Key topics in Akin’s July 2024 Sustainability/ESG Policy and Regulatory Update include:
- Updated Assessment of SFDR by EU Regulators: The European Supervisory Authorities have proposed changes to the Sustainable Finance Disclosure Regulation (SFDR), introducing new categories for financial products. This update aims to enhance transparency and address concerns about greenwashing.
- Impact of Anti-ESG Laws: A study by the United Nations (U.N.)-backed Principles for Responsible Investment highlights the unintended consequences of anti-environmental, social and governance (ESG) laws on financial institutions, suggesting these laws could complicate compliance and investment strategies.
- FCA’s Climate-Related Investigation: The Financial Conduct Authority (FCA) has initiated its first enforcement investigation into a business concerning climate-related issues, marking a significant step in regulatory actions on environmental disclosures.
- China’s ESG Reporting Standards: China has introduced ESG Reporting Standards that are set to become mandatory by 2030, aligning with the International Sustainability Standards Board (ISSB). The implementation of key standards will begin in 2027, aiming to improve the quality and consistency of ESG reporting.
- US Court Rulings on ESG: The U.S. Court of Appeals for the 5th Circuit has influenced the legal landscape by ordering a federal district court to reconsider a rule that allows fiduciaries to consider ESG factors in investment decisions. This reflects the ongoing legal debates and challenges surrounding ESG policies.
To read more, and for a comprehensive overview of other recent ESG policy and regulatory developments and their implications, please click here.