The DOL proposes rules that would curb proxy voting by plan fiduciaries on shareholder proposals. By Paul A. Davies, Paul M. Dudek, Ryan J. Maierson, and Kristina S. Wyatt Continued DOL Antipathy Toward ESG On August 31, 2020, the US Department of Labor (DOL) issued proposed rules that could induce Employee Retirement Income Security Act … Continue Reading
The sustainable finance classification system entered into force on 12 July 2020, providing a framework for other green initiatives. By Paul A. Davies and Michael D. Green On 12 July 2020, the EU’s regulation on the establishment of a framework to facilitate sustainable investment (the Taxonomy Regulation) entered into force, after several years of planning … Continue Reading
The guidance contains practical advice for navigating ESG diligence and compliance. By James R. Barrett, Paul A. Davies, Michael D. Green, Bobbi-Jo B. Dobush, and Jacqueline J. Yap* On June 19, 2020, the Equator Principles Association (EPA) issued Guidance on Implementation of the Equator Principles During the Covid-19 Pandemic, as prepared by Ramboll (Guidance). The … Continue Reading
Increasing interest in ESG issues presents an opportunity for sponsors to re-evaluate their existing ESG strategies. By Paul A. Davies, Nicola Higgs, Farah O’Brien, and Hannah Berdal The COVID-19 pandemic continues to present unprecedented challenges for European private equity firms and their portfolio companies. A significant number of companies have been forced to undertake emergency … Continue Reading
The ESG performance will be measured quarterly, with the average performance of the portfolio companies judged by reference to three KPIs. By Paul Davies, Dominic Newcomb, Farah O’Brien and Michael Green On 11 June 2020, private equity firm EQT announced that it has entered into an environmental, social, and governance–linked fund-level subscription credit facility (SCF) … Continue Reading
We are excited to announce the launch of Latham’s newest Book of Jargon®: Environmental, Social & Governance. This comprehensive digital glossary of more than 1,000 ESG terms was developed for the business, academic, and legal communities. This Book of Jargon is being presented with the World Business Council for Sustainable Development, a global, CEO-led organization … 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
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
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
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 legislation includes six key measures to cut greenhouse gas emissions and to reach carbon neutrality by 2050. By Paul A. Davies and Michael D. Green The French Parliament has adopted a new climate energy package to tackle the effects of climate change and boost France’s energy transition endeavors to reach carbon neutrality by 2050. … 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
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
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
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
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
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. … 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
