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The draft New Measure aims to enhance the environmental integrity of China’s carbon market by introducing new requirements for project registration and credit issuance.

By Paul A. Davies, Jean-Philippe Brisson, Michael Dreibelbis, and Qingyi Pan

China is preparing to relaunch its carbon credits program, the Chinese Certified Emission Reduction (CCER) Scheme, after suspending the program for over six years. On July 7, 2023, the Ministry of Ecology and Environment (MEE) and the State Administration for Market Regulation (SAMR) of the People’s Republic of China jointly released the draft Measure for the Administration of Voluntary Emission Reduction Trading (the New Measure).

The public consultation for the draft New Measure ended on August 6, 2023, and on September 15, 2023, the MEE ministry conference reviewed and passed the New Measure in principle. The formal release is expected to happen in October 2023, upon which the New Measure would replace the previous set of rules and become the governing law of the CCER Scheme.

Together with the national emission trading scheme (the China ETS) launched two years ago, the CCER Scheme represents China’s continuous efforts towards adopting market-based mechanisms for achieving its climate pledges (peaking emissions before 2030 and reaching carbon neutrality before 2060).[i]

Following the publication of the ISSB Standards, the IFRS Foundation will take over monitoring of companies’ climate progress from 2024.

By Paul A. Davies, Michael D. Green, and James Bee

On 10 July 2023, the International Sustainability Standards Board (ISSB) and Financial Stability Board (FSB) announced that the IFRS Foundation (the organisation that founded the ISSB) would take over the monitoring of the progress on companies’ climate-related disclosures relating to the Task Force on Climate-related Financial Disclosures (TCFD). This announcement follows the ISSB’s publication of its inaugural sustainability standards IFRS S1 and IFRS S2.

The transfer in monitoring activities marks the latest development in the ISSB’s ambition to consolidate the sustainability reporting landscape internationally, with the TCFD joining other standards (such as the SASB Standards) in the list of frameworks that were previously independently managed but are now under the consolidated auspices of the ISSB.

The regulation aims to minimise the EU’s contribution to deforestation and forest degradation.

By Paul A. Davies, Michael D. Green, and James Bee

The European Deforestation Regulation (EUDR) entered into force on 29 June 2023, following publication in the Official Journal of the European Union. However, the main requirements and prohibitions of the EUDR will apply from 30 December 2024, 18 months after the entry into force.

The regulation forms part of the European Green Deal (for more information on the Green Deal, refer to Latham’s blog post here), which includes a proposal to ensure EU consumption does not contribute to deforestation and forest degradation. The EUDR will repeal and broaden the scope of the existing EU Timber Regulation.[i]

LIDW23 member-hosted event provided insights into current and future trends in the greenwashing space.

By Sophie J. Lamb KC and Aleksandra Dulska

Latham & Watkins recently hosted a panel discussion during London International Disputes Week on the topic of greenwashing and how English law continues to evolve and adapt in order to meet the needs of international businesses and other stakeholders engaging with this issue. The event provided a platform to explore:

(1) The key drivers of greenwashing complaints

(2) The challenges organisations face when trying to define and explain their sustainability plans (including against the backdrop of rapidly evolving reporting guidelines)

(3) The associated litigation trends as observed globally

The panel included the Honourable Mrs Justice Cockerill DBE (Commercial Court Judge, High Court), Sophie J. Lamb KC (Partner, Latham & Watkins), Adam Heppinstall KC (Barrister, Henderson Chambers), and Meghan Sheehan (Director and Head of ESG and Sustainability, Kekst CNC).

This blog post summarises the key themes of discussion that took place and provides interesting insights as to what may lie ahead.

The Commission is also consulting on proposed targeted amendments to the Taxonomy Climate Delegated Act and on the Taxonomy Disclosures Delegated Act.

By Paul A. Davies, Michael D. Green, and James Bee

On 5 April 2023 the European Commission opened a consultation on its proposal for four additional environmental objectives under the EU Taxonomy Regulation[1] (the Taxonomy), including: (i) sustainable use and protection of water and marine resources; (ii) transition to a circular economy; (iii) pollution prevention and control; and (iv) protection and restoration of biodiversity and ecosystems.

The Commission is seeking feedback on technical screening criteria (TSC) for economic activities that may substantially contribute to one or more of those four environmental objectives. The TSC do not only identify the technical requirements that an activity must meet to be considered to make a substantial contribution to one of these areas, they also specify the conditions by which the activities can be considered to not do any significant harm to the remaining areas.

The Commission has already adopted TSC related to the economic activities of two other environmental objectives: climate change mitigation and climate change adaptation.

The Commission is also proposing amendments to the Taxonomy Climate Delegated Act, introducing additional activities that may be considered to substantially contribute to climate change mitigation or climate change adaptation, as well as the Taxonomy Disclosures Delegated Act.