On June 2, 2022, the US Commodity Futures Trading Commission (“CFTC”) released a request for information on how climate-related financial risk is related to the derivatives markets and underlying commodities markets (the “RFI”). The RFI is intended to inform the CFTC’s next steps in this rapidly developing area and respond to the 2021 Report on Climate-Related
US SEC Proposes Rules Regarding ESG for Certain Funds and Advisers
At an open meeting on May 25, 2022, the US Securities and Exchange Commission (“SEC” or “Commission”) approved two new proposals regarding ESG that will impact the fund and investment management industry. One of the proposals is directed solely at registered funds and business development companies (BDCs), while the other applies to registered funds, BDCs…
Singapore Publishes Second Version of Green Taxonomy for Financial Institutions
On May 12, 2022, Singapore’s Green Finance Industry Taskforce (GFIT) published a second consultation paper on its proposed taxonomy for Singapore-based financial institutions (“Singapore Taxonomy”), which aims to provide a common framework for classification of economic activities upon which financial products and services can be built and combat greenwashing by setting…
Hong Kong SFC Finalizes Climate Risk Requirements for Fund Managers
On August 20, 2021, Hong Kong’s Securities and Futures Commission (SFC) published its conclusions (the “Consultation Conclusions“) from last year’s consultation (the “Consultation“) on proposed amendments to the Fund Manager Code of Conduct (FMCC) that will require fund managers to consider climate-related risks in their governance, investment and risk management processes. The Consultation Conclusions set out the SFC’s analysis of the responses to the Consultation, as well as the final amendments to the FMCC that will require fund managers to implement a range of climate-related practices as early as August 20, 2022.
In this Blog Post, we provide a high-level overview of the amendments to the FMCC and highlight key takeaways from the Consultation Conclusions as Hong Kong enters a new phase of sustainable fund management.…
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Voluntary Carbon Markets Integrity Initiative Consultation Report Released
The Voluntary Carbon Markets Integrity Initiative (VCMI), a global task force initiated to monitor the integrity of voluntary markets for the purchase and sale of carbon offset credits, held a global launch event and issued its consultation report (VCMI Report) in late July. The VCMI Report seeks to provide further guidance…
Hong Kong Proposes Climate Risk Management Guidelines for Banks
On 20 July 2021, the Hong Kong Monetary Authority (HKMA) issued draft guidelines (the Draft Guidelines) on the management of climate-related risks by authorised institutions (AIs). The Draft Guidelines further develop the HKMA’s approach to climate risk, initially outlined in its June 2020 White Paper on Green and Sustainable Banking, and incorporate leading international standards and practices to provide comprehensive climate risk management guidance for banks in the areas of governance, strategy, risk management and disclosure.
In this Blog Post, we highlight key aspects of the Draft Guidelines and takeaways for AIs considering how to approach these new proposals in Hong Kong. For more information about evolving regulatory approaches to climate disclosure and risk management around the world, please see our comprehensive analysis, Climate Disclosure and Risk Management: Global Approaches.…
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UK Pensions Law: Podcast on Climate Risk Reporting Requirements II
On 8 April 2021, we discussed in our blog post the UK government’s consultation on the draft climate risk regulations under the Pension Schemes Act 2021. The government has recently published a response to the draft regulations, the finalised regulations and the accompanying statutory guidance. The new regulations will apply to trustees of larger…
China Publishes Environmental and Social Disclosure Rules for Listed Companies
In our blog post on 13 May 2021, we discussed the consultation papers published by the China Securities Regulatory Commission (“CSRC”) on proposed ESG-related amendments to the disclosure rules applicable to listed companies. On 28 June 2021, the CSRC published the final set of amendments (“Final Amendments”) to the disclosure rules applicable to annual reports and half-year reports, respectively, together with relevant explanations to the amendments (“Explanations”).
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EU Green Deal: EC Releases Roadmaps Toward an Ambitious Revision of REACH and CLP
The EU Green Deal announces a zero pollution ambition for a toxic-free environment that should be achieved, among other ways, through ambitious actions against the most hazardous chemicals and enhanced engagement in innovation for the development of safe and sustainable alternatives. One of the first deliverables of this far-reaching policy program is the Chemicals Strategy for Sustainability (CSS), which involves important revisions of the existing EU chemicals legislation including the Chemicals Control Regulation (REACH) and the Classification, Labelling and Packaging Regulation (CLP).
REACH and the CLP are the two main instruments and actual cornerstones of the EU chemicals legislation. They will be simultaneously reopened and revised between now and the end of 2022, with the affirmed objective to improve the protection of people and the environment in line with the Green Deal’s ambition. While the CSS announces this revision and the reinforcement of the existing provision, it provides little clarity as to the exact scope of the revision plan. It is thus rather unclear how important such revisions are intended to be.
On May 4, 2021, the European Commission published two important roadmaps that provide insights on the intentions of the EU executive on the framework for the revised REACH and CLP. The Commission elaborates on the legal and regulatory options that it can consider. Although targeted, the options envisaged by the Commission will certainly lead to significant revisions to the REACH and CLP, and in fact may in some instances constitute a real shift in paradigm.
Continue reading for additional background on the roadmaps and the implications for REACH and CLP in the future.…
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Brazil’s Central Bank Continues To Advance On Its ESG Agenda
On April 26, 2021, the Central Bank of Brazil (BCB) launched a new public consultation (No. 86/2021, the “Consultation”) on a proposed regulation for mandatory disclosure of social, environmental, and climate risks by financial institutions.
Climate-related risks must be disclosed in accordance with the TCFD Recommendations (“Recommendations”), including both…