisers (“WFA“) – a global organisation that represents the common interests of advertisers and marketers – has issued landmark guidance on how brands can ensure that any environmental claims featured in their marketing communications are credible for both consumers and regulators (the “Guidance“).  The Guidance, produced with the support of the International Council for Advertising Self-Regulation, the European Advertising Standards Alliance and the UK’s ASA (amongst others), is the first guidance that has been issued at an international level with regard to making environmental claims, and represents a highly significant development in the context of growing efforts to combat greenwashing.Continue Reading World Federation of Advertisers issues guidance on making credible environmental claims

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The move towards consolidated, aligned, sustainability disclosure requirements, long identified as an essential element of sustainability efforts, took a major step forward last week.  On 24 March 2022, the International Financial Reporting Standards Foundation (“IFRS Foundation”) and the Global Reporting Initiative (“GRI”) announced a collaboration agreement, the purpose of which is to seek to align their capital market and multi-stakeholder focussed sustainability disclosure regimes (the “Agreement“).  The Agreement represents the latest development in the IFRS Foundation’s efforts to consolidate the plethora of – sometimes disparate – international sustainability reporting regimes into a consolidated, more cohesive, framework, for the benefit of companies, investors and society at large.
Continue Reading International Sustainability Standards Board and Global Sustainability Standards Board to align their sustainability disclosure standards

Governance

The recent publication, on 27 February 2022, of the second instalment to the Sixth Assessment Report of the UN’s Intergovernmental Panel on Climate Change (“IPCC“) did not receive the same degree of attention as the first instalment in August 2021.  The findings, and message, of the second instalment, are no less severe, or potentially consequential, however, delivering as it does, the “bleakest warning yet” of the impacts of climate change.

The first instalment, developed by the IPCC’s Working Group I, focused on the physical science basis of climate change.  The second instalment, developed by the IPCC’s Working Group II, assesses the impacts of climate change, looking at ecosystems, biodiversity and human communities at global and regional levels.

The findings of the IPCC are, of course, deeply troubling in many respects, and the implications of those findings are likely to be extensive.  One area in which those implications are likely to be felt is that of climate litigation.  As explored in our previous article, the science based findings of the IPCC have played a role in affirming international legal standards on climate change and establishing the link between emissions and climate change, thereby – in some respects – strengthening the cases of climate litigants who may previously have encountered difficulties in establishing causation.  The ever-increasing urgency of the climate crisis, and the willingness – and ability – of stakeholders to use litigation to compel action to address that crisis, will continue to be features of the landscape as attention focuses on the IPCC’s findings.Continue Reading Climate Change Litigation: the IPCC’s latest Report links climate change to loss and damage

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Much is heard of the plethora of – often disparate – disclosure regimes and standards around sustainability, and the attendant difficulties for stakeholders, including investors, customers, and the public more generally, of assessing and comparing performance in a meaningful way.  Significant developments in the consolidation of the sustainability disclosure landscape are, however, imminent.

The Climate Disclosure Standards Board (CDSB) – an international consortium of businesses and NGOs that offers companies a framework for reporting environmental information – has announced that it will close down its operations and consolidate with the International Sustainability Standards Board (ISSB) at the end of January 2022.  In addition, the ISSB will complete the consolidation of the Value Reporting Foundation (VRF) – an international NGO that houses the Integrated Reporting Framework and the Sustainability Accounting Standards Board (SASB) Standards – by the end of June 2022. These developments mark significant steps towards the ISSB’s ambition to become the world’s leading sustainability standards board.Continue Reading International Sustainability Standards Board Commences its Streamlining of the Sustainability Disclosure Landscape