Corporate Sustainability Reporting Directive

On September 13, 2023, the California Legislature passed Assembly Bill 1305 (AB 1305), which imposes wide-ranging disclosure requirements on (1) entities that market or sell voluntary carbon offsets and (2) entities that purchase and rely on these offsets to advertise their climate goals.  The bill has been enrolled and is currently on Governor Newsom’s desk.

AB 1305 comes on the heels of escalating criticism of voluntary carbon offsets, including arguments that corporations use low-quality offsets to engage in greenwashing.  AB 1305 is likely to prompt companies to engage in careful due diligence before making climate-related claims and to ensure that they rely on high-quality offsets that correspond to real emission reductions or removals.…

Continue Reading Law Enacted by California Legislature Would Require Companies to Disclose Key Details About Voluntary Carbon Offsets and Claims Made in Reliance Upon Them

ESG and sustainability disclosure and reporting requirements for listed and non-listed companies are rapidly taking shape. As announced at COP26, there is now an International Sustainability Standards Board (“ISSB”) tasked with encouraging global uptake of ESG reporting standards. In the EU, the European Financial Reporting Advisory Group (“EFRAG”) is the body tasked with developing mandatory sustainability and ESG reporting standards under the EU’s Corporate Sustainability Reporting Directive (“CSRD”). Both the ISSB and EFRAG have each recently published ESG and sustainability disclosure and reporting “prototypes”. These prototypes are important pieces to an emergent reporting regime that is very likely to become critical commercially—if not mandatory—for many companies. There are also encouraging signs that what has until recently been a relatively disjointed set of standards, is beginning to come together under a more harmonized agenda and institutions.

This blog presents an overview of some of the detailed climate-related disclosure and reporting metrics covered by the ISSB and EFRAG climate prototypes, and highlights critical considerations for companies as more detailed and mandatory ESG and sustainability reporting frameworks begin to take shape.…

Continue Reading ESG & Sustainability Reporting Developments: Climate Disclosure Prototypes