On March 27, 2023, the ASEAN Taxonomy Board released Version 2 of the ASEAN Taxonomy for Sustainable Finance (the “ASEAN Taxonomy“). As we reported here, Version 1 of the ASEAN Taxonomy was first published in November 2021 and it was designed to promote the transition towards sustainable finance by the ASEAN member

On April 7, 2023, the Federal Reserve Bank of New York released two staff reports on climate-related risks for financial institutions. While the staff reports do not suggest or impose legal requirements, they provide financial institutions with insights on banking regulators’ positions on climate-related risk management requirements and current industry practices. In this Legal Update

In the Hong Kong government’s 2023-2024 budget, the Financial Secretary, the Hon Paul MP Chan, unveiled various measures to bolster Hong Kong’s economy following the Covid-19 epidemic, with a strong focus on promoting green and sustainable finance and technology and advancing the virtual assets sector (also reported here). 

The following initiatives were announced

On 28 February 2023, the Council of the European Union and the European Parliament reached a provisional agreement on the creation of the European Green Bond Standard (“EU GBS“).Continue Reading Alert – Council of the EU and European Parliament reach provisional agreement on European Green Bond Standard

A recent attention-grabbing report by the Guardian, Die Zeit and SourceMaterial claimed that “more than 90% of rainforest carbon offsets by biggest certifier are worthless“. This prompted a swift detailed rebuttal by Verra – the world’s largest certifier of offsets and the organization subject to the criticism – who argued that the Guardian’s

On 25 January 2023, the new CEO of the UK Competition and Markets Authority (“CMA”), Sarah Cardell, set out one way in which the CMA will seek to ensure that the UK’s transition to a net zero economy will not be held up by competition law concerns. Significantly, Sarah Cardell again emphasised that environmental sustainability is a strategic priority for the CMA. This is an invitation for businesses to start pushing harder on the CMA’s open door, for which Mayer Brown’s ESG team is on hand to help.Continue Reading Climate change: the CMA’s open door

On 26 January 2023, the UK’s Competition and Markets Authority (the “CMA“) announced that it intends to investigate the accuracy of environmental claims made by businesses in the fast-moving consumer goods (“FMCG”) sector. The CMA has stated that it will examine claims made both online and in-store about household products – such as food and drink, cleaning, homecare and self-care products – to determine whether they comply with UK consumer protection law.

The investigation of goods in the FMCG sector will expand the scope of the CMA’s ongoing anti-greenwashing work, which has the ultimate aim of ensuring products and services that claim to be ‘green’ or ‘eco-friendly’ are being marketed to consumers accurately.Continue Reading Greenwashing: UK competition watchdog to investigate the FMCG sector

On 31 January 2023, the UK Government published its Environmental Improvement Plan 2023 (the “EIP”), detailing how it plans to restore nature and improve environmental quality in the UK. In particular, the EIP proposes new commitments to upgrade wastewater treatment works, restore wildlife and promote nature-friendly farming practices. These new commitments underpin the ambitious international targets agreed at the UN Biodiversity Conference COP15 in December 2022, which the UK Government helped deliver (for further information about COP15, read our earlier blog post here).

The UK Prime Minister, Rishi Sunak, has said that the EIP “provides the blueprint for how we deliver our commitment to leave our environment in a better state than we found it, making sure we drive forward progress with renewed ambition and achieve our target of not just halting, but reversing the decline of nature“.Continue Reading UK Government publishes refreshed plans to improve environmental quality and reverse nature decline

FTSE Russell – a leading provider of benchmarks that are used extensively by investors across the globe – has removed 34 companies from the FTSE4 Good All-World benchmark (the “FTSE4Good Index”). The companies were removed for failing to meet climate performance standards imposed by the newly introduced ‘Climate Change Score’ system, which is based on parameters created by the Transition Pathway Initiative (“TPI”), an initiative backed by 132 investors with over US$50 trillion in assets under management.Continue Reading Climate performance – FTSE4Good Index looks to hold companies to higher environmental standards

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. Continue Reading Mandatory Disclosure: companies’ environmental disclosures analysed in the CDP’s 2022 ‘A List’ Report