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On November 10, 2021, the Association of Southeast Asian Nations (ASEAN) released Version 1 of the ASEAN Taxonomy for Sustainable Finance (the “ASEAN Taxonomy“). First announced in March 2021, the ASEAN Taxonomy will provide a common language for sustainable finance among the ten ASEAN Member States (AMS) that, together, comprise the fifth largest economy in the world. This is a necessary and timely development as ASEAN remains highly vulnerable to climate change, which has had a significant impact on the people, businesses and governments of ASEAN.

Version 1 is a significant step in ASEAN’s sustainability journey, as this initial document will provide the framework for continuing discussions among AMS as the ASEAN Taxonomy develops. In this Blog Post, we highlight key aspects of Version 1 of the ASEAN Taxonomy and compare this new framework against the world’s most prominent sustainability taxonomy, the EU’s Taxonomy Regulation (the “EU Taxonomy“).Continue Reading ASEAN Releases Sustainability Taxonomy for Southeast Asia

Wind farm and nuclear power plant

This blog was first published by Law.com

As usual, things ran over, but eventually the parties meeting under the United Nations Framework Convention on Climate Change and, separately but together (kind of), under the Paris Agreement, adopted two “Decisions” by consensus, being CP.26 and CMA.3 respectively.

Continue reading at Law.com.

Products

Climate change could have serious impacts on the mortgage industry, and stakeholders should take action now. That is the recent urgent message from federal regulators and mortgage industry stakeholders.

Recent reports and initiatives from the Mortgage Bankers Association’s Research Institute for Housing America, the White House, the Departments of Housing and Urban Development, Veterans Affairs…

United States - Washington DC

Timed to coincide with the opening of COP26—the UN Climate Change Conference—and citing his prior commitment to cutting greenhouse gas (GHG) emissions by 50-52 percent by 20301 and achieving a net-zero economy by 2050, on November 1, 2021, President Biden announced the launch of the President’s Emergency Plan for Adaptation and Resilience…

MOSS and glass globes

As widely heralded, yesterday marked the start of COP 26, the latest in a seemingly endless succession of climate negations.

Let’s look back to COP 15 (2009), the first COP I attended.  Back then, hundreds of pages of negotiating text (littered with square brackets illustrating undecided points and concepts) went into one end of the process.  Negotiations were on a dual track, with one stream attempting to agree a second Kyoto Protocol commitment period, and another trying to agree a broader way forward which would apply to global emissions.  Targets under the Kyoto Protocol covered around 25% of global emissions and did not constrain those of, for example, China and India.  The US had walked away from the Protocol soon after it was agreed.Continue Reading The View From COP26

Environmental

On October 21, 2021, the United States Financial Stability Oversight Council (FSOC) released its 133-page report on Climate-Related Financial Risk (Report) and related Factsheet. The Report discusses how climate-related financial risks can implicate financial stability and declares climate-related finance risk as an emerging threat to financial stability. In a new…

United Kingdom - London

In a significant development in the UK government’s drive towards “greening” the financial system, as part of the transition to a net zero carbon economy, HM Treasury published, on 18 October 2021, a policy paper entitled “Greening Finance: A Roadmap to Sustainable Investing” (the “Roadmap“).  The Government’s Green Finance Strategy envisages three phases:

  1. Informing investors and consumers: Ensuring that decision-useful information on sustainability is available to financial decision-makers;
  2. Acting on the information: Mainstreaming sustainability considerations into business and financial decisions; and
  3. Shifting financial flows: Shifting capital to align with a net zero and nature positive economy.

The Roadmap focusses on delivering the first phase through the introduction of economy-wide Sustainable Disclosure Requirements (SDRs).  The SDRs aim to bring together existing and new sustainability disclosure requirements under one integrated framework for corporates, asset managers and asset owners, and creators of investment products.

But what obligations will these organisations be subject to under the new SDRs, and how can they best prepare themselves to comply with such obligations?Continue Reading HM Treasury Publishes Its UK Sustainable Finance Roadmap

United States - Washington DC

On October 14, 2021, the U.S. Department of Labor (the “DOL”) published a proposed regulation entitled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” (the “Proposed Rule”).  The Proposed Rule is the latest in a series of DOL guidance and regulations regarding a plan fiduciary’s consideration of environmental, social and governance (“ESG”) factors when making investment decisions for ERISA plans and the exercise of shareholder rights by such plans. The Proposed Rule follows prior regulations issued by the DOL under President Trump in 2020 regarding both ESG (the “2020 ESG Rule”) and proxy voting (the “2020 Proxy Rule,” together with the 2020 ESG Rule, the “2020 Rules”). The 2020 Rules themselves followed a series of sub-regulatory guidance by the DOL, which issued guidance on these topics under each of the Clinton[1], Bush[2], Obama[3] and Trump[4] administrations. While the bedrock principals under the guidance largely remained unchanged, the gloss and tenor of the guidance has shifted, depending upon the political views of the White House’s then-current occupant.
Continue Reading US Regulator Shifts Toward Favorable View on ESG Investing and the Exercise of Shareholder Rights in New Regulation

Wind farm and nuclear power plant

In September, Illinois Governor JB Pritzker signed the omnibus, 956-page climate and energy legislative package titled the Climate and Equitable Jobs Act (the “CEJA”). The CEJA has an immediate effective date. In a Legal Update, we cover the amendments the CEJA makes to Illinois law with respect to decarbonization of the electric generation…