It was recently reported, on 8 September 2021, that investors managing USD 2.3 trillion in assets called for standardised climate and environmental disclosure from more than 1,000 privately held portfolio companies.  The investors, who joined a growing chorus advocating for improved disclosures around environmental issues, requested the private companies to provide such data through the non-profit disclosure platform, CDP, which provides a mechanism for climate disclosures that align with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).  The TCFD recommendations were published in June 2017, and have accelerated the focus on climate disclosures by providing the leading framework for disclosures relating to the financial impacts of climate-related risks.

But what are the TCFD recommendations, and how can companies prepare for reporting in compliance with them?


Continue Reading TCFD Recommendations: An Update on Climate Disclosures

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”).

Continue Reading China Publishes Environmental and Social Disclosure Rules for Listed Companies

On June 21, 2021, US financial regulators met with US President Joe Biden to discuss the US economy and update him on their efforts to address climate-related risks.  According to the White House readout of the meeting, the regulators said “they were making steady progress” on implementing President Biden’s executive order on climate-related risk. The briefing follows last week’s passage of HR 1187, the Corporate Governance Improvement and Investor Protection Act, by the US House of Representatives1 by a vote of 215 to 214. HR 1187 would mandate that the SEC create an ESG disclosure regime for public companies and provides numerous statutory requirements for those disclosures, including climate-related disclosures. Although the bill is unlikely to become law due to expected opposition in the US Senate, which requires a 60-vote supermajority to pass legislation, the passage of the HR 1187 by the House – combined with President Biden’s focus on climate-related risks in his meeting with financial regulators –  should bolster and influence the US Securities and Exchange Commission’s (SEC) ongoing development of new ESG disclosure requirements for US public companies under its existing statutory authorities. With regulators telling President Biden that they are “making steady progress,” new disclosure requirements for US public companies appear to be just around the corner.

Continue Reading The US Moving Toward Adopting New Climate Disclosures

On May 10, 2021, the Securities and Exchange Board of India (SEBI) issued a circular implementing new sustainability-related reporting requirements for the top 1,000 listed companies by market capitalization. New disclosure will be made in the format of the Business Responsibility and Sustainability Report (BRSR), which is a notable departure from SEBI’s existing Business Responsibility Report and a significant step toward bringing sustainability reporting up to existing financial reporting standards.

Continue reading for more details on the disclosure requirements in the new BRSR format.


Continue Reading India Imposes New ESG Reporting Requirements on Top 1,000 Listed Companies

On 21 April 2021, the EU Commission announced its proposal to extend existing sustainability reporting in a new Corporate Sustainability Reporting Directive (CSRD).  The proposal, which revises the Non-Financial Reporting Directive (the “NFRD“), will extend the reach of sustainability reporting to more companies and will cover more sustainability topics.

This is part of a wider, concerted effort by the EU to legislate for greater E, S and G reporting and accountability standards, like the EU’s proposed mandatory human rights and environmental due diligence law.  It is also part of a larger global trend: for example, New Zealand recently introduced a new Climate Disclosure Law (see our Blog Post on this here). Companies are increasingly embracing voluntary sustainability reporting but there are increased demands for mandatory reporting – the Global Reporting Initiative (GRI) for instance called for mandatory reporting in December last year. However companies’ standards of  voluntary reporting are of variable quality and often do not address the impacts of companies’ business activities on people and the environment.

Key aspects of the proposed Sustainability Reporting Directive:

  1. More companies would be asked to report on sustainability, up from 11,000 previously to nearly 50,000.
  2. The “double materiality perspective” is further reinforced – that is companies have to report on the impact of their business activities on people and the planet across the full value chain, as well as the sustainability risks for the business itself, and to disclose the process for determining their material issues.
  3. Measurements of sustainability will be more consistent, reliable, and therefore comparable, for investors and other stakeholders.
  4. Timing is subject to change, but it is expected these measures would take effect in 2024, i.e. reporting on the financial year ending 2023.


Continue Reading EU Moves Toward Comprehensive Corporate Sustainability Reporting Directive

On May 19th, 2021, Singapore’s Green Finance Industry Task Force (GFIT), an industry-led initiative convened by the Monetary Authority of Singapore (MAS), issued a detailed implementation guide for climate-related disclosures by financial institutions (FIs) and a whitepaper on scaling green finance in the real estate, infrastructure, fund management and transition sectors. In addition, the GFIT has established a framework to help banks assess eligible green trade finance transactions and will launch a series of ESG-related capacity building workshops and e-learning modules from May 2021 to April 2022 for FIs and corporates.

In an announcement, Ms. Gillian Tan, Assistant Managing Director (Development and International) at the MAS, said:

“GFIT’s initiatives to enhance climate-related disclosures and strengthen green capabilities will enable financial institutions to effectively develop green solutions and align their portfolios towards facilitating Asia’s transition to a low carbon economy. These initiatives will also contribute to global efforts to achieve greater consistency and comparability in climate-related disclosures, as well as provide investors and market participants with the necessary information for climate risk analysis and investment decision-making.”

Continue reading for more details on each of these significant new developments.


Continue Reading Singapore Financial Regulator Announces Initiatives on Climate Disclosures, ESG Capacity Building and More

On May 7, 2021, in connection with the implementation of China’s Securities Law, which came into effect on March 1, 2020, the China Securities Regulatory Commission (CSRCpublished consultation papers on amendments to the “Standards Concerning the Contents and Formats of Information Disclosure by Companies Offering Securities to the Public No.2 —

On February 24, 2021, Acting Chair of the US Securities and Exchange Commission (SEC), Allison Herren Lee, announced that the agency will focus on public companies’ climate change disclosures as part of an effort to both assess current compliance with federal securities laws and develop new disclosure requirements for climate change.

Specifically, she

In a keynote speech at the recent Climate Risk and Green Finance Regulatory Forum 2021, Ashley Alder, the Chair of the International Organization of Securities Commissions (IOSCO) and Chief Executive Officer of Hong Kong’s Securities and Futures Commission (SFC), addressed the “urgent need to retool the financial system to address the threat of climate change.” According to Mr. Alder:

“we are now in a crucial few months which will set the direction for years to come.”

Mr. Alder proceeded to highlight key climate-related issues that IOSCO is now addressing at a global level, effectively outlining the future of climate risk regulation by securities regulators. In this Blog Post, we discuss some of the key statements from Mr. Alder’s speech that foreshadow regulatory initiatives to come, as well as practical takeaways for market participants.


Continue Reading IOSCO Chair Outlines the Future of Climate Risk Regulation