Eye on ESG

Tracking the Transition to Sustainable Business and Finance

March 5, 2021

On March 3, 2021, the German government adopted a draft bill which obliges companies to ensure that human rights are observed throughout their entire supply chain. The aim of the “draft legislation on corporate due diligence in supply chains” (“Draft Bill”) (“Sorgfaltspflichtengesetz”) is to require companies to take steps to prevent human rights violations in their supply chains. This builds on the growing momentum for mandatory human rights due diligence (see our previous Blog Post…

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EBA Launches Public Consultation on Draft Technical Standards on Pillar 3 Disclosures of ESG Risks

By J. Paul Forrester

March 4, 2021

On March 1, 2021, the European Banking Authority (EBA) released its consultation regarding draft technical standards for Pillar 3 disclosures of ESG risks, including reporting templates and instructions. The European Union’s Capital Requirements Regulation (EU) No. 575/2013 (CRR) includes under Article 449a the requirement to disclose prudential information on ESG risks, including transition and physical risk—a requirement addressed to large institutions with securities traded on a regulated market of any member state. These disclosure…

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Greener Arbitrations – The Way Forward in International Dispute Resolution?

By Wei Na Sim

March 4, 2021

The drive towards sustainable change looks set to continue in 2021, with climate change issues continuing to receive attention from ESG-minded businesses and governmental bodies. The legal community is likewise keen on reducing the environmental impact of dispute resolution activities, in particular, in the (previously) jet-setting world of international arbitrations. One such initiative is the Campaign for Greener Arbitrations which aims to significantly reduce the carbon footprint of the arbitration industry. In this Blog Post,…

Eye on ESG

EBA Proposes Green Asset Ratio as KPI for Banks Under EU’s Sustainable Disclosure Requirements

By J. Paul Forrester

March 3, 2021

On March 1, 2021, the European Banking Authority (EBA) published advice to the European Commission on the disclosure requirement on environmentally sustainable activities in accordance with Article 8 of the EU’s Taxonomy Regulation. The EBA recommends key performance indicators (KPIs) and related methodology for the disclosure by credit institutions and investment firms of information on how, and to what extent, their economic activities are environmentally sustainable in accordance with the Taxonomy Regulation. In particular,…

Eye on ESG

UK Supreme Court Clarifies Parent Company Liability for ESG-Related Harms Caused by Foreign Subsidiaries

By Sam Eastwood, Miles Robinson, Daniel Hart, Jonathan Cohen & Libby Reynolds

March 2, 2021

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.…

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US SEC to Enhance Focus on Climate-Related Disclosure

By Christina M. Thomas, Andrew Olmem, J. Paul Forrester & Anna T. Pinedo

March 1, 2021

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 stated that she has directed the SEC’s Division of Corporation Finance “to enhance its focus on climate-related disclosure in public company filings.”…

Eye on ESG

Human Rights Due Diligence: Six Signals of Seriousness

By Sam Eastwood, James Ford & Libby Reynolds

February 25, 2021

How will EU Member States enforce the new EU mandatory human rights and environmental due diligence laws? What disclosure will be expected of companies and what steps will be deemed adequate? Shift, the highly influential centre of expertise on the UN Guiding Principles on Business and Human Rights, has released a discussion draft seeking to inform the development and enforcement of these new laws. The draft provides valuable insight into the criteria that national regulators…

Eye on ESG

UK to Require Pension Trustees to Address Climate Risk

By Richard Evans, Beverly Cox & Katherine Carter

February 24, 2021

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 these new climate risk requirements. Among other things, the proposals refer to the TCFD and would require trustees to integrate…

Eye on ESG

IOSCO Chair Outlines the Future of Climate Risk Regulation

By Mark Uhrynuk & Alexander W. Burdulia

February 23, 2021

Solar panels with wind turbines and electricity pylon at sunset.

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.”…

Eye on ESG

Business and Human Rights – The Case for Third Party Expert Input

By Sam Eastwood, James Ford & Libby Reynolds

February 23, 2021

Companies are increasingly exploring how they can introduce third party expert input in order to promote constructive exchange on ESG issues, including human rights. Third party experts can help companies better understand different perspectives, address conflicting goals and better integrate human rights into their policies, corporate strategy, risk management and reporting. As investors continue to require better human rights integration by their portfolio companies, expert input is becoming even more valuable. In addition to their…

Eye on ESG

Tracking the Transition to Sustainable Business and Finance

Blog Authors

Business and Human Rights – Germany Adopts Draft Mandatory Human Rights Due Diligence Law

EBA Launches Public Consultation on Draft Technical Standards on Pillar 3 Disclosures of ESG Risks

Greener Arbitrations – The Way Forward in International Dispute Resolution?

EBA Proposes Green Asset Ratio as KPI for Banks Under EU’s Sustainable Disclosure Requirements

UK Supreme Court Clarifies Parent Company Liability for ESG-Related Harms Caused by Foreign Subsidiaries

US SEC to Enhance Focus on Climate-Related Disclosure

Human Rights Due Diligence: Six Signals of Seriousness

UK to Require Pension Trustees to Address Climate Risk

IOSCO Chair Outlines the Future of Climate Risk Regulation

Business and Human Rights – The Case for Third Party Expert Input

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