This article is the first in a series, which we introduced in a previous Blog Post, exploring the “jargon” of the EU Commission’s Chemicals Strategy for Sustainability (CSS), an ambitious political action plan for chemicals regulation in the EU that was released in October 2020.

As part of this political initiative toward a profound reshape of the existing chemicals regulatory framework, the concept of “safe and sustainable by design” is fairly innovative and could well become one of the pillars of chemicals regulation in the EU. In a nutshell, the Commission calls in its CSS for a “transition” to chemicals that are safe and sustainable by design in order to reconcile the societal value of chemicals with human health and planetary boundaries. The Commission presents the “sustainable-by-design” concept as a holistic approach to achieve these objectives: it seeks to integrate “safety, circularity, energy efficiency and functionality of chemicals, materials, products, and processes throughout their life cycle and minimiz[e] the environmental footprint”. It is aimed at constituting an overarching concept, i.e., a guiding principle in the regulation of the chemicals sector.

This ambitious goal will have important concrete consequences for the industry. At the same time the safe and sustainable by design approach is advocated by the EU executive as an opportunity for the European industry to act as frontrunner in a stammering race for the production and use of safe and sustainable chemicals.

Continue reading for more information on the current state of play regarding “safe and sustainable by design”, the development of this important concept and next steps for related regulatory and political action.


Continue Reading “Safe and Sustainable by Design”: The Inception of a Possible Game-Changer in the Regulation of Chemicals in the EU

On May 4, 2021, the Hong Kong Monetary Authority (HKMA) released the details of its Green and Sustainable Finance Grant Scheme (GSF Grant Scheme), which will consolidate Hong Kong’s existing Pilot Bond Grant Scheme and Green Bond Grant Scheme into one new program. According to the Chief Executive of the HKMA, Mr. Eddie Yue:

“The global green bond market has grown from practically non-existent ten years ago to US$270 billion in 2020.  In Hong Kong, we have taken early and proactive steps to strengthen Hong Kong’s position as a regional green and sustainable finance hub, including the issuance of two rounds of Government green bonds since 2019 and the establishment of the Green and Sustainable Finance Cross-Agency Steering Group to coordinate cross-agency market development efforts.  The launch of a new [GSF] Grant Scheme to support green and sustainable bond issuance and lending will further enrich the green and sustainable finance ecosystem in Hong Kong.”

Continue reading for more details on the GSF Grant Scheme.


Continue Reading Hong Kong’s New Green And Sustainable Finance Grant Scheme Begins May 10

As businesses emerge from COVID with a significant amount of corporate debt, the landscape in the financial markets has also evolved: The focus on ESG issues has intensified. We have seen institutional investors demand more in these areas, in terms of both disclosures and concrete targets, from banks and funds.

Meanwhile, emerging regulations and reforms

The EU Green Deal announces the circular economy goal, which can only be achieved with the full mobilization of society and industry through the implementation of an integral EU policy for sustainability. Products and services should progressively become more “sustainable”, “environmentally friendly” and “green” and, ultimately, more respectful to the environment and society.

In line with this new trend, more and more companies advertise their products using a wide variety of “sustainability” and “green claims” (we note that the two terms do not have the same meaning, but will not focus on this distinction in the present short overview). Consumers often report being lost when navigating among all these numerous ecological labels, sustainability certification schemes and various self-made claims. Inevitably, this difficulty has a negative impact on brand credibility, the level playing field among the operators on the market and the overall level of consumer trust.

In such context, the European Commission has announced that companies will soon have to substantiate any sustainability or green claims they use in line with new harmonized EU rules and, most likely, a standard EU methodology capable of assessing, in a uniform manner, the impacts of products and services on the environment. These rules may also be accompanied by specific EU measures against “greenwashing”, possibly including sanctions. The forthcoming legislation should ensure fair competition on the EU market and boost the consumers’ trust.

In this Blog Post, we discuss important considerations for any company advertising sustainability or green claims, as well as the coming EU regulation in this space.


Continue Reading Advertising “Sustainability” and “Green Claims” in Products and Services in the EU: Fancy Commercial Practice Can Be a Real Legal Challenge

On April 15, 2021, General Mills, a leading global food company, announced that it had closed the first-ever sustainability-linked loan (SLL) facility for a US consumer packaged goods company.

The $2.7 billion five-year multi-currency revolving credit facility (RCF) was arranged by Bank of America (which acts as administrative agent) and syndicated to a significant number of banks and other lenders.

The RCF was filed with the US Securities and Exchange Commission and includes a matrix that will adjust the applicable interest rate and fees under the RCF based on General Mills’ reductions in its greenhouse gas emissions in owned operations (i.e., only Scope 1 and 2 emissions) and its use of renewable electricity for global operations.


Continue Reading US Interest in Sustainability-Linked Loans on the Rise

On April 9, 2021, the Division of Examinations of the US Securities and Exchange Commission (SEC) issued a Risk Alert that highlighted its observations from its recent examinations of investment advisers, registered investment companies and private funds offering ESG products and services. The Risk Alert also provides observations of effective practices.

ESG investing

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