At the end of 2020, the International Swaps and Derivatives Association (ISDA) surveyed its membership to identify its priorities for the growth of derivatives-related ESG issues. The membership answered that it expected growth in ESG derivatives and communicated a strong desire for documentation standardization.

On February 17, 2021, the US Climate Finance Working

The past few weeks have seen a flurry of ESG-related announcements coming from the US Securities and Exchange Commission (SEC) Acting Chair and staff. The most recent press release announced that the SEC has created a Climate and ESG Task Force in the Division of Enforcement:

[T]he Climate and ESG Task Force will develop initiatives to proactively identify ESG-related misconduct.  The task force will also coordinate the effective use of Division resources, including through the use of sophisticated data analysis to mine and assess information across registrants, to identify potential violations.
The initial focus will be to identify any material gaps or misstatements in issuers’ disclosure of climate risks under existing rules.  The task force will also analyze disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies.

SEC registrants may be wondering if these announcements change their legal obligations and what actions they should take in response in order to ensure compliance. We discuss the implications for registrants in this Blog Post.


Continue Reading US SEC Announces the Creation of a Climate and ESG Task Force

Two recent developments indicate the priority importance of, and increasing attention to, ESG data and technology:

  • MSCI (a provider of decision support tools and services for the global investment community) recently listed “The ESG Data Deluge” as one of its five ESG Trends for 2021. MSCI recognizes that the voluntary disclosure of ESG data by companies is increasing at a time when mandatory disclosure regulations are taking shape around the world, creating the “perfect storm” for a flood of company-related ESG data.
  • Meanwhile, ESMA (the EU securities regulator) recently called for the supervision and regulation of the ESG ratings and assessment industry, which relies on a range of ESG inputs, including company disclosures, to rate and analyze the sustainability performance of companies. These ratings and analyses are in turn used by a range of market participants as ESG data inputs for a variety of purposes.

As a flood of ESG data converges with a call for increased regulation by a critical securities regulator, data issues are likely to stay at the forefront of the ESG discussion for the foreseeable future. In this Blog Post, we highlight the significant commercial interest in ESG data and tech, as well as how some deficiencies in ESG data have led to increased regulatory attention.


Continue Reading The Future of Data and Tech in the ESG Era

On February 10, 2021, the primary global loan market trade associations—the Loan Syndication and Trading Association (LSTA), the Loan Market Association and the Asia Pacific Loan Market Association—released updated Green Loan Principles (GLP) and related Guidance.

The changes include a requirement that borrowers identify and manage potentially material social risks

The final rules governing China’s national emissions trading scheme (China ETS) took effect on February 1, 2021. In a recent Legal Update, we provide a reference point for international investors interested in participating in the China ETS by summarizing the final rules and comparing the China ETS with a scheme that may