Global: International Accounting Standards Board consults on how to reflect climate change better in financial statements

On 31 July 2024, the International Accounting Standards Board (IASB) published a consultation document, which sets out eight proposed illustrative examples to help companies disclose climate-related risks (and other uncertainties) in their financial statements. The examples in the IASB consultation, produced in collaboration with the ISSB, are intended to improve the transparency of information in financial statements and strengthen the connection between financial statements and other parts of a company’s reporting, such as sustainability reports. They do not add to or change the requirements in the IFRS Accounting Standards, but rather provide guidance on how these requirements should be applied. The IASB produced the examples in response to “strong demand” from investors, who have expressed concern that climate-related uncertainties are not sufficiently represented in financial statements. The consultation closes on 28 November, after which the IASB will determine whether the examples can be approved to formally accompany the IFRS Accounting Standards. For more information, see our blog post.  

Global: International Corporate Governance Network report on sustainability assurance provides guidance on investors’ expectations

On 12 July 2024, the International Corporate Governance Network (ICGN) published a report which provides guidance to investors on the interpretation of sustainability reporting assurances and sets out investors’ expectations regarding sustainability disclosures and the quality of external assurance. The report explains the difference between “reasonable assurance” and the less stringent “limited assurance”, and between “unqualified” and “modified” conclusions. The ICGN noted that some experts anticipate a “wave” of qualified opinions in the short term, on the basis that much of the information to be included in sustainability disclosures is “not ready for assurance”. The report goes on to highlight that investors expect sustainability reporting to be prepared with the same rigor and ethical approach as financial statements. For more information, see our blog post. 

Global: TNFD announces next wave of early adopters and sector-specific guidance

The Taskforce on Nature-related Financial Disclosures (TNFD) announced on 28 June 2024 that there has been a notable 30% increase in TNFD early adopters since the first list was released in January 2024 (i.e. an additional 96 organisations), bringing the total number of adopters so far to 416 organisations. This surge in commitments underscores the growing recognition within the business and financial sectors of the pressing need to address nature loss and integrate a consideration of nature and biodiversity into their core operations. The TNFD has also published the final versions of: (i) its first set of additional sector guidance covering sector specific metrics for eight real economy sectors; and (ii) additional guidance for financial institutions with recommended disclosures and disclosure metrics for banks, re/insurance companies, asset managers and owners, and development finance institution. The TNFD also published updated guidance on value chains which aims to help organisations identify and assess dependencies, impacts, risks and opportunities in their upstream and downstream value chains with regard to nature and biodiversity. For more information, see our blog post.

Global: GRI and TNFD publish interoperability mapping on nature and biodiversity disclosures

The Global Reporting Initiative (GRI) and the Taskforce on Nature-related Financial Disclosures (TNFD) have together published an interoperability map and guidance document which show that the TNFD Disclosure Recommendations and the GRI Standards, including the GRI 101: Biodiversity 2024, are highly aligned. The publication of this mapping exercise comes after similar mapping exercises were recently published on the TNFD and the EU European Sustainability Reporting Standards (ESRS) and the GRI Standards and the ESRS. These mappings form part of a broader effort to assist companies in navigating multiple reporting frameworks at once and may encourage additional reporting aligned to voluntary frameworks where there is a high degree of alignment with mandatory regimes. For more information, see our blog post. 

Global: New guidance from SBTN on setting science-based targets for nature

On 10 July 2024, the Science Based Targets Network (SBTN) released its guidance on setting science-based targets for nature, which provides a structured and comprehensive guide for businesses aiming to set nature-based targets and to better understand a company’s impacts and dependencies on nature. Based on a corporate pilot programme that commenced last year and finished in June 2024, the guidance includes technical guidance and resources for companies to use in setting science-based nature targets, and also sets out best practices for preparing these. For more information, see our blog post. 

Global: International Association of Insurance Supervisors fourth consultation on climate risk

The International Association of Insurance Supervisors (IAIS) has launched the fourth (and final) in a series of consultations on climate risk. It conducted the first and second consultations in this area in 2023, with a third launched in March 2024. The IAIS says that it will respond comprehensively to the comments received at the end of the project. This fourth consultation includes proposed new supporting material intended to better reflect climate-related risk as part of effective supervisory practice. It covers issues related to supervisory reporting and public disclosure, as well as macroprudential considerations and supervisory cooperation. The consultation closes on 28 October 2024.

EU: European Commission publishes FAQs on the CSRD

On 7 August 2024, the European Commission published a draft Commission Notice with Frequently Asked Questions (FAQs) on the interpretation of certain provisions of the Corporate Sustainability Reporting Directive (CSRD). The FAQs also include explanations relating to the European Sustainability Reporting Standards (ESRS) “where legal interpretation from the Commission has been deemed to be necessary” and the Sustainable Finance Disclosure Regulation (SFDR). The FAQs start with an overview of the sustainability reporting requirements introduced by the CSRD, accompanied by flowcharts on the scope and timing of the reporting requirements. This is followed by 90 explanations covering issues such as the scope of the CSRD (including requirements for third-country undertakings), application dates and exemptions, assurance of sustainability reporting, Article 8 Taxonomy Regulation disclosures, language requirements, digitalisation, publication and supervision, and interaction with the SFDR. For more information, see our blog post. 

EU: ESMA identifies key focus areas for issuers reporting under the CSRD

The European Securities and Markets Authority (ESMA) has recently published the Guidelines on Enforcement of Sustainability Information (GLESI), accompanied by a Statement on the first application of the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD). This initial reporting by large issuers is set to begin in 2025, as anticipated by the CSRD. However, the Statement is an extremely helpful document in indicating ESMA’s key enforcement priorities, which will be relevant to all CSRD reporting entities (and not just issuers who are caught in the first year of CSRD reporting). We recommend considering this document when thinking about key priorities in implementing the CSRD. For more information, see our blog post.

EU: EFRAG releases study on ESRS early reports

On 25 July 2024, the European Financial Reporting Advisory Group (EFRAG) released its report “State of play as of Q2 2024 - Implementation of European Sustainability Reporting Standards (ESRS): Initial Practices from Selected Companies”. The study analyses preliminary practices so far of implementing the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD) and highlights related challenges. EFRAG surveyed and interviewed 28 large EU-headquartered undertakings with a 50/50 split between financial institutions (banks, insurers, and asset managers) and non-financial institutions (companies in healthcare technology, chemicals, road transport, textiles and utilities). EFRAG did not review any actual reporting. The analysis focused on four areas: materiality assessment; value chain; gap analysis on datapoints; and organisational approach to ESG reporting. For more information on the key findings from this report, see our blog post.

EU: EFRAG issues new ESRS explanations

On 26 July 2024, EFRAG issued new explanations of the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD). The explanations aim to help in-scope companies in their reporting under the ESRS. New explanations were included in the Compilation of Explanations that now includes 93 explanations released by EFRAG up to July 2024. For more information, see our blog post. 

EU: Interaction between ESRS and GRI Standards

The Global Reporting Initiative (GRI) has published a Q&A on what the new European Sustainably Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD) mean for users of the GRI Standards. The GRI collaboration with EFRAG is expected to lead to 42,500 companies publishing impact reporting through the ESRS that is aligned with the GRI Standards. For more information, see our blog post. 

UK: FCA consults on proposals for new Prospectus Rules

The Financial Conduct Authority (FCA) has released a consultation on its proposals for the new Prospectus Rules: Admission to Trading on a Regulated Market sourcebook (PRM) which will replace the existing UK Prospectus Regulation. In common with the UK listing reforms, in force from 29 July, these proposals form part of the process of ensuring that the UK’s capital markets remain globally competitive. In the main, the proposed PRM will be broadly consistent with the current UK Prospectus Regulation: a prospectus will be required upon initial admission to trading, prospectus content will be generally the same and the exemptions to the requirement for a prospectus will be carried across from the Regulation. However, a number of significant changes are proposed, including extending sustainability reporting requirements. For more information, see our briefing.

UK: FRC calls for more outcomes-based reporting by large private companies

On 12 August 2024, the Financial Reporting Council (FRC) published a report on the quality of corporate governance reporting by private companies that follow the Wates Principles. The report shows that companies struggle with defining company purpose, connecting that purpose to strategy, culture and values, and explaining how stakeholder engagement affects board decision-making. Although the report found improvements in some areas, it also pointed out that there was over-reliance on boilerplate disclosures and that companies needed more company-specific reporting. The report includes a number of suggestions for improvement. Focus group participants involved in the report stressed the importance of reporting on risks and referred to specific types of risks and opportunities, such as sustainability, climate transition, health and safety, and reputational. For more information, see our client briefing. 

Netherlands: Dutch banks cleared to work together on sustainability reporting

The Dutch competition authority (Authority for Consumers and Markets (ACM)) has permitted Dutch banks to work together to prepare their sustainability reports and improve comparability. The ACM found that there were no adverse consequences of the cooperation, such as price increases or quality reduction. The Dutch authority reviewed the request under its policy rule on sustainability agreements, put in place last October 2023, which permits certain sustainability cooperation agreements between competitors.

EU: CSDDD published in the Official Journal of the EU

The Corporate Sustainability Due Diligence Directive (CSDDD or CS3D) was published in the Official Journal of the EU on 5 July 2024. Member states will have until 26 July 2026 to transpose the CSDDD into their national laws. The CSDDD will apply on a phased basis for in-scope companies from 26 July 2027. For more information on the CSDDD, see our blog post. 

EU: European Commission adopts first FAQs on the CSDDD

To mark the entry into force of the Corporate Sustainability Due Diligence Directive (CSDDD or CS3D) on 25 July 2024 (see above), the European Commission published initial guidance on the Directive in the form of Frequently Asked Questions (FAQs). In particular, the European Commission will have to adopt delegated measures, including adopting by 26 January 2027 (or 26 July 2027, depending on the measures) model contractual clauses and various guidelines to support compliance in practice. For more information on the FAQs and the CSDDD, see our blog post. 

Global: Linklaters advises the World Bank on first-of-its-kind carbon removal bond to fund Amazon reforestation

Linklaters has advised the World Bank (International Bank for Reconstruction and Development, IBRD) on the issuance of its nine-year US$225 million, principal-protected Amazon Reforestation-Linked Bond – the largest World Bank outcome bond ever. The bond will provide investors with a coupon that includes a fixed guaranteed component and a variable component linked to the generation of Carbon Removal Units (CRUs) from reforestation projects in the Amazon rainforest regions of Brazil. It is the first bond linking investors’ financial return to the removal of carbon from the atmosphere, differing from past transactions linked to the sale of carbon credits from avoided emissions. For more information, see our press release.

EU: ESMA sets out its long-term vision for sustainable investments

The European Securities and Markets Authority (ESMA) has published an opinion on the EU Sustainable Finance Regulatory Framework (the Framework), setting out some potential long-term improvements, which it says will help facilitate investors’ access to sustainable investments. The opinion builds on the findings of ESMA’s progress report on greenwashing and the ESAs joint opinion on the review of the SFDR, with which it is broadly aligned. The ESMA opinion looks to position the EU Taxonomy as the centre of the Framework (with ESMA notably pushing for it to replace the SFDR sustainable investment test longer term) and proposes a build out of the EU Taxonomy more generally, including prioritising the development of a social taxonomy. The opinion also advocates strengthening the incorporation of transition in the Framework, including with a definition of “transition investments” and with transition incorporated into any new product categorisation system. There are also calls for all financial products to disclose some minimum basic sustainability KPIs, as well as simple sustainability disclosures for certain financial instruments not captured by the SFDR. Given its long-term horizon and high-level approach, the opinion does not go into the technical details of policy proposals. For more information, see our blog post and video. 

EU: ESAs update Q&As on the SFDR 

On 25 July 2024, the European Supervisory Authorities (ESAs) updated their consolidated Q&As on the Sustainable Finance Disclosure Regulation (SFDR) and the SFDR Delegated Regulation. 15 new Q&As have been added covering a range of issues, including: (i) establishing a website to comply with Article 10 of the SFDR; (ii) the calculation of principal adverse impact (PAI) indicators being performed on a pass/fail basis; (iii) how to calculate the share of sustainable investment that qualifies as environmentally sustainable and its disclosure; (iv) how values in currencies other than EUR be converted to EUR; and (v) whether sustainable investment can also be made by investing in another financial product, such as a UCITS fund. 

EU: ESMA Guidelines on funds' names to apply from 21 November 2024 

On 21 August 2024, the European Securities and Markets Authority (ESMA) published translations in all official EU languages of its guidelines on funds’ names using ESG or sustainability-related terms (for detail on the guidelines, see our previous blog post). The guidelines will therefore start applying on 21 November 2024. National competent authorities now have two months to notify ESMA whether they: (i) comply; (ii) do not comply but intend to comply; or (iii) do not comply and do not intend to comply with the guidelines. The transitional period for funds existing before the application date will be six months after that date, i.e. 21 May 2025. Any new funds created on or after the application date must apply the guidelines immediately. The ESMA update (with an updated timeline) is available here.

EU: Updated redlines of CRR III and CRD VI

In June the final EU Banking Package was published in the Official Journal with most amendments applying in 2025. Next to implementing Basel III, the legislative package aims at ensuring that ESG considerations become an integral part of banking operations by amending the requirements for business strategies, processes and governance, for management bodies and remuneration requirements respectively. For more information, see updated redlines of the CRR and CRD.

EU: ESG challenges and opportunities for European direct lending funds

Over the past few years, investor demand and increasing regulatory scrutiny have made ESG issues an increasingly important consideration for asset managers.  When it comes to European direct lending funds, managers are becoming significantly more sophisticated in their analysis of ESG considerations and their effects on borrowers’ performance and risk profiles, and according to Pitchbook, in 2023 private debt strategies accounted for over 20% of funds classified as Article 8 under the Sustainable Finance Disclosure Regime (SFDR). Please see our latest briefing for insights on how managers are balancing ESG risks and opportunities within their portfolios and the market trends we are seeing in direct lending strategies. For more insights on ESG challenges and opportunities for European venture capital funds and private wealth, see our Funds Catch-Up series. 

Global: SBTi decision on use of carbon offsets to tackle Scope 3 emissions not expected until 2025

On 30 July 2024, the Science Based Targets initiative (SBTi) published four technical papers as an early step in its revision of the Corporate Net-Zero Standard (see SBTi press release):

• Scope 3 discussion paper: This discussion paper sets out the SBTi’s initial thinking on potential changes being explored around scope 3 target setting. However, the paper does not propose draft requirements or criteria. This paper is open for feedback until 12 September. 
• Evidence received on the effectiveness of Environmental Attribute Certificates: The release of all evidence submitted as part of the open call for evidence which took place in September-November 2023 on the effectiveness of Environmental Attribute Certificates - without SBTi assessment.
• Synthesis report of evidence on the effectiveness of Environmental Attribute Certificates in corporate climate targets – Part 1: Carbon credits: A report presenting the SBTi’s synthesis of the evidence submitted through the call for evidence on the effectiveness of carbon credits in corporate climate targets. This is the first of the three reports that will be published. The reports on the other EAC instruments will be published at a later stage. 
• Findings of independent systematic review on the effectiveness of carbon credits in corporate climate targets: A statement on the findings of the assessment conducted by an independent third party on peer-reviewed academic literature on the effectiveness of carbon credits when used as a substitute for direct abatement. The statement summarizes the process followed, findings and limitations of this research exercise.

The reports highlight studies that suggest that “various types of carbon credits are ineffective in delivering their intended mitigation outcomes” and pointing to “clear risks to corporate use of carbon credits for carbon offsetting”. However, the SBTi have made it clear that, although the evidence examined so far reveals some insights, the findings are mixed and further work is needed in the next stage of the process to draw conclusions. According to the SBTi’s chief technical officer: “The SBTi believes that direct decarbonisation must remain the priority for climate action and it looks forward to the extensive public consultation on the draft Corporate Net-Zero Standard.” A draft of the revised Corporate Net-Zero Standard will be released for public consultation towards the end of Q4 2024. This means we will have to wait until next year to find out the SBTi’s final conclusions on the use of carbon offsets. 

Global: Latest developments on transition plans 

For the latest developments on transition plans, including the ISSB taking over responsibility for the UK TPT materials on transition plans, EFRAG’s work on transition plan guidance under the EU CSRD, and the EU Platform on Sustainable Finance’s plans to publish recommendations on transition plans for the financial sector, see our blog post.  

EU: Net Zero Industry Act published in the Official Journal of the EU

Regulation (EU) 2024/1735 of the European Parliament and of the Council of 13 June 2024 on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 2018/1724 (usually referred to as the Net Zero Industry Act or NZIA) was published in the Official Journal of the EU on 28 June 2024. The NZIA entered into force on 29 June 2024, with most of its provisions applying from this date. The NZIA aims for the EU to produce 40% of its net-zero technology locally by 2030. It facilitates investment in such technologies by simplifying permitting procedures and prioritising strategic projects, among other measures. The NZIA also introduces non-price criteria (resilience and sustainability) into standard public procurement rules, aiming to exclude offers that rely too heavily on a single non-EU supplier. For more information, see our blog post. 

EU: Methane Regulation published in the Official Journal of the EU

On 15 July 2024, the Regulation (EU) 2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of methane emissions in the energy sector and amending Regulation (EU) 2019/942 (commonly referred to as the Methane Regulation) was published in the Official Journal of the EU. The Regulation establishes a new EU legal framework for the measurement, reporting, and verification of methane emissions in the energy sector. The Regulation will come into force on 4 August 2024. It is directly applicable in all Member States. For more information, see our blog post.

EU: Revised Industrial Emissions Directive published in the Official Journal of the EU

Directive (EU) 2024/1785 of the European Parliament and of the Council of 24 April 2024 amending Directive 2010/75/EU of the European Parliament and of the Council on industrial emissions (integrated pollution prevention and control) and Council Directive 1999/31/EC on the landfill of waste (usually referred to as the Revised Industrial Emissions Directive) was published in the Official Journal of the EU on 15 July 2024. The Directive will come into force on 4 August 2024. The Member States will need to transpose its provisions into national legislation by 1 July 2026. For more information, see our blog post.

EU: Navigating the new Ecodesign Regulation: practical implications for companies

As a cornerstone of the EU’s Green Deal and its Circular Economy Action Plan, the new Ecodesign Regulation for Sustainable Products (ESPR) introduces sustainability requirements for almost all kinds of products placed on the EU market, a digital product passport, and new obligations for the handling of unsold products. The ESPR significantly broadens the scope of its predecessor, the Ecodesign Directive, to include a wide array of products beyond just energy-related items. It mandates comprehensive sustainability standards across all stages of a product’s life cycle, from design to disposal, emphasizing durability, reparability, and recyclability with the ultimate goal of minimising environmental impact and promoting a circular economy. The ESPR will officially enter into force on 18 July 2024, but companies will have some time to adjust their operations due to the necessity of secondary legislation as well as transition periods. For affected companies, understanding the nuances of the new rules is essential not only for compliance reasons, but also for capitalising on opportunities to innovate in product design and sustainability practices. For more information, see our blog post.

EU: Right to Repair Directive published in the Official Journal of the EU

The Right to Repair Directive (R2RD) was published in the Official Journal of the EU on 10 July 2024. Member States will need to transpose the Directive into national law by 31 July 2026. The new rules will: (i) require manufacturers and, under certain conditions, further market players to repair in-scope products outside the legal warranty and to inform consumers about their obligation; (ii) amend the legal warranty rules laid down in the Sale of Goods Directive to make repair more attractive than replacement; and (iii) introduce other measures to promote repair. For more information, see our blog post. 

EU: Decarbonising gas markets: H2 Regulation and H2 Directive enter into force

On 4 August 2024, the EU legislative hydrogen and gas decarbonisation package came into force, comprising the Regulation (EU) 2024/1789 on the internal markets for renewable gas, natural gas and hydrogen (the H2 Regulation) and Directive (EU) 2024/1788 on common rules for the internal markets for renewable gas, natural gas and hydrogen (the H2 Directive). The H2 Regulation will apply from 5 February 2025 while Member States have until 5 August 2026 to transpose the new rules of the H2 Directive into national law. This legislative package updates the European gas market regulation (i.e. the Gas Regulation EC 715/2009 and the Gas Directive 2009/73/EC) which has remained largely unchanged since 2009, and aims to decarbonise the gas markets by making it fit for purpose for a gaseous EU energy mix by 2050 in which renewable and low carbon gases represent two third of the gaseous fuels. Hydrogen in particular is considered crucial to decarbonise certain heavy duty transport sectors (maritime transport, aviation, long distance heavy vehicles) and energy intensive industries where electrification is not an option. Given the limited availability of renewable hydrogen (i.e. hydrogen obtained via electrolysis using renewable electricity to split water into hydrogen and oxygen, referred to by the EU as a ‘renewable fuel of non-biological origin’) in the near term, the H2 Directive emphasises that low-carbon hydrogen (derived from non-renewable sources, see further below) will have to play a role in the energy transition in line with the EU’s climate targets in the short and medium term to reduce greenhouse gas emissions rapidly. For more information, see our blog post.

UK: New Labour government: is the UK back in the race to net zero?

The national election on 4 July 2024 ushered in a new Labour government in a landslide vote after 14 years of a Conservative government. Energy transition and net zero policy is a key priority for the new Labour government, second only to economic growth. Labour want to make the UK a clean energy superpower and the green finance capital of the world. Labour has also made a number of big announcements including in respect of the new National Wealth Fund, a new first-of-its-kind Mission Control centre to deliver clean power by 2030 and changes to the planning regime to “get Britain building again”. So, does this mean the UK is back in the race to net zero? For more information, see our blog post. 

UK: King’s Speech 2024: Bills most relevant to the green and net zero agenda

On 17 July 2024, the new Labour government unveiled the list of Bills (primary legislation) it intends to introduce in Parliament. This is done via the King’s Speech and an accompanying background briefing document setting out more detail on each of the proposed Bills, including a National Wealth Fund Bill, a Great British Energy Bill, and a Planning and Infrastructure Bill. For more information on the Bills that are most relevant to the Labour government’s green and net zero agenda, see our blog post. 

Global trends in climate change litigation

On 27 June 2024, the Grantham Research Institute on Climate Change and the Environment published its sixth annual Global Trends in Climate Change Litigation: 2024 Snapshot Report. The report focuses on developments in global climate change litigation over the period May 2023 to May 2024. Key takeaways are as follows: 

• Although the growth rate in new cases may be slowing down, the global footprint of climate change litigation continues to expand (with cases now in 55 jurisdictions). There is a continued increase in “climate-washing” cases, challenging governments or corporates’ alleged climate misinformation or misleading claims. Over 70% of these cases decided so far have been in favour of the claimant (54 out of 77). 
• The role of human rights-related arguments in climate change litigation is becoming increasingly prominent as adverse impacts of climate change become more evident. 45% of all international litigation involved human rights courts, bodies or tribunals. 
• The unprecedent ECHR judgment in the KlimaSeniorinnen and Others v. Switzerland case may establish an important precedent for future claims challenging governments’ climate ambitions and responses.
• The first of three advisory opinions was issued, clarifying specific legal obligations of State parties under the United Nations Convention on the Law of the Sea. Advisory opinions from the Inter-American Court of Human Rights and the International Court of Justice are expected in late 2024 and early 2025. 
• While the majority of cases identified pursue “climate-aligned” outcomes, there is an increase in “non-climate-aligned” litigation (looking to delay or obstruct climate action), and in litigation intended to challenge the manner in which climate action is taken (“just transition” litigation and “green vs green” litigation).
• As climate litigation continues to drive shifts in thinking and behaviour among many stakeholder groups, it remains crucial for businesses to be aware of and engage with the complex landscape of climate litigation and ESG litigation more broadly.

For further information, see our blog post. 

UK: Compliance guidance on pricing, urgency and green claims

The Digital Markets, Competition and Consumers Act 2024 (DMCC) will transform the Competition and Markets Authority’s (CMA) consumer powers with the introduction of direct enforcement and fines of up to 10% of global turnover for non-compliance. But ahead of its new powers biting, the regulator has been cutting its teeth by actively pursuing enforcement under the existing regime. Recent weeks have seen: (i) Wowcher as well as ASOS, Boohoo, and George (ASDA) agree undertakings with the CMA; (ii) a consultation letter issued to Worcester Bosch expressing concerns over misleading green claims in the heating sector; and (iii) the CMA indicating that it will pursue court action against Emma Sleep if it fails to change its online practices. These developments provide a helpful steer on what the CMA will consider compliant under the new consumer regime. For further information, see our blog post.

UK: Investors sue UK fashion retailer for £100m for allegedly misleading ESG disclosure under FSMA

On 17 May 2024, institutional investors in Boohoo Group Plc, a UK-based fashion retail company (Boohoo), filed a claim against the company seeking compensation for allegedly misleading disclosures relating to its ESG responsibilities, which were said to have resulted in a financial loss for its shareholders. This claim is one of the first of its kind in the UK. With the increase in disclosure requirements and the degree of attention being paid by regulators, consumers, claimant lawyers and litigation funders to ESG issues, it will only be a matter of time before further investors seek compensation for losses due to alleged breaches of ESG responsibilities, and this claim is likely to be seen as a litmus test of the viability of such a claim. For more information, see our blog post. 

Global: Recent biodiversity and nature regulatory developments and horizon scanning in the UK, EU and globally

In July 2023, we reported on the biodiversity and nature-related regulatory trends we were seeing in the UK and EU at the time (see our previous blog post). So, what’s happened since then? See our recent blog post which explores some of the recent key regulatory developments in the UK, EU and globally and provides an update on the trends we expect to see in the biodiversity and nature regulatory space over the coming months.

EU: Nature Restoration Law published in the Official Journal of the EU

Regulation (EU) 2024/1991 of the European Parliament and of the Council of 24 June 2024 on nature restoration and amending Regulation (EU) 2022/869 (commonly referred to as the Nature Restoration Law) was published in the Official Journal of the EU on 29 July 2024. The Regulation lays down rules to contribute to the long-term and sustained recovery of biodiverse and resilient ecosystems across the Member States’ land and sea areas through the restoration of degraded ecosystems. The goal is to restore at least 20% of land and sea areas by 2030, aiming to address all ecosystems requiring restoration by 2050.  The Nature Restoration Law will enter into force on 18 August 2024 and is directly applicable in all Member States. For more information, see our blog post.

UK: FCA publishes the final Listing Rules

The new UK Listing Rules, which have been published by the Financial Conduct Authority (FCA) on 11 July 2024, will restructure the London listing landscape for equity issuers when they come into force on 29 July 2024. The single commercial companies regime contains reduced barriers to listing and fewer shareholder approval requirements than the current premium segment and will enable UK-listed issuers to be more competitive. There have been several relaxations from the draft rules proposed in CP 23/31, including institutional investors being permitted within dual class share structures (subject to a ten-year sunset) and simplified and more flexible disclosure requirements in relation to significant transactions. For more information, see our client briefing.

UK: FRC signals new approach to Stewardship Code obligations

The Financial Reporting Council (FRC) has issued an update on its review of the UK Stewardship Code 2020 and interim measures for reducing reporting burdens and expectations. These aim to help investors to continue to strive towards high quality stewardship outcomes but in a proportionate way and with a focus on UK growth. The FRC has also acknowledged the influential role of proxy advisors in investor information gathering and voting on listed company business, and is considering how to achieve greater transparency of proxy advisor activities. For more information, see our blog post. 

EU: Insights from EBA report on gender-neutral remuneration policies and EU Pay Transparency Directive

The Capital Requirements Directive 2013/36/EU and the Investment Firms Directive 2019/34/EU (and relevant EBA sound remuneration Guidelines) require that relevant institutions have gender-neutral remuneration policies. Both Directives require the EBA to report on the application of these policies within two years of the Guidelines, and the EBA has just published its report on this on 16 July 2024. The Report is based on data up to 15 December 2023 on 254 banking firms and 99 investment firms. Our briefing highlights key findings of the Report with a focus on the requirements for firms to: (i) appropriately document the value of positions; and to (ii) monitor the gender pay gap over time. Those requirements will resonate with firms preparing for the upcoming EU Pay Transparency Directive (EUPTD), which will be in force from 7 June 2026. For more information, see our dedicated webpage.

UK: Positive action vs positive discrimination

Improving diversity, equity and inclusion (DEI) remains a strategic priority for many employers. As DEI ambitions grow, positive action can be a powerful tool to improve diversity in the workplace. However, navigating the legal framework can often prove to be a challenge for employers, as the line between what amounts to lawful positive action, and unlawful positive discrimination, is not always clear. The Linklaters Diversity Faculty has launched a new thought leadership series providing insights, commentary and guidance for employers on the most complex and technical areas of UK law, regulation and governance on DEI issues. The series includes a guide with a practical overview of the differences between lawful positive action and unlawful positive discrimination and explains how employers can navigate the grey area and promote diversity, equity and inclusion whilst staying on the right side of the legal line. For more information, see our briefing and our blog post exploring a recent employment tribunal case on positive discrimination.

UK: A Labour government: a new dawn for DEI?

As the dust starts to settle on this year’s General Election, businesses will undoubtedly be unpacking what the Labour party’s landmark victory means for them. Through upgrading existing rights and introducing brand new obligations on employers, the new government’s proposals are set to shake up the DEI landscape in a way unprecedented for over a decade. For more information on the key DEI-related rights and actions Labour proposes to introduce, see our blog post.

Global: A toolkit for AI projects

Artificial Intelligence (AI) will have significant and far-reaching effects for most businesses, allowing existing activities to be automated and new business models to be created. This applies to the legal function just as much as any other part of the business, opening the way for significant efficiencies in the way legal services are delivered. However, AI also raises new and interesting legal issues. Some of these involve the application of long existing laws to this new technology, whereas others arise from specific new regulation, such as the EU AI Act. Every in-house counsel needs a grasp of the key legal issues affecting artificial intelligence and the technical concepts underpinning it. For more information, see our updated AI Toolkit. 

Global: Contentious AI and ESG

Organisations can leverage AI to enhance their ESG strategies, for example in relation to net zero transition, ESG reporting, climate change modelling, and operational efficiencies. Yet the use of AI can also give rise to potential ESG litigation and regulatory scrutiny, including in respect of greenwashing claims, human rights or discrimination claims due to algorithmic biases or under emerging supply chain due diligence regimes, as well as liability for inaccuracies or lack of transparency when using AI for ESG data collection and analysis to comply with ESG disclosure requirements, or using AI for automated decision-making which could result in adverse ESG outcomes. For more information, see our Contentious AI webpage. 

Global: Tech Legal Outlook 2024 Mid-Year Update - Driving value from AI

AI is accelerating digital change and it continues to shape the outlook for 2024, bringing disruption and opportunity. But it remains a challenging path for businesses to drive value and manage the risks associated with AI in a shifting legal landscape. At the mid-year point, we see GenAI capability continuing to advance, investment flowing into AI and the digital infrastructure supporting it, and the Middle East growing in significance as a tech hub. The businesses implementing AI successfully at scale are embracing AI to advance their business priorities, addressing the risk issues, and continually testing, learning and optimising their solutions. In the latest wave of digital transformation, AI is also helping to transform the payment systems, products and services that underpin the digital economy. And while the increasing power demands of AI present sustainability issues, AI is also part of the solution to transition to net zero. For more information, see our Tech Legal Outlook 2024 Mid-Year Update.

Climate litigation

On 2 August 2024, Hawai’i Governor Josh Green announced that a global settlement agreement had been reached resolving all tort claims arising from the 2023 Maui wildfires. The settlement was reached after four months of mediation and involves seven defendants, among them government entities and communication companies. The proposed settlement terms, which remain subject to final court approval, include US$4.037 billion in compensation to be paid to the approximately 2,200 affected parties that have filed lawsuits. For more information, see our September 2023 ESG newsletter. 

Litigation involving challenges to state government rules

On 25 July 2024, three organizations filed a lawsuit in New York state court challenging New York Governor Kathy Hochul’s decision to block the Congestion Pricing Program, which was designed to reduce the number of vehicles on New York City streets, thereby diminishing dangerous air pollutants and greenhouse gases emitted daily from tailpipes into New York City air. The plaintiffs claim that the decision violates the New York State Constitution by failing to guarantee each person in New York a right to “clean air and water, and a healthful environment” and deprives New York residents of the air quality protection provided under the Traffic Mobility Act. The plaintiffs request that the court declare Governor Hochul’s action as unlawful and vacate her decision to block the Congestion Pricing Program.

On 14 August 2024, a federal judge in the U.S. District Court for the Western District of Missouri issued a ruling permanently enjoining recent rules Missouri had promulgated that required investment advisors to obtain written consent from their clients before considering environmental, social and governance (ESG) objectives in their investment decisions.  The court found that the rules are preempted by the National Securities Markets Improvement Act (NSMIA) and the Employee Retirement Income Security Act of 1974 (ERISA) and are impermissibly vague and unconstitutional under the U.S. Constitution.

Challenges to federal agency rules

On 28 June 2024, the U.S. Supreme Court published their decision in Loper Bright Enterprises et al. v. Raimundo, overturning long standing precedent—the Chevron Doctrine, which held in cases where the U.S. Congress did not directly address the issue at the center of a dispute when drafting a statute, courts were required to uphold an agency’s interpretation of the statute so long as it was reasonable. The Loper ruling significantly reduced authority of federal agencies such as the U.S. Environmental Protection Agency (EPA). 

On 1 August 2024, three environmental NGOs filed suit in the Northern District of California against the U.S. Department of Interior (DOI), the U.S. Fish and Wildlife Service, the U.S. Department of Commerce, and National Marine Fisheries Service to challenge four rule revisions used to implement the Endangered Species Act (ESA). The plaintiffs challenge two amendments that oversee listing, delisting, and designation of critical habitat and two revisions that govern consultations on federal actions that may impact listed species or critical habitat, arguing that the packages undermine the ESA’s purpose and are arbitrary and capricious under the Administrative Procedure Act (APA). The plaintiffs seek declaratory and injunctive relief. 

On 24 July 2024, another group of environmental NGOs sued the U.S. Bureau of Ocean Energy Management (BOEM) in the U.S. District Court for the District of Columbia to challenge its Air Quality Control, Reporting, and Compliance final rule. The complaint asserts that the rule violates the APA as it maintains “outdated and ineffective regulations governing air pollution from offshore oil and gas operations that were promulgated in 1980, rejecting significant changes that the [BOEM] had previously determined were needed to ensure compliance with its statutory mandates under the Outer Continental Shelf Lands Act (OCSLA)”. The plaintiffs seek declaratory and injunctive relief. 

Also in July, a group of twenty-three states and coal mining organizations filed petitions to the U.S. Supreme Court, seeking an immediate stay of the EPA’s final rule amending the Mercury and Air Toxics Standards (MATS), while their legal challenges are pending before the D.C. Circuit. Also in July and June 2024, multiple states and farming associations filed suits in Utah, Alaska, Wyoming, and North Dakota federal courts against the DOI and the U.S. Bureau of Land Management (BLM) to challenge the BLM’s Conservation and Landscape Health Rule. The plaintiffs argue, inter alia, that the conservation rule exceeds the BLM’s authority under the Federal Land Policy and Management Act of 1976 (FLPMA).

Other federal agency rules are receiving support. In August 2024, several environmental, consumer advocacy, investor and academic organizations filed amicus briefs in the U.S. Court of Appeals for the Eighth Circuit in support of the U.S. Securities and Exchange Commission’s (SEC) final rules on climate-related disclosures. For more information, see our May 2024 ESG Disputes Bulletin. 

Greenwashing

On 12 July 2024, a putative consumer class action was filed in the United States District Court for the Southern District of Florida against a major clothing company specializing in athletic apparel.  The complaint takes issue with the company’s sustainability campaign which, beginning in October 2020, set out goals including “ensur[ing] at least 75% of [the Company’s] products contain sustainable materials by 2025” and “sourc[ing] 100% renewable electricity to power the Company’s operations by 2021[.]”  The complaint asserts that the campaign creates a “general, express, and implied impression in consumers’ minds” that the company has a positive environment impact, while in reality producing greenhouse gas emissions, landfill waste, and microplastics.  

On 19 July 2024, an environmental non-governmental organization brought a lawsuit against a beverage retailer in the Superior Court of the District of Columbia alleging violations of the District of Columbia Consumer Protection Procedures Act. The Plaintiffs assert that the beverage retailer promotes a line of their bottled water as sustainable, natural, and environmentally friendly, despite the fact that the line contributes to plastic pollution and contains “other harmful substances[.]” 

On 13 August 2024, a class action complaint against a major airline was dismissed in the United States District Court for the District of Maryland, after the presiding judge ruled that the claim was preempted by federal law. The complaint was brought by a consumer arguing that he had paid a higher price to fly on the airline due to its advertised commitment to carbon-neutrality, which he asserted was not supported by the airline’s practices. The court determined that this claim related to the airline’s provision of transportation services, and was therefore preempted by the Airline Deregulation Act, a statute with the primary purpose of allowing airlines to select and design the marketing mechanisms appropriate to the furnishing of air transportation services. 

Litigation in the mining sector

On 1 August 2024, the U.S. Court of Appeals for the Eighth Circuit issued an opinion concerning a consolidated action brought by Peruvian citizens alleging environmental injury by exposure to toxic substances from a smelting and refining complex in rural Peru. The case was brought against a group of U.S. based entities that owned and/or operated the complex as well as certain executives and directors at those companies. The plaintiffs claimed that the defendants failed to sufficiently reduce lead emissions from the complex, as required under the terms of an Environmental Remediation Management Plan, which resulted in unsafe lead levels in the air. Following a district court’s decision to deny a motion to dismiss filed by the defendants, the defendants argued before the Eighth Circuit that the doctrine of international comity, a doctrine that reflects the extent to which the law of one nation, as put in force within its territory, shall be allowed to operate within the dominion of another nation, compels abstention from adjudicating the plaintiffs’ claims in U.S. courts. The Eighth Circuit affirmed the district court’s decision to deny the defendants’ motion to dismiss, rejecting their arguments that the case should have been dismissed based on the doctrine of international comity.

On 16 August 2024, a coalition of states filed a brief in support of a motion for stay/preliminary injunction in a case challenging a final rule proposed by the DOI entitled “Ten-Day Notices and Corrective Action for State Regulatory Program Issues.”  Under the rule, state decisions involving the regulation of surface coal mining and reclamation operations over which states have exclusive jurisdiction under the Surface Mining Control and Reclamation Act of 1977, would be subject to federal oversight through ten-day notices.  Additionally, the rule discards the requirement that citizens contact state regulators with concerns before seeking relief from the federal government and imposes timelines for states to complete complex investigations into mining sites. The plaintiffs claim that the final rule exceeds the DOI’s authority and is arbitrary, capricious, and otherwise inconsistent with law.

Monetary Authority of Singapore publishes its annual Sustainability Report 2023/2024  

On 4 July 2024, the Monetary Authority of Singapore published its annual Sustainability Report 2023/2024 which sets out MAS’ strategy on climate resilience and environmental sustainability to strengthen the resilience of Singapore’s financial sector to environmental risks, develop a vibrant sustainable finance ecosystem, build a climate-resilient investment portfolio and incorporate sustainable practices in MAS. Over the past year, MAS has worked with the industry and other partners on key sustainability initiatives, building on the refreshed Finance for Net Zero (FiNZ) Action Plan launched in April 2023. The FiNZ Action Plan expands the scope of MAS’ Green Finance Action Plan launched in 2019 to include transition finance. Key initiatives in 2023/2024 include: 

• Climate-Resilient Financial Sector: Issued a set of consultation papers proposing Guidelines on Transition Planning by banks, insurers and asset managers (see our previous blog post).
• Data, Definitions & Disclosures: Published the Singapore-Asia Taxonomy, the first taxonomy globally to pioneer the concept of a “transition” category (see our previous blog post); and published the Singapore Code of Conduct for ESG Rating and Data Product Providers (the Code), with an accompanying checklist for providers to self-attest their adoption of the Code (see our previous briefing). 
• Green & Transition Solutions and Markets: Launched the Transition Credits Coalition (TRACTION) to scale transition credits and launched Financing Asia’s Transition – Partnership (FAST-P), a blended finance initiative that aims to mobilise up to US$5 billion to de-risk and finance transition and marginally bankable green projects in Asia (see our previous ESG newsletter).
• Green FinTech: Launched Gprnt, an integrated digital platform that automates and streamlines the collection of ESG data to enable basic climate-related reporting by businesses in a simple and efficient manner.
• Skills and Capabilities: Launched the Sustainable Finance Jobs Transformation Map, which lays out the impact of sustainability trends on jobs in Singapore’s financial services sector and the emerging skills that the workforce will require to serve sustainable financing demand in the region (see our previous ESG newsletter). 

Going forward, MAS intends to update the analysis of climate scenarios which inform on the potential long-term impact on portfolio risks and returns due to climate change and extend its Climate Transition Programme to the corporate bonds portfolio.

Singapore: IETA launches Article 6 platform

On 31 July 2024, the Singapore Economic Development Board (EDB) and IETA (formerly the International Emissions Trading Association) launched the Singapore Carbon Market Alliance (SCMA). As reported in the joint EDB and IETA press release, the SCMA is the first platform in Singapore aimed at helping companies obtain access to high-quality Article 6 carbon credits. The SCMA is a by-invitation-only alliance that will connect leading international developers and suppliers of carbon credits, with Singapore-based corporates with strong climate commitment and interest in purchasing Article 6 carbon credits. In addition, from 2024, companies in Singapore will be allowed to use international carbon credits to offset up to 5% of their taxable emissions.

Singapore introduces energy transition measures bill 

On 6 August 2024, Singapore’s Ministry of Trade and Industry (MTI) tabled the Energy Transition Measures and Other Amendments Bill for its First Reading in Parliament (the Bill). The Bill will amend the Energy Market Authority of Singapore Act, Electricity Act, and Gas Act to support the nation's net-zero ambitions by 2050. Amongst others, the key measures include establishing a Future Energy Fund with an initial injection of $5 billion, centralising gas procurement through a new Central Gas Entity, and granting the Energy Market Authority various powers (e.g. the power to recover costs for decarbonisation initiatives, facilitate shared access to critical energy infrastructure, and implement power rationing during emergencies).

Indonesia: More favourable local content requirements for power producers

Indonesia’s Minister of Energy and Mineral Resources (MEMR) and the Minister of Industry (MOI) recently introduced three new regulations and one new decree relating to local content for electricity infrastructure construction. These regulations essentially replace the MOI Regulation No. 54/M-IND/PER/3/2012 of 2012 on the Guideline for the Use of Domestic Products for Electricity Infrastructure Projects, as last amended by MOI Regulation No. 23 of 2023 (MOI Regulation 54/2012), as the previously prevailing regulation on local content for electricity infrastructure construction. The new regulations mark the assumption of authority by MEMR for regulating local content requirements for the combined goods and services for power projects (previously regulated by MOI) and provide more favourable local content requirements for power producers in contrast to the requirements under MOI Regulation 54/2012, which had become a barrier to progressing a number of planned power project developments, particularly solar power projects. For more information, see our client alert.

ASEAN stock exchanges collaborate on ESG initiatives

In July 2024, at the 37th ASEAN Exchanges CEO Meeting, six ASEAN stock exchanges - Malaysia, Indonesia, Philippines, Singapore, Thailand and Vietnam (the ASEAN exchanges) – agreed to pursue four proof-of-concept projects over the next three years, including (i) harmonising data structures and standards to form an aggregated ASEAN approach, (ii) creating a standardised ASEAN ESG curriculum to support listed issuers towards efficient, automated and scalable assurance processes; (iii) incentivising quality reporting across supply chains working with banks to offer financing programmes with preferential rates tied to disclosures and commitment to decarbonise; and (iii) rewarding listed issuers with exemplary ESG performance. This is part of the ASEAN-Interconnected Sustainability Ecosystem (ASEAN-ISE) initiative where the ASEAN exchanges aim to adopt and implement common ESG metrics within their respective ESG data infrastructures, with the aim of improving transparency, comparability, and exemplary ESG practices across the region (see our previous ESG newsletter). 

China issues draft regulations on national carbon trading market 

On 2 July 2024, the Ministry of Ecology and Environment of China issued a consultation draft for the allocation of national carbon emission trading quotas for China’s power generation industry for the years of 2023 and 2024 (the Consultation Draft). The finalised Consultation Draft is expected to cover a list of entities, as defined by the provincial level ecology and environment departments, that own power generation assets. Among other things, the Consultation Draft covers the methodology for carbon emission trading quota allocations, issuance, clearance and carryover of the quotas, and treatment of the quotas in the event of merger, demerger or closure of the in-scope entities. Compared with the last version of the allocation scheme for carbon emission trading quota published in 2023, the Consultation Draft aims to improve the allocation mechanisms, adjust the scope of activities subject to the quota management, and introduce the quota carryover policy. 

China issues new plan to cut carbon emissions from the coal power generation industry

On 15 July 2024, the National Development and Reform Commission and the National Energy Administration jointly issued the Action Plan for Low-Carbon Transformation and Construction of Coal Power Plants (2024-27). The plan outlines that, by 2025, the first set of low-carbon projects will begin operations using low-carbon power generation technologies and the average emissions in those projects will be reduced by 20% compared to 2023 levels. By 2027, these low-carbon power generation technologies will be expanded with a lower operational cost and the average emissions in those projects will be reduced by 50% compared to 2023 levels. The plan provides coal-plant owners with three methods to reduce carbon emissions: biomass blending, green ammonia blending, and carbon capture, utilisation and storage. In addition, the plan also commits to enhancing financial support and policy support for low-carbon power generation projects.

China issues green targets for data centres

On 23 July 2024, the National Development and Reform Commission, the Ministry of Industry and Information Technology and two central bureaus jointly issued the Special Action Plan for Green and Low Carbon Development of Data Centres. As outlined in the plan, by 2025, data centers are expected to reduce their average power usage effectiveness (PUE) to below 1.5 and increase their utilisation of renewable energy by 10% annually. By 2030, data centers across the country will see their average PUE, and energy and carbon efficiency per unit of computing power, achieve internationally advanced levels, with a further improved utilisation rate of renewable energy. To meet these goals, China will improve the layout of data centers, impose stricter energy and water efficiency requirements for new projects, facilitate energy-saving and carbon-reducing transformation of existing facilities and encourage the adoption of energy-saving technologies and equipment.

China plans dual-control carbon emissions system as it aims for 2030 peak

On 2 August 2024, the State Council of China published the Work Plan for Accelerating the Establishment of a Dual Control System for Carbon Emissions. The plan introduces a new “dual carbon emissions control” system that covers both carbon intensity (carbon emissions per unit of GDP) and the total carbon emissions amount, signaling China’s transition from energy consumption control to carbon emissions control in pursuit of its carbon peak and carbon neutrality goals. The dual control system will come into force during the 2026-2030 five-year plan period, with carbon intensity being the primary measure, supplemented by the total carbon emissions amount. The plan also outlines several implementation measures along with the new system, including incorporating carbon emission measures into national economic and social development plans, improving the statistical and accounting system for carbon emissions by 2025, and updating relevant regulations to accommodate the dual carbon emissions control system. 

China issues guidelines to accelerate green transition of economic and social development

On 11 August 2024, the State Council of China released the Opinion on Accelerating Comprehensive Green Transition of Social and Economic Development. According to this opinion, by 2030, China will achieve “remarkable results” in the green transition across all areas of economic and social development. By 2035, the country aims to have established a green, low-carbon, and circular development economic system. The opinion outlines various tasks to achieve these goals, including accelerating the green and low-carbon transition in China’s industrial structure and the energy sector, developing low-carbon industries, and promoting the use of clean fossil energy. It is reported that China will also extend the implementation period of its low-interest loans to companies and projects in clean energy to the end of 2027 to help companies cut carbon emissions and actively develop financial instruments such as green equity financing, green financial leasing, and green trusts. 

Hong Kong Monetary Authority issues good practices on climate-related risk governance

On 22 August 2024, the Hong Kong Monetary Authority (HKMA) issued a circular recommending some industry good practices and key observations on climate-related risk governance for authorized institutions (AIs), which were based on findings and observations from the supervisory exercises that the HKMA has recently conducted. The HKMA understands that it may be difficult for AIs to incorporate climate-related measures into their governance framework given the evolving nature of such risks. These climate-related risks may affect AIs’ exposures to multiple inherent risks assessed under the HKMA’s risk-based supervisory approach. Therefore, by providing examples of good practice in the circular the HKMA is hoping to provide practical help for AIs to enhance their climate-related risk governance frameworks. For more information, see our blog post. 

Hong Kong SAR: FSTB launches the green and sustainable fintech proof-of-concept funding support scheme

On the 28 June 2024, the Green and Sustainable Fintech Proof-of-Concept Funding Support Scheme, commissioned by the Financial Services and the Treasury Bureau (FSTB), was launched. This scheme will provide early-stage funding to support technology companies or research institutes in Hong Kong which conduct green fintech activities, to collaborate with local enterprises (such as financial institutions, listed companies, carbon credit entities, etc.) to co-develop new projects that can address the industry pain points. The maximum grant for each approved project is HK$150,000. The scheme aims to promote the R&D and commercial adoption of innovative green fintech solutions across five key areas: (i) green & digital finance and investment; (ii) ESG disclosure, compliance & regulatory reporting; (iii) carbon trading, analytics, and technology; (iv) ESG data, intelligence, and analytics; (v) ESG/climate risk modelling & assessment. The applicant must be a technology company or research institute registered and having commenced business in Hong Kong and conducting “substantive” green and sustainable fintech or mainstream technology innovation activities.

Hong Kong SAR Government launches HK$25 billion in green bonds

On 17 July 2024, the HKSAR Government priced a landmark HK$25 billion green bond issuance across RMB, USD, and EUR, attracting over HK$120 billion in orders (see HKMA’s press release). In particular, the 20-year and 30-year RMB Green Bonds were offered for the first time by the HKSAR Government, extending the offshore RMB yield curve. Proceeds raised will be used to finance or refinance projects that provide environmental benefits and support sustainable development in accordance with the Green Bond Framework of the HKSAR Government. 

Hong Kong SAR: HKEX introduces Gold Standard carbon credits on Core Climate platform

The Hong Kong Exchanges and Clearing (HKEX) has announced the inclusion of Gold Standard’s Verified Emission Reductions (GS-VERs) on the Core Climate platform, with effect on 1 August 2024. HKEX launched Core Climate in October 2022 as an international carbon marketplace to facilitate effective and transparent trading of carbon credits and instruments. GS-VERs can now be traded on the Core Climate platform allowing a more diverse range of internationally certified climate projects to be available on the Core Climate platform. GS-VERs are carbon credits that represent a reduction or removal of GHG emissions from the atmosphere, which are certified by the Gold Standard, a leading certification body for climate and development projects. In a separate circular providing more details including product specifications, HKEX says trading fees are waived for all users trading GS-VERs, until further notice.

GFANZ Asia Pacific publishes case studies on financial institutions transition plans

In June 2024, GFANZ Asia published a report on Asia-Pacific Case Studies on Components of Financial Institution Net-zero Transition Plans (the Case Study Report). The Case Study Report is a supplementary report to GFANZ’s Recommendations and Guidance on Financial Institution Net-zero Transition Plans which was published in 2022. The Case Study Report sets out 12 case studies that helpfully illustrate some net-zero practices across asset management, banking and financial service providers across the APAC region. 

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