On 14 December 2023, following several rounds of inter-institutional negotiations, the European Council of the European Union (Council) and the European Parliament (Parliament) announced that a political agreement had been reached on a Directive on Corporate Sustainability Due Diligence (CS3D).  The European Commission (Commission) had initially published its proposal for CS3D on 23 February 2022, with the Council and the Parliament issuing their own positions on the text on 30 November 2022 and 1 June 2023, respectively (see our previous blogs, here, here and here).

Inspired by the 2017 French law on Corporate Duty of Vigilance and the 2021 German Supply Chain Law (see our previous blog post), and in response to growing stakeholder expectations and demands in the EU and globally, CS3D sets out EU standards for human rights and environmental due diligence (HREDD), requiring in-scope companies to mitigate their negative impact on human rights and the environment with respect to their own operations, those of their subsidiaries and those carried out by their business partners. In so doing, CS3D seeks to provide legal certainty and a level playing field as regards corporate supply chain obligations.

Continue Reading Human Rights and the Environment – EU Institutions Reach Political Agreement On Corporate Sustainability Due Diligence Directive

Most UK climate litigation concerns challenges to the decisions of public authorities on projects with environmental effects or policies being adopted by Government that can have significant impacts on the environment.

A series of five recent decisions in the courts – all of which have rejected challenges based on climate grounds – show that the UK courts are extremely reluctant to call into question the decisions of national or local public authorities in the case of individual projects.  However, as we will see, there is room for challenges to be successful in limited circumstances which we consider below.

Continue Reading A Wrap-Up of Recent UK Climate Change Litigation

The Monetary Authority of Singapore (MAS) launched the Singapore-Asia Taxonomy for Sustainable Finance (the “Singapore-Asia Taxonomy”) at the COP28 climate conference on 3 December 2023. This development is noteworthy as the Singapore-Asia Taxonomy is the world’s first multi-sector transition taxonomy for defining green and transition activities across eight key sectors, namely: (1) energy; (2) industrial; (3) carbon capture and sequestration; (4) agriculture and forestry; (5) construction and real estate; (6) waste and circular economy; (7) information and communications technology; and (8) transportation. The Singapore-Asia Taxonomy uses the traffic lights system of “green” (environmentally sustainable), “amber” (transition) and “ineligible” to classify activities based on their contribution to the taxonomy’s environmental objectives, currently focused on climate change mitigation. We previously reported on the work leading up to the finalisation of the Singapore-Asia Taxonomy here and here.

Continue Reading Singapore Launches World’s First Multi-Sector Transition Taxonomy

On 28 November 2023, Baroness Young of Hornsey introduced the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill (the “Bill”) to the House of Lords.  If passed, the Bill would introduce mandatory human rights and environmental due diligence (“HREDD”) into UK law.

The description of “reasonable” HREDD set out in the Bill is consistent with the standards set out in the UN Guiding Principles and existing and draft legislation in other jurisdictions (including the EU Corporate Sustainability Due Diligence Directive, “CS3D”, as outlined in our previous blog here).  Companies with international footprints, including through their direct operations and supply chains, should already have in place a plan to implement enterprise HREDD processes that meet existing soft law standards and emerging hard law HREDD requirements.

While it is unclear whether the Bill would be supported by the UK Government, companies should already be taking steps to anticipate and prepare for HREDD.  The direction of travel is undoubtedly trending towards HREDD legislation and stakeholder expectations around how companies should respond continue to increase.  In particular, several jurisdictions have already adopted laws that require companies to identify, address, prevent, mitigate and remedy harms in their operations and supply chains (e.g. France, Germany, Norway, Switzerland, the Netherlands) in advance of CS3D which will directly apply to many large non-EU based companies given its broad extraterritorial application, while others are considering such laws (e.g. CS3D) (e.g., see our previous blogs here and here).

Continue Reading Business and Human Rights – could the UK adopt mandatory human rights due diligence?

As we alluded to in our pre-COP video (which you can watch here), the first Global Stocktake under the Paris Agreement will be concluded at COP28.  Although it is an important milestone in terms of establishing a comprehensive picture of what has been achieved since the Paris Agreement was entered into and what remains to be done, discussions appear to be fraught.  Clearly, an exercise of this kind allows for the re-opening of old wounds around substantive matters such as how to share responsibility for mitigation efforts.  On this theme, at the opening ceremony, UNFCCC Executive Secretary, Simon Stiell, urged participants to signal the decline of the fossil fuel industry.  Current expectations are that decisions in this regard will be in the context of the Global Stocktake. 

Continue Reading COP28 Insights Mini-Series – Part 2

A new California ”anti-greenwashing” law comes into effect on January 1, 2024.  The law – called the Voluntary Carbon Market Disclosures Act (AB 1305) (VCMDA) – casts a wide net over companies participating in the California voluntary carbon market or that make certain “green” claims within California.  The VCMDA applies regardless of revenue thresholds if companies are deemed to “operate in” and “make claims within” California (with both of these terms already subject to some interpretive ambiguity).  The law also does not distinguish between public and private companies or US and non-US companies.  Our Legal Update tells you what you need to know about the reach and requirements of the new law.

Continue reading at Mayerbrown.com.

This mini Q&A series will follow COP28, providing you with a quick and easy way to stay informed as the discussion evolves. Our coverage will highlight significant and recent developments from a legal perspective, allowing you to assess the impact of these on your business. 

In this video, Tim Baines (Environmental partner, London, and founding member of Mayer Brown’s Global ESG Steering Group) sits down with Oliver Williams (Banking & Finance associate, London, and Editor of Mayer Brown’s Eye on ESG Blog) to discuss the operation and effectiveness of the Paris Agreement and key reasons why businesses should pay attention to the how COP28 unfolds in Dubai.

Watch on Mayerbrown.com.

On 28 November 2023, the UK’s Financial Conduct Authority (“FCA“) published its “Sustainability Disclosure Requirements (“SDR“) and investment labels” policy statement (PS23/16) (the “Policy Statement“). The Policy Statement introduces a set of new rules aimed at tackling greenwashing, including investment product sustainability labels and restrictions on how terms like “ESG”, “green” and “sustainable” can be used.

Continue reading at Mayerbrown.com.

The European Securities and Markets Authority (“ESMA“) has today published three useful explanatory notes covering key topics of the European sustainable finance framework, namely: a) the definition of “sustainable investments”; b) the application of do no significant harm (“DNSH“) principle; and c) the use of estimates.

The explanatory notes set out factual information regarding these concepts, with the aim of allowing stakeholders to navigate and better understand the EU’s sustainable finance legislative framework. These documents are described by ESMA as purely descriptive and not intended to replace relevant legal texts nor to provide guidance on the application of relevant provisions.

Nevertheless, they are a useful consolidated resource on these important and, at times, difficult topics and will be of particular value to those currently preparing for and applying these concepts in relation to the Taxonomy Regulation, Sustainable Finance Disclosure Regulation, Corporate Sustainability Reporting Directive and the Benchmark Regulation. For further information about these regulations, please read our earlier updates here, here, here and here.

The explanatory notes are available here:

Plastic pollution is a global environmental problem. To combat this issue, the United Nations Environment Assembly passed a resolution in March 2022 to develop a draft global agreement on plastic pollution by the end of 2024 (reported here). The third session of the Intergovernmental Negotiating Committee recently concluded in Nairobi, Kenya with the next session scheduled in April 2024 in Ottawa, Canada. Further, in April 2023, the international non-profit organisation, CDP, added plastic-related impacts to its global disclosure platform for companies and governments (reported here).

In Hong Kong, waste plastics continue to make up around 20% of municipal household solid waste disposal. To address growing concerns over the harmful effects of plastic waste on the environment and public health, the Hong Kong government recently passed the Product Eco-responsibility (Amendment) Bill 2023 (the “Bill“) to introduce regulations on disposable plastic tableware and other common plastic products, some of which will be banned from sale or free distribution in the coming year. Consequently, businesses in the food and beverage and hospitality industries will have to adapt their business operations. Hong Kong residents and visitors must also modify their consumption habits accordingly.

Continue Reading Hong Kong Promotes Product Eco-Responsibility: New Regulations on Disposable Plastic Products