As we alluded to in our pre-COP video (which you can watch here), the first Global Stocktake under the Paris Agreement will be concluded at COP28.  Although it is an important milestone in terms of establishing a comprehensive picture of what has been achieved since the Paris Agreement was entered into and what remains to be done, discussions appear to be fraught.  Clearly, an exercise of this kind allows for the re-opening of old wounds around substantive matters such as how to share responsibility for mitigation efforts.  On this theme, at the opening ceremony, UNFCCC Executive Secretary, Simon Stiell, urged participants to signal the decline of the fossil fuel industry.  Current expectations are that decisions in this regard will be in the context of the Global Stocktake. Continue Reading COP28 Insights Mini-Series – Part 2

On 28 November 2023, the UK’s Financial Conduct Authority (“FCA“) published its “Sustainability Disclosure Requirements (“SDR“) and investment labels” policy statement (PS23/16) (the “Policy Statement“). The Policy Statement introduces a set of new rules aimed at tackling greenwashing, including investment product sustainability labels and restrictions on how terms

Plastic pollution is a global environmental problem. To combat this issue, the United Nations Environment Assembly passed a resolution in March 2022 to develop a draft global agreement on plastic pollution by the end of 2024 (reported here). The third session of the Intergovernmental Negotiating Committee recently concluded in Nairobi, Kenya with the next session scheduled in April 2024 in Ottawa, Canada. Further, in April 2023, the international non-profit organisation, CDP, added plastic-related impacts to its global disclosure platform for companies and governments (reported here).

In Hong Kong, waste plastics continue to make up around 20% of municipal household solid waste disposal. To address growing concerns over the harmful effects of plastic waste on the environment and public health, the Hong Kong government recently passed the Product Eco-responsibility (Amendment) Bill 2023 (the “Bill“) to introduce regulations on disposable plastic tableware and other common plastic products, some of which will be banned from sale or free distribution in the coming year. Consequently, businesses in the food and beverage and hospitality industries will have to adapt their business operations. Hong Kong residents and visitors must also modify their consumption habits accordingly.Continue Reading Hong Kong Promotes Product Eco-Responsibility: New Regulations on Disposable Plastic Products

Brazil’s draft Sustainable Taxonomy Action Plan (the Action Plan), prepared by the Ministry of Finance, is currently under public consultation and receiving contributions and comments for its improvement. The deadline for taking part in the public consultation is October 20, 2023.

The development of a sustainable taxonomy seeks to address Brazil’s main environmental and social

UK Prime Minister, Rishi Sunak, has announced a major U-turn on the UK’s “net zero” policies.  This amounts to 3 key policy changes:

  • Electric vehicles – 3 years after announcing a ban on the sale of new petrol and diesel vehicles from 2030, the ban has been delayed to 2035;
  • New exceptions to ban on sale of new domestic gas boilers from 2035 – although the ban on the sale of new gas boilers from 2035 remains, new exceptions will be introduced to help poorer households, although the details are to follow.  The sale of oil, LPG and coal boilers for off-grid homes is to be delayed to 2035;
  • Tougher EPC requirements to be scrapped – from 2025, no residential property was to be let unless it achieved a “C” rating for energy efficiency.  This has been scrapped.  Mr Sunak said that this could have led to a requirement to invest around £8,000 per property.  No announcements were made regarding commercial properties.

The changes have met with a mixed response, with some commentators highly critical of Mr Sunak’s U-turn, warning that introducing uncertainty could severely undermine investor confidence in the UK.Continue Reading UK rolls back “net zero” ambitions, carbon offsets face renewed attack and the spotlight falls (again) on policing carbon markets

On 12 September 2023, Brazil´s Attorney General Office, representing the Brazilian Federal Environmental Agency, filed a climate litigation lawsuit against a livestock farmer, seeking compensation for the deforestation of the Amazon Forest between 2003 and 2016.

This blog post provides a brief overview on this new lawsuit, which further strengthens a new trend for climate litigation in Brazil.Continue Reading New lawsuit filed by Brazil’s Federal Government further strengthens climate litigation trends against private entities in Brazil

Two new bills have been passed in California as part of a “Climate Accountability Package” that require U.S.-based companies “doing business”[1] in California to make disclosures about their emissions and climate-related financial risks. These are (a) the Climate Corporate Data Accountability Act (California Senate Bill 253 (SB-253)) and (b) the Climate-Related Financial Risk Act (California Senate Bill 261 (SB-261)). The laws remain subject to approval by the California Governor (who has until October 14, 2023, to sign or veto them).

To assist companies in preparing for these new climate-related disclosure requirements, we have provided a summary of some of the key requirements below.Continue Reading New “Climate Reporting” Laws in California – Emissions and Climate-Related Financial Risk Disclosure Required

Companies are increasingly recognising that climate risk poses “strategic and operational risk” that could severely impact business operations. On 3 August 2023, United Nations Global Compact released Just Transition in Supply Chains: A Business Brief (the “Brief”).  At the heart of the Brief is a call for businesses to embed the concept of ‘just transition’ into supply chain risk management, taking into account both the environmental and social impacts of their supply chains. There is real concern that as companies increase their climate mitigation and adaptation activities, such actions may have unintended consequences that negatively affect workers, small businesses and local communities that drive global supply chains. On the other hand, integrating climate and social risks into a business’ core business and risk management could be “mutually reinforcing” and could “deliver valuable co-benefits”.Continue Reading UN Global Compact Publishes Business Brief on Just Transition in Supply Chains

On 30 June 2023, the Working Group on Impact Investment (“Working Group”), which was established under the Expert Panel on Sustainable Finance of the Financial Services Agency of Japan (“FSA”), published a report (“Report”) (in English and Japanese) setting out domestic and international trends in impact investment and draft basic guidelines consisting of four key principles as discussed below (“Guidelines”).  The Report seeks to fill a gap in the lack of standards regulating “impact investment”, one of several sustainable finance investment methods, and noted “impact investment” market practices are still developing. In contrast, other ESG investment methods such as “integration” and “positive or negative screening” appear to be more commonly used in the market.

The Guidelines seek to encourage dialogue and align understanding on basic concepts and processes for “impact investment” between investors, financial institutions and companies in Japan and globally, and develop knowledge and experience in this area. The Guidelines further aim to create an environment in which investors and financial institutions can invest more confidently without concerns of greenwashing, and to help companies in obtaining financing and support. Continue Reading Japan FSA Publishes Draft Guidelines on Impact Investment and Calls for Public Opinion