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
As part of national plans to cut carbon emissions, the UK Cabinet Office released a Procurement Policy Note on 5 June 2021 (“PPN 06/21“, or the “PPN“): this mandates the assessment of Carbon Reduction Plans by UK central government departments as part of the procurement of large public contracts.
Key aspects of the Public Procurement Notice
- UK Procurement Policy Note 06/21 requires a bidder for large public contracts (exceeding £5 million per annum) to produce a Carbon Reduction Plan (CRP) setting out how it intends to achieve ‘net zero’ carbon emissions by the year 2050 (compared to 1990 levels).
- This relates to regulated contracts for goods, services and/or works awarded by UK central government departments, their executive agencies and non-departmental public bodies.
- This will apply to procurement processes commenced on or after 30 September 2021 – bidders should take steps now to prepare for compliance, which might require new data collection and reporting procedures.
Section 54 of the UK Modern Slavery Act 2015 (MSA 2015) requires large businesses to produce a statement each year setting out the steps they have taken to ensure that their business and supply chains are slavery free, or a statement that they have taken no steps to do this. Legislative reform of some kind has been some time in the offing, particularly since the Government’s response in September last year to the 2019 “Transparency in supply chains consultation” (see our previous Legal Update).
Continue Reading UK Modern Slavery – a Bill to prohibit the “falsification” of slavery and human trafficking statements
The UK government has published a response to its January 2021 consultation on the new climate risk-related governance and reporting requirements that will apply to trustees of larger occupational pension schemes from 1 October 2021. The government has also published the finalised regulations and accompanying statutory guidance.
The requirements under the regulations are essentially unchanged from the consultation version – the changes that have been made are largely technical and are designed to clarify aspects of the requirements. Changes have also been made to the statutory guidance to provide further clarity and support for trustees.
Continue reading for our discussion on the governance and reporting requirements.
On May 17-19, 2021, Risk.net hosted their ESG and Sustainable Investing conference, bringing together 350 senior directors to explore how ESG principles and sustainable investing will re-shape the global financial market. Speaking on a panel discussing stewardship, fiduciary duty and shareholder engagement – “Using investor influence for a positive, transformational change” – Mark Manning, the Financial Conduct Authority’s (FCA’s) sustainable finance technical specialist, is reported to have said that “an investor either needs to inject capital into new, purposeful and impactful projects, or use active-investor stewardship and influence to drive meaningful change in investing companies’ strategies”.
Continue reading for more details and analysis regarding stewardship and sustainable investing.
On March 10, 2021, the UK government concluded its public consultation on climate risk regulations under the Pension Schemes Act 2021. The government is now analyzing public feedback and preparing consultation conclusions.
In a new podcast, Mayer Brown Counsel Beth Brown provides background on the Pension Schemes Act 2021 and outlines the regulations in the…
In a speech on March 17, 2021, the CEO of the UK’s Financial Conduct Authority (FCA), Nikhil Rathi, highlighted how the financial services regulator is prioritizing diversity and inclusion (D&I) initiatives in the near term. Speaking at the launch of the HM Treasury Women in Finance Charter Annual Review, Mr. Rathi outlined why D&I is a key consideration for the FCA, noting that:
“We care because diversity reduces conduct risk and those firms that fail to reflect society run the risk of poorly serving diverse communities. And, at that point, diversity and inclusion become regulatory issues.”
Key steps the FCA is now taking on D&I include:
- Working with the Prudential Regulation Authority (PRA) on a joint approach to D&I for all financial services firms; and
- Considering whether to make diversity requirements a part of the FCA’s premium listing rules, similar to the approach taken by NASDAQ in the US.
On March 11, 2021, the UK Government launched an online modern slavery statement registry. The announcement follows a commitment from the UK Government to strengthen the reporting requirements under section 54 of the Modern Slavery Act 2015 following its Transparency in Supply Chains Consultation.
The registry is intended to enhance transparency and accessibility…
The UK Supreme Court has handed down its judgment in the case of Okpabi and others v Royal Dutch Shell Plc and another. Although the judgment made no substantive findings on the facts of the dispute, the Supreme Court’s decision raised important issues with regard to the circumstances in which a parent company will be held liable for the actions of its subsidiary – including in relation to ESG-related harms, such as environmental damage.
Continue Reading UK Supreme Court Clarifies Parent Company Liability for ESG-Related Harms Caused by Foreign Subsidiaries
The UK’s Pension Schemes Act 2021 recently received Royal Assent on February 11, 2021. The Act addresses a range of initiatives intended to strengthen protections for pension scheme members, including a framework for new climate risk-related governance and reporting requirements for trustees of larger pension schemes.
The government is currently consulting on the details of…