On 5 February 2024, the Council of the EU and the European Parliament reached a provisional agreement for a regulation on ESG rating activities (the “Proposed EU Regulation“). The Proposed EU Regulation differs in certain respects from the version that was agreed upon by the Council of the EU in December 2023.

The Proposed EU Regulation has not substantively changed from the version that we commented on in December 2023 (for further detail on this, read our earlier blog post here). The latest version does, however, provide further detail on the scope of the Proposed EU Regulation, as well as on the applicable exclusions.

The Proposed EU Regulation needs to be approved by the Council of the EU and the European Parliament before going through the EU’s formal adoption procedure. The final regulation will start applying 18 months after its entry into force.

ilibrary-collection-cop28

Our mini Q&A series followed COP28, providing you with a quick and easy way to see how the discussions evolved. Our coverage highlighted significant and recent developments from a legal perspective, allowing you to assess the impact of these on your business. 

View the mini Q&A series at Mayerbrown.com.

Energy innovation light bulb graphic interface.

Recognising the threat of climate change and the importance of sustainable development, Singapore has made a commitment to establishing a robust framework of environmental and climate change laws and regulations – an unprecedented initiative in the Southeast Asia region.

Singapore launched its key environmental strategy in 2021 with the Singapore Green Plan 2030, a comprehensive roadmap laying out the Lion City’s sustainability vision for the next decade.

This Legal Update presents a brief overview of: (i) main targets and goals under the Singapore Green Plan 2030, (ii) key regulations and initiatives implemented, or to be implemented, in an effort to attain such targets and goals, and (iii) recent carbon market developments in Singapore. 

Continue reading at Mayerbrown.com.

Products

On December 21, 2023, the New York Department of Financial Services (“NYDFS”) finalized guidance on how the banks and mortgage institutions it regulates (“New York Institutions”) should manage climate-related financial and operational risks (the “Guidance”). The Guidance establishes extensive obligations for New York Institutions, which—even if tailored by the state to be proportionate to size and activities—may create a significant burden. This is particularly true for mortgage bankers and mortgage servicers, which, historically, have not been subject to the same prudential standards and risk management expectations as banks.

While the Guidance largely tracks the December 2022 proposed guidance, it includes some significant changes, particularly with respect to operational resilience and the roles of the governing body or board of directors and management.

The Guidance became effective upon issuance, although NYDFS has not established a timeline for implementation at this time. In this Legal Update, we provide background on the NYDFS’s climate risk management initiative and discuss the Guidance.

Continue reading at Mayerbrown.com.

On 20 December 2023, the Council of the EU reached an agreement on its negotiating mandate on a proposal for a regulation on ESG ratings  (the “Proposed EU Regulation“). This builds on the European Commission’s proposal, which was published on 13 June 2023.

The EU’s desire to regulate ESG rating agencies is a response to increasing concerns from a variety of stakeholders about the reliability, comparability and transparency of ESG ratings and the data behind these ratings.

Continue Reading Council of the EU agrees on proposal to regulate ESG ratings providers
Brazil - Rio de Janeiro

On December 14, the National Congress of Brazil overrode most of the presidential vetoes to Federal Law No. 14.701/2023 (the “Time Limit Act”), which regulates Article 231 of the Constitution to set guidelines for the recognition, demarcation, use and management of Indigenous lands. The Time Limit Act was initially published on October 20, 2023, but most of its articles had been vetoed by President Luiz Inácio Lula da Silva

Continue reading at Mayerbrown.com.

Energy innovation light bulb graphic interface.

On 7 December 2023, the Commission tabled three legislative proposals (the “Proposal(s)”) to implement the “One-substance-one-assessment” (“OSOA”) announced in the European Green Deal and the Chemicals Strategy for Sustainability (“CSS”).

At present, different harmonised agencies may carry out the safety assessments of the same chemicals under different pieces of harmonized legislation, at different times and often using different data. This, according to the Commission, creates inefficiencies and may result in inconsistent and less predictable regulatory outcomes.

Continue Reading Initial reflections on the recent ‘one substance, one assessment’ EU proposals
Sunrise on a lake

Following COP28 in Dubai, where our partner Luiz Gustavo Bezerra was present and participated in various discussions related to the transition to a low-carbon economy and the role of economic instruments and carbon markets, among several other topics, the implementation of initiatives that financially value the adoption of environmentally desirable practices by individuals and institutions is appropriate and urgent, in addition to command and control mechanisms that are limited to penalizing environmentally undesirable practices.

Payment for Environmental Services (PES) and the Reduction of Emissions from Deforestation and Forest Degradation (REDD+) are economic instruments that aim to compensate actions committed to the protection, recovery, or improvement of the environment, and play an important role in combating climate change.

To explain these topics, their main concepts, instruments and opportunities, in accordance with Brazilian federal and state legislation, our Environmental and Climate Change Practice prepared an e-book.

Learn more here.

Big Offshore wind-farm with transfer vessel

California recently enacted two laws—the Offshore Wind Expediting Act (SB 286) and the California Offshore Wind Advancement Act (AB 3)—to accelerate the development of offshore wind energy that could have significant implications for the industry and its stakeholders. The new laws aim to streamline the offshore wind permitting process, promote collaboration among state agencies and interested parties, and support the development of a seaport readiness strategy and in-state manufacturing goals.

This Legal Update summarizes some of the key provisions of the new laws and practical takeaways for investors and other stakeholders interested in pursuing offshore wind opportunities in California.

Continue reading at Mayerbrown.com.

Governance

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