A rating agency accepted a preliminary injunction regarding a disputed corporate sustainability rating. By Paul A. Davies, Michael D. Green, Joachim Grittmann, and Alexander Wilhelm As reported by a number of German newspapers and the environmental press, a dispute between the US proxy advisory firm Institutional Shareholder Services (ISS) and the German industrial image processing … Continue Reading
Proposals to enhance climate-related disclosures include promoting the use of the TCFD recommendations. By Paul A. Davies, Nicola Higgs, Chris Horton, James Inness, and Michael D. Green On 6 March 2020, the UK’s Financial Conduct Authority (FCA) launched a consultation primarily focused on enhancing requirements on certain listed companies to make climate-related disclosures (the Consultation). … Continue Reading
Asset owners from Japan, the UK, and California have issued a statement describing their vision of sustainable capital markets. By Paul A. Davies and Michael D. Green In January 2020, BlackRock CEO Larry Fink circulated his annual letter to CEOs in which he noted, “I believe we are on the edge of a fundamental reshaping … Continue Reading
The Court’s decision has important implications for the French Constitution and the interplay between economic growth and the environment. By Paul A. Davies, Fabrice Fages, and Michael D. Green On 31 January 2020, the French Constitutional Court (Conseil Constitutionnel) took a decision that aimed to balance the protection of the environment and human health … Continue Reading
Policy makers and regulators seem keen to adopt both a “carrot” and “stick” approach to channelling private finance sustainably. Financial services regulators have been particularly vocal in the last 12 months, specifically about the impact on the financial services sector as the world experiences, and attempts to respond to, climate change. Mark Carney, outgoing governor … Continue Reading
Governments as well as investors and companies will continue to actively address environmental, social, and governance issues this year. By Paul A. Davies, James R. Barrett, Michael D. Green, Aaron E. Franklin, and Kristina S. Wyatt Environmental, social, and governance (ESG) was more prominent than ever in 2019, as issues such as climate change and … Continue Reading
The final text of Principle 5 requires a consultation process between the client and the indigenous community. By James R. Barrett, Paul A. Davies, and Michael D. Green On 18 November 2019, the Equator Principles Association (EP Association) adopted the most recent iteration of the Equator Principles (EPs), the fourth version of the EPs that … Continue Reading
Despite an increased focus on ESG, the Code has received criticism for providing less stringent requirements than an earlier proposal. By Paul A. Davies and Michael D. Green The Financial Reporting Council (FRC) has published the final draft of the UK Stewardship Code 2020 (the Code), which sets out standards for UK institutional investors to … Continue Reading
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 … Continue Reading
Bank of England Governor identifies three areas of improvement in creating a sustainable finance system. By Paul A. Davies and Michael D. Green On September 24, 2019, the Bank of England (BoE) published two speeches given by its governor, Mark Carney, in which he calls for climate change-related risks and resilience to be brought into the heart of … Continue Reading
To aid potential investors, ELFA has called for a coordinated approach to ESG disclosure and analysis amongst leveraged finance borrowers. By Paul A. Davies and Michael D. Green 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 … Continue Reading
Launched ahead of the UN Climate Action Summit in New York, the PRB provides a global framework for a sustainable banking system. By Paul A. Davies and Michael D. Green 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 … Continue Reading
Supply chain risk management and assurance are critical to identify and reduce risks and protect companies from legal and reputational harm. By Sara K. Orr, Kristina S. Wyatt, and Julia S. Waterhous Potential environmental, social, and governance (ESG) issues posed by suppliers in increasingly complex supply chains can increase reputational risks to an organization. Corporate … Continue Reading
Changes to the Investment Regulations mean greater ESG disclosure requirements in statements of investment principles. By Paul A. Davies, Michael D. Green, and Shaun Thompson 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 … Continue Reading
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 … Continue Reading
Mark Carney’s latest speech discusses the importance of green finance in transitioning to a low-carbon economy. By Paul A. Davies and Michael Green In September 2015, Bank of England Governor Mark Carney delivered his milestone Tragedy of the Horizon (Tragedy) speech. This speech warned that climate change will lead to financial crises, falling living standards, … Continue Reading
A new regulation will detail how financial market participants and financial advisors must incorporate ESG risks and opportunities in their procedures. By Paul A. Davies and Michael D. Green The European Union (EU) is committed to being the global leader in fighting climate change and implementing the Paris Agreement. Since climate change is increasingly viewed … Continue Reading
The revised Code is likely to encourage a more robust and substantive review of ESG issues by institutional investors. By Paul A. Davies and Michael Green Background The UK Stewardship Code (the Code) was originally published in 2010 following a review of corporate governance. The Financial Reporting Council (FRC) has responsibility for the Code, and … Continue Reading
TCI’s proposal is poised to become its own carbon reduction program with a focus exclusively on the transportation sector, alongside RGGI’s existing cap and trade program. By Jean-Philippe Brisson, Joshua T. Bledsoe, David B. Amerikaner, and Benjamin W. Einhouse The Regional Greenhouse Gas Initiative (RGGI) may soon have a transportation-focused companion to its functioning power … Continue Reading
A new report by ShareAction, a charity and pressure group, reflects growing demands for companies to disclose ESG and climate-related information. By Paul A. Davies and Michael D. Green Background Pressure continues to grow on asset managers and their advisors to incorporate companies’ environmental, social, and governance (ESG) performance and climate risks in their screening … Continue Reading
Landmark ruling requires the European Commission to disclose impact assessments used as a basis for its legislative decision-making process. By Antonio Morales and Rosa Espín The Grand Chamber of the Court of Justice of the European Union recently issued a landmark judgment finding that impact assessments should be considered public documents. This decision sets a … Continue Reading
The precedent-setting legislation establishes a comprehensive liability scheme for soil contamination, increasing fines for pollution violations while creating tax benefits for remediating contaminated properties. By Paul Davies, Andrew Westgate, and Kimberly Leefatt The Standing Committee of the National People’s Congress, China’s highest legislative body, passed the nation’s first law dedicated to soil protection and pollution … Continue Reading
Risk and opportunities come with ESG commitments, which include advancing the SDGs. By Sara K. Orr, Kristina S. Wyatt, and Bobbi-Jo B. Dobush In a recent article, Latham lawyers highlighted the increasing importance of environmental, social, and governance (ESG) issues in corporate decision-making and how companies are linking ESG issues to the United Nations’ 2030 … Continue Reading
Companies with stronger ESG standards usually perform better financially, according to recent research. By Paul A. Davies and Michael D. Green A recent report by Axioma, provider of enterprise market risk and portfolio analytics solutions, found that companies with better environmental, social, and corporate governance (ESG) standards “…often outperform the market” and exceed their financial … Continue Reading
