Energy innovation light bulb graphic interface.

The inaugural International Sustainability Standards Board (“ISSB“) sustainability disclosure standards, namely IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) (the “ISSB Standards“), have received positive feedback from stakeholders across the globe since its issuance on 26 June 2023 (which we reported here). This includes endorsement by the International Organization of Securities Commissions (IOSCO) on 25 July 2023.

The long-awaited ISSB Standards are intended to serve as a global baseline for transparent, reliable and comparable corporate disclosure of climate and sustainability-related information, and will help to inform investment decisions. In this blog post, we summarise several Asian regulators’ responses to the ISSB Standards which have been positive.  

Continue Reading Asia Regulators’ Responses to the ISSB Disclosure Standards
Wind Turbines Farm

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 costs and investment required to support the later connection of future offshore development(s) is referred to as “Anticipatory Investment”. The UK’s Office of Gas and Electricity Markets (Ofgem) has recognised that careful consideration needs to be given to the management and allocation of risk in the context of Anticipatory Investment to ensure appropriate investment is forthcoming and to facilitate increased co-ordination of projects. In light of this, Ofgem is reviewing aspects of its Anticipatory Investment policy and has undertaken a consultation with respect to its approach to Early Stage Assessment.

Continue reading at Mayerbrown.com.

ESMALogo

On 11 July 2023, the European Securities and Markets Authority (ESMA) published a public statement on sustainability disclosure in prospectuses, available here: ESMA32-1399193447-441 Statement on sustainability disclosure in prospectuses (europa.eu).

The statement is addressed to the National Competent Authorities (NCAs) to promote coordinated action regarding sustainability-related disclosure included in prospectuses under current legislation. While the statement is addressed to NCAs, ESMA have said that its contents should be taken into account by issuers and advisers when drawing up a Prospectus Regulation (PR) compliant prospectus that contains sustainability-related disclosure.

Whilst there is little in the way of deviation from best practice here, the statement reflects the enhanced focus of ESMA and NCAs on ESG disclosure and is likely to result in additional commentary from NCAs during the prospectus approval process.

A summary of some of the key takeaways is included below.

Continue Reading ESMA release Public Statement on Sustainability Disclosures in Prospectuses
Greenwashing_-_Main

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 and product – there are common themes. Here, we take an in-depth look at those themes and make suggestions for how organisations can think about mitigating greenwashing risk.

Continue reading at Mayerbrown.com.

Governance

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
MicrosoftTeams-image (2)

Businesses, especially micro, small and medium-sized enterprises (MSMEs), continue to face practical challenges in ESG reporting due to costs, the lack of resources and expertise on sustainability reporting, and the complexities around multiple standards and reporting frameworks in use globally.

On 22 June 2023, the Monetary Authority of Singapore (MAS), United Nations Development Programme (UNDP) and the Global Legal Entity Identifier Foundation (GLEIF) announced an initiative to develop digital ESG credentials for MSMEs worldwide to facilitate ESG reporting for this sector. The initiative, named Project Savannah, will produce a multi-jurisdictional proof of concept targeted for launch at the upcoming COP28.

Continue Reading Digital ESG credentials for micro, small and medium-sized enterprises globally – from Singapore to the world
ifrs-sustainability-menu-image

On 26 June 2023, the International Sustainability Standards Board (“ISSB”) issued its long-awaited inaugural global sustainability disclosure standards: IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) (together, the “Standards”). The ISSB also released a related Sustainability Standards Navigator tool and a three-minute video. The ISSB’s aim is for the Standards to be the global baseline of all sustainability-related disclosures. In this Legal Update, we examine the disclosures required by the Standards and discuss what the passage of the voluntary measures could mean for entities across the globe.

Continue reading at Mayerbrown.com.

A bird

A new requirement for most developments to achieve a minimum level of “biodiversity net gain” will come into force in November this year.  For some this will be an additional burden when preparing planning applications, but others will see it as an opportunity to create value through enhancing biodiversity whilst burnishing their “green” credentials.

Continue reading at Mayerbrown.com.

MOSS and glass globes

On June 22, 2023, the International Capital Markets Association (ICMA) issued its first update of its Climate Transition Finance Handbook (CTFH) since its original publication in December 20201 and an updated version of its Sustainability-Linked Bond Principles (SLBPs).

In its related press release, ICMA states that the updated CTFH:

[I]ntegrates the progress made by the market and the official sector on climate transition guidance and disclosures. The document includes dedicated recommendations for climate-themed green, sustainability and sustainability-linked bonds and acknowledges the development of “climate transition” bonds in certain jurisdictions. It includes new annexes with illustrative disclosures, infographics and a list of wider market and official sector guidance for climate-themed bonds.

ICMA’s Green, Social, Sustainability and Sustainability-Linked Bond Principles (Principles) were also concurrently supplemented by further guidance, specifically:

ICMA also noted that these updates to the Principles will be discussed at the 2023 Annual Conference of Principles to be held in hybrid format in Singapore on Wednesday, 28 June, with the Monetary Authority of Singapore as the supporting partner. The conference agenda features a discussion on the key updates of the 2023 guidance from the Principles and incorporates the Asia Pacific perspective. The annual conference will also cover the critical topics currently being debated in sustainable finance including regulation, market integrity and climate transition finance.

1Described in our related December 10, 2020, Legal Update “ICMA Issues Climate Transition Finance Handbook and FAQs.”

1845_HLGAvocats

On June 14, 2023, the European Commission proposed negotiating directives for a critical minerals agreement with the United States, intending to promote a partnership between the US and the European Union as allies in the global race to net zero and to strengthen their respective critical mineral supply chains. Back in early March, US President Biden met with European Commission President Ursula von der Leyen, and they issued a joint statement announcing that they would commence discussions about an EU-US Critical Minerals Agreement.

Continue reading at Mayerbrown.com.