On 7 August 2024, the European Commission published a set of frequently asked questions on the implementation of the EU Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464) (“CSRD“) and the interpretation of certain legal provisions in the Accounting Directive (Directive 2013/34/EU), the Transparency Directive (Directive 2004/109/EC) and the Sustainable Finance Disclosure Regulation (Regulation
The Commission Delegated Regulation (EU) 2024/1700 supplementing Regulation (EU) 2017/2402 with regard to regulatory technical standards (“RTS”) was adopted on June 18, 2024. These RTS set out the content, methods and presentation of information in relation to the principal adverse impacts (“PAIs”) of the assets financed by the underlying exposures on sustainability factors for securitizations and the new rules will enter into force on 8 July 2024. ESG STS disclosure is a key feature of the EU’s objectives to promote sustainable finance and steer capital flows towards sustainable activities.Continue Reading Be prepared: The technical standards on STS securitizations’ ESG disclosures enter into force on July 8, 2024
The First Civil Senate of the German Federal Court of Justice, which is in charge of competition law, has ruled that advertising with an ambiguous environmental term (here: “climate neutral”) is generally only lawful if the specific meaning of the relevant term is explained in the advertising itself.
Judgment of June 27, 2024 – I ZR 98/23Continue Reading German Federal Court of Justice on advertising with an ambiguous environmental term
The European Securities and Markets Authority (ESMA), published a combined report on its 2023 Common Supervisory Action (CSA) and the accompanying Mystery Shopping Exercise (MSE) on marketing disclosure rules under MiFID II. ESMA, together with the National Competent Authorities (NCAs), states that marketing communications and advertisements generally comply with MiFID II requirements. Investment firms generally have procedures in place that ensures compliance with the rules for marketing materials. However, there are increasing concerns about marketing material which includes sustainability claims. ESMA identified several areas of improvements and announces that further supervisory actions in this area shall be undertaken.Continue Reading ESMA’s Final Report on the 2023 Common Supervisory Action and Mystery Shopping Exercise on marketing
On 14 May 2024, the European Securities and Markets Authority (“ESMA“) published its final report on “Guidelines on funds’ names using ESG or sustainability-related terms” (the “Guidelines“). The Guidelines aim to provide fund managers with clear and measurable criteria to assess their ability to use ESG and/or sustainability-related terms
The European Securities and Markets Authority (“ESMA“) has today published three useful explanatory notes covering key topics of the European sustainable finance framework, namely: a) the definition of “sustainable investments”; b) the application of do no significant harm (“DNSH“) principle; and c) the use of estimates.
The explanatory notes set out
Our international ESG team has been keeping an eye on what’s going on with regards to green taxonomies. With so much activity already this year, we summarize some of the key developments below.
EU
We recently published this reminder of the EU’s taxonomy framework. Our publication is particularly relevant to non-EU groups with large subsidiaries
The EU Corporate Sustainability Reporting Directive (“CSRD“) entered into force on 5 January 2023 and the associated European Sustainability Reporting Standards (“ESRS“) were adopted by the European Commission on 31 July 2023. Together, the CSRD and ESRS create detailed sustainability reporting requirements that will apply to a significant number of EU and non-EU companies and substantially increase the scope of their sustainability reporting.
Application of the rules is now imminent and, for some, CSRD reporting periods will begin from 1 January 2024.
In this update, we take a look at the implications of the CSRD for non-EU companies and what companies can do to prepare.Continue Reading The EU Corporate Sustainability Reporting Directive is upon us – what non-EU companies should know and do
On 11 July 2023, the European Securities and Markets Authority (ESMA) published a public statement on sustainability disclosure in prospectuses, available here: ESMA32-1399193447-441 Statement on sustainability disclosure in prospectuses (europa.eu).
The statement is addressed to the National Competent Authorities (NCAs) to promote coordinated action regarding sustainability-related disclosure included in prospectuses under current legislation. While the statement is addressed to NCAs, ESMA have said that its contents should be taken into account by issuers and advisers when drawing up a Prospectus Regulation (PR) compliant prospectus that contains sustainability-related disclosure.
Whilst there is little in the way of deviation from best practice here, the statement reflects the enhanced focus of ESMA and NCAs on ESG disclosure and is likely to result in additional commentary from NCAs during the prospectus approval process.
A summary of some of the key takeaways is included below.Continue Reading ESMA release Public Statement on Sustainability Disclosures in Prospectuses
The risk of an accusation of “greenwashing” is now an important concern for many companies. Greenwashing is an ill-defined concept but, nevertheless, is increasingly a source of litigation and regulatory scrutiny – with more of both expected. It carries with it reputational, regulatory and litigation risks for which companies should be prepared. Whilst the risks are always context specific – varying by jurisdiction, industry