The delay may complicate the regulatory landscape for sustainable finance as the EU moves toward a standardized classification system. By Paul A. Davies, Nicola Higgs, and Michael D. Green The UK government (government) has delayed a decision on whether it will adopt the EU’s taxonomy of sustainable finance activities (the Taxonomy) as the UK approaches … Continue Reading
Do European Commission ambitions signal a new, more sustainable direction of travel for the EU and globally? By Paul Davies and Michael Green On 27 May 2020, the European Commission (the Commission) announced a €750 billion stimulus fund aimed at helping the economies of the EU member states recover from the shock sustained as a … Continue Reading
Governments are under pressure to ensure that any financing used to assist the economic recovery from COVID-19 embeds climate change policy. By Paul A. Davies and Michael D. Green The economic impact of COVID-19 has required unprecedented state intervention and support for companies and individuals in countries around the world. Now, certain climate policy advisors … Continue Reading
The Initiative aims to grant investors, consumers, and other stakeholders a clearer picture of companies’ non-financial performance. By Paul A. Davies and Michael D. Green On 30 January 2019, the European Commission began a consultation process on a potential initiative to revise and improve the Non-Financial Reporting Directive (NFRD) (the Initiative). The Commission has not … 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
The European Commission has also established a mechanism to assist the transition of regions that will be more profoundly impacted by the 2050 carbon-neutrality target. By Paul A. Davies and Michael D. Green On 11 December 2019, the European Union announced that it would enshrine into legislation its goal to achieve carbon neutrality by 2050 … Continue Reading
How companies that are unable to issue green bonds can still participate in sustainable finance. By Paul A. Davies, Aaron E. Franklin, and Kristina S. Wyatt If the 2010s were the decade in which green bonds took hold, the 2020s will be the decade in which sustainable finance hits the broader marketplace. The green bond … 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
MEE declares full steam ahead on China’s environmental initiatives, including an NGDF, private sector finance, Yangtze River conservation, and the social credit system. By Paul A. Davies and Zoe Liu Xu Bijiu, director general of the general office of China’s Ministry of Ecology and Environment (MEE), has given the clearest signal to date that China’s … Continue Reading
The formal adoption reflects the EU’s acknowledgement that a robust system of sustainable finance will be essential to the proposed capital markets union. By Paul A. Davies and Michael D. Green On 8 November 2019, the Council of the EU published a press release announcing the adoption of legislative reforms that aim to enhance the … Continue Reading
The launch of the International Platform on Sustainable Finance indicates an increased focus on a globalized approach to coordinating sustainable finance. By Paul Davies and Michael D. Green On October 18, 2019, the EU, China, India, and five other countries combined to launch the International Platform on Sustainable Finance (IPSF). Acknowledging the role that private … Continue Reading
Technical Expert Group recommends minimum requirements for two new benchmarks. By Paul A. Davies and Michael D. Green 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. … 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
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
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
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 … Continue Reading
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 … Continue Reading
Three new publications provide issuers with key guidance on Green, Social, and Sustainability Bonds. By Paul A. Davies, Michael D. Green, and Aaron E. Franklin The Executive Committee for the Green Bond Principles recently published three documents providing key guidance complementing the Green Bond Principles (GBPs), the Social Bond Principles (SBPs), and the Sustainability Bond … Continue Reading
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 … Continue Reading
The seven-week inquiry will assess the potential impact of decarbonization on the UK economy, and examine opportunities for the growth of green finance. By Paul A. Davies and Michael D. Green On World Environment Day, June 5, 2019, the UK Treasury Committee (the Committee) launched an inquiry into the decarbonization of the UK economy and … Continue Reading
Recent studies show ESG implementation in mainstream finance has improved significantly, presenting opportunities for sustainable, long-term returns. By Paul A. Davies and Michael D. Green In recent years, Environmental, Social and Governance (ESG) implementation has transformed from a niche to mainstream activity, as asset managers, asset owners, and pension funds increasingly recognize the importance of … 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
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
