On 20 December 2023, the Council of the EU reached an agreement on its negotiating mandate on a proposal for a regulation on ESG ratings  (the “Proposed EU Regulation“). This builds on the European Commission’s proposal, which was published on 13 June 2023.

The EU’s desire to regulate ESG rating agencies is a response to increasing concerns from a variety of stakeholders about the reliability, comparability and transparency of ESG ratings and the data behind these ratings.Continue Reading Council of the EU agrees on proposal to regulate ESG ratings providers

On 7 December 2023, the Commission tabled three legislative proposals (the “Proposal(s)”) to implement the “One-substance-one-assessment” (“OSOA”) announced in the European Green Deal and the Chemicals Strategy for Sustainability (“CSS”).

At present, different harmonised agencies may carry out the safety assessments of the same chemicals under different pieces of harmonized legislation, at different times and often using different data. This, according to the Commission, creates inefficiencies and may result in inconsistent and less predictable regulatory outcomes.Continue Reading Initial reflections on the recent ‘one substance, one assessment’ EU proposals

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

What is a taxonomy anyway?

The EU’s “Taxonomy” is a classification framework that determines whether an economic activity is environmentally sustainable.  

Under EU legislation, “large” EU companies will soon need to report on their taxonomy “alignment” as part of their mandatory sustainability disclosures.  This means, at risk of oversimplifying, reporting on the extent to which

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 31 July 2023, the European Commission adopted the European Sustainability Reporting Standards (“ESRS“). EU and non-EU entities subject to the new EU Corporate Sustainability Reporting Directive (“CSRD“) will be required to report against the ESRS, making the development of interest to entities preparing for reporting under the CSRD regime.Continue Reading European Commission adopts the European Sustainability Reporting Standards

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

On June 14, 2023, the European Commission proposed negotiating directives for a critical minerals agreement with the United States, intending to promote a partnership between the US and the European Union as allies in the global race to net zero and to strengthen their respective critical mineral supply chains. Back in early March, US President