ESG

International Tribunal on the Law of the Sea Issues Landmark Advisory Opinion on Climate Change

Posted on May 30, 2024

Posted in Environmental, Social, and Governance

The Tribunal confirmed that States party to UNCLOS must take measures to prevent marine pollution caused by climate change, on top of their obligations under the Paris Agreement.

By Paul A. Davies, Sophie J. Lamb KC, Michael D. Green, and Stephanie Forrest

On 9 April 2024, the International Tribunal on the Law of the Sea (ITLOS, or the Tribunal) issued a long-awaited advisory opinion on climate change and international law, concluding that States party to the United Nations Convention on the Law of the Sea (UNCLOS) are subject to specific obligations to prevent, reduce, and control greenhouse gas (GHG) emissions and their adverse effect on the marine environment.

The Case Against the SEC’s Final Climate Rules Begins in Earnest (and What It Means)

Posted on April 8, 2024

Posted in Environmental Litigation, Environmental Regulation, Environmental, Social, and Governance

The Eighth Circuit is poised to determine the fate of the SEC’s final climate regulation, potentially by the end of the year.

By Paul A. Davies, Sarah E. Fortt, and Betty M. Huber

On March 21, 2024, the US Court of Appeals for the Eighth Circuit was selected as the court that will hear challenges against the Securities and Exchange Commission (SEC or Commission) over its final climate disclosures rules, which were adopted on March 6.[i]…

China’s Stock Exchanges to Plan Sustainability Disclosure Rules for Big Companies

Posted on March 15, 2024

Posted in Environmental Regulation, Environmental, Social, and Governance

The guidelines aim to transform China’s approach to ESG by introducing sustainability disclosure rules for large listed companies.

By Hui Xu, Paul A. Davies, Jean-Philippe Brisson, and Qingyi Pan

On February 8, 2024, under the auspices of the China Securities Regulatory Commission (CSRC), each of China’s three major stock markets — Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange— unveiled draft guidelines on sustainable development reports (SDRs) (collectively referred to as the Guidelines). The Guidelines require the largest Chinese public companies to publish high-quality and standardized SDRs, and are open for public comment until February 29, 2024.

Four Stock Exchanges Collaborate to Develop the ASEAN-Interconnected Sustainability Ecosystem

Posted on March 6, 2024

Posted in Environmental, Social, and Governance, Green Finance

The stock exchanges of Malaysia, Indonesia, Thailand, and Singapore have partnered to advance sustainability in ASEAN through the development of an interregional ESG ecosystem.

By Paul A. Davies, Farhana Sharmeen, Michael D. Green, James Bee, and Kevin Mak

On February 15, 2024, Bursa Malaysia Berhad (Bursa Malaysia), Indonesia Stock Exchange (IDX), The Stock Exchange of Thailand (SET), and Singapore Exchange (SGX Group) released a joint statement announcing their collaboration on the development of the ASEAN-Interconnected Sustainability…

EU Reaches Provisional Agreement on ESG Ratings Regulation

Posted on February 27, 2024

Posted in Environmental, Social, and Governance

The European Parliament and the Council of the EU have made some significant changes to the European Commission’s proposal.

On 5 February 2024, the European Parliament and Council of the EU announced that they had reached a provisional political agreement on the text of the ESG Ratings Regulation (the Regulation). The agreed text was subsequently published on 14 February 2024. The Regulation was initially proposed by the Commission in June 2023, and seeks to introduce a new regulatory regime for ESG ratings providers “operating in the Union”. Refer to this Latham blog post for previous commentary on the proposal.

New Zealand Supreme Court Paves Way for Novel Climate Change Claim

Posted on February 12, 2024

Posted in Air Quality and Climate Change, Environmental Litigation, Environmental, Social, and Governance

On appeal of a strike out decision, the Court gives the plaintiff “his day in court” to argue that corporates owe a common law duty of care in tort to reduce greenhouse gas emissions.

By Sophie J. Lamb KC and Stephanie Forrest

On 7 February 2024, the Supreme Court of New Zealand decided to allow a novel climate change claim to proceed to trial. In Smith v. Fonterra, the Supreme Court reversed the earlier decision of its Court of Appeal…

UK Government Launches Critical Imports and Supply Chains Strategy

Posted on January 18, 2024

Posted in Environmental, Social, and Governance

London skyline seen from the River Thames

The strategy aims to boost supply chain resilience of critical goods.

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

On 17 January 2024, the government launched the Critical Imports and Supply Chains Strategy (the strategy), which aims to safeguard UK supplies of goods including medicine, minerals, and semiconductors.

The strategy forms part of a wider government initiative to back businesses and grow the UK economy by helping companies build resilient supply chains and maintain supplies of critical goods and raw materials.

The strategy notes that recent global events, including the COVID-19 pandemic, geopolitical tensions, and climate change have highlighted vulnerabilities of the UK’s essential supply chains. The strategy thus focuses on ensuring reliable access to critical imports for present and future needs.

MAS publishes Code of Conduct for ESG Rating and Data Product Providers

Posted on December 18, 2023

Posted in Environmental, Social, and Governance

The voluntary code aims to enhance transparency and improve comparability and reliability of ESG data and scores.

By Paul A. Davies, Farhana Sharmeen, Michael D. Green, James Bee, and Kevin Mak

The Monetary Authority of Singapore (MAS) has published a Code of Conduct for Providers of Environmental, Social, and Governance (ESG) Rating and Data Products (Code), and an accompanying compliance checklist for providers (Checklist), following a public consultation conducted from June to August 2023. The Code covers best practices on governance, management of conflicts of interest, and transparency of methodologies and data sources, including disclosure on how forward-looking elements are taken into account in data products. This disclosure is intended to allow users to better consider transition risks and opportunities when determining capital allocation.

For more details on the initial consultation, please see this Latham article.

Singapore Establishes New Platform for ESG Data

Posted on November 30, 2023

Posted in Environmental, Social, and Governance

The artificial intelligence platform is the most recent development in Singapore’s green initiatives as part of Project Greenprint.

By Paul A. Davies, Farhana Sharmeen, Michael D. Green, James Bee, and Kevin Mak

A new platform called “Gprnt.ai” (Gprnt), which launched in November 2023, aims to unify existing pilots under Project Greenprint to support Singapore’s sustainability reporting and data needs.

The full platform is due to go live in early 2024, and will scale up progressively.

FCA Finds Further Improvement Needed on Design, Delivery, and Disclosure of ESG Funds

Posted on November 28, 2023

Posted in Environmental, Social, and Governance, Green Finance

The FCA has set out good and poor practices for asset managers to consider in relation to funds with ESG or sustainable characteristics.

By Nicola Higgs, Anne Mainwaring, and Charlotte Collins

On 16 November 2023, the FCA published the findings from its review of how asset managers have been embedding current regulatory expectations regarding the design, delivery, and disclosure of funds marketed as having ESG or sustainable characteristics.

With the FCA yet to finalise its Sustainability Disclosure Requirements (SDR) and investment labelling regime, it reviewed authorised fund managers’ (AFMs’) compliance with existing regulatory requirements, including the Guiding Principles set out in the Dear Chair letter issued in July 2021 (see this Latham blog post). The recently implemented Consumer Duty has added an extra dimension for AFMs to consider since the Guiding Principles were issued. The FCA highlights that the consumer understanding outcome is particularly relevant for AFMs providing ESG or sustainable funds; under this outcome, firms need to provide investors with the information they need at the right time and present it in a suitable way.

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