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

Given the ambitious targets for offshore wind in support of the UK’s net zero ambitions, it is recognised that the existing grid connection infrastructure may be inadequate and that it is likely that provision needs to be made for more co-ordinated grid connections that incorporate the additional capability required to connect future offshore generation projects.

The risk of an accusation of “greenwashing” is now an important concern for many companies. Greenwashing is an ill-defined concept but, nevertheless, is increasingly a source of litigation and regulatory scrutiny – with more of both expected. It carries with it reputational, regulatory and litigation risks for which companies should be prepared. Whilst the risks are always context specific – varying by jurisdiction, industry

Climate-related litigation is increasingly being used as a tool to hold private and public sector actors to account over their contributions to climate change. According to the Grantham Institute’s 2023 Global Trends in Climate Change Litigation Policy Report (the “Report“) – which was published on 29 June 2023 – around two-thirds of climate-related cases have been filed since 2015: between 1986 and 2014, approximately 800 cases were filed, but between 2015 and May 2023, approximately 1,557 cases were filed.

Although the majority of the climate-related cases identified in the Report were brought against regional and national governments, the Report identified an increase in the number of climate-related cases brought against private sector actors. Of the 190 climate-related cases identified in the Report as being filed between June 2022 and May 2023, around 46% were filed against an increasingly diverse pool of private sector actors. This reflects the growing recognition by prospective litigants of litigation as an effective means of influencing the actions private sector actors are taking to address climate change. We discuss the trends identified in the Report in this blog post.Continue Reading Climate litigation – the Grantham Research Institute on Climate Change and the Environment publishes its 2023 global trends in climate litigation report

On 7 June 2023, the UK Advertising Standards Authority (“ASA“) – the UK’s independent advertising regulator – banned a series of advertisements from a number of large oil and gas companies for including misleading information about their socio-environmental credentials. These landmark rulings, which mark the latest step in the ASA’s fight against greenwashing, are expected to set a precedent for how companies advertise their socio-environmental credentials in the future. More broadly, the increased regulatory scrutiny will likely feed into the expected rise in ESG-related litigation.

This move from the ASA mirrors similar moves by regulators and law-makers both in the UK and in other jurisdictions. The UK Competition and Markets Authority (“CMA”) has, for example, commenced investigations into the accuracy of environmental claims made by businesses in the fast-moving consumer goods sector (for further information on the CMA’s investigation, read our earlier blog post here). The US Federal Trade Commission and the European Commission have also taken steps to tighten regulation addressing greenwashing in marketing materials (for further information on these initiatives, read our earlier blog posts here and here).Continue Reading Greenwashing: UK advertising watchdog bans greenwashing advertisements

On 24 May 2023, Walk Free, an international human rights group focused on the eradication of modern slavery, published the fifth edition of its Global Slavery Index (the “Index”), which provides a national level analysis of modern slavery across 160 countries.

Modern slavery is a growing global problem against a backdrop of compounding risks.  According to the Index, some 50 million people around the world are living in modern slavery, with a reported 28 million in forced labour, 22 million in forced marriage and 12 million in child labour.  Moreover, the Index estimates that around US$ 468 billion of goods imported by the G20 are at risk of being tainted by modern slavery. This includes products related to: cattle, coal, cocoa, coffee, electronics, fish, garments, gold, palm oil, rice, solar panels, sugar cane, textiles and timber.

The Index includes a heatmap that illustrates where modern slavery risks are more acute.  In practice, this may prove to be a helpful tool for companies seeking to identify and assess human rights (and, in particular, modern slavery risks) in global supply chains in order to respond to: emerging mandatory human rights due diligence (“HRDD“) laws; obligations under established international norms (such as the UN Guiding Principles); and increasing stakeholder expectations.Continue Reading Business and Human Rights – Global Slavery Index 2023 highlights global nature and scope of modern slavery risks in supply chains

At the Spring 2023 National Meeting of the US National Association of Insurance Commissioners (“NAIC”), a number of sessions were held focused on environmental, social and governance (“ESG”) initiatives, led by the Special (EX) Committee on Race and Insurance (the “R&I Committee”) and the Climate and Resiliency (EX) Task Force (“C&R Task Force”), both of

Companies must recognise that they are subject to increased expectations in terms of effective identification and management of social issues. A failure to do so – and the resulting inequality – is increasingly seen as representing a systemic risk to the resilience of business operations and value chains. Expectations are reinforced by the wave of new due diligence regulations and reporting standards focussed on addressing both the ‘E’ and ‘S’ in ESG (see, for example, our earlier blog posts on the EU’s Corporate Sustainability Reporting Directive here, as well as on the UK Financial Conduct Authority’s Greenwashing rules here).

CFOs have a critical role in communicating how companies are addressing wider social issues linked to their business operations and ensuring companies’ compliance with related regulations and reporting standards. To help CFOs execute this role effectively, the World Business Council for Sustainable Development (the “WBCSD“) and Shift have released a primer for CFOs for advancing the ‘S’ in ESG (the “Report“). The Report aims to provide a starting point for CFOs working to address the demands and challenges associated with the ‘S’ in ESG, covering both an overview of the what, the who and the how of corporate social performance and key recommendations for improving the measurement of that performance.Continue Reading Business and Human Rights – a “primer” for CFOs for advancing the ‘S’ in ESG

Mining companies are closely linked to the energy transition, both as businesses for which new requirements apply and as suppliers of critical minerals used to produce electric vehicles batteries, solar panels and wind turbines, among other products. In this Legal Update, we discuss emerging climate change-related guidelines and requirements, give examples of how mining companies

In what marks its latest move to tackle modern slavery, on 10 February 2023, the UK Government published its new guide for commercial and procurement professionals, entitled “Tackling Modern Slavery in Government Supply Chains” (the “Guidance”). The Guidance is aimed at helping procurement and commercial practitioners at all levels who are operating in government comply with their statutory obligations in respect of modern slavery. It builds on the UK Government’s “Slavery and human trafficking in supply chains: guidance for businesses” and its modern slavery statement Progress Report.Continue Reading Business and Human Rights – the UK Government publishes new guidance on tackling modern slavery in Government Supply Chains