The EU updated their plans for regulating ESG ratings to improve their reliability and comparability as part of their Sustainable Finance Strategy. Based on the delay, requirements are not likely to be introduced until 1Q23.
While we are on the topic of the EU, the European Commission announced a major climate action plan – 55% reduction in net emissions by 2030. A more detailed look at the plan shows – not surprisingly – significant reliance on emissions trading/offsets.
SEC’s acting director of enforcement Melissa Hodgman waved a warning flag during a webinar held by Managed Funds Association that enforcement initiatives will likely begin soon for investors claiming green/ESG investment strategies and for company ESG disclosures, especially for ESG matters determined to be material. If you aren’t already improving your internal controls for ESG data collection and monitoring, you might want to consider that a priority.
US$4.2T investor group is pushing for banks to include biodiversity in addition to climate change in their financing activities. The investors in this group will consider the banks’ responses in connection with voting on shareholder proposals as well as director elections.
Law firms are beefing up their ESG advisory practices. We’ve written before here and here that the threat of climate litigation is more real and significant than ever. Latham & Watkins published a detailed analysis last year as well. Now demand for litigators in ESG – and climate specifically – is growing.