The Commission’s proposal seeks to reshape EU Sustainability requirements by amending CSRD, CSDDD, EU Taxonomy, and CBAM.
By José María Alonso, Paul A. Davies, Fabrice Fages, Michael D. Green, Nicola Higgs, David Little, Cesare Milani, Axel Schiemann, James Bee, and Toon Dictus
On 26 February 2025, the European Commission (Commission) published its much-anticipated first Omnibus Package. This first Omnibus package regarding sustainability contains a set of legislative proposals designed to
The Standards provide a framework for all Chinese companies’ sustainability disclosures and the applicability extends beyond listed companies.
By Paul A. Davies, Farhana Sharmeen, Michael D. Green, James Bee, and Qingyi Pan
On May 27, 2024, China’s Ministry of Finance published the new Corporate Sustainability Disclosure Standards (Draft for Comment) (the Standards). The Standards set out the general provisions, disclosure objectives, and information quality requirements, which aim to lay the ground for China’s unified national sustainability disclosure standard system, expected to launch by 2030. The goal of the Standards is to promote transparent disclosure throughout the value chain and to enhance the competitiveness of Chinese companies globally.
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.
The Civil Aviation Authority of Singapore will also launch 12 key initiatives, including a levy on sustainable aviation fuel and low-carbon electricity imports.
By Paul A. Davies, Farhana Sharmeen, Michael D. Green, James Bee, and Kevin Mak
The Civil Aviation Authority of Singapore (CAAS) has launched the Singapore Sustainable Air Hub Blueprint (Blueprint) as part of its efforts to decarbonise Singapore’s aviation sector while enabling sustainable growth.
The Blueprint aims to reduce domestic aviation emissions[i] from airport operations by 20% from 2019 levels (404ktCO2) in 2030 and achieve net zero domestic and international aviation emissions by 2050. This net zero goal aligns with both Singapore’s national climate target and the International Civil Aviation Organisation’s target for the global aviation industry. Alongside the Blueprint, CAAS will introduce 12 initiatives to decarbonise Singapore’s aviation sector and five enablers for the effective implementation of these decarbonisation initiatives. The initiatives will be implemented across three domains: airport, airline, and air traffic management.
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.
The new rules would oblige companies to integrate their human rights and environmental impact into their management systems.
By Paul A. Davies, Michael D. Green, and James Bee
On December 14, 2023, the European Council (Council) and European Parliament (Parliament) reached provisional agreement on the Corporate Sustainability Due Diligence Directive (CSDDD). The agreement follows an extensive negotiation processes, which began in June 2023, after the European Commission had initially proposed the CSDDD in February 2022.
The CSDDD’s key aim is to enhance the protection of the environment and human rights globally. The CSDDD as proposed will set obligations for companies regarding the actual and potential adverse impacts of their own operations, those of their subsidiaries, and those carried out by business partners, described as the “business chain of activities.” The CSDDD would also establish a requirement for large EU companies to adopt a plan to ensure that their business model and strategy are compatible with the Paris Agreement, i.e., including concrete targets and measures in line with limiting global warming to 1.5 °C.
The proposed CSDDD would establish rules on penalties and civil liability for infringements (although these will ultimately be set by Member States).
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 second version includes guidance on metrics and how companies can conduct dependency and impact evaluation.
By Paul A. Davies, Michael D. Green, Austin J. Pierce, and James Bee
On 28 June 2022, the Taskforce on Nature-related Financial Disclosures (TNFD) released version 0.2 of its framework for nature-related risk and opportunity management and disclosure (the Framework). The announcement builds on the release of the first iteration in March 2022, which was broadly received positively by market participants in a public feedback process hosted on the TNFD website.
The TNFD was established to develop a risk management and disclosure framework for organisations to report and act on evolving nature-related risks, with the ultimate aim of supporting a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes. As the name may suggest, the TNFD has based much of its fundamental structure, including many aspects of the core disclosure recommendations, on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The TNFD hopes that the Framework will therefore have the market impact that the TCFD recommendations have had in the climate space, and provide a basis by which companies can represent their natural capital-linked risks and opportunities in a clear and comparable manner for investors.
The association noted that regulators could provide market participants with much-needed additional trust in ESG ratings and data.
By Paul A. Davies, Nicola Higgs, Michael D. Green, James Bee, and Anne Mainwaring
On 23 November 2021, the International Organization of Securities Commissions (IOSCO) published a report and set of recommendations (Recommendations) in relation to the providers of environmental, social, and governance (ESG) ratings and data products. The Recommendations come as the market for ESG ratings and data products has grown considerably over recent years, largely as a result of the increasing demands of investors to obtain reliable and comparable ESG-related data on companies. The Recommendations follow on from a consultation that IOSCO issued in July 2021 (for more information, see this Latham blog post), and include a summary of the feedback that was received in relation to the consultation as an Annex.
IOSCO recognised that the area of ESG ratings and data product providers is not one that securities regulators would ordinarily be concerned with. However, given the rapidly expanding role these providers have within global securities markets, IOSCO noted that the involvement of regulators could provide market participants with much-needed additional trust in ESG ratings and data.
The European Commission continues to explore how competition policy can support the bloc’s increased focus on sustainability and progression towards climate neutrality by 2050.
By David Little and Anuj Ghai
On 10 September 2021, Inge Bernaerts, Director of DG Competition, delivered a keynote speech at the 25th IBA Competition Conference on behalf of Executive Vice-President and Commissioner for Competition, Margrethe Vestager. (The speech was complemented by a concurrent Policy Brief.) The European Commission (the EC) has often used the annual conference as a platform to announce new policy initiatives. This year, the Commissioner’s speech focused on how competition policy could be used to support the European Green Deal — a set of policy and regulatory initiatives intended to enable the bloc to achieve climate-neutrality by 2050. For more information, see Latham’s previous posts here, here, and here.