The European Commission has requested the European Financial Reporting Advisory Group (Efrag) to delay its work on sector-specific sustainability reporting standards to provide additional guidance on existing sector-agnostic proposals. This move aims to ease the burden on businesses and stakeholders involved in consultations. Efrag will adjust its workplan and increase staff to support the implementation of the European Sustainability Reporting Standards (ESRS), which are crucial for the EU Corporate Sustainability Reporting Directive. The directive will require nearly 50,000 companies to report on social, environmental, and governance factors starting in 2024. The ESRS are based on the principle of double materiality, differing from the International Sustainability Standards Board's focus on financial materiality. The commission's request aligns with the EU's goal to reduce corporate reporting requirements by 25% to enhance market competitiveness.

The UK government has unveiled a road map to revive the nuclear energy industry, including plans for a new power station and a £300mn nuclear fuel programme. Consultations on siting new nuclear power stations and attracting private capital will be open until March 10 and April 4, respectively. Norway has agreed to deep-sea mining.

The Monetary Authority of Singapore has introduced a sustainable finance taxonomy, becoming the first to include transition categories. The taxonomy uses a traffic light system to distinguish between green investments and those aiding the transition to net zero but not meeting green criteria. It covers eight economic sectors and emphasizes the early phase-out of coal power plants, particularly in Asia. The framework aims to support activities on a pathway to net zero or contributing to net zero outcomes.

ClientEarth has filed a lawsuit against Danone in a Paris court, alleging the company violates France’s Corporate Duty of Vigilance Law by failing to effectively reduce its single-use plastic footprint. Supported by Surfrider Foundation Europe and Zero Waste France, the NGO claims Danone's efforts are insufficient, focusing only on recyclability. Danone disputes the accusations, advocating for a global treaty on plastics. The case highlights broader issues of corporate responsibility and environmental law, with potential implications for other French companies and ongoing litigation against TotalEnergies over environmental concerns in Uganda and Tanzania.

The European Commission has initiated a consultation to design sustainability agreements for the agriculture sector, indicating a willingness to relax competition rules. The EU's recent agricultural policy reform allows for certain antitrust exemptions, applicable only when agreements are essential to meet sustainability standards exceeding mandatory EU or national levels.

Key announcements from the 2023 UN climate conference in Dubai, focusing on the momentum gained for phasing out fossil fuels during energy day. The day started with the release of the latest 'global stocktake' at 5am local time, highlighting the differing visions and exhaustion among participants.

Three US supervisory authorities, including the US Securities and Exchange Commission, the Federal Trade Commission, and the Commodity Futures Trading Commission, are intensifying efforts to address greenwashing within their regulatory frameworks. This increased scrutiny targets corporate net zero pledges, sustainability product marketing, and environmental, social, and governance reporting.

The French High Council of Statutory Auditors (H3C) has been designated as the main supervisory authority for audit firms examining ESG factors in France. The French government has tasked H3C with the inspection and sanctioning of non-financial audits under the EU Corporate Sustainability Reporting Directive.

A new report from the University of Oxford’s sustainable finance group suggests that the EU could end its dependence on Russian gas by 2028 through additional investments of €512bn in heat pumps and renewables. The report emphasizes the importance of shifting focus from substituting Russian gas imports to expanding clean energy production.

Royal Bank of Canada emerged as the largest financier of fossil fuel companies in 2022, providing $42.13 billion to the industry and surpassing JPMorgan. Despite a decrease in overall financing for fossil fuel companies, banks' policies still allow for a significant annual loophole of $750 billion. This information comes from a study conducted by the Rainforest Action Network, BankTrack, and other campaign groups.

The emergence of Scope 4 emissions, also known as 'avoided' emissions, in company reports is sparking debate within the industry about their role in carbon accounting. While policymakers focus on legislating indirect emissions from a company's value chains (Scope 3 emissions), businesses offering climate solutions are increasingly incorporating Scope 4 emissions into their reporting.

The International Maritime Organization (IMO) has set emissions reduction targets for the shipping industry, marking progress in an industry that has been slow to address decarbonisation. However, these targets are not aligned with the Paris Agreement and fall short of the levels scientists deem necessary to mitigate severe climate change impacts. After intense discussions, delegates from 175 countries within the IMO adopted a revised strategy to aid in the decarbonisation of the shipping sector.

Women are underrepresented in climate negotiations and conventions, which jeopardizes a just transition. Climate change and biodiversity loss disproportionately affect women due to their reliance on natural resources, public services, and lower incomes. UN Women emphasizes the importance of integrating gender-inclusive factors in climate policy.

European renewable utilities, supported by climate-friendly policymaking, have a lower cost of capital than their fossil fuel counterparts. Europe’s climate policy and regulatory agenda has been linked to the reduced cost of equity and debt for electricity companies with a higher share of solar and wind power operating across the continent.

Litigation concerning climate change and the rights of different age groups is on the rise globally. Courts are increasingly considering the generational impacts of climate change, with younger and senior claimants becoming more common. Notably, the European Court of Human Rights is hearing cases with a generational angle, and the US is witnessing a surge in youth activist cases related to state constitutional rights to a healthy environment.

Liabilities linked to the use of plastics and its chemical components are raising concerns for companies and investors. Environmental pollution from plastic waste is well-documented, but healthcare issues related to microplastics in ecosystems and human bodies are only beginning to emerge.

Heated debate around the taxation of shipping emissions is continuing at the International Maritime Organization in London this week. Delegates from the 175 member states of the UN agency that supervises the maritime sector took the stand in the plenary session, arguing for or against the measures being considered to reduce the sector’s emissions. Public opposition to an emissions tax on shipping vessels made consensus seem a distant hope at this week’s UN meeting, but in private, talks might be advancing.

The UK government has initiated a consultation on a Carbon Border Adjustment Mechanism, set to affect imports from 2027. The US SEC's climate disclosure rules face challenges in the Eighth Circuit. The EU's Nature Restoration Law faces uncertainty, while the Corporate Sustainability Due Diligence Directive and Critical Raw Materials Act progress. The European Commission plans revisions to the Common Agricultural Policy and strategic initiatives for Horizon Europe. The UK Court of Appeal ruled climate change evidence inadmissible in criminal damage cases. Greenpeace's observer status at the International Seabed Authority is under scrutiny. KLM was found guilty of greenwashing by the Amsterdam District Court. The Texas Board of Education divested $8.5bn from BlackRock amid ESG backlash. The US EPA finalized pollution-cutting rules and banned asbestos use.

With climate regulation increasingly enshrined in national legislation to meet net zero targets, policymakers should prepare for greater legal pushback. Experts suggest that while currently a small proportion, lawsuits targeting climate legislation could become more common as governments enforce stricter carbon emission regulations.

Policymakers in Europe and the UK are moving towards regulating the ESG rating industry to enhance transparency and consistency. ESG rating agencies ISS, MSCI, and Sustainalytics have updated their methodologies to reflect their latest rating views. The scope and enforcement level of the upcoming regulations are still under discussion.

UK directors may face personal liability for breaching fiduciary duties if they fail to consider nature-related risks, as highlighted by a new legal opinion. Boards are advised to prioritize and integrate these risks into their decision-making processes to avoid legal challenges, according to environmental consultancy Pollination Law and the Commonwealth Climate and Law Initiative.

MSCI is expected to downgrade several ESG fund ratings as it amends its methodology. This change may impact the financial markets, particularly funds that have been rated highly under the previous criteria.

During COP28's designated 'day of rest', delegates engaged in trade talks and deal-making away from the official program.

Goldman Sachs Asset Management's global insurance survey, representing over $13tn in assets from 343 insurance companies, indicates that climate change may force insurers to exit certain business lines and raise premiums due to risks from extreme weather events. The survey, conducted in February 2023, found that property and casualty insurance are most at risk, with 38% of respondents considering exiting certain lines and 34% foreseeing necessary price increases. Michael Gregory of RSA highlighted the UK's flood risk and the industry's insufficient mitigation measures. The European Insurance and Occupational Pensions Authority suggested integrating nature-related risks into supervisory frameworks. The survey also revealed a significant shift towards ESG considerations in investment decisions, with 90% of insurers incorporating ESG factors, compared to 68% in 2017. Regulatory changes and net zero targets are influencing ESG investment allocations, particularly in Asia and EMEA.

The European Commission has opted not to define 'sustainable investment' or introduce minimum criteria for sustainability funds under the EU Sustainable Finance Disclosure Regulation (SFDR). Despite requests for guidance and minimum standards, particularly after market turbulence and concerns of greenwashing, the Commission maintains that SFDR is a disclosure regime, leaving it to financial market participants to assess and disclose their investments' sustainability. The decision has been met with mixed reactions, with some industry leaders endorsing the emphasis on transparency, while others worry about further market confusion and the dilution of the 'dark green' category of Article 9 funds.

EU cornerstone climate policies, including the EU Nature Restoration Law, are experiencing pushback, delaying agreement until after the European parliament elections in June due to opposition from Hungary. The UK Competition and Markets Authority has issued warnings to fashion retailers regarding greenwashing practices.

The penultimate day of COP28 saw mixed reactions to the latest draft of the 'global stocktake,' with some progress noted but significant disappointment expressed by various stakeholders. Key points include calls for tripling renewable energy capacity, phasing down unabated coal, and accelerating efforts towards net zero emissions. Criticism centered on the draft's optional language and lack of specific targets, particularly regarding methane emissions. The EU and small island nations voiced strong objections, while some saw the inclusion of fossil fuels in the draft as a positive step. Negotiations continue, particularly around the Article 6.4 mechanism for carbon markets.

A new standalone crime of ecocide is being proposed in the Scottish parliament by MSP Monica Lennon, aiming to impose prison sentences of up to 20 years for environmental polluters. The consultation, supported by Stop Ecocide International, will run until February 9, 2024. The proposed law seeks to create stronger deterrents against environmental damage and elevate existing legislation. The ultimate goal is to incorporate ecocide into the Rome Statute, which governs the International Criminal Court.

The maritime industry is undergoing significant changes as it faces increased scrutiny over decarbonisation efforts. Fincantieri's CEO, Pierroberto Folgiero, emphasizes the need for supportive policies rather than punitive measures to achieve emissions reduction targets. The EU's FuelEU Maritime initiative and the International Maritime Organization's revised greenhouse gas strategy are key regulatory drivers. Fincantieri is exploring various green fuel alternatives, including hydrogen and nuclear, but faces challenges related to fuel availability, cost, and infrastructure. Discussions on a potential shipping emissions tax are ongoing, with Folgiero advocating for reasonable levies. Collaboration within the maritime ecosystem and with stakeholders is crucial for a successful transition to green fuels.

Unrestricted expansion in ESG and sustainability-related corporate jobs risks confusing business strategies unless their functions are properly embedded throughout the value chain. Experts emphasize the need for clear job descriptions and the integration of sustainability roles across the entire business. Companies should avoid overpromoting individuals with limited expertise and ensure that sustainability is not treated merely as a compliance function. The transition to a lower carbon economy requires comprehensive training and the development of teams with complementary skillsets.

A new China-Singapore Green Finance Taskforce, led by the Monetary Authority of Singapore and the People’s Bank of China, aims to enhance sustainable finance flows by aligning bond issuance and taxonomies and facilitating green technology. The task force includes senior members from financial institutions and green fintech companies, with support from the EU’s International Platform on Sustainable Finance. Additionally, the MAS has launched its Finance for Net Zero action plan to focus on transition finance activities, including a consultation on ESG ratings and data providers. The Hong Kong stock exchange is also reviewing climate disclosure rules to align with international standards.

A new China-Singapore Green Finance Taskforce, led by the Monetary Authority of Singapore and the People’s Bank of China, aims to enhance sustainable finance flows by aligning bond issuance, taxonomies, and green tech facilitation. The task force includes senior members from financial institutions and green fintech companies, with support from the EU’s International Platform on Sustainable Finance. Singapore's Finance for Net Zero action plan will focus on transition finance, including a code of conduct for ESG ratings and data providers. The Hong Kong stock exchange is also reviewing climate disclosure rules to align with international standards.

Brazil's new president, Luiz Inácio Lula da Silva, has reinstated the Amazon Fund to combat deforestation, with Norway and Germany resuming their donations. The fund's success hinges on diversifying international donors and fostering impactful projects. Lula's broader green policy agenda includes halting deforestation, achieving zero greenhouse gas emissions in electricity, and issuing green bonds. However, political divisions and the lack of a regulated carbon market pose challenges. Experts emphasize the need for modernizing Brazil's energy sector and implementing comprehensive energy efficiency plans.

Corporate boards in the US are revising their diversity, equity, and inclusion (DEI) policies in response to the Supreme Court's ruling against affirmative action, which has increased the risk of anti-discrimination litigation. Experts from Mayer Brown and Baker McKenzie emphasize the need for legally sound DEI strategies to mitigate potential legal challenges. Despite the legal risks, firms like Veris Wealth Partners argue that DEI initiatives are crucial for maintaining a company's social license to operate. The article also highlights recent legal actions against DEI policies, including a high-profile lawsuit involving Starbucks, and discusses the broader implications for corporate diversity efforts in the US.

The maritime industry is facing stricter decarbonisation targets due to new EU regulations, including the inclusion of shipping in the EU's emissions trading system and the FuelEU Maritime initiative. These measures aim to reduce greenhouse gas emissions and promote the use of low carbon fuels. The industry, responsible for 3% of global emissions, has historically avoided intense scrutiny. French President Emmanuel Macron is advocating for a global tax on shipping emissions. The International Maritime Organisation is also updating its greenhouse gas strategy, with a revised plan expected soon. Experts highlight the significant investment needed for the transition and the potential challenges posed by market dynamics and split incentives.

New measures for the assurance of ESG reporting in the EU and UK aim to enhance credibility and reliability, impacting auditing services. The EU's Corporate Sustainability Reporting Directive mandates assurance requirements, while the UK is updating its audit regime, including a consultation on corporate governance code updates. Experts highlight differences between the EU's mandatory approach and the UK's voluntary compliance, noting potential challenges in skillset requirements and the evolving nature of assurance standards. The investment community seeks credible audits to ensure companies meet ESG commitments.

MSCI is revising its methodology for rating ESG funds, impacting around 31,000 funds with expected downgrades. The changes aim to enhance stability, transparency, and accuracy, particularly for swap-based ETFs. The new approach will assess ESG ratings based on underlying index holdings rather than collateral holdings. Analysts support the stricter criteria, viewing it as a positive development for the sector. Other ESG rating companies have not indicated similar changes. Regulatory bodies in the EU and UK are scrutinizing ESG rating methodologies to address transparency and accuracy concerns.

The youth climate case Juliana vs United States will proceed to trial after a federal judge in Oregon rejected the US government's dismissal attempt. The US Treasury and IRS proposed regulations for clean hydrogen production tax credits. The European Financial Reporting Advisory Group released draft guidance documents for consultation. France's SRI label revisions may lead to significant divestments. The UK Sustainable Investment and Finance Association urged the Labour party to maintain its green investment commitment. Norway's largest pension fund, KLP, divested from 12 companies over environmental and human rights concerns. Switzerland's youth social democrats proposed an inheritance tax to fund climate action.

EU financial regulators and the ECB have submitted opinions on the first set of sustainability reporting standards, urging the European Commission to provide more clarity on materiality assessments. The European supervisory authorities seek improved consistency and guidance on setting materiality thresholds and defining 'value chain' for financial services. The current standards cover various environmental and social factors, with a second set focusing on sector-specific standards for SMEs. The EU's 'double materiality' principle contrasts with other initiatives, requiring companies to disclose both the impact of sustainability factors on their business and their business's impact on the environment and society. The standards will be adopted by June 30, 2023, under the EU Corporate Sustainability Reporting Directive.

Germany's new supply chain due diligence act mandates companies to assess human rights and environmental risks, establish reporting systems, and take corrective actions. The law affects companies with over 3,000 employees, lowering to 1,000 in 2024, and includes penalties for non-compliance. Similar laws exist in France, Norway, and are being debated in the Netherlands, while the UK has the Modern Slavery Act. The EU is still negotiating its broader Corporate Sustainability Due Diligence directive.

The article discusses the potential impact of a Brexit on the UK and the EU, emphasizing the uncertainty and risks involved. It highlights the lack of a concrete plan for a post-Brexit scenario and the potential for economic instability. The piece also explores the pro-Brexit arguments, such as sovereignty and control over immigration, and the skepticism towards the EU. It notes the possible short-term effects on financial markets and the long-term implications for trade and legislation. The article also touches on the internal political ramifications within the UK, particularly for the Conservative Party and Prime Minister David Cameron, and the potential for a resurgence of pro-EU independence movements in Scotland.