Bill calls for new ESG disclosure requirements in the Securities Exchange Act of 1934 and formation of a Sustainable Finance Advisory Committee.
By Paul A. Davies, James R. Barrett, and Kristina S. Wyatt
On September 20, 2019, the US House Financial Services Committee passed H.R. 4329, the ESG Disclosure Simplification Act of 2019. The bill formed part of a suite of bills addressing environmental, social, and governance (ESG) disclosures that were the subject of hearings in the House Financial Services Committee in July, as discussed in this blog post. While unlikely to become law under the current administration, the bill’s passage in the House Committee reflects the continuing drumbeat for reporting companies to issue additional ESG disclosures.
Overview of the Bill
ESG Disclosures
The bill would amend the Securities Exchange Act to require issuers to provide disclosures in their proxy statements describing the link between ESG metrics and the issuer’s long-term business strategy, as well as the process used to determine such impacts. The bill would also require the Securities and Exchange Commission (SEC) to adopt rules to compel issuers to disclose ESG metrics in any filing requiring audited financial statements. Continue Reading
On 30 September 2019, the EU Technical Expert Group on Sustainable Finance (TEG) published its final report on climate benchmarks and environmental, social, and governance (ESG) disclosures (the Report), as well as a summary of the Report. The Report makes recommendations regarding the minimum technical requirements for the methodology that pertains to two new climate benchmarks. The Report also makes recommendations for suggested ESG disclosures on a wide range of benchmarks. This post will examine the TEG recommendations and their implications for the future of these climate benchmarks.
Environmental, social, and governance (ESG) issues are playing an increasing role in the global leveraged finance market. As a result, borrowers who wish to access this market should consider paying closer attention to their ESG performance. The European Leveraged Finance Association (ELFA) has called for a coordinated approach to ESG disclosure among companies that wish to access leveraged loans, with the aim to help potential investors analyse ESG issues in a more consistent and uniform manner.
On 22 September 2019, the United Nations and a group of 130 banks from 49 countries launched the UN Principles for Responsible Banking (PRB) to provide an international framework for a sustainable banking system, and allow signatories to demonstrate their commitment to achieving the goals expressed in the UN Sustainable Development Goals (SDGs) and the Paris Climate Agreement.
Potential environmental, social, and governance (ESG) issues posed by suppliers in increasingly complex supply chains can increase reputational risks to an organization. Corporate supply chains generally include every company that comes into contact with a particular product or service. In other words, the “supply chain” refers to the series of steps and processes involved in the production and/or distribution of goods and services. This can include direct and indirect suppliers, manufacturers, distributors, and retailers, and may involve companies and individuals all over the world.
On August 15, 2019, California Air Resources Board (CARB) staff published a revised 
The US Environmental Protection Agency (EPA) 
In response to trustees’ uncertainty about how environmental, social, and governance (ESG) factors — as non-financial factors — apply to pension schemes, the Law Commission and the Department for Work and Pensions (DWP) have been exploring fiduciary duties and regulatory changes to better accommodate ESG factors in pension schemes since 2014.