US House Financial Services Committee Holds Landmark Hearing on ESG Reporting

By Craig Kublin on July 22, 2019 Posted in Environmental Regulation

Building a sustainable and competitive economy: an examination of proposals to improve ESG disclosures.

By James R. Barrett, Paul A. Davies and Kristina S. Wyatt

The US House Committee on Financial Services, Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets has held the first ever US Congressional hearing on environmental, social and governance (ESG) issues. The hearing focused on reporting requirements for US public companies in response to increasing interest in the investor community for enhanced ESG disclosures and uniform reporting standards.

The hearing follows on the heels of the UK’s announcement that all listed companies and large asset owners will be required to report on climate-related information in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). The hearing also follows the EU’s adoption of requirements that financial professionals provide information on the incorporation of ESG criteria into their financial management processes. Continue Reading

China Publishes Public Consultation on Environmental Protection Regulations for Construction Projects

By Latham & Watkins LLP on July 19, 2019 Posted in China, Environmental Regulation, Project Siting and Approval

MEE Opinions aim to clarify application of laws, expand the scope of illegal behaviour, and introduce new administrative penalties.

By Paul A. Davies and R. Andrew Westgate

The Department of Laws, Regulations, and Standards of China’s Ministry of Ecology and Environment (MEE) recently issued a notice of Public Consultation for the Opinions on Several Issues on the Application of Laws concerning Administrative Penalties for the Illegal Activities of “Production before Final Acceptance” (the 2019 Public Consultation).

This blog will discuss the background to the 2019 Public Consultation, and the MEE Opinions that aim to clarify application of laws, expand the scope of illegal behavior, and introduce new Administrative Penalties. Continue Reading

ECJ Decision Examines Definition of ‘Waste’ for Transboundary Consignments

By Latham & Watkins LLP on July 18, 2019 Posted in Contaminated Properties & Waste, Environmental Litigation, Environmental Regulation, European Environmental and Public Law

ECJ Decision Examines Definition of ‘Waste’ for Transboundary Consignments

Request for preliminary ruling from the Hague Court of Appeal confirms that the concepts of “waste” and “discard” must be interpreted broadly.

By Paul A. Davies and Michael D. Green

The European Court of Justice (ECJ) recently handed down its judgment in response to a request for a preliminary ruling in criminal proceedings against Tronex BV (Case C-624/17), a Dutch wholesaler of residual consignments of electronic goods. The case concerns the transboundary shipment of electronic and electrical appliances to a third party in Tanzania.

This blog will examine the legislative framework and facts underpinning the case, and the ECJ’s discussion and decision. Continue Reading

EPA Will Not Require Financial Assurances From Electric Power Sector

By Latham & Watkins LLP on July 16, 2019 Posted in Energy Regulatory, Environmental Regulation

EPA’s decision to forego financial requirements will likely face opposition by eNGOs.

By Claudia M. O’Brien and Stacey L. VanBelleghem

On July 2, 2019, the US Environmental Protection Agency (EPA) published its proposed decision not to impose new financial responsibility requirements on the Electric Power Generation, Transmission, and Distribution industry under Section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), following nearly a decade of litigation, stakeholder input, and EPA assessment.

Section 108(b) and EPA’s Path to This Decision

CERLCA imposes a joint and several liability scheme that holds certain entities (e.g., certain owners and operators, generators, arrangers, and transporters of hazardous substances) liable for the costs or damages associated with environmental remediation. Section 108(b) of CERCLA authorizes EPA^[i] to develop regulations requiring owners or operators of certain “classes of facilities [to] establish and maintain evidence of financial responsibility consistent with the degree and duration of risk associated with the production, transportation, treatment, storage, or disposal of hazardous substances.” Section 108(b)(2) identifies factors to consider to determine the level of financial assurances necessary in light of the level of risk. These factors include: “the payment experience of the [Hazardous Substance Superfund], commercial insurers, courts settlements and judgments, and voluntary claims satisfaction.” Continue Reading

Equator Principles Association Releases Equator Principles 4 for Consultation

By Latham & Watkins LLP on July 11, 2019 Posted in Air Quality and Climate Change, Environmental, Social and Governance, Green Finance, Project Siting and Approval

Proposed revisions to the Equator Principles 3 include human rights, social risk, and climate change.

By James Barrett, Paul A. Davies, Joel H. Mack, and Michael D. Green

The Equator Principles Association (EP Association) recently released the draft text of the Equator Principles (EPs) version 4 (EP4). The EP Association intend the draft text to form the basis for a formal round of public consultation, led by Business for Social Responsibility™. The review of EP3 and proposed development of EP4 was originally announced in late 2017. Prior to publication of the draft EP4, environmental consultants, ERM, conducted a preliminary round of stakeholder consultation, and the results can be viewed here.

EP Association and EPs

The EP Association is the unincorporated association of member EP Financial Institutions (EPFIs). Almost 100 financial institutions across 37 countries are members, including ABN Amro, Standard Chartered plc, the Royal Bank of Scotland, Citigroup, and the Commonwealth Bank of Australia. The object of the EPFIs is to manage, administer, and develop the EPs. Continue Reading

UK Government Publishes Green Finance Strategy

By Latham & Watkins LLP on July 3, 2019 Posted in Green Finance

Green Finance Strategy builds on the Green Finance Taskforce report, highlighting the City of London’s role in delivering a green economy.

By Paul A. Davies and Michael D. Green

On July 2, 2019, the UK government published its Green Finance Strategy (Strategy), subtitled “Transforming Finance for a Greener Future.” The document outlines how the finance sector, and better climate disclosure from corporate actors, can drive progress in relation to climate change and help the UK achieve its net-zero emissions target.

The Strategy aims to: position climate and environmental factors as financial and strategic imperatives; establish a shared understanding of “greening”; clarify UK governmental and private sector roles and responsibilities; transition to a long-term approach; and build robust, transparent, and consistent green financial market frameworks.

This blog will explore the background to the Strategy, as well as the Strategy’s main themes and aims.

International Banks Adopt the Poseidon Principles

By Latham & Watkins LLP on July 3, 2019 Posted in Air Quality and Climate Change, Green Finance

Banks to disclose climate alignment of shipping portfolios with IMO’s strategy of 50% emissions reduction by 2050.

By Paul A. Davies and Michael D. Green

On June 18, 2019, a group of 11 banks — including Citi, Societe Generale, DNB, Citigroup, ABN Amro, and ING — announced the adoption of the Poseidon Principles (PPs). The PPs are accompanied by a framework for integrating climate considerations into shipping investment decisions and for assessing how well a portfolio aligns with the International Maritime Organization’s (IMO’s) Initial Greenhouse Gas Reduction Strategy, which aims to reduce total greenhouse gas (GHG) emissions by at least 50% by 2050 based on 2008 levels. This blog post will explore the four key principles established in the PPs, covering climate alignment, accountability, enforcement, and transparency.

Poseidon Principles Association and Poseidon Principles

The PPs governing body, the Poseidon Principles Association (PPA), was formed on June 18, 2019. The PPA is responsible for the management, administration, and development of the PPs. The PPA is supported by the Rocky Mountain Institute (an independent non-profit organization aiming to accelerate the adoption of a shift to greater efficiency and more use of renewables), the University College London Energy Institute, and Lloyd’s Register. The PPA is committed to improving the role of maritime finance in addressing global environmental issues, spearheaded by the PPs. Continue Reading

European Commission Publishes New Guidelines on Corporate Climate-Related Reporting

By Latham & Watkins LLP on June 21, 2019 Posted in Air Quality and Climate Change, European Environmental and Public Law, Green Finance

The guidelines, along with three new reports on green finance, demonstrate the European Commission’s intent in respect of meeting its Paris Agreement targets.

By Paul A. Davies, Michael D. Green and Clément Pradille

On June 18, 2019, the European Commission (Commission) published new guidelines on corporate climate-related information reporting, as well as three new reports by the Technical Expert Group on Sustainable Finance (TEG), as part of the Commission’s Sustainable Finance Action Plan (Action Plan). The new guidelines provide companies with information and recommendations to support their approach to reporting the impact of their activities on climate change, and also how climate change impacts the business of those companies.

Understanding the Guidelines

The Commission published its guidelines on reporting climate change-related information (2019 Guidelines) under the Non-Financial Reporting Directive 2014/95/EU (Directive). The 2019 Guidelines are part of the Action Plan, which was published in March 2018 and aims to reorient capital toward sustainable investment, manage financial risks arising from climate change, and foster transparency and a long-term view in financial and economic activities. Continue Reading

6 Things to Know about EPA’s Final ACE Rule

By Latham & Watkins LLP on June 21, 2019 Posted in Air Quality and Climate Change, Energy Regulatory, Power, Oil, Gas and Minerals

In a significant and potentially precedent-setting action, EPA terminates the Clean Power Plan, narrows the scope of required controls to the regulated unit, and axes previously available compliance options.

By Stacey L. VanBelleghem and Robert A. Wyman

On June 19, 2019, the US Environmental Protection Agency (EPA) released its final Affordable Clean Energy (ACE) Rule to replace the Obama Administration’s Clean Power Plan (CPP). Both rules would regulate carbon dioxide (CO₂) emissions from existing electric generating units (EGUs) pursuant to Section 111(d) of the Clean Air Act (CAA).^[i] EPA made few changes from its 2018 proposal (summarized in this prior Latham post), with the notable exception of EPA’s decision to proceed with a separate rulemaking to finalize its proposed revisions to New Source Review (NSR) rules for power plants.

EPA Rulemakings

EPA’s recent notice announcing the final ACE Rule identifies three actions, which EPA characterizes as “separate and distinct rulemakings.” Continue Reading