On March 25, 2021, the New York Department of Financial Services (NYDFS) issued for public comment “Proposed Guidance for New York Domestic Insurers on Managing the Financial Risks of Climate Change” (Guidance). Comments must be submitted by 11:59 p.m. EDT on Wednesday, June 23, 2021, and must be made
On March 10, 2021, the US Department of Labor (DOL) released a policy statement that it will not enforce or otherwise pursue enforcement actions against a fiduciary for failing to comply with the “Financial Factors in Selecting Plan Investments” regulation published on November 13, 2020 (the “ESG Rule“), and the “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” regulation, published on December 16, 2020 (the “Proxy Voting Rule“). Both regulations were promulgated by the DOL shortly before the Biden administration took office. In the recent policy statement, the DOL stated that certain stakeholders, including asset managers, plan sponsors and consumer groups have expressed concern over whether these rules accurately reflect a fiduciary’s duties under ERISA and appropriately consider the utility of ESG factors in making investment decisions. As a result, the DOL intends to “revisit” each of these rules.
Continue Reading The US Department of Labor’s Non-Enforcement Policy on Recent ESG and Proxy Voting Rules
Offshore wind (OSW) project development in the United States continues its rapid pace. In addition to the significant “E” factors already present in such projects, several recent OSW solicitations undertaken and executive orders released during the COVID-19 pandemic have included specific “S” factors.
In our Legal Update, we provide further detail on OSW…
In another step toward the integration of climate factors into the US corporate disclosure landscape, Acting Chair of the US Securities and Exchange Commission (SEC), Allison Herren Lee, issued a request for public input on climate change disclosures on March 15, 2021.
The request seeks input relating to 15 climate-related disclosure topics, including:…
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.
With the surge of climate and stakeholder litigation all over the globe–comprising climate, supply chain and human rights issues–not only should governments be concerned, but mainly the private sector. It is not new that, in addition to creating stakeholder engagement and pushing forward public policies, ESG concerns pose significant reputational and financial risks, particularly to corporations. This is not only true for those companies dedicated to carbon-intensive activities or exposed to supply chain liabilities, but also to financial institutions enabling the development and expansion of such activities.
This is a particularly relevant matter in Brazil, which already relies on a well-established legal and case law framework capable of supporting sanctions and prosecution against corporations and financial institutions deemed liable in connection with environmental degradation.
In this Blog Post, we discuss the existing legal framework in Brazil with respect to environmental degradation, and how that framework might apply to the broader range of ESG issues, from climate to supply chain and human rights liability.
On December 7, 2020, the Brazilian Securities and Exchange Commission (CVM) launched a consultation on proposed amendments to Normative Ruling 480/2009 aimed at, inter alia, increasing transparency by improving the quality of information disclosed by publicly-held companies on ESG aspects.
Following the global trend of enhancing and simplifying disclosures—similar to what the US Securities Exchange Commission (SEC) has recently done with Regulation S-K—CVM’s main goal is to reduce compliance costs while also responding to investors’ increasing demand for better ESG data. In this Blog Post, we highlight the main ESG-related amendments proposed by CVM in this new consultation paper.
On February 9, 2021, the US National Association of Insurance Commissioners (NAIC) announced its strategic priorities for 2021, and these included Climate Risk and Resiliency. The NAIC is a US standard-setting and regulatory support organization created and governed by the chief insurance regulators from all 50 US states, the District of Columbia and…
On January 27, 2021, President Biden signed Executive Order 14008, Tackling the Climate Crisis at Home and Abroad (the “Order”). The Order sets forth the Biden administration’s policies to address climate change through both foreign and domestic policies and demonstrates the administration’s intent to make addressing climate change a top priority for nearly…