On 26 June 2023, the International Sustainability Standards Board (“ISSB”) issued its long-awaited inaugural global sustainability disclosure standards: IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) (together, the “Standards”). The ISSB also released a related Sustainability Standards Navigator tool and a three-minute video. The
On April 19, 2023, the influential CDP (formerly known as the Carbon Disclosure Project) announced that nearly 7,000 organizations worldwide can disclose their plastic-related impacts for the first time, as CDP’s global environmental disclosure platform opens for 2023 reporting. CDP is adding plastic-related reporting to its online platform in response to a request from more than
The Stock Exchange of Hong Kong Limited (HKEX) recently published a consultation paper proposing to mandate all listed companies in Hong Kong to provide climate-related disclosure in their Environmental, Social and Governance (ESG) reports. The proposal is formulated with reference to the Climate Standard exposure draft published by the International Sustainability Standards Board and will be introduced
The European Commission has finally published its eagerly awaited Proposal for a Directive on substantiation and communication of explicit environmental claims (‘the Green Claims Proposal’). As its name suggests, the Proposal was crafted with a view to putting an end to non-mandatory consumer-facing claims of environmental benefit that bear no relation to reality
On January 1, 2023, the European Commission’s Delegated Regulation (EU) 2022/1288 of April 6, 2022 (“Delegated Regulation“), which introduces “Level 2” of the Sustainable Finance Disclosure Regulation (“SFDR”), entered into force. Level 2 of the SFDR complements and clarifies Regulation (EU) 2019/2088 of the European Parliament and of the Council of
On February 17, 2023, the Securities Commission Malaysia (“SC”) published the revised Guidelines on Sustainable and Responsible Investment Funds (“Guidelines”) setting out the reporting and disclosure requirements for a fund to qualify as a Sustainable and Responsible Investment (“SRI”) Fund and, under a new chapter added to the Guidelines, an ASEAN Sustainable and Responsible Fund (“SRF”). The amendments revise the first version of the Guidelines issued in December 2017 and are effective on the date of issuance.
In what marks its latest move to tackle modern slavery, on 10 February 2023, the UK Government published its new guide for commercial and procurement professionals, entitled “Tackling Modern Slavery in Government Supply Chains” (the “Guidance”). The Guidance is aimed at helping procurement and commercial practitioners at all levels who are operating in government comply with their statutory obligations in respect of modern slavery. It builds on the UK Government’s “Slavery and human trafficking in supply chains: guidance for businesses” and its modern slavery statement Progress Report.
Regulators are increasingly mandating companies to make environmental disclosures (see here, here and here).
The CDP – a not-for-profit organisation aiming to encourage the disclosure of environmental risk – has measured and scored the effectiveness of companies’ 2022 environmental disclosures in their latest ‘A List’ Report (the “CDP Report”). The CDP Report shows that a mere 12 of the 18,700 companies that responded to the CDP’s questionnaires scored a ‘triple A’ for their environmental disclosures, whilst over 29,500 companies scored an ‘F’ after failing to provide any data to the CDP.
According to the CDP, over 680 investors with combined assets of US $130 trillion, and over 280 large purchasers with US $6.4 trillion in buying power requested over 48,000 companies to disclose environmental information through the CDP in 2022.
On December 23, 2022, the Federal Acquisition Regulatory Council (“FAR Council”) extended its 60-day comment period an additional 30 days from January 13 to February 13, 2023, for its proposed rule on Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk. (We previously provided an in-depth analysis on the proposed rule.)
For more information
On 23 November 2022, the European Financial Reporting Advisory Group (“EFRAG“) submitted the first set of draft EU Sustainability Reporting Standards (“ESRS“) to the European Commission.
As discussed in our previous blog post (which you can read here), the draft ESRS – which in-scope entities will be required to report against under the Corporate Sustainability Reporting Directive (“CSRD“) – were released on 29 April 2022 and made available for public consultation until 8 August 2022. Following the end of the public consultation, EFRAG amended the ESRS and approved updated versions on 16 November 2022. EFRAG subsequently submitted the updated draft ESRS to the European Commission.
The CSRD was adopted by the Council of the European Union on 28 November 2022, meaning the requirement to report against the ESRS will apply in stages from 2024, with first submissions due in 2025 (for more information on the CSRD, read our legal update here).