ESG

The following interview originally appeared in the National Law Journal.

What you need to know

  • One of the significant issues many of their multinational clients have is the growing divide between how they operate and what’s expected of them in the U.S. versus Europe.
  • At the same time the legal field has experienced this anti-ESG backlash over the last year in the U.S., the EU has moved full speed ahead on many ESG initiatives with significant consequences for businesses, including the EU Taxonomy, the Sustainable Finance Disclosure Regulation, the Corporate Sustainability Reporting Directive, and the Corporate Sustainability Due Diligence Directive.
  • There is also growing litigation risk because with so much more scrutiny, and so much more information in the public domain, there are a range of stakeholders and potential plaintiffs on ESG issues, from state officials to NGOs

The Biden administration has set clear policy goals to establish effective corporate net-zero strategies on the one hand, yet there has also been growing pushback against the climate aspect of ESG in many red states. How do you advise clients on climate regulation in this very fluid environment?

Jayni Hein: We are all witnessing this summer, yet again, record-breaking land and ocean temperatures and pervasive wildfire smoke. It’s undeniable that climate change is affecting how we live today and how businesses operate. How both the government and the private sector respond is critically important.…

Continue Reading Q&A: Navigating Climate and ESG Amid Regulatory Uncertainty

On 19 June 2023, after almost 20 years of negotiations, the United Nations (“UN”) member states adopted a landmark treaty to ensure the conservation and sustainable use of marine Biodiversity of areas Beyond National Jurisdiction (the “BBNJ” treaty).

One of the cornerstones of the BBNJ treaty is the creation of a new mechanism for the fair and equitable sharing of benefits arising from activities with respect to “marine genetic resources” (“MGRs”) and “digital sequence information” (“DSI”) from MGRs.  This mechanism is groundbreaking because it will require companies to pay for the use of genetic resources beyond national jurisdiction for the first time.  Until now, under the existing Convention on Biological Diversity (“CBD”) and its Nagoya Protocol, companies were required to make (non-)monetary contributions only for the utilization of genetic resources under national jurisdiction (e.g., from national territories, national seas and exclusive economic zones).  The BBNJ creates new “Access and Benefit-Sharing” (“ABS”) obligations on MGRs from maritime areas beyond national jurisdiction (i.e., the High Seas and the Area). 

Companies in sectors whose R&D depends on marine genetic resources will be required to contribute to share financial and other benefits.  In this blog we focus on those provisions of the BBNJ which will have the most direct impact on companies.…

Continue Reading Historic Marine Biodiversity Treaty creates new Access and Benefit-Sharing obligations for life sciences companies

Sustainability governs all policies and sectors of social and economic life. The goal of sustainable development is to meet the needs of today’s generations without compromising the self-sufficiency of future generations. Companies are called upon to innovate as economic conditions indicate a change in the direction of sustainability. Sustainability considerations and green developments have increasingly caught the attention of competition law’s enforcers. Competition authorities such as the European Commission (“Commission”), the Hellenic Competition Commission (“HCC”), the Dutch Competition Authority (“ACM”) and the German Competition Authority (“Bka”) have taken a positive stance towards accepting sustainability initiatives proposed by the private sector. How can companies balance both sustainability and competition law? In this blog post, we analyze recent developments that further explain the sustainability framework that companies have to navigate.…

Continue Reading Building a sustainability strategy – what companies can (not) do from a competition law perspective

The European Commission is expected to present a Proposal for a Directive on Green Claims  (“Proposed Green Claims Directive” or “the Proposal”) within the next few months.  Together with the Proposal for a Directive empowering consumers for the green transition through better protection against unfair practices and better information (“Consumer Empowerment Directive Proposal”), the Proposed Green Claims Directive would contribute to the EU’s green transition towards a circular, climate-neutral and clean economy by creating a common methodology for the substantiation of green claims that concern the environmental footprint of products, services and companies.  It would aim to reduce greenwashing and enable consumers to take informed purchasing decisions based on reliable information about the sustainability of products and traders.

If adopted, it is likely to significantly limit the environmental claims that businesses can make in the EU/EEA.  Businesses may want to consider approaching the Commission to try to influence the final legislative proposal that it is expected to present by March 2023.  Once the Commission presents its legislative proposal, businesses should consider proposing amendments to the European Parliament and Council. …

Continue Reading Upcoming EU Rules on Green Claims

The Greenhouse Gas Protocol (“GHG Protocol” or “Protocol”)—a leading standard setter for measuring and managing corporate greenhouse gas emissions, borne of a partnership between World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD)—has opened stakeholder surveys concerning the revision of its Corporate Accounting and Reporting Standard, Guidance on Scope 2 Emissions, and the Scope 3 Standard and Scope 3 Calculation Guidance.…

Continue Reading Corporate Carbon Counting Under Scrutiny—Comments Requested on Pending Updates to the Greenhouse Gas Protocol

On December 14, 2022, during an open Commission meeting, the Federal Trade Commission voted unanimously to issue a Federal Register notice requesting comments on the efficacy of the Green Guides.  The initial request for comments seeks input on whether to retain, modify, or rescind the Guides.  The notice was published in late December, marking the beginning of a 60-day comment period that ends on February 21, 2023.…

Continue Reading FTC Launches Green Guides Review, 60-day Comment Period Closes February 2023

The European Union (“EU”) has passed the world’s most far-reaching mandatory environmental, social, and governance (“ESG”) reporting regime.

The Corporate Sustainability Reporting Directive (“CSRD”) will apply to an initial group of large EU companies from 2024 and gradually extend its reach to smaller companies over the course of the following four years. It is ultimately expected to apply to more than 50,000 companies incorporated, listed, or doing business in the EU. Notably, from 2028 the CSRD will apply to non-EU parent companies that generate more than EUR 150M of net turnover in the EU and have at least one EU subsidiary subject to the CSRD (or a local branch of a certain size). (See Appendix for a table with detailed information on the CSRD’s application thresholds and dates.)…

Continue Reading EU Mandatory ESG Reporting Takes Shape: CSRD is Passed and EFRAG Adopts Draft ESRS

Negotiations over the text of the final Declaration appear to have not progressed significantly since yesterday. The issues holding up progress now are the same issues that had been identified at the outset as key: loss and damage; mitigation gaps (weak NDCs); the $100 billion in climate finance promised to developing countries from 2020; and the doubling of the proportion of the $100 billion going to adaptation projects. The dual Egyptian Foreign Minister and COP President called on delegates to find solutions—though normally the responsibility for moving text forward lies with the host country.  …

Continue Reading Highlights from Cop 27: Solutions Day

COP 27 was electrified yesterday by the speech of President-elect Lula of Brazil. Promising to reverse the deforestation of the Amazon and commenting that Brazil is already a global agricultural giant without the need to clear any more rainforest, he called on wealthy nations to make good on their COP 15 pledge to set aside $100 billion per year for adaptation and demanded additional funding for loss and damage, noting that the countries least responsible for climate change were those currently suffering from it the most. He also underlined the importance of international partnerships, including the recent agreement between Brazil, Indonesia, and the Congo to work together on conservation.…

Continue Reading Highlights from COP 27: Biodiversity Day

On November 15th, all eyes were on the G20 Summit where news that the meeting between Presidents Biden and Xi had been broadly positive–including instructions for officials to re-engage on climate change–along with the announcement of funding to help Indonesia move away from reliance on coal-fired energy, served as a welcome boost to the mood in Sharm.…

Continue Reading Highlights from COP 27: Energy Day