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

The pressure on States and corporates to take action to address the socio-economic and environmental impacts of climate change is rapidly increasing. This pressure has resulted in a substantial rise in the number of climate change-related disputes. Although many of these disputes have thus far been brought before national courts, arbitration is likely to become an increasingly important method for resolving climate change-related disputes in the near future, since these disputes are often of an international nature and may benefit from the use of a neutral forum. In particular, there is likely to be an increase in climate change-related investment treaty arbitration, given the rising influence of climate change in the investment treaty landscape. This will bring into focus a variety of considerations affecting investments which are subject to the protection of one or more investment treaties.

Continue Reading Climate Change and Investment Treaty Arbitration

During the COP26 summit, a coalition of 190 countries and organisations committed to phase out coal energy by 2040 as part of their commitment to transition to a low-carbon economy.  The coalition also stated, in their ‘Global Coal To Clean Power Transition Statement’, that they would provide a framework to support affected workers, sectors and communities to make a “just transition” away from unabated coal power.  The coalition’s concern is that the transition to a low-carbon economy may leave many coal-dependent economies at risk of economic hardship and social unrest.

The ‘Just Transition Assessment‘ (the Assessment) recently published by the World Benchmarking Alliance (WBA) provides important insight into the metrics that NGOs may lobby for in order to achieve what they view as a “just transition” (for information on some of the WBA’s other initiatives, please see our Corporate Human Rights Benchmark publication).  In carrying out the Assessment, the WBA states that it has measured the actions that some of the world’s most influential companies have taken to support workers and communities whilst they transform to low-carbon business models.

The Assessment contends that there is a “systematic lack of action by  companies to identify, prepare for and mitigate the social impacts of their low-carbon strategies”.  The Assessment goes on to state that these purported inadequacies need to be addressed, as transition risks being adversely affected by social unrest among those whose livelihoods are threatened.


Continue Reading Just Transition: The World Benchmarking Alliance Publishes Its ‘Just Transition Assessment’

The sheer volume of capital flows into sustainable, or ESG-focused, funds and products over recent months reflects the rapidly increasing number of investors with ESG-related preferences, or demands, when selecting those investments.  Evaluating, and comparing, the ESG credentials of different investment products presents significant difficulties, however, in circumstances where information and disclosures about those products – and even the terminology used – are, at best, inconsistent, and often incomplete; and, at worst, may attract accusations of “greenwashing”, by using marketing materials to mislead investors about the ESG approaches used in their products.

Continue Reading The CFA Institute releases Global ESG Disclosure Standards for Investment Products

Many UK companies will soon be mandated to make TCFD-aligned disclosures. This follows the Financial Conduct Authority’s (FCA) introduction of the Listing Rules (Disclosure of Climate-Related Financial Information) Instrument in December 2020, which requires companies with a UK premium listing to disclose on a comply-or-explain basis against the Task Force on Climate-related Financial Disclosures (TCFD) recommendations in their annual reports. The FCA and UK Government have held consultations on extending this requirement to standard-listed and large private companies.

To help companies comply with these disclosure requirements, the Financial Reporting Council’s Financial Reporting Lab (the ‘Lab‘) has recently published a ‘TCFD: ahead of mandatory reporting’ report (the ‘Report‘), which provides examples of good disclosure practices by companies that have already voluntarily adopted the TCFD framework. The Report refers to research recently conducted by the Alliance Manchester Business School on the approaches companies have taken to conducting climate-related scenario analysis (the ‘Research‘), which is required in order to comply with the TCFD recommendations. Together, the Report and the Research provide holistic practical advice for companies on making TCFD-aligned disclosures, which is also relevant for non UK based companies who are considering how best to address the TCFD recommendations.


Continue Reading TCFD: Preparing for Mandatory Reporting

Many factors are putting pressure on corporates and financial institutions to address climate change. The UK is currently rolling out mandatory economy-wide disclosure in accordance with the Task Force on Climate-Related Financial Disclosures (TCFD) Recommendations. Beyond this lies immense investor and stakeholder pressure, including by way of shareholder resolutions, and increased media, NGO

In a significant development in the UK government’s drive towards “greening” the financial system, as part of the transition to a net zero carbon economy, HM Treasury published, on 18 October 2021, a policy paper entitled “Greening Finance: A Roadmap to Sustainable Investing” (the “Roadmap“).  The Government’s Green Finance Strategy envisages three phases:

  1. Informing investors and consumers: Ensuring that decision-useful information on sustainability is available to financial decision-makers;
  2. Acting on the information: Mainstreaming sustainability considerations into business and financial decisions; and
  3. Shifting financial flows: Shifting capital to align with a net zero and nature positive economy.

The Roadmap focusses on delivering the first phase through the introduction of economy-wide Sustainable Disclosure Requirements (SDRs).  The SDRs aim to bring together existing and new sustainability disclosure requirements under one integrated framework for corporates, asset managers and asset owners, and creators of investment products.

But what obligations will these organisations be subject to under the new SDRs, and how can they best prepare themselves to comply with such obligations?


Continue Reading HM Treasury Publishes Its UK Sustainable Finance Roadmap

As interest in, and demand for, sustainable goods and services continue to increase rapidly, so too has the volume of statements, assertions and claims, often in the context of advertising, regarding the sustainability credentials of those goods and services.

In a further sign of the continued trend towards stricter regulation, and enforcement, in the context of so-called “greenwashing”, the UK’s Competition and Markets Authority (CMA) recently published its “Green Claims Code” (the “Code“), a guidance note for businesses on making environmental claims when advertising goods and services in the UK.


Continue Reading The UK’s CMA Publishes Guidance on Environmental Claims Used in Advertising

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?


Continue Reading TCFD Recommendations: An Update on Climate Disclosures