The Hong Kong Monetary Authority (“HKMA”) released a research report last week showing evidence that about one-third of global corporate green bond issuers are reaping the benefits of issuing green bonds without cutting down their greenhouse gas (“GHG”) emissions. This type of ‘greenwashing’ behaviour impedes progress on combating climate change and

On 25 August, 2022, the Australasian Centre for Corporate Responsibility (“ACCR”) expanded its case against the Australian gas company, Santos Ltd. (“Santos”), with new and more detailed allegations around greenwashing.

Last year, ACCR filed a consumer protection lawsuit with the Federal Court of Australia regarding certain misleading or deceptive statements Santos

**A Chinese version of this blog post follows the English version.**

China’s State Council-backed think tank, China Enterprise Reform and Development Society (“CERDS“), alongside a number of major Chinese companies including Ping An Insurance Company, issued “The Guidance for Enterprise ESG Disclosure” effective on 1 June 2022 (“Guidance“). The Guidance is China’s first ESG disclosure guideline, and covers all companies and industries.  It follows the environmental disclosure rules issued by China’s Ministry of Ecology and Environment (MEE) which came into effect earlier in February 2022 (which we reported here).

Continue Reading China issues first ESG disclosure guidance: international guidelines with Chinese characteristics

On 3 August 2022, Australia’s Financial Services Council (“FSC“) published FSC Guidance Note No 44 Climate Risk Disclosure in Investment Management (“Guidance Note”) to provide a set of common baseline expectations for the investment management industry’s approach with respect to net-zero commitments, disclosure of climate-friendly investment features and climate change risk reporting. 

Continue Reading Australia’s Financial Services Council issues new guidelines on climate risk disclosure for asset managers

On 28 July 2022, 161 States voted in favour of a United Nations General Assembly (“UNGA“) resolution declaring access to a clean, healthy and sustainable environment, a universal human right (“UNGA Resolution“). In a remarkable display of global solidarity, the resolution received zero ‘against’ votes, and eight ‘abstain’ votes. This vote follows the passing of a similar resolution in the United National Human Rights Council in October 2021. UN Special Rapporteur on human rights and the environment, David Boyd, hailed the UNGA Resolution as having the potential “to be a turning point for humanity”.

Continue Reading Business and Human Rights: New Universal Human Right To Access A Clean, Healthy And Sustainable Environment

On 23 February 2022, the European Commission published its much-anticipated draft corporate sustainability and due diligence directive (the “Draft Directive”).  The Draft Directive sets out a proposed EU standard for human rights and environmental due diligence (“HREDD”) which, importantly, would apply to any non-EU-based company and its subsidiaries  if those group companies have aggregate annual net turnover in the EU of:

  • more than EUR 150 million (Group 1); or
  • more than EUR 40 million with at least 50% of net worldwide turnover generated in a “high-risk” sector which includes textiles, clothing and footwear, agriculture, forestry, fisheries, food & extractives (Group 2).

Notably, the HREDD applies even if a company and its subsidiaries do not have a physical presence in the EU, if the above net turnover threshold is met.

The Draft Directive requires both Group 1 and Group 2 companies to take appropriate measures to identify, and mitigate, actual and potential adverse human rights and environmental impacts arising from their own operations anywhere in the world (not just in the EU) and, where related to their value chains, from their “established business relationships”.

Colleagues from our offices throughout the world have prepared briefings which are specific to particular locations, giving insights into related matters in those jurisdictions.

Continue Reading Human Rights and the Environment – What non-EU-based companies need to know regarding the EU draft Corporate Sustainability Due Diligence Directive

­In a previous blog post, we noted that the International Sustainability Standards Board (ISSB) will shortly publish its proposed general sustainability-related and climate disclosure requirements.

On 31 March 2022, the ISSB published highly anticipated drafts of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (General Requirements Exposure Draft) and IFRS S2 Climate-related Disclosures (Climate Exposure Draft) for public consultation and comments. Each of the Exposure Drafts are accompanied by a ‘Basis for Conclusions’ and ‘Illustrative Guidance’ document. A high-level summary of the proposed requirements is available here.

Continue Reading International Sustainability Standards Board Begins Public Consultation on Draft Proposed Standards on General Sustainability-Related Financial and Climate-Related Disclosures

On 2 March 2022, 175 nations endorsed a historic resolution at the fifth session of the United Nations Environmental Assembly to develop a draft global agreement on plastic pollution by the end of 2024. Significantly, the resolution covers the full lifecycle of plastic including its production, design and disposal. Inger Andersen, Executor Director of the

In December 2021, the Hong Kong Monetary Authority (HKMA) issued the results of its pilot climate risk stress test (CRST).  The CRST assesses the potential impact of climate change on the Hong Kong banking sector.  It marks the latest such publication by a regulator on the topic, with French regulator, Autorité de contrôle prudentiel et de résolution (ACPR), having published the results of its climate risk stress test in Q2 2021 and a number of other countries’ regulators undertaking similar analyses during 2022.

The CRST indicates that the Hong Kong banking sector should remain resilient to climate-related shocks given the Banks’ strong capital buffers. However, it was noted that simplified assumptions and use of historical data in modelling could mean the potential impact could be more serious than predicted.

The exercise identified various climate-related vulnerabilities for Banks to seek to address and highlighted gaps in terms of insufficient granular, reliable data, as well as a lack of widely-accepted standards for classifying and identifying climate risk exposures.  HKMA notes that addressing these issues will require concerted efforts of the industry.

In this Blog Post, we set out a high level summary of the CRST in terms of the scope of the CRST, pertinent findings and actions required to enhance climate risk management going forward.

Continue Reading HKMA Publishes Report On First Climate Risk Stress Test Of The Hong Kong Banking Sector