Author: Molly Porter

Throughout the world there have been many sustainable finance policy focused initiatives. This includes rules aiming for greater ESG and climate data transparency and tackling greenwashing in financial markets.In this latest ESG Quick Takes podcast episode, ESG Book’s Isabel Verkes speaks to Inna Amesheva and Aishwarya Shukla, to discuss the key regulatory developments of 2022 and 2023 so far. Learn more in our ESG Policy Digest February update and out January update.For monthly ESG policy updates, subscribe to our newsletter.

 

DISCLAIMER

ESG Book, registered with Companies House under Company No. FC035689 and UK establishment no. BR020774, and with registered office at Fifth Floor, Jamestown Wharf, 32 Jamestown Road London, NW1 7BY, is the UK branch of ESG Book GmbH, a limited liability company organized under the laws of Germany, with registered number HRB 113087 in the commercial register of the court of Frankfurt am Main, and having its seat and head office at Zeppelinallee 15, 60325 Frankfurt am Main, Germany.

PROFESSIONAL ADVICE – This podcast is provided for general information purposes only and does not constitute professional advice. If professional advice is required, services of a competent professional should be sought. THIRD PARTY INFORMATION – Certain information contained in this podcast has been obtained from sources outside ESG Book. While such information is believed to be reliable for the purposes used herein, no representations are made as to the accuracy or completeness thereof and none of ESG Book or its affiliates accepts any responsibility for such information. RELIANCE – ESG Book makes no representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein, and accepts no liability for any loss, of whatever kind, howsoever arising, in relation thereto, and nothing contained herein should be relied upon. TRADEMARK – “ESG Book” and other words or symbols in this document that identify ESG Book products and services are product and service marks of ESG Book. Other words or symbols in this document that identify other parties’ goods or services are the trademarks or service marks of those other parties. VIEWS EXPRESSED – Any views or opinions presented are solely those of the speaker, and do not necessarily represent the views or opinions of ESG Book. ENQUIRIES – Any enquiries in respect of this podcast should be addressed to ESG Book or its affiliates.

In the fleeting month of February it may be easy to overlook a flurry of regulatory activity that signals the continuity and confluence of ESG in policymaking matters. This month’s ESG Book Policy Digest explores a coincidental set of global initiatives aimed at mobilizing green bond markets. In Europe, legislators made strides in setting up voluntary EU green bond standards (EUGBS) to provide a legitimate system for the issuance of green bonds by financial market participants. The depth and breadth of sustainability reporting is also under review by the European Central Bank (ECB), which expressed its approval of the draft European Supervisory Reporting Standards (ESRS) that outline ESG metrics for demonstrating compliance with the Corporate Sustainability Reporting Directive (CSRD). The EU has additionally underscored a focus on its ‘Green Industrial Plan,’ hinting at a ‘laissez faire’ approach that will enable the growth of a competitive clean energy economy. In the EU Parliament, the Environmental Committee issued a legislative mandate that would require all private sector entities to achieve climate neutrality by 2050. Oversight activity related to climate risk will also extend to the own risk and solvency assessment (ORSA) in 2023, as evidenced by the European Insurance and Occupational Pensions Supervisory Authority’s (EIOPA) latest action plan. In neighbouring UK, the Capital Markets Authority (CMA) has issued guidance to help firms reach environmentally sustainable agreements without breaching competition rules.

In India, the Reserve Bank of India (RBI) has announced new guidelines for climate risk management. India’s Securities and Exchange Board of India (SEBI) became the latest authority to formulate its own fund labelling regime in lockstep with global regulators such as the U.S. Securities and Exchange Commission (SEC) and the European Securities Markets Authority (ESMA). Additionally, SEBI released a set of operational guidelines for green bond issuers. Also in Asia Pacific, Chinese regulators are reportedly due to instate mandatory ESG disclosure requirements for listed firms. Finally, in the Philippines, the Securities and Exchange Commission created draft guidance on sustainability bonds that will be applicable to ASEAN-based issuers.

This month’s ESG Policy Digest updates signal that regulators worldwide are emphasising the idea that sustainability regulation does not necessarily overwrite existing rules, but rather serves to provide guidelines for the consistent interpretation of a modified rules-based system of governance for more robust financial markets.

International

Nations Agree Historic Oceans Treaty

After a decade of negotiations, nations have achieved a landmark accord to safeguard the world’s oceans. The High Seas Treaty seeks to secure and restore marine ecosystems by designating 30% of the oceans as protected areas by 2030. The accord was reached at the UN headquarters in New York on 4th March, after 38 hours of discussion, resolving disputes over funding and fishing rights that had delayed negotiations for years. The most recent international agreement on ocean conservation was the UN Convention on the Law of the Sea, which was signed 40 years ago in 1982. This agreement recognized the high seas as international waters where all countries have the right to conduct research, fish, and navigate, but only 1.2% of these waters are currently safeguarded.Read more

Europe

Provisional agreement reached on European Green Bond Standard

Key negotiators in the European Parliament have established the first ‘best-in-class’ green bond standard. Companies issuing green bonds in accordance with the standards can communicate the use of proceeds in a substantive disclosure. Disclosures would provide decision-useful information to investors, allowing them to suitably add sustainable technologies and businesses to their portfolio. In addition to enhancing transparency, companies that adopt the EUGBS will be aligned with the EU Taxonomy’s classification system for sustainable economic activities.Read more

ECB publishes staff opinion on draft ESRS

The European Central Bank has expressed support for the draft ESRS which strengthens the implementation of sustainability disclosure requirements under CSRD. The draft ESRS would help financial and credit institutions enhance the assessment of climate-related risk and resilience. In its draft form, the ESRS incorporates environmental reporting metrics such as Scope 1, 2 & 3 emissions and requires the disclosure of transition plans in line with a Paris-aligned climate scenario. Furthermore, to comply with CSRD, the reporting standards require private entities to provide estimates of physical and transition risk. Overall, ECB staff welcomed the definition of standards, targets and quantitative metrics as this will improve the availability of granular data relevant to ECB and other European Supervisory Authorities. Additionally, by making ESRS E1 mandatory, irrespective of materiality assessment, the ESRS also address the cross-cutting data needs of other EU climate legislation. The ECB has stated that its data collection efforts could, however, be distorted by an exemption from reporting for subsidiaries included in the consolidated reporting of the controlling entity. In conclusion, the ECB staff opinion letter notes that consistent and comparable data is the key to ensure the effective implementation of CSRD and any data aberrations could negate efforts to reduce the reporting burden.Read more

European Commission unveils Green Industrial Plan and ‘transition framework’

Following the passage of the Inflation Reduction Act (IRA) in the US, EU lawmakers pushed for a centralized plan to provide clean energy financing and subsidies that would help maintain competitiveness with US businesses. Last month, the European Commission announced the release of its ambitious Green Industrial Plan to expedite the scaling of net zero technologies and products and further the EU’s climate neutrality objectives. The industrial initiative relaxes state aid rules and eases the regulatory burden for companies operating in the EU. Members of the European Parliament strongly believe that the EU Single Market will undergo a transformation through the allocation of funding for clean technologies and training and development for green jobs. The Plan includes a production capacity framework that will ensure strategic dependencies in the global supply and value chain are accounted for and ‘do not put green transition at risk’.Read more

EU Parliamentary committee votes to strengthen climate “due diligence” obligations

In a landmark move, the EU environment committee voted to put in place stricter climate due diligence obligations for large companies and SMEs. CSRD is the newest legislation that requires companies to minimize adverse environmental impacts and prevent human rights violations across the value chain. For years, companies in the EU have outsourced carbon emissions abroad, where it may be easier to eschew manufacturing processes oversight. The Environment Committee within the EU Parliament voted to impose a mandate on the private sector to achieve climate neutrality by 2050, by primarily reducing greenhouse gas emissions. This means companies will have to formalize transition plans and monitor negative environmental impacts that conflict with the targets outlined in the 2015 Paris Agreement.Read more

EIOPA issues 2023 supervisory convergence plan focusing on ESG risks

The European pensions and Insurance regulator EIOPA published a Supervisory Convergence Plan for 2023 which includes a section on enhancing quality capital requirements (the second pillar of Solvency II plans). This means that the own risk and solvency assessment (ORSA) under the EU’s Solvency II directive may be adapted within the context of climate change. EIOPA currently supports the oversight of materiality assessment for climate-related risks and advocates for the integration of climate risks in ORSA. In 2023, EIOPA plans to monitor greenwashing and identify solutions to clarify consumers’ contractual obligations based on key findings from natural catastrophe insurance coverage (behavioural study). Furthermore, the authority will incorporate ESG risks into the upcoming comparative study on Life risk modeling. Read more

United Kingdom

UK CMA publishes guidance on competition laws applicable to environmental sustainability agreements

The UK’s Competition and Markets Authority (CMA) issued guidance for firms seeking opportunities to collaborate without breaching competition laws. The regulator illustrated use cases where rules would be “permissive” to help competitors share the costs and burden of mitigating climate change. According to the proposed guidelines, firms that enter into collaborative agreements that positively contribute towards environmental sustainability would not be in violation of competition laws. The CMA’s draft guidance is open for consultation until April 11, 2023. Read more

Asia Pacific

Indian central bank announces regulatory guidelines on climate risk and sustainable finance

On July 27, 2022, the Reserve Bank of India (RBI) published a discussion paper on climate risk and sustainable finance to solicit feedback from regulated entities on proposed changes in monetary policy. Based on public comments and analysis of feedback, the RBI released a framework for the acceptance of green deposits, disclosure requirements for climate-related risks and guidance on climate scenario analysis and testing. Before testing the preparedness of regulated entities, the RBI will consolidate resources for climate-risk management and issue guidelines in a phased manner. Read more

Indian securities regulator sets operational guidelines on green bonds

Under the new set of green bond guidelines, issuers of green debt instruments must outline sustainability objectives in the offer document. Issuers must also disclose details for determining the eligibility of financed projects and the use of proceeds. For increased transparency, green debt issuers will have to provide third-party verification of the use of proceeds and institute processes to assess continued eligibility of green bond projects and activities. The operational guidelines will be in effect from April 1, 2023.Read more

SEBI proposes new categories of ESG schemes for mutual funds

The Securities and Exchange Board of India (SEBI) proposed a new rule to create five new types of ESG mutual fund schemes – exclusions, best-in-class, integration, positive screening, impact and sustainable objectives. SEBI’s latest regulatory initiative allows asset management companies to launch only one of each fund type with a minimum of 80% investment in securities related to the thematic ESG focus. ESG funds will have to identify the sustainable investment strategy and details of the chosen ratings provider in disclosures. This follows similar initiatives by the US SEC, ESMA and the FCA in the UK to provide a fund-classification system that boosts transparency for investors. Read more

Chinese regulators poised to adopt mandatory ESG disclosure requirements

Regulatory authorities in China are considering the introduction of mandatory ESG reporting requirements for all public companies listed in China. According to the proposal, regulators are initially looking at having the new disclosures apply on a ‘comply or explain’ basis. The proposal builds upon a voluntary set of ESG reporting guidelines that came into effect on 1 June 2022, as well as the Chinese Securities Regulatory Commission proposal issued in May 2022 focusing on a revised disclosure regime for publicly listed entities. Once the new regulation comes into force, the first entities in scope would be state-owned enterprises who would be expected to issue their first reports as early as December 2023. Read more

Philippine SEC introduces guidance on sustainability-linked bonds

On February 2, 2023, the Securities and Exchange Commission (SEC) of the Philippines released a preliminary memorandum circular (MC) for public feedback regarding the issuance of sustainability-linked bonds (SLB) in the Philippines, in accordance with the ASEAN Sustainability-Linked Bond Standards (ASEAN SLBS). This aims to promote the use of sustainability-linked bonds in financing companies that prioritize sustainability. According to the guidelines, the entity issuing the bonds must either be an ASEAN issuer or a non-ASEAN issuer that has key performance indicators (KPIs) associated with an ASEAN member nation. Final comments on the proposal were due by 17 February 2023. Read more

Singapore Green Taxonomy in final consultation phase

Singapore is set to finalize its green and transition taxonomy for financial institutions. The final consultation seeks input from stakeholders on thresholds and criteria for five sectors: agriculture and forestry/land use; industrial; waste and water; information and communications technology; and carbon capture and sequestration. The Green Finance Industry Taskforce (GFIT) is deliberating a ‘measures-based’ approach to account for the uncertainty in technological solutions to achieve net zero in the industrial sector. This approach would complement Singapore’s traffic light classification which sets targets and criteria for transition activities that allow for a ‘progressive shift towards a net zero outcome across different sectors.’ Read more

Other News & Resources

• IFRS Sustainability and Climate Reporting period to begin in 2024. Read more
• NGFS seeks feedback on climate scenarios from interested stakeholders. Read more
• ASCOR publishes consultation report for the first public investor framework to assess sovereign bond issuers on climate change. Read more
• GRI Mining Standards open for stakeholder consultation. Read more
• SBTi adds land metrics to target-setting framework. Read more

 

Have we missed anything?
ESG Book manages the world’s largest repository of sustainability reporting provisions with over 3,400 regulations across 80 jurisdictions globally. If there is a recent ESG regulatory development we have missed, we would like to hear from you and invite you to contribute below.
Click here to access the ESG Regulatory Provisions Contributor Form

2023 marks a considerable shift in priorities at the intersection of politics and business. This was evident at the World Economic Forum in Davos, where regulators and industry leaders set out key objectives to revitalize the global economy and promote sustainable development in an increasingly turbulent and fragmented world. In the aftermath of a global energy crisis, regulators are vying for market stability and a steady decoupling from unsustainable fossil fuel assets. Consequently, clean energy financing was widely debated in Davos as part of a larger incentive scheme across the EU. In the policymaking world this month, the European Central Bank was in the spotlight after launching a new set of indicators to help banking organizations measure emissions and track green finance flows.

Ahead of Davos, US governmental bodies announced a series of policy measures to accelerate growth and investment in ‘green’ economic activities. First, the US Securities and Exchange Commission (“SEC”) confirmed the issuance of a finalized Climate Disclosure rule in April 2023. Also, this month, the White House revealed a nature-based accounting system to measure the value of natural resources in economic terms. Turning to the banking sector, the US Federal Reserve launched a pilot exercise to gain insight into the banking sector’s preparedness and resilience in terms of climate-related risks.

In other parts of the world, ESG policies focused on regulating companies and data providers. Australia’s carbon trading scheme is under scrutiny after an independent investigation of emissions offsetting methods. In South Korea, the Financial Supervisory Service (FSS) has created guidance for ratings agencies that conduct ESG-bond evaluations.

Sustainability regulation around the world provides the necessary checks and balances for financial markets whose logic is often embedded in oscillating behavior-driven choices. Although the number of ESG policy interventions restores optimism in the pace of transition, we must also acknowledge the influence of a growing list of ESG critics and polarized debate. Regulators need to stand up to the challenge of providing market certainty and clarity, while not stifling innovation and entrepreneurship.

Europe

ECB launches statistical indicators to help banks analyze climate-related risks

The ECB introduced a set of indicators to help assess climate-related risks in the financial services sector and monitor the flow of green transition finance. The ‘analytical’ indicators – financed emissions (FE) and carbon intensity (CI) – measure carbon emissions financed by the financial services sector. Financed emissions would measure an issuer’s total greenhouse gas emissions weighted by the investment as a share of the company’s total value. The resultant Financed Emissions is a unit of measure that can be compared to the production value of the company to calculate Carbon Intensity, with an additional consideration of transition risk indicators and exposure of loans and securities to high-emitting economic activities. The ECB has also included sustainable finance indicators in the data set to track the progress of sustainability-linked bonds in the EU market. At this stage, the ECB metrics are ‘experimental indicators’ and the ECB has advised to use them ‘with caution’. The ECB welcomes comments and feedback, however, no deadline regarding the implementation of the indicators has been specified.
Read more

US clean energy package encourages EU lawmakers to introduce centralized green incentives system

The United States earmarked a substantial portion of the federal budget for clean energy subsidies. European legislators noted that the multi-billion-dollar package would create a huge windfall for clean energy businesses in America. To remain competitive with the US, several member states are now calling for an EU-wide measure to scale investment in alternative energy. Regulators and industry leaders also discussed the reality of record high energy prices which necessitate a shift towards renewable energy. However, currently, there is no stopgap EU-wide measure that would expedite the permit process for renewable energy companies.Read more

Americas

SEC confirms final Climate Disclosure Rule in April

The SEC announced that it would release the final rule to enhance climate-risk reporting for investors in April. Central to the rule is a GHG emissions reporting requirement to facilitate comparability between investment securities. Emissions metrics will be a critical component for the standardization of ESG data, which, in turn, will help funnel capital inflows towards climate-related investment opportunities. Additionally, the rule seeks alignment with international standards for climate disclosures. The SEC has integrated nearly all TCFD recommendations – the leading authority on climate-related risk disclosures used by most corporates, investors and securities regulators. However, the regulator has faced continuous backlash in the form of pre-emptive policymaking in conservative state legislatures. Many state treasuries have also taken concrete steps to oppose the rule within their jurisdiction by placing ‘woke’ asset management firms such as BlackRock on a divestment list. Though the rule is favored by a majority of SEC regulators, a handful of dissidents have commented on the pecuniary implications of compliance as auditing costs will more than double for covered entities. Read more

Biden-Harris administration unveils national strategy for nature-based accounting

On January 19, the White House released a national strategy to measure the economic value of natural resources with statistical data and drive sound policy decisions. Special Envoy for Climate Change, John Kerry announced the plan during a speech at the Word Economic Forum in Davos, Switzerland stating that the initiative “will put nature on the national balance sheet”. The accounting of natural capital in the US economy provides insight into the value of healthy ecosystems through an economic lens. Executive branch organizations and agencies can use this data to examine the impact of climate change on long-term economic growth. This, in turn, can help regulators identify depleting natural assets and integrate environmental risk into economic policy. A national biodiversity strategy will also have broader implications for the private sector, creating opportunities for industries that are least impacted by nature loss and natural disasters, such as renewable energy, to attract investment. Read more

US Fed launches Climate Scenario Analysis Exercise for banks

The Federal Reserve is conducting a climate scenario analysis (CSA) for six large US banking organizations. Participating banks must provide an estimate of the impact of scenarios on specific assets in their loan portfolios. For physical risk assessment, a banking organization must show how climate scenarios affect commercial and residential real estate portfolios over a one-year time horizon in 2023. The transition-risk module considers the effect of scenarios on corporate loans and real estate loan portfolios altogether over a 10-year time horizon from 2023 to 2032. Data from physical risk and transition-risk modules must be supplemented by quantitative responses on climate-risk management practices. The Federal Reserve will collect responses until July 21, 2023. Read more

Asia Pacific

Australian carbon trading scheme set for reform

An independent review of Australia’s scheme for providing carbon credits raises questions around the efficacy of greenhouse gas emissions reduction methods. This means that entities purchasing credits on the carbon market may not offset their emissions in real terms such as avoided deforestation and human-led native forest regeneration. To remedy the discrepancy in the carbon credits scheme, the review panel has proposed a new ‘carbon abatement integrity committee’. The Australian government has concluded that the scheme is functioning adequately, however it plans on incorporating recommendations from authorities in future. Read more

South Korea’s FSS introduces ESG ratings guidelines

The Financial Supervisory Service (FSS) of Korea introduced a set of guidelines for the standardization of ESG ratings methodologies. Credit ratings agencies that validate ESG bonds can incorporate assessment criteria in the “Guidelines” and consequently establish consistent standards across different agencies. Agencies that provide comparable evaluation reports and verify the use of funds can help provide decision-useful information to investors and prevent the occurrence of greenwashing practices in a nascent industry. The FSS also proposed minimum investment ratios as part of disclosure requirements for ESG bond evaluation. The guidelines will be effective from February 1, 2023, and Korea’s Financial Services Association will recognize the ESG certification process as best practice. Read more

Other News & Resources

• EBA publishes Roadmap to Sustainable Finance: The leading standard-setting body will finalize climate-related risk disclosures and a biodiversity framework for corporate reporting in 2023. Read more
• Indian financial institutions unprepared to deal with climate risks. Read the latest report by think-tank ODI’s Sarah Colenbrander, in partnership with researchers from the Climate Bonds Initiative and adviser auctusESG.

Have we missed anything?
ESG Book manages the world’s largest repository of sustainability reporting provisions with over 3,400 regulations across 71 jurisdictions globally. If there is a recent ESG regulatory development we have missed, we would like to hear from you and invite you to contribute below.
Click here to access the ESG Regulatory Provisions Contributor Form

In 2022, policy became a vehicle to reorient capital flows through multiple routes, at different levels – international and domestic. The convergence of standards and frameworks created direct links between a variety of actors in sustainable finance. Despite geopolitical turmoil and shadowy economic forecasts, regulators are pursuing the sustainability objective through timely and fortuitous interventions.

The European Union continues to be the epicenter of ESG-related policymaking. In December, the EU passed legislation banning the sale of products linked to deforestation activities. European regulators are also revisiting provisions in the Corporate Sustainability Reporting Directive (CSRD) to potentially grant exemptions to the financial services sector. The European Insurance and Occupational Pensions Authority (EIOPA) is conducting a deep study on the impact of climate and social risks on long-term investments. The Swiss government is set to launch its own version of an ESG fund labelling rule to provide decision-useful information for sustainable investing. Despite banks likely escaping the remit of EU sustainability rules, the Basel Committee has initiated vital action by providing guidance to the banking sector on integrating climate-related financial risks. In the United Kingdom, plans are underway to open consultation on the supervision of ESG ratings providers. Regulatory reform in the ESG realm continues in the U.S., with the Federal Reserve proposing a climate-risk framework for big banks. In Asia, the Green and Sustainable Finance Cross-Agency Steering Group has announced a collaboration with the Carbon Disclosure Project to help improve the quality of ESG data in Hong Kong for first-time reporting SMEs.

With a new year beginning, policymakers and practitioners will embark on an intellectual endeavour to create consistent global sustainability reporting rules. Though many challenges and pitfalls lie ahead, 2023 promises to be a substantial year characterized by increasing investment in adaptation and social sustainability.

Europe

EU reaches deal on deforestation-free supply chains

The European Union has reached an agreement to ban the sale of deforestation-linked products in the EU market. Products including palm oil, cattle, soy, coffee, cocoa, timber and rubber as well as derived products such as beef, furniture and chocolate are covered by the regulation. Companies will have to issue a due diligence statement verifying that the production of these goods has not caused damage or degradation of forest ecosystems anywhere in the world after 31 December 2020. However, banks will be exempt from the due diligence obligations for at least two years. This regulatory initiative underscores the COP15 agenda to establish a post-2020 global biodiversity framework for achieving measurable nature-positive outcomes.
Read more

Banking & finance may be exempt from CSRD requirements

On November 28, the EU Council and European Parliament reached an agreement to adopt the Corporate Sustainability Reporting Directive (CSRD). The legislation
significantly expands mandatory sustainability disclosure requirements for all large EU companies operating in the EU. More recently, the EU Council proposed to exempt banks and investment funds from CSRD following resistance from several member states including Spain, France, Italy and Slovakia. The draft proposal allows each member state to decide whether financial services providers should account for their environmental and social footprint. Speculation about the rule will continue in the banking and financial services sector until the final version is published over the course of 2023.Read more

EIOPA considers sustainable investing impact on solvency risks

The European insurance authority published a discussion paper on the prudential treatment of sustainability risks. EIOPA is working to determine whether the consideration of environmental and social factors is “warranted” under the Solvency II risk-based framework. In the discussion paper, EIOPA provides guidance on assessing transition risks and its potential impact on prudential risks related to bonds, stocks and real estate. On the climate front, the paper examines underwriting risk on non-life insurance based on climate change adaptation. EIOPA’s final focus area is prudential treatment of social risks. The regulator is
inviting feedback from stakeholders until 5 March 2023.Read more

Switzerland proposes ESG fund labelling rule

The Swiss Federal Council released a position paper on sustainable investing rules to prevent greenwashing. The proposed rule requires funds that are labelled ‘sustainable’, ‘green’, or ‘ESG’ to pursue the suggested sustainability objective by setting quantifiable targets. This suggests alignment between linked economies as regulators in the UK, US and EU are working simultaneously to formalise policies that protect financiers from being misled by exaggerated ESG-related claims. Unsurprisingly, different versions of the same rule are being announced to increase transparency and ease of comparability between financial products. In Switzerland, a working group under the Federal Department of Finance will oversee the implementation of the final rule which will be released by the end of September 2023. Read more

Basel Committee recommends integrating climate risks into existing capital rules

The Basel Committee on Banking Supervision has published responses to FAQs on how banks should incorporate climate-related financial risks. The committee of global financial regulators aims to “promote consistent interpretation” of the existing Basel Framework. Many FAQs seek to clarify best practices with respect to judging exposure of assets and credit risk ratings based on climate risks. The recommendations are also in alignment with the Basel Committee’s principles for the effective management and supervision of climate-related financial risk. Read more

United Kingdom

UK set to regulate ESG data and ratings providers

Chancellor of the Exchequer, Jeremy Hunt, announced a series of regulatory reforms to boost growth in the financial services sector following Brexit. As part of the “Edinburgh Reforms”, the UK will release a new green finance strategy early this year and, additionally, launch a consultation for the oversight of ESG ratings providers to promote “consistent standards” and transparency.  Read more

Americas

The US Federal Reserve consults on a climate-risk framework for banks

The United States Federal Reserve is seeking feedback on a high-level climate-risk framework for the largest financial institutions (over $100 billion in total assets). Eligible entities will be bound by principles for the sound management of physical risks and transition risks in terms of climate change. These principles cover internal policies and procedure, risk management, data quality, governance and scenario analysis. The proposed principles are compatible with proposals issued by other federal agencies such as the Federal Deposit Insurance Corporation. Read more

Asia Pacific

The Steering Group chaired announces collaboration with CDP to release climate-related risk disclosure by SMEs

The Steering Group will work together with the Carbon Disclosure Project to strengthen the sustainability reporting regime in Hong Kong, focusing primarily on improving data quality and accessibility. The collaboration has led to the first cross-sector template for SMEs reporting in Hong Kong for the first time. The template has three different modules to allow for a range of granularity in reporting based on company size and complexity. Read more

Other News & Resources

• EBA publishes Roadmap to Sustainable Finance. Read more
• ISSB announces guidance and temporary relief for Scope 3 emissions disclosures. Read more
• The Federal Acquisition Regulatory Council (FARC) will extend the comment period for the proposed rule on Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk by 30 days. Read more

Have we missed anything?
ESG Book manages the world’s largest repository of sustainability reporting provisions with over 3,400 regulations across 71 jurisdictions globally. If there is a recent ESG regulatory development we have missed, we would like to hear from you and invite you to contribute below.
Click here to access the ESG Regulatory Provisions Contributor Form

Tech companies are known for their low emissions profile, but what about their clients? How can big tech not just improve its own carbon footprint, but also help drive corporate sustainability in other sectors? This is what we talk about with Justin Keeble in this episode. He is Managing Director of Global Sustainability at Google Cloud, and leading several initiatives to support Google and its clients with sustainability and related decision-making. To learn more about the work of Justin and his team, see their latest thought piece here.

DISCLAIMER

ESG Book, registered with Companies House under Company No. FC035689 and UK establishment no. BR020774, and with registered office at Fifth Floor, Jamestown Wharf, 32 Jamestown Road London, NW1 7BY, is the UK branch of ESG Book GmbH, a limited liability company organized under the laws of Germany, with registered number HRB 113087 in the commercial register of the court of Frankfurt am Main, and having its seat and head office at Zeppelinallee 15, 60325 Frankfurt am Main, Germany.

PROFESSIONAL ADVICE – This podcast is provided for general information purposes only and does not constitute professional advice. If professional advice is required, services of a competent professional should be sought. THIRD PARTY INFORMATION – Certain information contained in this podcast has been obtained from sources outside ESG Book. While such information is believed to be reliable for the purposes used herein, no representations are made as to the accuracy or completeness thereof and none of ESG Book or its affiliates accepts any responsibility for such information. RELIANCE – ESG Book makes no representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein, and accepts no liability for any loss, of whatever kind, howsoever arising, in relation thereto, and nothing contained herein should be relied upon. TRADEMARK – “ESG Book” and other words or symbols in this document that identify ESG Book products and services are product and service marks of ESG Book. Other words or symbols in this document that identify other parties’ goods or services are the trademarks or service marks of those other parties. VIEWS EXPRESSED – Any views or opinions presented are solely those of the speaker, and do not necessarily represent the views or opinions of ESG Book. ENQUIRIES – Any enquiries in respect of this podcast should be addressed to ESG Book or its affiliates.